Balancing Scores by CMA Pankaj Jain

Balancing Scores CMA Pankaj Jain Group CEO Logix Group www.linkedin.com/in/pjainonline ASSOCHAM National summit on Profit Re-Engineering (28.10.15) Driving Business Performance 2 3 About Balance Scorecard The Balanced Score Card is a strategic performance management system that translates the vision and strategy of an organization into operational objectives and measures. Objectives and measures are developed for each of four perspectives: The financial perspective The customer perspective The process perspective The learning & growth perspective The objectives of these four perspectives are linked to provide strategic feedback to the managers through cause & effect relationship. 4 Balancing Short + Long term objectives Financial + Non-financial measures Lagging + Leading performance drivers Internal + External performance perspectives Objective + Subjective performance measures Tangible + Intangible assets Scores Measureable performance indicators for each perspective Desired Outcome + Their performance drivers About Balance Scorecard…contd. 5 Financial How do we look against the financial objectives of our owners? Customer How do we look to the customers that we want to attract? Organizational Capability How do we get better – learn & improve? Internal Process What must we excel at for our customers? Vision Mission Values About Balance Scorecard…contd. 6 Vision Purpose, why we exist -where the organization is headed Critical Success Factors Strategically important things to be done well, to accomplish strategic goals Strategic Themes How to get there, and fundamental approach to competitive advantage Financial Perspective Customer Perspective Internal Processes Key Performance Indicators Innovation & Learning How well the company is doing Measuring Business Performance Through Actionable Indicators Strategic Capabilities “have the right skills & technology…” Internal Processes “Doing the right things…” Customer “The customers delight” Financial “Increasing shareholders value” The right place to start Not the right place to start  7 Cause and Effect Linkages 8 9 Developing Balance Score Model Financial How do we look to shareholders? What are the business performance levers we use to create value? —Return (Profitability, Productivity, Asset utilization, Risk management) —Growth (Sales growth, Sales mix - existing versus new products, markets) Customer How do we look to customers? Who are our customers; what customer/ market segments do we serve? What is our value proposition; i.e., what do customers in each segment expect & value from us? Internal Process At what must we excel? What is the value chain of internal processes through which we: —Deliver on our value proposition(s) to targeted customer/ market segments? Create value for shareholders? What key processes will it take to move from identifying customer needs to satisfying them? What are our core competencies ? Organizational Capability Can we continue to improve & create value in the future? To achieve our vision, how must we learn, innovate, & improve? What enabling capabilities do we need in order to execute our strategy? —Skills & competencies —Knowledge assets & best practices —Organizational context, climate, culture —Technology 10 Making Balance Scorecard Successful 11 Thanks! Seasoned CMA with spirit of entrepreneurship and having over 24 years of diversified experience across wide spectrum of industries while working at India and overseas with proven track record of aligning strategies with business and building trust based relationships globally. Have managed numerous strategic business initiatives involving Venture Formation, Business Modelling, Strategic Financial Planning, Corporate Alliances, Mergers, Demergers, Acquisitions, Divestments, Cost Optimization, Business Restructuring, Capital Structuring, Corporate Governance and Corporate Financing for successful businesses with global foot prints and hold distinction of turning around the financial position of company through dynamic initiatives. A post graduate in commerce from Meerut University and has affiliations with leading professional bodies such as Institute of Cost Accountants of India, Institute of Company Secretaries of India, Indian Institute of Management, Calcutta, Institute of Directors, All India Management Association, Institute of Internal Auditors, Computer Society of India and is also founder of Young Entrepreneurs Network and Indian Society of Management Accountants. About CMA Pankaj Jain