Download WaveRiders*s Strategic Objectives

BALANCED SCORECARD
2 b. Winning strategies part 1
TEAM A2
Bo Kongthaisereekul
Janet Ho
Veronica Mwikwabhi
Edelen Melo-Ortega
Cresna Ponthy
James Byrne
WaveRider’s
BSC Deployment
Fundamental Theory of BSC
Advantages and Disadvantages (Mitigating actions)
Comparison of other deployment method
Assumptions (people & operation way)
Wave Rider’s Vision
Deployment Plan recommendation (Five years)
Conclusion
Balanced ScoreCard – BSC (1990)
BSC is tool for leader to communicate strategy to employee
and external stakeholders the outcome and performance drives
by which the organization will achieve its mission & strategy
objectives
Measure Performance and Set Strategy:
• Effective organizational performance management
• Effective implementation strategies (Removing barriers
for Financial measurement and Strategy Execution)
Niven, P. (2002). Balanced Scorecard Maximizing Performance and Maintaining
Results. New York: Jonh Wiley & Sons, Inc.
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
BSC – LEARNING AND GROWTH
PERSPECTIVE
Learning & growth perspective. As enablers to other 3 perspectives (fundamental
vehicle). It helps to close the gap to ensure sustainable performance in the future.
1. Employee skills
2. Employee satisfactions
3. Availability of information
4. Alignment
Pal's Sudden Service. (2001 ). Retrieved February 10, 2011,
from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
BSC – INTERNAL BUSINESSS PROCESS
PERSPECTIVE
Internal business process. Efficient the process via:
1. Product development
2. Production excellence
3. On time delivery
4. After sales services
Pal's Sudden Service. (2001 ). Retrieved February 10, 2011,
from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
BSC – CUSTOMER PERSPECTIVE
1. Operation excellence
2. Product leadership
3. Customer intimacy (Customer satisfaction,
customer loyalty, market share & customer
acquisition)
Pal's Sudden Service. (2001 ). Retrieved February 10, 2011,
from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
BSC – FINANCIAL PERSPECTIVE
Financial measures. Result focus on bottom-line, indicators:
1. Profitability
2. Revenue growth
3. Economic value added.
Pal's Sudden Service. (2001 ). Retrieved February 10, 2011,
from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
Advantages
• Strategy alignment with 3 primary stakeholders:
Shareholders, Customers and Employees
• Both financial and non-financial criteria
• Allows review the past financial situation in an ongoing consistent
manner.
• Engagement of employee voice through learning and growth able to
assess whether any strategic action implemented will match desired
outcome
• Acts as an excellent education tool for staff
Pal's Sudden Service. (2001 ). Retrieved February 10, 2011,
from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
Disadvantages
• The concentration on three primary stakeholders has the converse effect
of neglecting other stakeholder
• Requires a long thought process to develop
• Trade-offs between different measures is ignored even when in direct
confliction
• Should not be taken as full comprehensive delineation of the company
Pal's Sudden Service. (2001 ). Retrieved February 10, 2011,
from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
Mitigating the negative effects
• Primary stakeholder must be clearly
recognised
• Empowerment to the team members (flexible
and freedom to achieve strategic priorities)
Pal's Sudden Service. (2001 ). Retrieved February 10, 2011,
from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
Comparison of other deployment method
Hoshin & BSC (Main differences)
Hoshin focuses on selecting and monitoring the right measure to drive change (an “ends justifying the
means” approach)
BSC centered primarily on the capability of company’s process for delivering value to customer (means
contributing toward end)
Flexibility
BSC strongly emphasized the goal must to be achieved (does not provide clearly approach of how) Hoshin
does with short (annual)/middle (3-5y.) and long-term plan (5-10y.)
Change
BSC does not cover review and monitoring system (closed-loop) to modify plan (change)
Hoshin emphasized PDCA cycle. Hoshin deployment method sometimes neither delayed nor allowed the
process(review)
Communication
Hoshin integrates people together from top-down and bottom-up deployment.
Although, it is difficult to achieve the involvement of everyone.
Witcher, B.J. and Butterworth, R. (2001), “Hoshin kanri: policy management in Japanese-owned UK subsidiaries”, Journal of Management Studies, Vol. 38 No. 5, pp. 651-74.
Yang, T.M. and Su, C. T., (2007), “ Application of hoshin kanri for productivity improvement in a semiconductor manufacturing company.”, Journal of Manufacturing Technology
Management, Vol. 18 (6), pp.761-775
Witcher, B., (2002), ”Hoshin kanri: a study of practice in the UK”, Managerial Auditing Journal, Vol. 17(7), pp.390-396
Assumptions…
• The research Market is not yet
concluded , but the correct approach
seems to be to open the distribution
channels to the European market.
• Better negotiation strategy in terms of
sourcing to foster competitive
advantages.
ViSiON
(Direction)
The vision statement provides a word picture of what the
organization intends ultimately to become in next 5,10,or
15 years.
By not having appropriate vision statement, organization might has a problem
to guide the actions of employees which result lack direction and eventually
unable to take benefits from any strategy that put on place. Thus there are
several key points in order to create effective vision:
(Niven, 2002),
ViSiON
Key points
· Concise (should be simple, powerful and compiling)
· Appeals to all stakeholders
· Consistent to mission and values
· Verifiable
· Feasible
· Inspirational
(Niven, 2002),
WaveRider’s
Strategic Objectives
The VISION
To be the preferred
boats provider in our
market(s) achieving a
large market share by
providing:
Exceptional valueSafe and Innovative
products
FINANCIAL
Strategy 6
(Key Words)
Customers Delightment
CUSTOMER
Safety
Customer Service
Post-sale
Innovation (R&D)
A fun, positive and
profitable experience
for all stakeholders
Continuous
Improvement
Service
Pal's Sudden Service. (2001 ). Retrieved February 10, 2011,
from http://www.baldrige.nist.gov/PDF_files/Pals_Application_Summary.pdf
INTERNAL
GROWTH
Kaplan , R., & Norton, D. (1993, September-October).
Putting the Balanced Scorecard to Work. HARVARD BUSINESS REVIEW , p.5.
Wave Rider - BSC
Financial
L&G
Customer
IB Process
Learning & Growth Deployment
Objects
Staff training
Employee satisfaction
Measures
Targets
Initiatives
Y1
Y2
Y3
Y4
Y5
length of time for training (hours)
150
150
120
120
120
Training Program
% of satisfied employee
60%
70%
80%
90%
95%
Welfare & Benefits
2
3
3
4
5
collect by interviews and surveys
R & D and Innovation
number of patents compared with
competitors
Research on new product
Internal Business Process
Deployment
Objects
Measures
Targets
Y1
Production efficiency of New Product
Production Level
Y2
Y3
Initiatives
Y4
Y5
Lead time
Staff Training
SeaHorse ↓
20%
20%
15%
15%
12%
SeaSpray ↓
60%
50%
45%
35%
33%
SailAway ↑
20%
30%
40%
50%
55%
stock/ amount of total products
27%
produced
25%
20%
18%
15%
Reorganise Production Plan
(% of each product)
Reduce stock level of Current
Products
Improve Finance and HR
Departments
Reorganise Production Plan
Reorganise Finance and HR Department
Customer Deployment
Objects
Measures
Targets
Initiatives
Y1
Y2
Y3
Y4
Y5
Quality of new product
(Sailaway)
DPMO
No. of Defects relative to total
products produced
5.00%
2.00%
1.00%
0.5%
0.1%
Six Sigma
Customer Delightment
% complaints relative to total sales
unit
10%
10%
8%
5%
2%
Membership Program
% number of new customers relative
to total current customer
10%
15%
20%
30%
40%
Marketing Campaign
compare with competitors
8%
8%
8%
5%
5%
Benchmark
Shipment
(Delivery to Customers)
Sale Growth
10%
12%
12%
15%
18%
Promotion, Discount
Increase Market share of
New Product
% of market share
5%
10%
15%
20%
30%
Find more distribution channels
and customer base
Increase No. of Customers
Competitive price
Financial Deployment
Objects
Measures
Targets
Y1
Y2
Y3
Y4
Y5
Gross Margin
46.47%
48%
49%
50%
51%
Return on Sales
5.46%
6%
6.50%
8%
10%
ROCE
7.99%
8%
9%
11%
14%
Administration costs
(admin. cost/GP)
57%
57%
55%
53%
50%
Material costs
51%
50%
49%
46%
45%
Profitable growth
Maximise returns
Manage operating costs
Cause & Effect
Financial Perspective
Customer Perspective
Gross Margin
Return on Sales
New product Quality-Sail
Customers Delightment
Away
Return on Capital
Employed
Administration Costs
Material Costs
Increase No. of
Customers
Competitive price
Shipment (Delivery)
Increase Market Share
Reduce Stock Levels of
Current Products
NPI New Product
Introduction
Improve Finance and HR
Departments
Internal Business Process
Productivity Efficiency
Production Level
Marketing-Sales
(Efficiency)
Learning & Growth
Staff training
Education
Improve Employee
Satisfaction
R&D (Innovation )
CONCLUSIONS
BSC provides a linkage between strategy and vision
through four perspectives to achieve organization
shared objectives. Yet, it has potential issues in
terms of in review mechanism during deployment
phase. Therefore, it requires adjustment to maximize
its benefits.
Reference
Witcher, B.J. and Butterworth, R. (2001), “Hoshin kanri: policy management in Japanese-owned UK subsidiaries”, Journal of
Management Studies, Vol. 38 No. 5, pp. 651-74.
Yang, T.M. and Su, C. T., (2007), “ Application of hoshin kanri for productivity improvement in a semiconductor
manufacturing company.”, Journal of Manufacturing Technology Management, Vol. 18 (6), pp.761-775
Witcher, B., (2002), ”Hoshin kanri: a study of practice in the UK”, Managerial Auditing Journal, Vol. 17(7), pp.390-396
Norreklit H. (2000), The balance on the balanced scorecard - a critical analysis of some of its assumptions, Management
Accounting Research, 11, pp. 65–88.
Kaplan R S and Norton D P (1996) “Balanced Scorecard: Translating Strategy into Action” Harvard Business School Press
Marquardt, E.P., (1997), "Aligning Strategy and Performance with the Balances Scorecard," ACA Journal: 18-27.
Yeung A. and B. Berman. (1997) Adding value through human resources: Reorienting human resource measurement to drive
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Nair, M. (2004). Essentials of balanced scorecard. Hoboken, N.J: John Wiley & Sons.
Andon, P., Baxter J., Mahama H. (2005). ‘The Balanced Scorecard: Slogans, Seduction, And State Of Play’. Australian
Accounting Review, Vol.15, No.1, pp.29-38.
Olve, N. G., Petri, C. J., Roy, J., and Roy, S. (2004). Twelve years later: Understanding and realizing the value of balanced
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