Bilprovningen

Inclusiveness has been the key to achieving buy-in to the Balanced Scorecard concept at Bilprovningen.

I. Background

For Ghita Bergdahl, Head of the Controller Department at Bilprovningen, the Swedish Vehicle Inspection Company, implementing the Balanced Scorecard makes sound business sense. “It’s important to have a complete picture of how the organization works,” she says. “No management process, for example the budget, can be entirely successful without being linked to strategic goals. Furthermore, employees can only contribute fully if they understand how their day-to-day operational targets support strategic aims.”

II. Building the Scorecard

Bilprovningen implemented the Balanced Scorecard at the beginning of 2006. But the seeds of the scorecard concept were planted already in 2001 when a new CEO arrived at the company.

“The scorecard was appealing because it balances financial and non-financial outcomes,” says Bergdahl. “Given our remit for improving road safety and contributing to a better environment, we have stakeholder requirements that are broader than just producing a profit.” Financially, in 2005 the organization achieved EBIT (earnings before tax and interest) of SEK 103 million on a turnover of SEK 1,500 million.

To conduct the process of building the Balanced Scorecard system, Bilprovningen formed a Steering Committee in 2003 chaired by the CEO. The committee consisted of senior managers serving as project champions overseeing the scorecard creation process.

A project team consisting of Bergdahl and an external consultant managed the scorecarding process on a day-to-day basis. “We worked to raise awareness and to implement the philosophy,” comments Bergdahl. “We were focused on getting people at all levels to understand what the Balanced Scorecard is all about, and the benefits that implementation would bring to Bilprovningen as an organization”.

She continues, “But just as importantly we wanted to show how the scorecard would enable employees to better dispatch their everyday duties.”

The senior team of Bilprovningen was determined to create scorecard awareness and a strategic management system that agreed with the culture of the organization as well as stakeholder requirements. “We put a lot of effort in getting everyone on board, and encouraging people to tell us what they thought was important,” says Bergdahl. “It was all about getting people to see that they were part of the process and not just recipients of the latest headquarter project.”

To help reach the correct strategic management solution, the scorecard project included as a core component an in-house team of about 12 employees that were drawn from various functions (such as IT, production and finance) and reflected the company in terms of thoughts and experience. The team provided input on how they believed the scorecard philosophy should be applied within Bilprovningen and what they thought the organization was capable of delivering in terms of a strategic management process.

III. A Scorecard of Columns

Team feedback, along with wider organization-wide consultations led to the shaping of a Strategy Map that differs stylistically, if not philosophically, from a more conventional map. As with most Strategy Maps, Bilprovningen’s map supports an articulated corporate vision. In Bilprovningen’s case this includes safety, service and cost components – for example: ‘we improve road safety, contribute to a better environment and improve vehicle economy for private motorists and companies’.

Moreover, the organization works in terms of the typical four perspective scorecard of financial, customer, internal and employees. But where Bilprovningen’s map design differs somewhat from the standard is that it does not depict the map according to a hierarchy with finance at the top descending to people at the base. Indeed, Bilprovningen’s Strategy Map is non-hierarchical. The four perspectives are arranged as columns, thus each is accorded equal importance. Bergdahl explains the thinking that triggered this design decision.

“Some people in the organization felt that we might be too focused on the financials and in turn lead us to make compromises regarding the other important perspectives. By arranging the scorecard according to columns we signal that we have as much focus on employee, process (such as safety) and customer outcomes as we do on the financials.”

In line with a conventional scorecard design template, Bilprovningen supports its strategic objectives with measures, targets and initiatives. For instance, the strategic objective to be cost effective is supported by a measure of operating profit, which has a target of 35% and an initiative example is to reduce building costs.

Also conventionally, the high-level Strategy Map and Balanced Scorecard were created through a series of workshops where the senior team debated and agreed upon the strategic objectives, measures, etc. The workshops were facilitated by Bergdahl and the external consultant.

IV. Scorecard Cascade

The two project leaders also played the lead role in facilitating the scorecard cascade process, in which aligned scorecards were created within Bilprovningen's 16 districts. Workshops were held for each of the district management teams, through which a picture emerged as to the common objective that the district leaders should focus on in support of corporate strategic objectives. “A clear sense of alignment and a common direction began to emerge,” says Bergdahl.

On a monthly basis the scorecard is reviewed by the district managers and by Bergdahl’s staff. “If the review shows that performance is on or close to target no further action is taken. If it however shows that the manager is off target an analysis is conducted and perhaps a plan is made,” says Bergdahl, who today is responsible for the scorecard process, with the support of a team of four.

She adds that locally a manager of a business unit reports the outcome of his scorecard to the district manager. “So there’s a local process as well as a central corporate process.”

A scorecard has now also been created for the headquarter support staff. Bergdahl admits that some employees from the corporate centre struggled with the scorecard concept, simply because they were not used to working with measures. Indeed, overcoming a natural resistance to being measured has been to a lesser degree evident in other parts of the organization, a common experience in most companies. “To deal with all concerns we constantly try to remind everyone that the real focus is on our strategic goals, and that measures are merely mechanisms for monitoring progress toward those goals,” she says.

Bergdahl believes that buy-in to the concept of the Balanced Scorecard was perhaps easier for employees within Bilprovningen to grasp than it might be at other, more commercial organizations. “We have always focused on results that are much wider than financial, so it was relatively straightforward to get employees to understand the importance of balance.”

V. Better Local Management

A further challenge faced by Bilprovningen was getting people to see ‘what’s in it for me’, or how the scorecard benefits them personally. Bergdahl states that the Corporater Scorecard Solution is a good aid when showing managers how the scorecard can help them to improve their local operations management.

Bilprovningen began working with Corporater in mid-2005, implementing the solution in autumn and completing the organizational rollout at the beginning of 2006.

Given that Bilprovningen has placed great emphasis on ensuring that the scorecard supports the organizational culture, it also emphasized the need of a scorecard solution that agrees well with its own requirements. “We wanted a Balanced Scorecard application that could easily reflect our management process and where we didn’t have to make adjustments.”

She says that this was delivered by the Corporater solution. “Feedback from the rollout was unanimous in that the Corporater solution is extremely user-friendly. End-users find it very easy to work with.”

Ease of use is crucial, explains Bergdahl. “We want everyone in the organization to realize that strategy is everyone’s job. The Corporater solution enables employees to visualize the big picture, how strategies and operational targets fit together, and how they personally contribute at the local level.”

VI. Looking Ahead

Looking ahead, Bergdahl comments that now when the organization has a clear vision of how its management process should be performed the next step is to continue to: “translate theory into practice and get to the point where strategy truly is everyone’s job.”

About Bilprovningen

Headquartered in Vällingby, Bilprovningen is the Swedish Vehicle Inspection Company. With a mission to improve road safety and to contribute to a better environment, the company completes about 5.4 million inspections per year. Bilprovningen’s 2,100 employees work in 16 districts, 180 stations and two mobile units. The organization, 52% of whose shares are owned by the Swedish government, reported a 2005 EBIT of SEK 103 million on a turnover of SEK 1,500 million.