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Developing a Business Case for a Balanced Scorecard

Developing a Business Case for a Balanced Scorecard. IQPC Conference, Canberra 16 August 2001 David Spearritt Director, Orion Consulting Network. Outline. Case for and against Identifying likely support and resistance Lame excuses Case study Lessons learnt. Wisdoms.

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Developing a Business Case for a Balanced Scorecard

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  1. Developing a Business Case for a Balanced Scorecard IQPC Conference, Canberra 16 August 2001 David Spearritt Director, Orion Consulting Network

  2. Outline • Case for and against • Identifying likely support and resistance • Lame excuses • Case study • Lessons learnt

  3. Wisdoms • Drucker – ‘unless you have a case against, you don’t have a case for………’ • Sun Tze – ‘if you know the enemy and know yourself, you need not fear the result of a hundred battles’.(‘Art of war’, 500BC)

  4. Issues • Strategy • Monitoring tool • Strategy gap/link • Performance management • Trends • Integration • CEO/Department Head • Alternative tools

  5. Strategy • For • BSC enables monitoring progress on strategy • Against • PS strategy often vague/motherhoods • Boston strategic planning school • PS more risk conscious

  6. Monitoring Tool • For • Simple/manageable monitoring tool • Against • Easy to miss something politically important • Weakens areas not measured

  7. Strategy Gap • For • Fills gap between Vision and Op Plans • Against • Highlights strategic gaps • Limits scope for ambitious gap-fillers • Works best for strategy focused orgs

  8. Performance • For • Improves performance in key areas • Against • Highlights poor performance • Encourages manipulation of results

  9. Trend • For • BSC => worldwide trend • Against • Just another fad • We’re different

  10. Integration • For • Integrated/holistic device • Against • Reductionism culture • Detail, perfectionist culture

  11. CEO/Dept Head • For • Assists CEO and Board • Helps monitor all aspects of organisation • Against • Exposes affected managers’ performance • Accountability=>vulnerability

  12. Alternatives • Triple bottom line reporting • KPI’s • Executive information systems

  13. Lame Excuses • Lack of data/information • Need new IT or BSC systems • Too expensive • Already have it • Other priorities

  14. Other issues • Responsibility – who will manage BSC? • Allocation of resources • Staging implementation/expectations • Monitoring progress • Adapting to change

  15. ICC Approach • 1. Concept Discussion Paper • 2. Implied strategies Discussion Paper • 3. Suggested BSC and KPI responsibilities • 4. Implementation • Reused existing terminology • CEO/executive support • ‘Takeover’ when successful • Social/Environmental perspectives

  16. Reduce crime Increase school retention rates Reduce truancy Stabilize homes Reduce drug/alcohol abuse Improve community health Increase sport/rec activities Reduce unemployment Increase local jobs Community pride and capacity Improve community relations Goodna SIP

  17. Business Case Lessons • Use Organisation’s language and style • Cost/benefit analysis • Identify WIIFM’s • Keep costs low until runs on the board • Benefits mainly: - • Value of the strategy being measured • Cost savings from focusing on strategy

  18. Conclusion Balanced Scorecard – Simple, but not easy Or Luck = preparation + opportunity

  19. Further info • david@orionco.net • 1300 767 466 • PO Box 1391 Toowong BC, Qld, 4066

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