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Now that the Execution Premium book by Drs. Kaplan and Norton has been out in the market for a number of years, let's take a look at the benefits that can be realized through the XPP implementation in your organizaiton. Let's take it a couple stages at a time. Stage 1 and 2 looked at Develop the Strategy and Translate the Strategy, stages 3 and 4: Align the Organization with the Strategy and 4: Plan Operations. Now let's look at stages 5: Monitor and Learn and 6: Test and Adapt. In these last two stages, strategy becomes part of the fabric of the organization's management process and governance model right alongside operational review meetings. A business intelligence capability nees to be formalized and linked to the strategy. As part of testing the strategy, new insights should be shared, and strategic and operational processes can be altered to ensure maximum effectiveness. This feedback loop brings you back to strategy refresh, translation and alignment, thus closing the loop on the XPP management system. Some of the benefits realized in these final stages include:
STAGE 5: MONITOR AND LEARN
- Develops a BI competency center to assure accurate, timely data to improve decision making
- Develops an analytic information architecture to harness data, information, and insight
- Creates a governance process and calendar to manage strategy as a process that delivers results
- Conducts strategy and operational review meetings to ensure strategy execution is on track
STAGE 6: TEST AND ADAPT
- Confirms effectiveness of the strategy
- Models business and operational processes to optimize ability to execute the strategy
- Analyzes results in order to make necessary modifications to achieve performance outcomes. Provides direction on what is working and what needs improvement
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
Decision Making,
ESM General Information,
Initiative Management,
Innovation,
Reporting,
Sustainability
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Posted
9/14/11
@ 3:42 PM
by ESM Team ESM Team
Now that the Execution Premium book by Drs. Kaplan and Norton has been out in the market for a number of years, let's take a look at the benefits that can be realized through the XPP implementation in your organizaiton. Let's take it a couple stages at a time. Stage 1 and 2 looked at Develop the Strategy and Translate the Strategy. Now let's look at stages 3 and 4: Align the Organization With the Strategy and 5: Plan Operations. In these stages, the strategy has been clarified with scorecards and strategy maps at the enterprise level so now they need to be cascaded down into the business and support areas to ensure vertical alignment. Individuals might employ personal Balanced Scorecards and development plans to link the performance review process with the strategy. A communication program around the strategy is also paramount. The organization can begin to link strategy to key processes, driver models, and dashboards. Rolling forecasts and dynamic resource allocation are often found around the operational planning step.
STAGE 3: ALIGN THE ORGANIZATION WITH THE STRATEGY
- Defines the corporate role so that organizational units receive strategic guidance & direction
- Cascades strategy maps and scorecards to ensure organizational alignment to the strategy
- Leverages synergies between corporate, SBU, shared services, and other units to ensure alignment
- Communicates the strategy so that everyone understands his/her role in executing it
- Aligns team and individual goals and incentives to ensure the behavioral changes required for success
STAGE 4: PLAN OPERATIONS
- Identifies critical processes required to execute the strategy
- Establishes cross-functional business teams to drive performance across organizational boundaries
- Develops rolling forecasts and dynamic resource allocation to link strategy and operations
- Implements driver based planning to identify the critical levers of performance
- Creates operational dashboards that identify the key performance indicators that drive performance
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
Decision Making,
ESM Development Team,
ESM Features,
ESM General Information,
ESM Tips and Tricks,
Initiative Management,
Innovation,
Operational Reporting,
Personal Balanced Scorecard,
Reporting,
Risk Management,
Software as a Service,
Strategy Maps,
Sustainability
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Posted
9/7/11
@ 2:25 PM
by ESM Team ESM Team
Now that the Execution Premium book by Drs. Kaplan and Norton has been out in the market for a number of years, let's take a look at the benefits that can be realized through the XPP implementation in your organizaiton. Let's take it a couple stages at a time. Stage 1 and 2 of 6: Develop the Strategy and Translate the Strategy. These stages are where the organization performs S.W.O.T. analysis, Gap and shift statements, identifies key overarching strategies, clarifies the mission and vision and key risks. Then the strategy is developed into Balanced Scorecards and strategy maps. Typically an Office of Strategy Management (OSM) or other like group/individual is tapped to manage the strategy implementation and execution.
STAGE 1: DEVELOP THE STRATEGY
- Defines how shareholder value will be created to achieve new levels of performance
- Identifies required changes from current to future state so the organization understands it
- Quantifies vision, values, mission, objectives, and risks so they are measurable
- Analyzes strengths, weaknesses, opportunities, and threats to determine course of action
- Formulates strategy so that the entire organization can execute it
STAGE 2: TRANSLATE THE STRATEGY
- Clarifies strategy with a strategy map to produce a one-page action plan that works
- Develops a Balanced Scorecard to specify objectives, targets, measures, and initiatives
- Identifies key risk indicators that must be managed to avoid failure to execute
- Focuses on initiatives with the greatest impact to accelerate time to results
- Allocates resources dynamically to produce the most effective outcomes
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
ESM Features,
Initiative Management,
Innovation,
Operational Reporting,
Personal Balanced Scorecard,
Reporting,
Strategy Maps,
Sustainability
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Posted
8/31/11
@ 3:19 PM
by ESM Team ESM Team
Judging from recent interviews and articles, it appears Balanced Scorecard co-creator Bob Kaplan’s new favorite case study is Volkswagen Brazil. In particular, he is impressed with the company's ability to communicate strategy to its 22,000 employees.
Kaplan is particularly charmed by a Volkswagen robot that roams the corporate premises and “talks” to employees about strategy. Giga, who has the face of a VW Beetle’s hood and wheels as feet, makes star appearances at employee gatherings and also shows up in comic strips to affirm strategic goals for employees.
This thoughtful and creative approach to strategy communications humanizes the idea of strategy, makes it fun and accessible, and gets people talking about it. It has also contributed to a cultural change inside the company, which, in turn, enabled a major financial turnaround.
For companies that can't afford to build a robot, there is a less expensive and more interactive approach available—if interactivity is measured by the vibrancy of human-to-human, rather than human-to-robot, dialogue. With the right selection of social media tools, you can leverage your corporate intranet (or a 3rd party platform) and raise strategy communications to a whole new level. Let’s look at some of the more common social media tools to see how they can be used in the strategy communication process:
Blogs… for Strategy Execution
According to Wikipedia, “Blogs are usually maintained by an individual with regular entries of commentary, descriptions of events, or other material such as graphics or video.” If the purpose of your strategy communication intranet is to communicate strategy, you don’t want to let every employee blog on it (just as you wouldn’t let every employee on stage at a company meeting to discuss strategy). Only your CEO and other executives responsible for communicating strategic objectives should launch a blog series under the banner of strategy communications. Depending on how “young-at-heart” your executives are, they may create and post the blogs themselves. More likely, your communications department will manage the operations of the blog. For example, if an executive is more comfortable speaking than writing, your communication team can film him and post the video entries as a video blog.
Online Discussions…for Strategy Execution
Company employees can comment on executive blogs, but the primary purpose of the strategy blog is for leaders to broadcast the message to the field. An online discussion forum is different. Discussion forums are inherently a more democratic, interactive form of exchange. There is an expectation that the person who begins the discussion will carefully listen to responses and continue to engage as the discussion unfolds. The best discussions begin with an honest question and an appeal for help. These forum discussions are the perfect complement to a more structured application for Balanced Scorecard creation and control.
Private Groups Collaboration…for Strategy Execution
You might not be ready to communicate the strategy to the entire organization. For example, Scott Nadler describes ERM’s strategic communication program in stages, starting with a private discussion between a dozen executive insiders, then to a group of 40, and finally to all 3,000 at the company. The access rights to your online collaboration space should mirror this off-line reality. For example, you might choose to launch a private group for the 40 people inside your own intranet or as a private subgroup in a more public community such as Palladium XPC.
In summary, you have a great new set of inexpensive social tools to help you communicate strategy. If they are deployed carelessly, they will be a waste of time and a distraction. However, with the right matching of specific social tools and oversight to keep the discussions focused, you will find an effective new communication program. This channel will only become more powerful – even transformative -- as more “digital natives” come into the organization.
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This week the ESM team had the opportunity to partake in Palladium's strategy practice day. The two day-session allowed the strategy practice team to share Balanced Scorecard (BSC) best practices uncovered in recent projects.
Dr. David P. Norton joined the strategy practice session to listen in on the latest happenings in strategy implementation and execution. He supplied the practice team with additional insight into “harvesting the benefits of strategy execution.” Dr. Norton spoke directly about organizations' desire to view immediate results of the Execution Premium Process (XPP). Following the XPP, organizations will typically see tangible results in up to two years. Two years may seem like a long time to wait for results, but as Dr. Norton explained, "before every story of 'shareholder value,' there is another story of 'value creation.'”
Palladium has recognized 150 Hall of Fame organizations for their succeess in strategy execution using the Balanced Scorecard. Success can be marked in significant achievements such as doubling market share or having #1 brand recognition in the industry. While these outcomes may have multiyear timelines, the short term results are the driving function that kept the momentum of strategy alive. An objective like, “Easy to do business with” can be measured by a customer satisfaction rating. Scheduled customer satisfaction surveys will idenfity the performance on the road to increased market share and brand recognition. As short term gains, like “increased revenue per customer,” are reached the organization is one step closer to the fulfillmeant of their strategy. On the road to strategy execution, remember to take the time to assess your organization's gains and losses, be they big or small.
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Several of our product experts recently returned from Palladium’s 2010 Americas Summit, held this year in La Jolla, CA. It was a great conference – strong attendance, great speakers, and considerable insight to be gained from both the case studies presented, and personal conversation.
As our experts provided attendees with live demos, they recount numerous occurrences of present clients passing by, and joining in to offer first-hand testimonials. Thanks to them, and to all of you, for being such being such strong proponents of ESM. Hearing the stories of your successes is valuable to those looking for more information, and also makes us truly proud to be a supporting part of your strategy management programs.
Recurrent obstacles identified by attendees we spoke with included 1) employee engagement and 2) effective communication of strategy and strategic performance. As indicated in the third step of the XPP, Alignment requires organizations to align business units AND employees alike to the strategy. In doing so, they often times overlook the most critical component of alignment– communication. Communication is paramount in a Strategy-Focused Organization to develop buy-in and commitment to the strategy at an individual level.
Over the last decade, ESM has made addressing this commonly shared weakness a priority. In continually improving the product to support evolving need, two new features were released this month: a second generation release of ESM’s Personal Balanced Scorecard component – PBSC 2.0, as well as a capability for integrating ESM with SharePoint.
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For more than 100 years the national investigative force now known as the Federal Bureau of Investigation has fought corruption and crime in the U.S. The terrorist attacks of September 11, 2001 resulted in a change in strategic priorities, the first being protecting the U.S. from future terrorist attack. For an agency with an $8 billion budget and 34,000 employees, this required a significant change in culture, strategy, organization, processes, and systems. A strategic change agenda paved the way. The Bureau’s Strategy Management Office—now 10 professionals strong—manages strategy with the help of divisional strategy coordinators who are responsible for deploying strategy maps and scorecards. Performance results have dramatically improved. These include enhanced intelligence capability, the degree of intelligence sharing with other agencies, the quality and timeliness of intelligence information, increased surveillance capacity, critical incident response effectiveness, and talent and technology readiness. "The complex threats we face have required a fundamental change in the way we work together," says Robert S. Mueller, III, director. "We created the Strategy Management System to drive and manage change, articulate specific objectives, and measure progress toward those objectives. SMS has been incredibly useful to the FBI, providing the means to focus on long-term goals, while balancing the need to address crime and terrorism, everyday."
The Hall of Fame award honors organizations that have achieved execution excellence through the use of the Balanced Scorecard (BSC), the world’s preeminent strategy and performance management system. The BSC 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 links strategy to operations to drive business outcomes. A recent study published in the journal Advances in Accounting found that organizations "that adopt the BSC significantly outperform those that do not…over a three year period beginning with the year of adoption. These results provide strong evidence that the BSC is an effective strategic management tool that leads to improved shareholder returns."
The Balanced Scorecard is equally effective in driving results in government and not-for-profit organizations. A focus on performance is critical for any organization, especially during challenging economic times. "While the global economic environment is improving, many organizations, from private companies to government agencies, still face significant challenges," said Robert L. Howie Jr., Managing Director of Palladium and Director of the Hall of Fame program. "Organizations using the Palladium Kaplan-Norton strategy execution approach are well-equipped to gain the kind of insights needed to capitalize on new opportunities, mitigate risk, and improve organizational performance."
Founded in 2000, the Palladium BSC Hall of Fame program today has a roster of 153 honorees—including Infosys Technologies, Millipore Corporation, Motorola, Public Service Electric and Gas Company, and Volkswagen do Brasil—that span private and public sectors in more than 20 countries. Winners are selected based on the quality of their BSC implementation and the results they demonstrate over a period of at least two years.
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The mission of Boys and Girls Clubs of America—an association of more than 4,000 local clubs—is to enable youth, especially those in need, to reach their full potential as productive, responsible citizens. The Boys and Girls Clubs of Puerto Rico, a local affiliate, has since its inception nearly 50 years ago served tens of thousands of youth in this U.S. territory. In five years the number of youth serviced has grown 200%, their satisfaction with club programs has grown from 53% to 93%, the number of facilities has doubled, revenues have increased 227% and profitability (retained operating funds) has been achieved.
Each of the 200 professionals employed by the club has a personal scorecard aligned with that of the enterprise. "A small non-profit talking about strategy execution, process improvement, return on investment, and talent management is almost an abnormality," says José A. Campos, CEO. "But the focus and drive resulting from implementing the strategy mapping and scorecard approach allow us to meet the demands of our donors and stakeholders, and quantify and demonstrate our impact and positive return for their investments. We are confident that our strategy management system provides the framework for sustainable breakthrough results."
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Despite its value, most organizations' written, objective-level performance analysis is generally not very good. Most performance analysis does not explain the data, discuss its underlying causes and implications, or integrate it into a broader discussion of strategic performance and environmental trends. My recent reading of strategy review reports of a handful of Palladium Balanced Scorecard Hall of Fame for Executing Strategy® organizations proved to me that even exemplars of strategy execution sometimes fall short in their written performance analysis, thus missing valuable opportunities.
Fortunately, this problem can be remedied. Writing insightful, actionable performance analysis is a skill that can be learned. Through Palladium's work guiding dozens of organizations in strategy reporting, we've identified several common pitfalls in performance analysis that performance analysis writers need to learn to avoid.
Pitfall 1: Focusing Only on the Measure Data, without Explaining or Interpreting
Often, performance analysis merely regurgitates what the data already show, or simply explains the components of the corresponding measure(s). What good does that do? Analysis writers need to dig deeper for more contextual data that might explain the performance. What is the reason for the last period's measure performance? How do we explain any period to period trends? What does the measure's outcome tell you about the performance of its corresponding objective?
Pitfall #2: Omitting Qualitative Information
Numbers are concrete, and objective, and therefore make people more comfortable and confident. But they don't tell the whole story. And they can indeed mislead, whether inadvertently or not (think of all the ways statistics can be presented to support any side of an argument). Qualitative information can often reveal the reasons behind the numbers better than the deepest dive into the detailed data can. It would seem self-evident that qualitative information is a critical element for understanding what drives performance. Yet far too often, such information is absent in written analysis.
Pitfall #3: Ignoring the Reasons for the Performance Result
Sometimes all the analysis in the world won't yield a definitive explanation for a performance result. Yet even when there is no certain answer, it is always better to offer a hypothesis than to forgo explanation altogether. For decision makers, there is little that is more unsatisfying than to ask “Why” and be told “I have no idea.” Offering a thoughtful educated guess will at least get the conversation started.
Pitfall #4: Avoiding Any Discussion of Risk
No one likes to be the messenger of bad news, but addressing risk openly and accurately is the key to avoiding unexpected declines in performance and greater risk. Even in our age of heightened risk awareness, risk and strategy are still often viewed as separate areas, one involving all that could go wrong, and the other, all that an organization hopes for. In reality, the two are inextricably linked. The strategy represents a hypothesis of the way the business operates and what activities are crucial to attain the ultimate desired outcome. Each strategic objective is achieved by successfully managing its performance drivers. Since it's a given that there are specific risks that can impede each performance driver; why would such risks not be part of the strategic conversation?
Pitfall #5: Focusing on Details at the Expense of the Bigger Picture
For any number of reasons, performance analysis writers often delve into one aspect of an objective’s performance, overlooking the objective-level view. In fact, it is not uncommon for performance analysis to not even indicate whether the objective is being achieved. Writers must step back from all of the quantitative and qualitative data they have collected and approach objective-level performance analysis by first drafting a summary statement about the objective's overall performance.
To read the full length article, log into the ESM, select Resources: Libraries: BSR: Complete Issues: and select the following issues.
David McMillan, “Five Pitfalls of Writing Performance Analysis,” Balanced Scorecard Report, November – December 2010
…or…
David McMillan, with Barnaby Donlon, “How to Write Performance Analysis That Truly Enhances Decision Making,” Balanced Scorecard Report, November – December 2008
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I just came across an excellent account of the Balanced Scorecard effort undergone at the Royal Botanic Garden Edinburgh. In this paper, BSC champion and strategy director, Alasdair Macnab, along with Chris Carr and Falconer Michell from University of Edinburgh tell the implementation story. They focus their research on how the Balanced Scorecard approach can be successfully adopted for nonprofit businesses. The team also reviews why the Executive Strategy Manager was selected as the preferred solution and how it streamlined the data reporting and presentation while providing leadership and employees froma cross the organization critical line of sight into the strategy.
Key findings cited from the paper include:
Just as strategies are specific to an organisation, the balanced scorecard (BSC)/strategy map can and should be adapted to suit an individual organisation to leverage the full power of the BSC system.
• The effort and commitment required from senior management involved in transforming strategy management processes should not be underestimated as individuals/departments will become more accountable for their actions, particularly in the public sector, and resistance to change may be experienced as a consequence.
• If an effective costing system is developed, such as the one described in this report, management will see how their staff are directing their efforts, particularly important in knowledge based organisations.
• With their intimate knowledge of the organisation, the management accountant is well placed to become very involved or direct the transformation process to manage strategy execution leading to improved effectiveness/profitability of the organisation. In this way the management accountant becomes more of a strategic partner to the business.
• The research relates primarily to the practitioner who should find it helpful as the work is based on research subject to academic rigour but is translated into a pragmatic approach via the case study; thereby demonstrating its usefulness to a real organisation.
See:” Implementation of the balanced scorecard and an alternative costing system at the Royal Botanic Garden Edinburgh,” available at the following link:
Access the full report here
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
Decision Making,
ESM Development Team,
ESM Features,
ESM General Information,
ESM Tips and Tricks,
Initiative Management,
Operational Reporting,
Reporting,
Risk Management,
Software as a Service,
Strategy Maps,
Sustainability
|
Posted
7/22/10
@ 11:43 AM
by ESM Team ESM Team
Congratulations to Abu Dhabi Government with their induction into the BSC Hall of Fame for Executing Strategy on May 20, 2010 at the EMEA Summit in Madrid. This organization has been using ESM's eLearning for building and managing with the Balanced Scorecard for over two years.
Abu Dhabi is the largest of the seven emirates that comprise the United Arab Emirates (UAE), as well as its rapidly growing capital city. The emirate is ruled by the UAE president. Abu Dhabi’s Vision 2030 is to create a confidant, secure society; build a sustainable, open, and globally competitive economy; and to become one of the five top governments in the world. A unified strategy execution framework for the whole of government was chosen to translate the vision into action and outcomes. Investments are rationalized and prioritized on the basis of their ability to deliver results in social and environmental sustainability, a knowledge-based economy, human capital, infrastructure, and government excellence. Agency performance contracts help ensure a focus on strategic objectives. Within two years, GDP increased 30%, growth accelerated 74%, trade surged 156%, customer satisfaction increased 33%, and the number of Emirati women in the workforce grew 35%. “Based on the adoption of the BSC and our achievements, we have become a strategy-focused government,” says His Excellency Mohammed Ahmad Al Bowardi, Secretary-General of the Executive Council. “The structured framework of the Kaplan-Norton approach has established the basis for cross-government alignment, transparency, and accountability.” For Abu Dhabi, the road ahead is paved with success.
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Congratulations to Folkhälsan on their induction into the Balanced Scorecard Hall of Fame for Executing Strategy at the EMEA Summit in Madrid on May 19, 2010.
Folkhälsan is a non-governmental organization providing social welfare and healthcare services in the Swedish-language regions of Finland. This NGO has 1,500 employees serving 17,000 people through outpatient clinics, day care centers, rehabilitation units, and elderly care facilities. Known for the quality of its care, it has leading programs in preventive medicine and genetics research. Increasing competition from lower cost providers, however, caused Folkhälsan to reassess how they could continue to provide competence, commitment, and care at levels their members had come to expect. They needed a new way to manage, and in 2004 adopted the BSC to clarify strategy, drive performance, and optimize data. They have learned to excel at reporting, which has improved their ability to make timely decisions. Membership growth is up 10%, revenues have increased 20%, and great-place-to-work rankings and employee trust scores have improved four basis points. “Our growth has not been achieved at the expense of quality,” says Stefan Mutanen, Folkhälsan CEO. “Our management system helps up pay attention to what’s really important, align our business lines and operating units, and—with the help of the strategy map and BSC compass, identify and improve the critical steps and processes necessary to achieve our vision.” As a result, Folkhälsan is two steps ahead.
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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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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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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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Palladium Group, Inc., the global market leader in helping organizations execute their strategies, today named four organizations to the Palladium Balanced Scorecard Hall of Fame for Executing Strategy™ for achieving an execution premium. The awards were presented today at the 2008 Palladium North American Summit in San Diego, California to officials of the Army & Air Force Exchange Service; the City of Corpus Christi, Texas; New Brunswick Power Group; and Weichert Relocation Resources,Inc.
"Applications for the award were at an all-time high this year," said Robert L. Howie Jr., Managing Director of Palladium and Director of the Hall of Fame program. "These four organizations were chosen as the most successful at achieving and sustaining breakthrough performance results." The Balanced Scorecard (BSC), created by Drs. Robert S. Kaplan and David P. Norton, is the world's predominant strategy execution framework. Based on the simple premise that "what gets measured is what gets done," the BSC is also a performance management philosophy and system that links strategy to operations. The BSC itself continues to receive recognition as strategic management tool that leads to improved shareholder returns. A recent study published in Advances in Accounting found that companies that adopt a BSC outperform firms that do not over a three year period beginning with the first year of adoption. Launched in 2000, the BSC Hall of Fame Program publicly honors organizations that successfully use the BSC to achieve and sustain performance results. The 120 organizations inducted to date represent a broad cross-section of private- and public-sector industries from more than 19 countries across the globe. A Steuben crystal Rising Star, designed by Robert Cassetti, is presented to senior officers of each winning organization. The Army & Air Force Exchange Center (AAFES), founded in 1898, is today is a $9 billion global retailer with 50,000 employees serving 8.7 million customers in 3,100 stores in 30 countries. AAFES adopted the Balanced Scorecard as part of transformation effort to prepare the organization to meet growing and diverse demands of increasingly mobile customers in the 21st century. The BSC helps create alignment, drive accountability, optimize resource allocation, and link strategy to operations. In four years revenue has increased by 11%, dividends 19%, employee satisfaction 16%, and customer satisfaction 17%. Inventory has been reduced by about $108 million. "The BSC has given us the ability to look beyond traditional financial measures to drive long-term sustainability that focuses on employee optimization," observes Michael Howard, AAFES COO. "The BSC aligns corporate resources and energies to drive performance that ensure AAFES continues to provide a valued benefit to the military market." The City of Corpus Christi is Texas's largest coastal city and the nation's sixth largest port. The municipal government employs 3,300 serving a population of 295,000. The city adopted the BSC to clarify and communicate its strategy; align departments, divisions, and employees; and make better, timely, and informed decisions that impact citizens' lives. In only two years, constituent satisfaction has increased 16%, favorable quality of neighborhoods is up 22%, workforce retention is up, and citizen/customer wait time is down. The city's bond rating improved, fueled in part by the BSC management system. "Everyone in the city organization must understand what is important, and with it comes a renewed sense of customer service for our residents," says Angel R. Escobar, Interim City Manager. "Now, with the BSC, we know what we are great at and what we need to improve upon...our monthly BSC meetings unify departmental directors to collectively focus on and discuss solutions to real issues." New Brunswick Power Group, a regulated monopoly owned by the Province of New Brunswick, provides hydro, oil, coal, diesel, and nuclear power to 375,000 customers in Atlantic Canada. The company has annual sales of $1.5 billion and employs 2,700 in a unionized environment (90% of employees are union members). Under the leadership of a new CEO in 2004, the company committed to becoming a Strategy-Focused Organization to deliver safe, reliable, cost-effective service while reducing upward pressure on rates. "Like many best practice organizations, we implemented an Office of Strategy Management to enhance our ability to execute strategy," says David D. Hay, President and CEO. "Management teams are having the right discussions at the right time to make better decisions. Our success, in spite of many challenges, can be attributed in part to the focus and alignment created by the BSC philosophy of management." Weichert Relocation Resources Inc. (WRRI) is one of the world's leading relocation management companies, with about 15% global market share. Part of the Weichert Family of Companies--a privately held group of real estate, relocation, and financial services companies-- WRRI employs 450 professionals around the world. WRRI adopted the BSC to implement a strategic planning and performance management system and to help manage a series of acquisitions. An unexpected benefit attributed to BSC adoption was a breakthrough innovation in supply chain management, resulting in a better customer solution, a new source of revenue, and a competitive differentiator. In three years revenue increased 46%, EBITDA increased almost 10 fold. "Our BSC program represents the most important business decision and business achievement that we have realized over the past decade," according to Aram R. Minnetian, President. "It is a source of competitive advantage, and has made us a better company. I could not imagine leading our company without it."
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Record Attendance at Palladium Group's 11th Annual North American Summit Indicates Strategy Execution High Priority Among Global Executives Palladium Group, Inc., the global market leader in helping organizations execute their strategies, today announced the successful completion and new attendance record of its annual North American Summit: Achieving the Execution Premium: Linking Strategy to Operations held November 3-6, 2008 in San Diego, Calif. Winners of the Palladium Balanced Scorecard Hall of Fame for Executing Strategy TM were honored among some 400 executives, brought together to learn how to more effectively link strategy and operations to achieve an execution premium.
"Given the economic climate, companies' executive teams are under fire from their shareholders. There is little room for financial error and every business unit is expected to do more with less. Our North American Summit provided organizations and their leaders with tools and an understanding of how to bridge their strategy and execution to protect shareholder value in a tough economy," said Dr. David B. Friend, M.D., Chairman of the Board, President, and CEO of the Palladium Group. "Leaders that cannot successfully execute on their strategy cannot remain competitive. With tight budgets, this year's record breaking attendance is a testament to the role of strategy execution in executives' priorities. Key to executing is learning how to make better decisions." Exemplars of strategy execution were honored at this year's Balanced Scorecard Hall of Fame ceremony. Inductees included the Army & Air Force Exchange Service, the City of Corpus Christi, New Brunswick Power Group, and Weichert Relocation Resources, Inc. Welcomed into a global network of more than 116 high performing organizations to date, this community successfully used the Balanced Scorecard (BSC) to achieve and sustain performance results. Underscoring the continued importance of the Balanced Scorecard in today's economy, recent research published in Advanced in Accounting reveals that companies that adopt a BSC outperform firms that do not adopt the BSC over a three year period. The creators of the Balanced Scorecard, Drs. Robert S. Kaplan and David P. Norton, conducted the event's first ever Master Class that took delegates through each stage of their best practice management system, introduced in the January 2008 issue of Harvard Business Review. Participants had the unique experience to participate in interactive troubleshooting sessions with Drs Kaplan and Norton during the class. While keynotes and session tracks focused around four themes: Developing and Translating the Strategy, Aligning the Organization, Linking Strategy to Operations, and Monitoring and Adapting the Strategy, an invitation-only breakfast addressed risk management practices – considered by CFOs the number one cause of the current financial crisis, according to a study conducted by an affiliate of The Economist. Led by Andrew Pateman, vice president and strategy practice leader and Philip Peck, vice president and finance practice leader, the interactive discussion touched on the concept of key risk indicators (KRIs) and reviewed categories of risk that organizations should monitor. Business from around the globe attended, participated and presented on how they have achieved an execution premium. The following list of organizations shared their experiences and best practices for achieving and sustaining success: • Bank of Tokyo – Mitsubishi UFJ • Canon U.S.A., Inc. • Guaranty Bank • Kaiser Permanente • Lagasse • Merck & Co., Inc. • Nemours • Saatchi & Saatchi Worldwide • U.S. Postal Service Palladium will offer its 2008 Balanced Scorecard Certification Boot Camp on December 9-12, 2008 at its training facility in Lincoln, MA. Participants will meet Dr. Norton at an exclusive Harvard Faculty Club reception and book-signing as part of the program. For more information, or to enroll, contact Patricia O'Donnell at 781.402.1276. Palladium's Master Class with Drs. Kaplan and Norton will next be offered on March 17-19, 2009, in Orlando, Florida. The program provides direct access to the strategy execution gurus who will walk delegates through each stage of their new management system and explore the process for linking strategy to operations in detail as presented in their new book, The Execution Premium: Linking Strategy to Operations for Competitive Advantage.
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The Balanced Scorecard--created by Drs. Robert S. Kaplan and David P. Norton--is the world's predominant strategy execution framework. Based on the simple premise that "what gets measured is what gets done," the BSC is also a performance management philosophy and system that links strategy to operations. Launched in 2000, the BSC Hall of Fame Program publicly honours organisations that successfully use the BSC to achieve and sustain performance results. The 106 organizations inducted to date represent a broad cross-section of private- and public-sector industries from more than 19 countries across the globe. A Steuben crystal Rising Star, designed by Robert Cassetti, is presented to senior officers of each winning organization. The Dubai Electricity & Water Authority (DEWA) provides electricity and water to nearly 800,000 customer accounts in the emirate.
One of the largest government agencies in Dubai, with an annual operating budget of $3B and a 2008 capital budget of nearly $10B, DEWA operates one of the largest desalination plants in the world. One of the best-run agencies in Dubai, DEWA is ranked number-one in customer e-service by the government. "At DEWA, we are faced with unrelenting pressure to keep pace with Dubai's double-digit economic growth, which shows no sign of abating," according to Saeed Mohamed Ahmad Al Tayer, Managing Director and CEO. "We have used the Balanced Scorecard to create a focus on our strategy...with unprecedented results." DEWA is both the first organisation from the United Arab Emirates and the first from the Middle East to be inducted into the BSC Hall of Fame. DEWA is an avid user of the Executive Strategy Manager application.
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