Vision Strategic Objectives Performance Impact Control Operational Transaction Strategic Management and Strategic Capability Decision Support and Control Data Processing Strategic Level Implementation Level The Strategy and Implementation HR Performance Development Co., Ltd.
Traditional Implementations: What ’ s Wrong? Company A: “ We want to Improve the Service Minds of Our Employee ” “ How? ” Training Action Plan = Train Employee for the Service Minds Target 100% within Q2 of 2000 Company B: “ We want to increase Profits by 10% this year ” “ How? ” Reduce Production Cost HR Performance Development Co., Ltd. Company C: “ We want to expand market to new segment ” “ How? ” Increased marketing activities targeting at new market segment Action Plan =Expand new market segment, Target market share 20% within Q4 of 2000
Measuring the Success: A Real Life Example Lag Indicators: Statistics, e.g. Record in last 2 Years Rankings etc. Competency Lead Indicators: Health in this few days Training Records etc. Performance Drivers Will he win? HR Performance Development Co., Ltd.
Balanced Scorecard: Put Strategy to Action To achieve our vision, how should we appear to our customers? Customer To satisfy our shareholders and customers, what business processes must we excel at? Internal Business Process To succeed financially, how should we appear to our shareholders? Financial To achieve our vision, how will we sustain our ability to change and improve? Learning and Growth Vision and Strategy Source: Robert S.Kaplan and David P.Norton HR Performance Development Co., Ltd.
Financial Perspectives in Details: HR Performance Development Co., Ltd. Source: Robert S.Kaplan and David P.Norton
Customer Perspectives in Details: HR Performance Development Co., Ltd. Source: Robert S.Kaplan and David P.Norton Market ShareReflects the proportion of Business in a given Market ( in terms of number of Customers, Dollar Spents, or Unit Volume Sold) that a Business Unit Sales. Customer Acquisition Measures, in Absolute or Relative Terms, the Rate at Which a Business Unit Attracts or Wins New Customers or Businesses. Customer Retention Tracks, in Absolute or Relative Terms, the Rate at Which a Business Unit Retains or Maintains ongoing Relationships with its Customers. Customer Satisfaction Assesses the Satisfaction Level of Customers Along Specific Performance Criteria within the Value Proposition. Customer Profitability Measures the Net Profit of a Customer, or a Segment, after Allowing for the Unique Expenses Required to Support that Customer. Customer Profitability Customer Profitability Customer Retention Customer Retention Customer Acquisition Customer Acquisition Customer Satisfaction Customer Satisfaction Market Share Market Share Core Measures
Indentify the Market Create the Product/ Service Offering Build the Products/ Services Deliver the Products/ Services Service the Customer Need Identify Customer Need Satisfied Internal Process Perspectives in Details: HR Performance Development Co., Ltd. Adapted from Robert S.Kaplan and David P.Norton by HR Performance Development Ref: Michael E. Porter “ Competitive Advantage ” Generic Value Chain-Model and Related Strategy to Balanced Scorecard Innovation Process Operation Process Postsale Service Process Management and Firm ’ s Infrastructure Strategic Themes Strategic Measures Function Job Key Performance Indicators (KPI)
Learning and Growth Perspectives in Details: HR Performance Development Co., Ltd. Staff CompetenciesTechnology/ProcessClimate for Action Adapted from Robert S.Kaplan and David P.Norton by HR Performance Development Employee Satisfaction Employee Retention Employee Productivity Results Core Measurement Enablers Internal Capability Internal Processes FinancialCustomer
Learning and Growth Perspectives HR Performance Development Co., Ltd. แผนการโยกย้ายงาน ผู้บังคับบัญชาแผนพัฒนาอาชีพ แผนการมอบหมายงานแผนการฝึกอบรมสถานที่ทำงาน Competencies Information/Technology Climate for Action/ Attitude เพื่อนร่วมงาน ข้อมูลที่จำเป็นระยะเวลา ความสะดวก
Case Study: Metro Bank- The Problems and Strategies Problems: (1) Excessive Reliance on a Single Product (Deposits), and (2) A Cost Structure that made it Unprofitable to service 80% of its Customers at Prevailing Interest Rates. Strategies: (1) Revenue Growth: Reduce Volatility of Earnings by Broadening the Sources of Revenue with Additional Products for Current Customers, and (2) Productivity: Improve Operating Efficiency by Shifting Nonprofitable Customers to more Cost- Effective channels of Distribution. The case from Robert S.Kaplan and David P.Norton HR Performance Development Co., Ltd.
Case Study: Metro Bank- The Strategy Linkages The case from Robert S.Kaplan and David P.Norton Improve Revenue Improve Revenue Broaden Revenue Mix Broaden Revenue Mix Improve Operating Efficiency Improve Operating Efficiency Increase Customer Confidence in Financial Advise Increase Customer Confidence in Financial Advise Increase Customer Satisfaction Through Superior Execution Increase Customer Satisfaction Through Superior Execution Develop Customer Segment Develop Customer Segment Develop New Product Develop New Product Develop Cross-Sell Product Line Develop Cross-Sell Product Line Shift to Appropriate Channel Shift to Appropriate Channel Minimize Operational Problem Minimize Operational Problem Provide Rapid Response Provide Rapid Response Increase Employee Productivity Increase Employee Productivity Develop Strategic Skills Develop Strategic Skills Access to Strategic Information Access to Strategic Information Satisfy Personal Goals Satisfy Personal Goals Financial Perspective Customer Perspective Internal Perspective Learning and Growth Perspective The Revenue Growth Strategy The Productivity Strategy HR Performance Development Co., Ltd.
Case Study: Metro Bank- Increasing Employee Productivity Strategic Initiatives Redesign the Staff Development Process 1. Identify Strategic Jobs 2. Build Competency Profiles 3. Assess Current Staff 4. Forecast Requirements 5. Identify Gap 6. Build Staff Development Plan Performance Driver (Lead Indicator) Strategic Job Coverage Ratio Strategic Outcome Measure (Lag Indicator) Revenue per Employee, or Sales per Salesperson Strategic Objective: “ Develop the Competencies needed to Support the Sales Processes ” HR Performance Development Co., Ltd. The case from Robert S.Kaplan and David P.Norton
Case Study: Metro Bank- The Balanced Scorecard Strategic Objectives Financial F1- Improve Returns F2- Broaden Revenue Mix F3- Reduce Cost Structure Customer C1- Increase Customer Satisfaction with Our Products and People C2- Increase Satisfaction “ After Sales ” Internal I1- Understand Our Customer I2- Create Innovative Products I3- Cross-Sell Products I4- Shift Customers to Cost-Effective Channels I5- Minimize Operational Problems I6- Responsive Service Learning L1- Develop Strategic Skills L2- Provide Strategic Information L3- Align Personal Goals (Lag Indicators) Return-On-Investment Revenue Growth Deposit Service Cost Change Share of Segments Customer Retention New Product Revenue Cross-Sell Ratio Channel Mix Change Service Error Rate Request Fulfillment Time Employee satisfaction Revenue per Employee (Lead Indicators) Revenue Mix Depth of Relationship Satisfaction Survey Product Development Cycle Hours with Customers Strategic Job Coverage Ratio Strategic Info Avail Ratio Personal Goals Alignment Strategic Measurements The case from Robert S.Kaplan and David P.Norton
Balanced Scorecard: A Framework for Action Balanced Scorecard Clarifying and Translating the Vision and Strategy Clarifying the Vision Gaining Consensus Strategic Feedback and Learning Articulating the Shared Vision Supplying Strategic Feedback Facilitating Strategy Review + Learning Communicating and Linking Communicating and Educating Setting Goals Linking Rewards to Performance Measures Planning and Target Setting Setting Targets Aligning Strategic Initiatives Allocating Resources Establishing Milestones HR Performance Development Co., Ltd. The case from Robert S.Kaplan and David P.Norton Adapted from Robert S.Kaplan and David P.Norton by HR Performance Development Ref: Michael E. Porter “ Competitive Advantage ”