Balanced Scorecard Personal Scorecard

1. Balanced ScorecardPersonal Scorecard What is Your Personal Long-Term Goal? What would your personal scorecard include? Who are your stakeholders? The University of Tennessee

2. Balanced Scorecard Mission and Vision Statements Microsoft’s Annual Report Vision A computer on every desk and in every home. Mission In our pursuit of that vision, we have grown, changed, adapted, and reinvented ourselves--to meet the challenges of our competition, to take advantage of innovation, and to deliver on the dreams and demands of our customers. We continue to be committed to outstanding products, solid operations, and long-term shareholder value. The University of Tennessee

3. Balanced Scorecard Mission and Vision Statements AT&T’s Annual Report Vision We are dedicated to being the world's best at bringing people together -- giving them easy access to each other and to the information and services they want and need -- anytime, anywhere. Mission We believe in respect for individuals, dedication to helping customers, highest standards of integrity, innovation, and teamwork. By living these values, AT&T aspires to set a standard of excellence worldwide that will reward our shareowners, our customers, and all AT&T people. The University of Tennessee

4. Balanced Scorecard Kaplan and Norton The Balanced Scorecard provides executives with a comprehensive framework that translates a company’s vision and strategy into a coherent set of performance metrics. The University of Tennessee

5. A Balanced Scorecard Illustration Financial Perspective • Return-on-Capital • Economic Value Added • Profit Forecast Reliability • Sales Backlog Customer Perspective Internal Business Perspective • Pricing Index Tier II Customers • Customer Ranking Survey • Customer Satisfaction Index • Market Share (Tier I, Key accounts) • Hours with Customers on New Work • Rework • Safety Incidence Index • Warranty Cost Reduction Innovation and Learning Perspective • % Revenue from New Services • Staff Attitude Survey • # of Employee Suggestions • Revenue per employee Source: Kaplan and Norton The University of Tennessee

6. Why Design & Implement a Balanced Scorecard? 1. To Clarify and Translate Vision and Strategy 2. To Align Operational Strategies with Strategic Initiatives 3. To Communicate and Link Strategic Objectives and Measures 4. To Enhance Feedback and Learning The University of Tennessee

7. What happens if you do not have a quantifiable value creation metric? The University of Tennessee, Knoxville, is committed to the development of individuals and society as a whole through the cultivation and enrichment of the human mind and spirit. Our mission is accomplished through teaching, scholarship, artistic creation, public service, and professional practice. The University of Tennessee

8. Balanced ScorecardWhy is this necessary? - Resource allocation!!! Operationalize to Professors: Scholarship: Internationally Recognized Scholar Teaching: Excel in the Classroom Service: Significant Contribution to Service Full Professor : Met University’s Expectations Associate Professor: On Track Assistant Professor: One Year Renewable Contracts Performance Measures: Scholarship: Publications, Presentations Teaching: Evaluations, Instructional Materials Service: Chairs of Committees, Active Participation in Associations The University of Tennessee

9. Mission (Baylor Health Care System) Quality patient care. Technologically advanced equipment. And leading-edge facilities and services. Baylor’s commitment to physicians and other medical professionals is as strong today as it was in 1903 when Baylor University Medical Center was first established as Texas Baptist Memorial Sanitarium. Throughout the years, we’ve maintained and improved upon our pioneering leadership position by emphasizing hard work, a personal approach to patient care and a dedicated commitment to medical research. (Boone Powell Jr. CEO) The University of Tennessee

10. Baylor Health Care System 1. Build and Strengthen Financial Resources 2. Develop the Workforce 3. Improve Operational Excellence 4. Increase Market Share 5. Create and Enhance Physician Alliances The University of Tennessee

11. Balanced Scorecard Kaplan and Norton A properly constructed Balanced Scorecard articulates the theory of the business (value creation). The scorecard should be based on a series of cause-and-effect relationships derived from the strategy, including estimates of the response times and magnitudes of the linkages among the scorecard measures. The University of Tennessee

12. Kaplan and Norton Examples Figure 7-5, page 160, National Insurance Figure 5-8, page 113, Pioneer Petroleum Figure 5-7, page 111, Kenyon Stores The University of Tennessee

13. Balanced Scorecard Benefits I. Process of preparing and analyzing scorecard results can lead to many indirect benefits (self-analysis, self-discovery). II. Assists in prioritizing management actions. The real question asked is “What can we do if we can only concentrate on a few things?” III. Link long-term strategic objectives to current actions. IV. Keeps management in touch with the “pulse” of the entire organization. V. Managing information (not just assets) starts the process of managing intangible (or knowledge based) assets. The University of Tennessee

14. Balanced ScorecardFinal Thought Consistency in performance measurements is preferred to bias. In other words, it is better to be imprecisely moving in the right direction than be precisely chasing the wrong target. The University of Tennessee