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Bahrain, a small isle in the Persian Gulf has been fully engaged in their government-based economic plan, Vision 2030. Through Vision 2030, Bahrain hopes to transform itself from an oil rich nation to a fierce global competitor, shaped by the private sector and government infrastructure. The vision also encompasses plans to double the household disposable income and improve the quality of life by 2030.
With this transformation, government organizations such as the Ministry of Works (MOW) and the Electricity and Water Authority (EWA) had to change their strategy to fit Vision 2030. Due to Bahrain’s rapid growth, MOW, had difficulty in retaining high quality staff and cost reductions, while EWA struggled with their operating budget and increasing electricity consumption. Faced with these challenges, MOW and EWA adopted the BSC and ESM to align their strategic goals to the plan.
By employing the BSC via the ESM, MOW was able to better align their strategy to the 2030 vision. Through the integration of risk management and strategic management, MOW improved risk mitigation. To implement the integration, they established theme teams to analyze the risks in each theme. Furthermore, the BSC helped MOW in the modification of objectives. With SWOT analysis, it was found that they needed to find financing alternatives to manage their costs. Also, the refinement of objectives allowed for an improved representation of key areas of focus.
EWA implemented the BSC by defining new initiatives. The redefinition of initiatives enhanced the capacity for consumption, thus better managing costs. IT played an integral part of cost management. Through IT billing and planning software and the ESM, allowed EWA to better anticipate future expenditures. To improve the overall employee satisfaction and performance management, EWA established My HR. My HR upgraded job roles and associated descriptions and helped EWA to find and retain qualified employees.
Bahrain’s Vision 2030 encompassed all areas of the economy in both the private and public sector. By employing the BSC, MOW and EWA aligned their organizational goals to the global vision, paving the way for success.
For the full text article, go to My ESM > Resources > Libraries > May/June 2010 BSR (v12#3).
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Seven years ago, Lagasse, Inc. struggled to manage inventory and deliver value to their customers in their supply-chain process. Lagasse, Inc. is a B2B wholesaler of commodity products, with suppliers such as Proctor & Gamble, Rubbermaid, and Kimberly Clark. Some of their key suppliers felt the impact of the overall supply chain inventory and inefficiencies in all steps of the order fulfillment process. By implementing the BSC and strategy maps, Lagasse, Inc. improved the supply-chain inventory process, as well as improving relationships with suppliers.
Lagasse, Inc. worked with one of their key clients, Superlative, to align their supply-chain management systems. Once Lagasse developed their strategy map, they shared it with Superlative, illustrating the supplier's supply chain, procurement, and financial meausures. Superlative built their own strategy map and they compared financial goals. By sharing supply chain and financial information, both companies were able to locate the flaws in their current business methods. Together, they identified areas of waste and opportunities to transfer savings, and teamed up on several efforts to create a joint initiative map. A joint initiative map is a spreadsheet-based BSC which lists key objectives with a checklist of initiatives and tasks, which link the objectives. Teams from every relative department of the organizations made a comprehensive plan to connect to the joint initiative map.
The collaboration between Lagasse and Superlative resulted in greater transparency, enhancing coordination of business processes. Within the first six months of implementing the collaborative strategy, Lagasse and Superlative saw an annualized distribution savings in excess of $1 million. Lagasse sped up inventory turnover and strengthened profitability, while Superlative benefitted from efficiency in transactions and improved forecasting. After the success seen in the joint initiative map, Lagasse decided to extend the practice to other suppliers, selecting those with the highest potential. Lagasse only aligns themselves with the top 20 suppliers and have similar strategic values. Essentially, alignment with suppliers was transformed into a long-term strategy. Lagasse's operational teams have greater internal visibility, engaging leaders in all areas of the process. Alignment with suppliers through joint strategy maps has become a competitive advantage for them, emphasized through their cost-to-serve program. The cost-to-serve program allows Lagasse to align and collaborate with suppliers to create mutually beneficial relationships.
For more information, please navigate to Resources in your ESM
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Norwegian oil giant, Statoil, has taken a new approach budgeting with the Balanced Scorecard management system. Statoil is a strong member of the Beyond Budgeting movement, replacing traditional accounting methods of forecasting with dyamic forecasting. Dynamic forecasting allows for predictions to be made on a continuous basis. It has become an integral part of their success in the weakening economy.
Statoil's implementation of dynamic forecasting has heavy implications on their Balanced Scorecards. They initiated an Ambition to Action program in 1997, which aims to drive performance and is the foundation of their performance management system. With the Ambition to Action program Statoil has over 800 Balanced Scorecards. Dynamic forecasting fits into their balanced scorecard methodology, due to its flexibility and ability to create alignment. Instead of having an annual budget, Statoil uses a continuous budgeting structure. They divide their approach into three categories: continuous resource allotment, target setting, and forecasting. Each are done independently, generating three different figures, as opposed to having a one-number budget. Essentially, dynamic forecasting allows companies to adjust to the real-world. It better predicts any fluctuations within organizations, allowing them to better prepare and anticipate for sudden changes. There are numerous limitations in annual budgeting, whereas in dynamic forecasting it is highly flexible and easily adjusts to any alterations. Coordination of company processes must be conducted on a continous basis.
To view the full-text article, go to the BSC Library and click on Resources.
"Dynamic Forecasting: A Planning Innovation for Fast-Changing Times." By Bjarte Bogsnes, Vice President of Performance Management Development at Statoil
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In the recent Harvard Business Review article, "Managing Alliances with the Balanced Scorecard" Authors Robert S. Kaplan, David P. Norton and Bjarne Rugelsjoen use the Solvay/Quintiles case to demonstrate how the Balanced Scorecard management system help companies create better alliances with their partners. Read about their story, process, and success in the full text article, compliments of Quintiles Transnational Corp.:
Download here or go to: http://www.quintiles.com/information-library/case-studies/managing-alliances-balanced-scorecard/
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The ESM chief architect and I spent this week visiting clients in the Kingdom of Bahrain and are amazed by the progress made specifically by the Electricity and Water Authority and Ministry of Works. I'd like to highlight some key characteristics that are driving success:
- Both employ an Office of Strategy Management team, meaning an organized group is focused on strategy execution. These individuals are passionate about what they do, the change they are driving, and the desire to push strategy management to the next level. For more information of the key processes of an OSM, go to http://store.executivestrategymanager.com and preview the OSM Resource Center toolkit.
- Engaged leadership right up to the Minister and Sheikh are driving key Execution Premium Processes.
- The strategy has been cascaded into the organization with hundreds of individuals "touching" the strategy. This engagement is awesome in a culture where exposure to the strategy at all levels hasn't always been the norm.
- Best practice and knowledge sharing is practiced and encouraged.
- Review meetings include the use of "action items" to ensure follow through of meeting decisions. I cannot emphasize enough the power of taking action against the strategy via action items in the ESM.
- Strategy maps and other communication elements are displayed throughout the organization to reinforce the power of strategy management.
- Both organizations have a healthy governance process and as they test and adapt their strategy and processes, they are always looking for excellence.
I wish these organizations continued success. Now off to Dubai and then home.
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Captain Earl Armbruster: You almost tore that boy's arm off!
Action Jackson: So? He had a spare.
As a Palladium consultant helping clients implement the Balanced Scorecard, I've had my share of meetings where I've felt like my arm was being torn off. And the next three hours seemed like one of those meetings. I booted up my laptop, straightened my tie, and said to myself "How would Action Jackson handle this?"
We were preparing for an upcoming Strategy Review Meeting and the day's agenda including reviewing over 70 measures with the reporting team. While this activity was necessary, and part of our methodology, I was not looking forward to the additional work I knew the meeting would generate.
I was going to use ESM to step through each measure, review the graphs, and look for common mistakes like missing titles, incorrect axis labels, and confusing color schemes. My plan was to write each discrepancy in my notebook and spend the evening in my hotel room transcribing the notes, sending individual emails to the reporting team, and creating a simple spreadsheet to track the follow-up activities. If I was lucky, and the mistakes were limited, I might be able to skip dinner and finish before midnight.
Fortunately, our ESM Consultant was onsite to assist. She introduced me to a new feature in ESM – Action Items – that not only made the meeting run better but gave me enough time to eat dinner and get a good night's sleep.
Action Items are automated reminders, or "ticklers," accessible from the Meeting View screens. Clicking the "Add Action Item" icon brings up a window allowing you to create an action item associated with a particular measure, objective, or initiative. The template can be completed quickly, and is automatically associated with the owner of the component. When that owner logs into ESM, the Action Items are displayed on his or her dashboard along with the relevant due-dates.
We used this feature extensively throughout the review meeting; capturing specific follow-up items quickly and easily with no need for reminder emails. Accountability was improved; there was no longer the excuse of "I didn't get your email..." The resulting list of Action Items can even be sorted, to help with project management tracking.
The team completed their action items and the review meeting went exceptionally well. Chalk up another time-saving ESM success!
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After the first day of ESM training in Nairobi, Kenya, I turned to my new colleague and hesitantly confessed. "You know, when I first heard I would be coming to a company called 'Safaricom,'..."
She turned to me with a knowing smile. "A safari is not just a holiday to witness the glory of the wild; it is also a journey." She continued, "Safaricom accompanies its customers on their life's journey with mobile services anytime and anywhere."
Her words were perfectly chosen, yet did not sound rehearsed. Instead, they captured the passion I heard for the company's vision; a vision that incorporates Safaricom's goals with a rich metaphor for African culture.
And I heard this passion – consistently – from everyone I spoke to on my trip.
With such consistent passion across the organization, it's no wonder that Safaricom, Kenya's leading mobile operator, has been one of Africa's great success stories. They are the biggest company in East Africa, with a six hundred-fold growth rate and a market share of 80%. This 80% figure is incredible; Safaricom's subscriber base grew from 20,000 to 12 million between 2000 and 2008.
They have been successful but realize that continued success is truly a journey. And to help them on that journey, they've adopted the Balanced Scorecard approach to prioritize their activities and ensure sustainability of their growth into the future.
The Safaricom leadership team realized that the passion behind their vision statement, so prevalent throughout the company, was a huge asset that could be leveraged as they deployed their strategy. And they were determined to make this deployment consistent and accurate throughout the organization. They realized that a strong framework, like the Balanced Scorecard, coupled with an effective tool, like ESM, would give them the vehicle they needed for this important journey.
I enjoyed working with the Safaricom team and shared best-practices in three areas: strategic messaging, actionable movement, and ongoing motivation. Or, more simply: >> Get the message across >> Make it happen >> Keep it going
To provide a Kilimanjaro-level overview:
Strategic Messaging: The ESM serves as a feedback mechanism, reporting on the carefully-selected components that reflect the strategic intent of the executive team. Everyone in the organization – from front-line workers up to the executives – can answer the question "How are we doing on what's important?"
The ESM helps answer this question by providing access to everyone in the organization. Employees have read-only access to the strategy and the objectives, while Scorecard owners can actively update the performance of their initiatives, measures, objectives, and themes.
Actionable Movement: Knowing the strategy is one thing; to ensure the journey is successful Safaricom must not only monitor the dials, but move the dials on their scorecard. The ESM facilitates the analysis necessary to achieve this movement and enables ongoing understanding of the activities required to align the work and attain the goals.
One especially-useful function within ESM is Action Items. Action Items can be used as a tracking device to ensure that commitments made in strategy review meetings are kept and that progress is taking place. The use of Action Items dramatically improves meeting productivity by empowering individuals to capture, distribute, archive, and manage all information associated with meetings. ESM allows users to easily assign and track Action Items.
Ongoing Motivation: Strategy review meetings provide the opportunity to assess progress, and the ESM can be used to ensure that action occurs between meetings. But it's important to maintain that progress on a continual basis – keeping everyone in the company motivated and aligned with the long-term goals.
Two ESM features can help maintain this motivation by maximizing the engagement of all Safaricom personnel. The Alignment tab shows how every aspect of the strategy aligns to other things within the organization. This is a powerful, visual way for everyone to see how their work impacts others, and forces accountability for overall performance. And Personal Balanced Scorecards drive the strategy down to the individual level, allowing everyone to know exactly how their daily jobs affect and contribute to the success of the company.
An African proverb states "For tomorrow belongs to the people who prepare for it today." Safaricom is actively preparing for their journey to tomorrow, and it should be a successful one.
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We finished up our client upgrade and training of ESM in Jakarta and were blown away by the internal passion around the BSC process and ESM to facilitate their strategy design and meeting management. Hundreds of internal users turned up for the ESM 5 training. In these standing room only sessions, there was a passion and energy around the new version of the ESM.
The client has broken their users up into client administrators, with a client administrator sitting within each key business area and end users, which exist throughout the organization. Although the ESM is user friendly for those of us who are not computer wizards, selecting "power" client administrator users within each scorecard is a best practice approach, especially when support and guidance is required by end users. I appreciated the visual communication elements around the client's offices. Scorecard and strategy map posters were located in entry ways, elevators, even bathrooms! This is how organizations need to communicate their strategy. While the ESM application is their main communication vehicle, supporting visual materials only reinforces the process. After a quick overnight flight to Sydney, we are speaking with delegates today around their scorecarding program. I've found that many of the delegates are just getting started with developing their scorecards and maps. I appreciate the enthusiasm that's generated at these summits. Delegates walk away with a "let's do it" attitude. Welcome to the scorecarding world!
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After a fairly significant amount of flying to get to Jakarta I set up the ESM booth, jumped online and logged into the ESM without issue. I was "blown away" by the speed. In fact, I think it was faster than many days I navigate within the application at our headquarters in Lincoln, MA. The ESM is truly globally deployed and accessible from all corners of the world.
There's great energy at the opening day of the Jakarta Summit and organizations from throughout this region are eager to apply their learning from this event. When speaking with delegates a common area of challenge with the Balanced Scorecard methodology revolved around making the strategy actionable for everyday employees in their organization, not just those who are involved in the design and reporting meetings. ESM 5 supports driving actions down to individuals through our increased action item functionality, ownership setting at the initiative and milestone level, new custom My ESM dashboard views, and primary/secondary ownership setting. I've found that these features have resonated well with the audience here.
It's fun to see how organizations are implementing the BSC framework from this region and watch the ESM community expand before my eyes. Now I just need to get over this jet lag!
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Aligning leadership incentives and one's organization are fundamental components of successful and efficient business management. Few understand this axiom as well as SMDC Health Systems. St. Mary's Hospital encountered intense financial pressure in 1997 when Clinton's Balanced Budget Act called for the largest decrease in funding for Medicare in the program's history, some $116.4 billion. As a result, funding for both graduate medical education and for entire urban hospitals treating low income patients would be drastically slashed. St. Mary's, in an effort to beef up their economic strength in face of the deteriorating federal support, underwent a period of M & A which culminated in the creation of SMDC Health Systems as we know it.
This new organization needed to rapidly implement a new strategy and management system, and after struggling to formulate a successful strategic plan, they found their answer: the Balanced Scorecard. The Balanced Scorecard enabled then-CEO Dr. Peter Person to translate the company's idyllic mission, "To Bring the Soul and Science of Healing to the People We Serve," into a working strategy. Working with the best the organizational management industry has to offer, Palladium Group, SMDC finalized its first-ever strategy map and scorecard. The system facilitated SMDC's transformational change, enabling them to monitor progress with key performance indicators and measures tailored to their strategic initiatives. BSC took a disjointed, multi-silo company and converted it into a streamlined and well-integrated business. By July 2004, the corporate team had cascaded the HQ strategy map and scorecard down to 10 scorecards for SMDC's various entities, clinical service lines, and departments. The Balance Scorecard aligned the organization under the overarching strategy, and its successful execution translated to a $20 million improvement in SMDC's operating performance and stronger cash flow. Dr. Person notes the power of the system, "everyone was aligned along the same thought by way of understanding and collectively working towards an overall, common strategy." When we bring on new executives, says Person, we acculturate them to the BSC by explaining that "this is the way we manage and execute strategy."
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The city of San Fernando in the Philippines has harnessed the innovation of the Balanced Scorecard in their aspiration to become a "Dream City." San Fernando Mayor Oscar Rodriguez plans to solidify his ambitions for his city with the Performance Governance System (PGS) which is a project he began in 2004. This system operates according to the Balanced Scorecard and boasts 10 objectives ranging from making LGU's (local government units) basic services accessible to the people in need.
Progress is measured by citizen, or "client," satisfaction. Since the program began, an annual survey has shown a steady increase in citizen satisfaction with the government's ability to meet their needs. Another success in the program's strategic execution is that the LGU's have dramatically reduced the time required to obtain a business permit, from six weeks to two hours. This has resulted in a order of magnitude more businesses operating and generating tax revenues in the city and fulfilling a key objective, to "Develop a dynamic, competitive and sustainable local economy." The Balanced Scorecard has brought focus, efficiency, and notoriety to San Fernando and has created concrete growth in this promising city.
St. Vincent Catholic Medical Centers is the only one of 8 Catholic acute care hospitals in New York City to survive from 2007 to 2008. St. Vincent Catholic Medical Centers calls their Balanced Scorecard program the Strategic Alignment Roadmap or "STAR". STAR is powered by the Executive Strategy Manager application.
According to the article, Paul Goebel, senior vice president and chief administrative officer of St. Vincent Catholic Medical Center says "Some 400 hospital directors have been educated and trained in STAR. Each director is then responsible for implementing STAR in his or her department according to an individualized objective template." Goebel says that STAR is a key driver of a cultural renewal called "Transition to a Culture of Performance." The ESM team is proud to support this transition at such a critical institution.
Click here to read the full article.
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In the July-Aug 2010 BSR report, the article "Unifying Your Far-Flung Workforce Around Your Strategy" highlights the importance of workforce unification in delivering a new company strategy. The strategy cannot be fully executed without all of the employees' committment to action. Not only must the businesses clearly articulate the new strategy to ensure a consistent understanding, but they must motivate the employees to engage in strategy execution. Four recent inductees to the Palladium Balanced Scorecard Hall of Fame for Executing Strategy, share their stories on how they rallied their organizations together to stand behind their new direction. One of the inductees, Grupo Acir, demonstrate their internal transformation to reach their strategic destination.
Grupo Acir is a national radio group based out of Mexico City, Mexico, servicing both the public and private sectors. Recently, new legislation in which resulted in limited political campaign expenditures reduced Grupo Acir's consistent revenue streams from advertising. Their reliance on political advertising had made them vulnerable, thus they had to shift their business strategy. Grupo Acir decided to amp their revenues from commercial advertisers via a new business model, changing their focus to the private sector. They aimed to lower their CPPs (cost to broadcast and ad per 1,000 persons) to justify their premium pricing strategy.
This was a challenge for Group Acir, as their departments worked indepently from one another. First, it was crucial to create a common language in regards to the new strategy. Grupo Acir created an online Strategy Information System to provide information and a standard understanding of the business direction. The mission, vision, and ultimate goals are clearly stated through a corporate level strategy map. In addition to the website, Grupo Acir held an event for employees, where they presented the new mission and vision to the employees.
To further motivate their employees, Grupo Acir altered their compensation system. By using the BSC, Grupo Acir manages employee performance through attitude, skills, and performance of corporate-level strategic objectives. They have also invested in more training in strategic job categories. The categories have experienced the best impact on advancing the strategy.
For access to the full text article, navigate to My ESM >> Resources.
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I came across our most recent BSC Hall of Fame recipient and ESM user, Bahrain Electricity and Water Authority's public web site landing page where their strategy execution success is proudly highlighted. Sitting on the right column are real time statistics on electricity and water availability and consumption. It's great to think of the ESM positively impacting an organization as vital as this one.
What I love most about both the Bahrain EWA and the Ministry of Works, another BSC Hall of Fame winner and ESM user, is that they have adopted the BSC process to fit the culture of their organization. When I spoke with these clients, they conveyed their best practice strategy review meeting approach to collect scorecard data prior to the review meetings and encourage leadership teams to review that data before the actual face to face meeting. I also learned that they run the ESM live in the review meeting (versus the ESM data report exports to PowerPoint, PDF, and Excel) to rapidly drill down into cascaded scorecards, and across the different business areas of concern. From my perspective, the most critical element to their success has been closing the loop of the Execution Premium 6 step model: Monitor and Learn and Test and Adopt. The output of these steps comes from the action items captured in their strategy review meetings. Every meeting has one or two individuals capturing action items live in the ESM, enabling rapid communication of meeting take away points to all employees. With the ESM 5.0 release we expanded action item capabilities so that they better integrate into the scorecard review process. Action items are period specific, can be assigned to both primary and secondary owners, can be assigned to a strategic element (so that it then displays in the strategic element detail performance page), and tracked with performance status indicators from meeting to meeting. Check out Bahrain's energy consumption (and read about their BSC Hall of Fame Award) at:
http://www.mew.gov.bh/default.asp?action=article&ID=725.
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Accounting for risk has become a hot topic in strategy management over the last year as organizations struggle through annual strategy refreshes in these turbulent times. This has raised the topic of how to address these risks within the balanced scorecard methodology, and ultimately, how to include the management of risk in your ESM implementation.
A strategic risk is the threat or possibility that an action or event will adversely affect the firm's ability to achieve its objectives. These risks are large enough that they should be managed on the strategic level, and in the balanced scorecard that means we need ways of measuring our exposure, assigning scarce resources to mitigation, and periodically reporting on exposure and progress.
Several of my recent clients have struggled with how best to include strategic risks in their monthly strategy review meetings while, as best practices demonstrate, keeping all the information within ESM itself. Based on feedback from those clients and other consultants and members attending Palladium's annual Strategic Risk Conference, we have designed the following approach.
Risk spans the entire scorecard and every theme, so it makes sense to establish a 'Risk' perspective in addition to the traditional perspectives. Into this new perspective go objectives for each risk, ideally prefixed similar to 'Risk 1: Overexposure to currency fluctuations'.
Treating risks as objectives allows us to select measures, establish ownership, align initiatives and report on status just like any other objective. The different perspective serves to keep these separate from traditional objectives. To illustrate the alignment of Risks to Objectives, we use the Cause and Effect functionality in ESM. Each risk objective is listed as a 'Cause' of an objective, this way when you are reporting on the objectives ESM will list out the risks aligned as 'Causes' with a status indicator and link.
This approach allows you to adequately address the impact of risk on your strategy and ensure that you are regularly evaluating your exposure to the most serious dangers. Aligning initiatives demonstrates that effort is being placed on mitigation and that mitigation itself is being regularly reviewed.
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The Ministry of Works, Kingdom of Bahrain is responsible for this island country's infrastructure and capital asset formation. It is a driving force in realizing Bahrain's national strategy embodied in Vision 2030 which seeks social, economic, and democratic transformation. Also clients of the Executive Strategy Manager, the Ministry uses the ESM to help communicate long term goals to individuals throughout the organization. The Ministry's leadership commitment, employee awareness, and governance to link strategy to operations are exemplary. In one year on-budget projects increased from 23% to 86%, and in four years the projects' value increased 10 fold with basically the same number of staff.
The Ministry's reputation in the press went from one of the bottom three to one of the top three Bahraini ministries. "The Balanced Scorecard system has been instrumental in driving outstanding and quantifiable performance improvements across the Ministry," says Minister Fahmi Bin Al-Jowder. "Our strategic learning has become a core organizational capability that is driving further breakthrough performance." For the Ministry, it's not the strategy but the execution that counts.
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One of the largest and best run government agencies in Bahrain, the Electricity & Water Authority provides these critical services to nearly one million people. EWA's 3,500 employees in 17 locations live a customer-centric culture, allocate resources effectively, and focus on performance and results. The breakthrough results of EWA since the implementation of their Balanced Scorecard have been accelerated by the Executive Strategy Manager. Managing 16 scorecards and all 3,500 employees in the ESM, the ESM has helped to create strategic alignment and accountability at the corporate, division, and individual level.
Revenue is up 22% in 2 years, while production costs have fallen by an average of 18%. Spare water capacity is up 50%, spare electricity capacity up 81%. Customer service is also up, water quality improved, employee productivity increased. An Office of Strategy Management provides a center of excellence to manage by strategic theme. "The roadmap towards excellence has become a reality thanks to the Balanced Scorecard," says Dr. Abdulmajeed Ali Alawadhi, Chief Executive. "With a clear vision, well articulated implementation, successful alignment, and motivated employees, our success will be sustainable." The EWA is the first Bahraini organization to be inducted into the Hall of Fame.
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Palladium Group, Inc., the global leader in helping organizations execute their strategies by making better decisions, today named four organizations to the Palladium Balanced Scorecard Hall of Fame for Executing Strategy™ – Bahrain Electricity & Water Authority, Bahrain Ministry of Works, Borusan Logistik, and Dubai Municipality. Two of these organizations, Bahrain Electricity & Water Authority and Bahrain Ministry of Works, actively use Palladium's Executive Strategy Manager to help them better execute strategy. By allowing for greater collaboration and enhanced presentation, the ESM has launched these two clients to the breakthrough results which earned them the honor of the Balanced Scorecard Hall of Fame.
The award represents the achievement of business excellence using the Balanced Scorecard, the world's predominant performance management philosophy that is based on the simple premise that "what gets measured is what gets done." Created by Palladium Group co-founders Drs. Robert S. Kaplan and David P. Norton, the Balanced Scorecard is also a performance management philosophy and system that links strategy to operations. The Balanced Scorecard continues to receive recognition as a strategic management tool that leads to improved shareholder returns, all of which is accelerated using Palladium's Executive Strategy Manager.
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I've had a lot of organizations ask me how to "tell the story of their strategy" using their strategy map in the ESM as their guide. I'd like to provide our ESM community with an example approach that could be adapted for your organization. Once upon a time...
This strategy map tells the story of our strategy over the next 3-5 years. We believe that if we achieve these strategic objectives, we will achieve our strategic destination of becoming a XXX organization. (I often see a top level financial or stakeholder objective here. We regard the lower two perspectives as to what we are putting into the strategy and the top two perspectives as to what we are getting out of the strategy, our outcomes.
In order to achieve our strategic destination, we need to have the right people, skills, and culture (point to L&G perspective) to help us execute on our key internal business processes, organized by the following key themes (point to and say each theme). If we do these things internally, we believe we will successfully execute on our customer objectives--driving the customer outcomes we are looking for. Happy customers become repeat customers which become referrals to increase our customer base. Ultimately, this will drive healthy revenue growth (or the stakeholder outcomes you desire). And we always need to be cognizant of managing our operations (point to financial right side of the map).
Now that I've walked through the high level story of our strategy, allow me to now drill in on the cause and effect logic behind our objectives.
First, we have XXX key objectives that we've called out on our map to signify that they are absolutely critical to our success. Read each objective.
Within Learning and Growth perspective we have the following objectives.....these drive each of our themes internally. Within the first theme we have the following perspectives (work through the theme starting at the bottom and working your way up showing the cause and effect logic). Then do the remaining themes.
Move up to the customer perspective and if they are written in quotes, then say this is through the eyes of the customer. This is what they are looking for from us. Then read each objective.
Finally, present your financial objectives as the ultimate test if you are executing on your strategy.
Speak to how you measure success via measures that sit behind the strategy map (show the full BSC summary tab), with initiatives that are helping you close the gap between your current state and what you are trying to achieve.
Good luck.
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The ESM team is pleased to officially announce the forthcoming ESM 5.0 Beta release in Q1 2009. Thank you to all the past and present clients over the past 8 years for your feedback on how to make the ESM as user friendly and effective as a meeting mangement solution as possible.
To read the full release, please click on the following link:
Read the 5.0 Press Release
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