2Operational Transaction The Strategy and ImplementationVisionStrategicObjectivesPerformance ImpactControlOperational TransactionStrategic Managementand Strategic CapabilityStrategic LevelDecision Supportand ControlData ProcessingImplementationLevelHRPerformanceDevelopmentCo., Ltd.
3Traditional Implementations: What’s Wrong? Company A:“We want to Improve the Service Minds of Our Employee”“How?” TrainingAction Plan = Train Employee for the Service MindsTarget 100% within Q2 of 2000Company B:“We want to increase Profits by 10% this year”“How?” Reduce Production CostCompany C:“We want to expand market to new segment”“How?” Increased marketing activities targetingat new market segmentAction Plan = Expand new market segment, Targetmarket share 20% within Q4 of 2000HRPerformanceDevelopmentCo., Ltd.
4Will he win? Measuring the Success: A Real Life Example Lag Indicators:Statistics, e.g. Record in last 2 YearsRankingsetc.CompetencyLead Indicators:Health in this few daysTraining Recordsetc.Performance DriversHRPerformanceDevelopmentCo., Ltd.
5Balanced Scorecard: Put Strategy to Action To succeed financially, how should we appear to our shareholders?FinancialTo achieve our vision, how should we appear to our customers?CustomerTo satisfy our shareholders and customers, what business processes must we excel at?Internal Business ProcessVision and StrategyTo achieve our vision, how will we sustain our ability to change and improve?Learning and GrowthSource: Robert S.Kaplan and David P.NortonHRPerformanceDevelopmentCo., Ltd.
6Financial Perspectives in Details: Source: Robert S.Kaplan and David P.NortonHRPerformanceDevelopmentCo., Ltd.
7Customer Perspectives in Details: MarketShareCustomerAcquisitionCustomerProfitabilityCustomerRetentionCustomerSatisfactionCore MeasuresMarket ShareReflects the proportion of Business in a given Market ( in terms ofnumber of Customers, Dollar Spents, or Unit Volume Sold) that aBusiness Unit Sales.CustomerMeasures, in Absolute or Relative Terms, the Rate at Which aAcquisitionBusiness Unit Attracts or Wins New Customers or Businesses.CustomerTracks, in Absolute or Relative Terms, the Rate at Which a BusinessRetentionUnit Retains or Maintains ongoing Relationships with its Customers.CustomerAssesses the Satisfaction Level of Customers Along SpecificSatisfactionPerformance Criteria within the Value Proposition.CustomerMeasures the Net Profit of a Customer, or a Segment, afterProfitabilityAllowing for the Unique Expenses Required to Support thatCustomer.HRPerformanceDevelopmentCo., Ltd.Source: Robert S.Kaplan and David P.Norton
9Internal Process Perspectives in Details: Generic Value Chain-Model and Related Strategy to Balanced ScorecardPostsaleServiceProcessInnovationProcessOperationProcessIndentifytheMarketCreate theProduct/ServiceOfferingBuild theProducts/ServicesDeliver theServicetheCustomerCustomerNeedIdentifyCustomerNeedSatisfiedManagement and Firm’s InfrastructureKey Performance Indicators (KPI)Strategic ThemesFunctionStrategic MeasuresJobAdapted from Robert S.Kaplan and David P.Norton by HR Performance DevelopmentRef: Michael E. Porter “Competitive Advantage”HRPerformanceDevelopmentCo., Ltd.
10Learning and Growth Perspectives in Details: InternalProcessesInternal CapabilityCore MeasurementResultsFinancialEmployeeRetentionEmployeeProductivityCustomerEmployeeSatisfactionStaff CompetenciesTechnology/ProcessClimate for ActionEnablersHRPerformanceDevelopmentCo., Ltd.Adapted from Robert S.Kaplan and David P.Norton by HR Performance Development
11Information/Technology Learning and Growth PerspectivesCompetenciesClimate for Action/AttitudeInformation/Technologyข้อมูลที่จำเป็นแผนการฝึกอบรมสถานที่ทำงานแผนการมอบหมายงานผู้บังคับบัญชาระยะเวลาแผนการโยกย้ายงานเพื่อนร่วมงานความสะดวกแผนพัฒนาอาชีพHRPerformanceDevelopmentCo., Ltd.
12Case Study: Metro Bank- The Problems and Strategies (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.HRPerformanceDevelopmentCo., Ltd.The case from Robert S.Kaplan and David P.Norton
14Case Study: Metro Bank- The Strategy Linkages The Revenue Growth StrategyThe Productivity StrategyImproveRevenueBroadenRevenue MixImprove OperatingEfficiencyIncrease CustomerConfidence inFinancial AdviseSatisfaction ThroughSuperior ExecutionDevelopCustomerSegmentNewProductCross-SellProduct LineShift toAppropriateChannelMinimizeOperationalProblemProvideRapidResponseIncreaseEmployeeProductivityStrategicSkillsAccess toInformationSatisfyPersonalGoalsFinancialPerspectiveInternal PerspectiveLearning and GrowthHRPerformanceDevelopmentCo., Ltd.The case from Robert S.Kaplan and David P.Norton
19Case Study: Metro Bank- Increasing Employee Productivity Strategic Objective:“Develop the Competencies needed to Support the Sales Processes”Strategic Outcome Measure(Lag Indicator)Revenue per Employee, orSales per SalespersonPerformance Driver(Lead Indicator)Strategic Job Coverage RatioStrategic InitiativesRedesign the Staff Development Process1. Identify Strategic Jobs2. Build Competency Profiles3. Assess Current Staff4. Forecast Requirements5. Identify Gap6. Build Staff Development PlanHRPerformanceDevelopmentCo., Ltd.The case from Robert S.Kaplan and David P.Norton
20Case Study: Metro Bank- The Balanced Scorecard Strategic MeasurementsStrategic ObjectivesFinancialF1- Improve ReturnsF2- Broaden Revenue MixF3- Reduce Cost StructureCustomerC1- Increase CustomerSatisfaction with Our Productsand PeopleC2- Increase Satisfaction “After Sales”InternalI1- Understand Our CustomerI2- Create Innovative ProductsI3- Cross-Sell ProductsI4- Shift Customers to Cost-Effective ChannelsI5- Minimize Operational ProblemsI6- Responsive ServiceLearningL1- Develop Strategic SkillsL2- Provide Strategic InformationL3- Align Personal Goals(Lag Indicators)Return-On-InvestmentRevenue GrowthDeposit Service Cost ChangeShare of SegmentsCustomer RetentionNew Product RevenueCross-Sell RatioChannel Mix ChangeService Error RateRequest Fulfillment TimeEmployee satisfactionRevenue per Employee(Lead Indicators)Revenue MixDepth of RelationshipSatisfaction SurveyProduct Development CycleHours with CustomersStrategic Job Coverage RatioStrategic Info Avail RatioPersonal Goals AlignmentThe case from Robert S.Kaplan and David P.Norton
21Balanced Scorecard: A Framework for Action Clarifying and Translating the Vision and StrategyClarifying the VisionGaining ConsensusStrategic Feedback and LearningArticulating the Shared VisionSupplying Strategic FeedbackFacilitating Strategy Review + LearningCommunicating and LinkingCommunicating and EducatingSetting GoalsLinking Rewards to Performance MeasuresBalanced ScorecardPlanning and Target SettingSetting TargetsAligning Strategic InitiativesAllocating ResourcesEstablishing MilestonesAdapted from Robert S.Kaplan and David P.Norton by HR Performance DevelopmentRef: Michael E. Porter “Competitive Advantage”HRPerformanceDevelopmentCo., Ltd.The case from Robert S.Kaplan and David P.Norton