Summary

In many of the companies that have abolished traditional budgeting, the balanced scorecard has become a true cornerstone in the new management process, instead of a competitor to the traditional budget with the two often sending conflicting and confusing signals to bewildered managers. Leaving the budget in Statoil in 2005 resulted in a turbo-charging of our scorecard process, after having operated with budgets and scorecards in parallel since 1997. Now the organisation realised that we were serious about the scorecard, it was no longer just a new box on top of all the old ones.

Money Iceberg - how much of your potential gets realized  - Many times in the past years, I have been asked the question - "What is the derivable value from successfully executing strategy?" We know there is potentially a huge value from successfully implementing strategy, but only recently I came across research data that quantifies this value.

Summary

This article examines the challenges of creating effective links between the Balanced Scorecard on the one hand and compensation and incentives on the other hand. Monetary incentives are, in principle, a powerful motivator for aligning employee efforts to Balanced Scorecard objectives. In fact, Robert Kaplan and David Norton, creators of the Balanced Scorecard, recommend the incentive-compensation link as a sub-component of the principle that calls for making strategy everyone’s everyday job. However, establishing a clear incentive-compensation link that actually works is one of the most challenging aspects of a Balanced Scorecard approach to enterprise performance management.

Summary

The article begins with what is the ultimate objective of a strategic performance management initiative like the Balanced Scorecard – ‘to make strategy everyone’s job.’ To do so, organizations need to align individual performance with the strategic objectives. In this endeavor,
personal Scorecards assume significance as a central tool.    

In an ideal scorecard cascade, personal scorecards serve as the final step in the process, starting from corporate, divisional, business unit, functional, and team to individual levels. The underlying belief is that cascading the scorecard to the deepest level of the organization fully aligns the individual’s objectives to the organization’s objectives.

Personal scorecards also introduce a high degree of transparency into organizational performance and also serve as the only appraisal system within the organization.

Summary

This interview features Lawrence Ganti, Corporate Director, Office of Strategy Management, for the Geneva, Switzerland based Serono, which reported 2005 revenues of more than $2.5 billion, making it the largest biotechnology company in Europe and among the leaders in the world. It has eight manufacturing plants and 4,900 employees spread across 45 countries. Serono’s groundbreaking work includes its treatments for infertility, growth hormone deficiency and multiple sclerosis. Serono was inducted into the prestigious Balanced Scorecard Collaborative Hall of Fame in 2006.

In this interview, drawing from his experience of facilitating the Balanced Scorecard program in Serono, Lawrence Ganti presents a practitioner’s viewpoint regarding various aspects of the Balanced Scorecard concept.

Summary

"Peter Ferdinand Drucker, who left us in 2005, would have reached ten decades this year. Through his 39 books, countless articles, and literally thousands of speeches around the globe his legacy as the father of modern management thinking is well entrenched, and the penetrating questions he so humbly posed continue to challenge and inspire all of us working in the organizational world today. Covering the entire Drucker canon is well beyond the scope of a single article, so in these few pages I’d like to share with you some of my favorite Drucker questions and concepts, and challenge you to look deep within yourself and your organization in considering responses to queries I believe are as relevant today as they were when Peter tapped them out on his trusty Brother typewriter years ago."

Strategic Objectives – The real Kings & Queens of a Scorecard Project  - I have seen how many companies start with ‘data’ as their Holy Grail. “What is the data we have that can give us information?”  This is an important question but not the most important question you can raise.

Summary

The world over, demand for performance transparency, responsibility and accountability of organizations is increasing – issues that form the core of corporate governance. This article argues that legislative and regulative interventions are not adequate to improve the corporate governance standards. In fact, a major analysis reveals that lack of compliance with accounting/financial rules and regulations is only a minor cause of poor performance. The analysis finds that strategic failure, such as misjudging consumer demand or competition, is a greater cause – pointing to the fact that corporate governance and corporate performance management are closely linked.