Summary 

When it comes to enterprise performance management and improving organisational performance, organisations have a bewildering array of approaches, frameworks, methodologies and models to choose from. Two of the most popular approaches are the Balanced Scorecard and the EFQM Excellence Model, which was created by the European Foundation for Quality Management.

This resource is a case study of Inland Revenue, an experienced user of the EFQM Excellence Model, and was created when the Balanced Scorecard was introduced in the organisation.

Summary

Headquartered in Norway, Statoil is an integrated oil and gas company operating in 32 countries with 25,000 employees. Through 2006, Statoil ran a series of pilot initiatives to become a budget-free enterprise, following in the path of a previous daughter company, Borealis, which was a pioneer of the Beyond Budgeting movement.

With a clear understanding of extremely dynamic nature of today’s business environment and the limitations of a static budget concept, Statoil realized the need for tools that could help it address the key actions of target setting, forecasting and resource allocation. By focusing internal discussions on the key question of ensuring the best possible performance, the senior team got people to look beyond budgeting. A scorecard user from 1997, Statoil was already convinced about the tool’s strategic management capabilities and had developed over 700 scorecards. This made the Balanced Scorecard the central tool for Statoil’s approach to performance planning and performance management, as it moved to become a budget-free enterprise.

Summary

This interview is part of a series in which experts respond to questions about some of the persistent issues facing leaders, as they seek to create an adaptive enterprise and achieve new levels of performance. This round features Jeremy Hope, Research Director, Beyond Budgeting Round Table.

The interview focuses on budgeting. Issues covered include the definition of an adaptive organization; strengths and weaknesses of the conventional budgeting process; an examination of budgeting as an annual performance contract; the opinions of finance managers and line managers regarding budgeting; effectiveness of budgeting in goal setting, performance evaluation and reward; and reasons why leaders don’t move to new models, even when aware of the shortcomings of the traditional budget. It also identifies major cultural barriers for transforming the conventional budgeting process and critically examines the relevance of annual targets for communicating financial projections and ongoing projections to the investment community. The interview concludes with Jeremy Hope’s take on the shape the adaptive organization will take in the next few years.

Summary

This resource is a case study of Inland Revenue, an experienced user of the EFQM Excellence Model, and was created when the Balanced Scorecard was introduced in the organisation.

The Part 1 of this 3 series article looked at the literature on the use of both models and the limited literature on combined use. Part 2 shows how internal research with senior directors and the department’s quality community was then undertaken to form a benchmark for any recommendations. The main research was conducted with four comparator organisations who are all noted users of excellence models and the Balanced Scorecard.

Summary

The UK-based Remote Bank is an example of an organization that deployed the Balanced Scorecard as it central management tool right from the time it was a small startup.

Launched in the late 1990s with staff strength of just 50, Remote Bank offered telephone based banking services. In the run up to the company’s launch, the then CEO had decided on the use of the Balanced Scorecard as the core tool to steer the startup.

Summary

This interview is part of a series in which experts respond to questions about some of the persistent issues facing leaders, as they seek to create an adaptive enterprise and achieve new levels of performance. This round features Dr. Fritz Roemer, Senior Business Advisor, The Hackett Group.

The interview focuses on budgeting. Issues covered include the definition of an adaptive organization; the strengths and weaknesses of the conventional budgeting process; an examination of the budgeting concept as an annual performance contract; the opinions of finance managers and line managers regarding the budgeting approach; and the effectiveness of budgeting in goal setting, performance evaluation and reward. The interview also seeks to discover why leaders are unable to move to new models, even though they appreciate the shortcomings of the traditional budget. It also identifies the major cultural barriers for transforming the conventional budgeting process.

Summary

The paper demonstrates how EFQM and Balanced Scorecard models can be used together in a manner that maximises the strengths and minimises the weaknesses in the use of each. The paper also identifies critical success factors and the kind of broader strategic management frameworks necessary for successful use of the EFQM Excellence Model and Balanced Scorecard.

The final part of the series concludes by suggesting that the best practice is to use the models in a strategic management process based on solid Plan, Do, Check, Act principles actively managing the organisation.

Summary

Scandinavian Bottlers was set up in the late 1990s as a regional bottler for a major soft drinks corporation. From the very start, the management decided to use the Balanced Scorecard as its core strategic management tool because they perceived it as a powerful mechanism to align the company’s vision, goals and strategic initiatives. In fact, the Strategy Map and Scorecard were created before the launch of the organization. Key inputs to the scorecard came from the Annual Business Plans formulated by functional heads.