凯捷-平衡计分卡-An Introduction to Balanced Socrecard

BalancedScorecardBackgroundOverview&ExamplesTheBSCconceptMeasurementMotivatesBehaviour“Whatyoumeasureiswhatyouget〞“It’snotwhatyouexpect

…

it’swhatyouinspect〞“Ifyoucanmeasureit,youcanmanageit〞TheBalancedScorecard’s(BSC)fundamentalpremiseisthatmeasurementmotivatesbehaviourThescorecarddifferssubstantiallyfromtraditionalmeasurementapproachesTheBSC’sfocusisonfactorswhichcreatelong-termeconomicvalueinanorganisation,forexample:Customerfocus.Organisationallearning.Businessprocesses.Traditionalaccountingmeasuresarebydefinitionbackwardlooking:Financialmeasuresonlyreflecttheresultsofactionsalreadytaken.Donotprovideanindicationoffuturefinancialperformance.Donotindicatedesiredperformance.Donotprovideabasisforplanningandtargetsetting.CriteriaForAGoodBalancedScorecardAGoodBalancedScorecardwill“Tellthestory〞ofyourstrategyCauseandEffectRelationships:Everymeasureshouldbepartofa“causeandeffect〞chaintodetermineifthemeasurescorrectlyrepresentsanddrivesthestrategy.LinkedtoFinancials:EverymeasureselectedshouldultimatelyDrivePerformance.Focusonfactorsthatcreatelong-termvalue.Abalanceofleadandlagindicators: MeasuresthatCreateChange:Measuresmustcausetheorganisationtochangeitsbehaviourinsomeway.Company

StrategyAs-IsVisionClarifyingandTranslatingtheVisionandStrategyStrategicFeedbackandLearningPlanningandTargetSettingCommunicationandLinkingFeedbacksystemusedtotestthehypothesesonwhichstrategyisbased.Strategydevelopmentisacontinuousprocess.Stretchtargetsareagreed.Investmentsaredeterminedbythestrategy.Annualbudgetsarelinkedtolong-rangeplans.Goalalignmentexistsfromtoptobottom.OpencommunicationofstrategyisbasisforemployeeempowermentBalanced

ScoreboardTheBalancedScoreboardcreatesastrategicframeworkforactionThestrategyisthereferencepointfortheentiremanagementprocess.Thesharedvisionisthefoundationforstrategiclearning.TheBalancedScorecardtranslatesvisionandstrategyintofourdimensionsofperformance“Whenweachieveourvision,howwillourorganisationlearnandgrow?〞“Whenweachieveourvision,howwillwelooktoourbusinesspartners?〞“Whenweachieveourvision,howwillourinternalbusinessprocessesoperate?〞“Whenweachieveourvision,howwillwelooktoourshareholders?〞VisionCustomersandPartnersFinancial/ShareholderInternalProcessesLearningandInnovationForeachofthefourdimensions,objectives,measuresandtargetsareexplicitlydefinedFinancial/ShareholderObjectivesMeasuresTargetsCustomersandPartnersObjectivesMeasuresTargetsInternalProcessesObjectivesMeasuresTargetsLearningandInnovationObjectivesMeasuresTargetsVisionThelinkagebetweenthefourdimensionsiscrucialinensuringlong-termsuccessFinancialClientsatisfaction,efficientandeffectivedeliveryofserviceswilldeliverfinancialresults.Excellentprocessesandpeoplewilldeliverclientsatisfaction.

Goodpeopleinefficientprocessessupporteffectiveness.

Youneedgoodpeople,peopleprocessesandstructuretoachievehighperformance.Shareholder

ValuePartners/CustomersInternalProcessesLearning&GrowthAlignmentthroughtheorganisationwillbeachievedbycascadingthescorecardHighLevelScorecardBusinessUnitorDepartmentalScorecardsIndividualScorecardsShareholder/Parent/RequirementsFinancialCustomers

&PartnersInternal

ProcessesVisionLearning

&InnovationFinancialCustomers

&PartnersInternal

ProcessesVisionLearning

&InnovationFinancialCustomers

&PartnersInternal

ProcessesVisionLearning

&InnovationFinancialCustomers

&PartnersInternal

ProcessesVisionLearning

&InnovationWhenimplementedwell,thebenefitsofBalancedScorecardcanbesignificantSeniorexecutivesarefocusedandalignedaroundasmallnumberofcriticalobjectivesandsuccessmeasures.Asimple,singlemanagementreportmakesprogresstowardsfinancial,customer,internalprocessesandlearningobjectivesclearlyvisible.ThePlan-Do-Reviewprincipleestablishesclearaccountabilityforachievingobjectives,forsuccessandfailureTheBSCimplementationestablishesastrategicfeedback/monitoringsystemthatdrivesactionstoexcelincriticalperformanceindicatorsFocusBalanced

PerformanceAccountabilityContinuous

ImprovementTheBSCProcessBalancedScorecarddesignisonlyacomponentoftheoverallprocessScorecardDesignScorecardImplementation/Roll-outStrategicIntentDevelop

&finaliseObjectivesDevelop&finaliseMeasuresDeterminebaselines

andsettargetsIncorporatescorecardreviewaskeyiteminbusinessmanagementmeetingsManagebusinessaccordingtoscorecardReview/

refinescore-cardonaregularbasis

inconjunc-

tionwithstrategy

review

processAlign/planinitiativesaccordingtoscorecardDevelopandimplementBUandsectionscorecardsEnsurescorecardalignmentReview&refineon

anongoingbasisManageBU,sectionetc.according

to

scorecardformatFeedbacktohighlevelscorecardtoensurealignmentCorporate/ShareholderinputwhererelevantCommunicateScorecardtoorganisationCascadescorecardtoindividuallevel.Toensureindividualfocusandalignment.BalancedScorecardBusinessManagement

ProcessTheBusinessManagementProcess(BMP)implementstheBalancedScorecardinaPlan-Do-ReviewCycleLinktoHigherLevelBSCFinancialLearning

and

InnovationInternal

ProcessesCustomers

and

PartnersMeasuresTargetsObjectivesLinktoLowerLevelBSCLinktoHigherLevelBMP/ReportLinktoLowerLevelBMP/ReportReview

BSCTakeAction:InitiativesPlansBudgetsMeasureActualsagainstTargetsCompileReportTargetPlan-Do-ReviewsessionDetermineRootCausesforVariancesDefineActionStepsPDRSessionWhatmakesagoodObjectiveorMeasureWeneedtohaveclearandcommunicateddefinitionsoftheBSCcomponentsObjective:Statementthatdefineswhatwemustdotoachievethevision.Linkedtoourstrategy.Measure:Anumericindicatorthatwillindicatesuccessfulachievementoftheobjective.Leadindicator–Indicatesthelikelihoodofchange(forwardlooking).Lagindicator–Indicatethatchangehasoccurred(backwardlooking).Target:Valueofthemeasurethatwewouldliketoachieveinagiventimeframe.Mustbeachievable.PerspectiveA“Good〞BalancedScorecardincludesobjectives,measurementsandtargetsthatpromotechangeExample:FinancialCustomerInternalLearningBusinessObjectives• Shareholdervalue• Profit• Newrevenue• DifferentiationStrategicalliances

Customerservice• Productivity

• Newproductdevelopment• Segmentation• Peoplepolicy• Alliancemanagement• CustomerfocusMeasurements• %dividendgrowth• OperatingMargin• Revenuefromnewservices• Targetmarket-shareProfitsfromalliances

Customersatisfaction• Revenue/workhour• Productdevelopment

cycletime• Numberofinitiativestargetedatprofitablesegments• Managementspanofcontrol• Numberof“learning〞partnerships〞• %managementtimeinterfacingwith

customersTargets

• CPI+X%annually• Topquartile• 25%inthreeyears• Numberone• $Minfiveyears• Numberonecustomerrating• Best-in-classwithinfiveyears• Reducedby50%intwoyears• 60%withinoneyear• Tripleinthreeyears• 10infiveyears• 20%intwoyearsAccountabilities

FinanceDirectorCEOBusinessDevelopmentManagerMarketingDirectorBusinessDevelopmentManagerMarketingDirectorCOOResearchandDevelopmentManagerMarketingDirectorHumanResourcesDirectorBusinessDevelopmentManagerCEO...andclearaccountabilitiestoensureownership.TheobjectivesdefinewhattheorganisationmustdotoachievethevisionDescriptionofagoodobjective:Linkedto,anddescriptiveofacomponentofthevision/strategy.Relevanttowhattheorganisationwantstoachieve.Actionorientated:Startstatementwithaverb.Measurable:theremustbeamannerinwhichwecandeterminesuccessinachievingtheobjective:Clearandconcise.Understandabletothewholeorganisation.Mustbeabletoassignoverallaccountabilitytoasingleperson.MeasuresmustbethekeyindicatorsthatregisterachievementoftheobjectiveTheSMARTcriteriadefinesagoodmeasure:Simple – relativelyeasytoaccess,collateandcalculate.Measurable – e.g:numberofhoursworked,linesinstalled,etc.Aactionable – abilitytotakeactiononvariancestoplan.Relevant – abilitytoinfluencethatwhichisbeingmeasured.Timeous – mustbedetermined/measuredasfrequentlyas

possible,orwhenrelevant. – thelongerthedelayinmeasuringthelessthechance toallowtimeous/appropriateaction.Targetsmustbesetforeachmeasure,anddefinegoalsfortheorganisationtoachieveCriteriaforagoodtarget:Mustbeachievable.Providesomestretchfortheorganisation.Setforagoodfixedtimeperiod.Determineintermediatevalues,toevaluateprogress.Alignedwithwhattheorganisationwantstoachieve.Supportedbyandhavebuy-inoftheexecutiveteam.Theobjectives,measures,targetsandaccountabilitiesneedtobedefinedatalllevelsoftheorganisation.Priority:EffectivelyManageValueAddingProcessesFormula:Weightedrankingoftotalunitcostofproduction+plantreliabilityindex+totalstaffingindex+computerisedinstrumentationindex+totalmaintenance+sustainingcapitalindex.Source:SiteLeadershipForeachobjectiveandmeasurewewilldevelopaprecisedefinition...Measure:Costexcellencerating

FormulaNotes:Aweightedindexthatgivesaquartileperformancecostexcellenceposition.Weightingstoreflecttheirimportancetoeachbusiness.Categoriesare1stto4thquartileRankings,asdefinedbyexternalconsultantsatleasteveryotheryear,butdoneyearlyAcomparativegroupisdefinedFormulatobedefinedbytypeofplantrelevanttotheirbusinessneedandvalueproposition.Weightingsmayshiftovertime.UpdateFrequency:AnnualActiontoImplement:Useblendofindustrystudies(e.g.,Solomon,Mastio,ChemSystems,Townsend),andanalysisofone-on-onecomparisonsvs.leaders.Mayalsousesimplifiedbenchmarksandmodels,asappropriate.EffectivelyManageValueAddingProcesses:Bethelowcostproviderofproductsandservicesbyachievingcompetitiveexcellenceinallourbusinessprocesses.EXAMPLEObjective:Perspective:

Internalprocesses

Measure:

Costexcellencerating¦...andanapproachtosettingtargetsEffectivelyManageValueAddingProcesses:

Bethelowcostproviderofproductsandservicesbyachievingcompetitiveexcellenceinallourbusinessprocesses.Objective:FrequencyofMeaningfulUpdate Monthly Annually QuarterlyMeasurementdefinition/formula(SeealsoMeasurementProfile):Weightedrankingoftotalunitcostofproduction+plantreliabilityindex+totalstaffingindex+computerisedinstrumentationindex+totalmaintenance+sustainingcapitalindex.Approachtosettingtargetsand/ordevelopingmeasure[Iftargetsexist,identifysource]:Targetistobetopquartile.Sites(typesofplants)willneedtoselectthekeyvariables,weightthem,andchooseasuitableexternalbenchmarkingmethodology.RecommendationsneedtobeagreedbybusinessteamsandleadershipteamTargetsettingresponsibility:Manufacturingleadership/SBUAccountabilityforresults:ManufacturingleadershipTracking/reportingresponsibility:SiteleadershipCompletiondate:1995(somecouldbereadybyJanuary)LinkagetoBusinesses:Throughbusinessteams,alignedwithSBUstrategyLinkagetoBTStreams/Initiatives:ManufacturingCapitalinvestmentexcellenceSupplychainEXAMPLEExampleObjectivesandMeasuresGenerally,BSCobjectivesfocusaroundkeythemesineachofthefourareasFinancial/ShareholderThemesShareholdervalue.ROI.Profitability.Turnover/Revenue.Learning&InnovationThemesAttract,retainandmotivateemployees.ClarifyandcommunicateRolesandResponsibility.Buildingskills.Manageresources(leadership).Knowledgemanagement.InternalProcessThemesLowcosts.Productionefficiency.Quality:ISOcompliance.Safety.Productionvolume.Environment.Processeffectiveness.Customers&PartnersThemesRetention.Satisfaction.Value-addedtocustomers.VisionTheBalancedScorecardshouldcontainabalanceofleadandlagindicatorsF1 Meetshareholder

expectationsF2 ImproveoperatingperformanceF3 AchieveprofitablegrowthReturnonEquityCombinedRatioBusinessMixC1 ImproveagencyperformanceC2 SatisfytargetpolicyholdersAcquisition/Retention

(vs.plan)Acquisition/Retention

(bysegment)AgencyPerformance

(vs.plan)

PolicyholderSatisfactionSurveyI1 Developtargetmarkets

I2 UnderwriteprofitablyI3 AlignClaimswithbusinessI4 ImprovedproductivityBusinessMix(bysegment)

LossRatioClaimsFrequencyClaimsSeverityExpenseRatioBusinessDevelopment

(vs.plan)UnderwritingQualityAuditClaimsQualityAuditHeadcountMovementManagedSpendingMovementL1 UpgradestaffcompetenciesL2 AccesstostrategicinformationStaffProductivityStaffDevelopment(vs.plan)StrategicI/TAvailability

(vs.plan)ObjectivesMeasuresLeadIndicators(PerformanceDrivers)LagIndicators

(CoreOutcomeMeasures)LearningInternalCustomerFinancialAREAPRODUCTIONMANAGERDIRECTORZONEMANAGERTEAMLEADERSampleTargetforSpecificTimeWindow

FromTo21hours19hoursReduceareacycletimefrom22to8daysReduceoverallcycletimefrom73to28daysStrategicBusinessObjectiveReducezonecycletimefrom7to3daysReduceteamcycletimefrom30to11hours5.1days4.6days17days15days48days44daysTop-DownandBottom-UpLinkedPLANACTUALQuarterlyTimeWindowTargetPLANACTUALQuarterlyTimeWindowTargetPLANACTUALQuarterlyTimeWindowTargetPLANACTUALQuarterlyTimeWindowTargetObjectives,measuresandtargetsateachlevelhavetobealignedtop-downandbottom-upExample:CarManufacturerReduceoverallcycletimefrom73to28daysMeasuresshouldbecascadedaswiththisrailwayutilityManagingDirectorFunctionalManagersAreaManagersDepartmentManagersSectionManagersWorkGroup,

SupervisorsandStaffBusinessobjective:

“92%oftrainsto

arrivewithin5

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available%trains

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downtimeExampleBSC:TelcoSupp.ClientKeyIssuesTelcoSupp’svisionistobethemostsuccessfullocaltelecommunicationssolutionsproviderProducerandsupplierofproductsinthetelecommunicationsindustry.Visionistobethemostsuccessfullocally.Alignmentofleadershiptomeetlong-termgoals.Increasingcustomerdemands.TheTelcoSupp’sBSCobjectivesweredesignedtosupporttheVisionFinancial/ShareholderDeliversustainablegrowthinprofitability.Maximiseshareholdervalue.Ensurefinancialindependencebyfundingfuturegrowthandinitiativesinternally.OrganisationalLearningAttractandretainappropriateskills.Developalearningculture.Communicateeffectively.Applyemploymentequityprincipals.Empowerouremployees.Developacompanyteamspirit.Define,communicateandlivethevalues.InternalBetheindustrybenchmarkbyanymeasure.InvestintherightprojectstoensureourfutureBecomeacentreofcompetence.Developabalancedrelationshipwiththeparentcompany.BusinessPartnersCustomer:Increasemarketshare.Broadencustomerbase.Improveservicequalitytoexceedcustomerexpectations.Buildlongtermcustomerpartnerships.Alliances:PursuealliancestoenableusinourmarketSuppliers:BuildlongtermsupplierrelationshipsCommunity:ActivelysupportSouthernAfricandevelopmentAmeasurementsystemwillassessprogresstowardstheobjectives.VisionBenefitsConcernsCommentsonTelcoSupp’sBSCCascadedintotheorganisationtocreatefocus.ParentcompanyhasadoptedBSCconceptandsuggestedBSCdevelopmentandimplementationforotherdivisions.Strong‘businesspartner’andorganisationallearningfocus.Highnumberofobjectives(21).Accountabilitiesrestwithafewindividuals.BalancedScorecardCommentsTelcoSupp’sBSCmeasuresandaccountabilitiesObjectivesFinancialDeliversustainablegrowthinprofitabilityMaximiseshareholdervalue.AgreedMeasure(s)Operativeprofitonturnover.ROCE.EVA.Ensurefinancialindependencebyfundingfuturegrowthandinitiativesinternally.CashflowAccountabilityFinancialDirectorFinancialDirectorFinancialDirectorBusinessPartnersObjectivesMarketShareIndex(aggregatesegments)Customers’supplierevaluations.Customersurveys(includesapreferredsupplierassessment.)Numberofcustomerscontributing>5%ofturnoverovertotalcustomersIncreasemarketshare.Broadencustomerbase.Improveservicequalitytoexceedcustomerexpectations.Buildlongtermcustomerpartnerships.Pursuestrategicalliancestoenableusinourmarket.ActivelysupportSouthernAfricandevelopment.Marketshareinspecificbusinesssegments(asmeasuredintheMarketShareIndex)ValueofbusinessviaBlackEconomicEmpowermentcompanies.IPPcredits.%purchasevolumeviaframeagreementsBuildlongtermsupplierrelationshipsAgreedMeasureMarketingDirectorMarketingDirectorMarketingDirectorMarketingDirectorFinancialDirectorFinancialDirectorAccountabilityCustomersAllian-

cesSupp-liersComm-uniryTelcoSupp’sBSCmeasuresandaccountabilities(cont.)InternalBetheindustrybenchmarkbyanymeasure.BecomeaCentreofCompetence.Developabalancedrelationshipwiththeparentcompany.ObjectivesRefertoQualityMeasurementSystem.Numberofsignificantcentresofcompetence.ProportionofownbusinessversuscommissionbusinessInvestintherightprojectstoensureourfutureNetpresentvalueofallprojectbusinesscasestobeimplementedAgreedMeasureOperationsDirectorCEOCEOExecutiveAccountabilityMarketingDirectorOrganisationalLearningObjectivesStaffturnoverNumberofunfilledpositionsTrainingandeducationexpenditureas%ofpayroll.RefertoQualityMeasurementSystem.Attractandretainappropriateskills.Developalearningculture.Communicateeffectively.Applyemploymentequityprincipals.Empowerouremployees.DevelopaSiemensteamspirit.Define,communicate&livethevalues.%Blackstaffpenetration.%Blackandgenderrepresentivity.AgreedMeasureRefertoQualityMeasurementSystem.RefertoQualityMeasurementSystem.RefertoQualityMeasurementSystem.HRDirectorHRDirectorHRDirectorHRDirectorHRDirectorHRDirectorHRDirectorExecutiveAccountabilityExampleBSC:ChemCoClientKeyIssuesChemConeededastrategytomanageadiverseportfolioinahighlycyclicalmarketManufacturerofpetrochemicals:PolymersandmonomersforuseasindustrialfeedstocksPrimarilycommodityproductsApproximately6000employeesOneyearintoatwoyearBusinessTransformation™projectHighlycyclicalmarket.Widevarietyofproductandcustomertypeswithintheportfolio.Majorleadershipchangeunderway.ShareholderCustomerInternalProcesses

SocietyEmployeeLearning&GrowthDevelopaLearningOrganisationFocusonMarginEnhancementStrivetoContinuousEnhancementManageValueAddingProcessEffectivelyChampionResponsibleCareFosterProductStewardshipDemonstrateCommunityLeadershipProvideCustomerValueDevelopTotalBusinessRelationshipsBuildFinancialStrengthAchieveProfitableGrowthDeliverResultstoShareholderCreateaClimateforResultsChemCo'sBalancedScorecardtranslatedthefirm’sstrategyintostrategicobjectivesacrossfiveperspectivesBenefitsConcernsCommentsonChemCo’sBSCDefinedlinkagestoultimatelyprovideshareholderreturns.Introduced“society〞dimensiontoindicatecommunityresponsibility.Reducefocustothirteenkeyobjectives.BalancedScorecardCommentsBroadandgenericobjectivesandmeasures:Notspecifictotheorganisation.Couldapplytoothercompanies.EmployeeLearning&GrowthPerspectiveSocietyPerspectiveInternalProcessesPerspectiveShareholderPerspectiveCustomerPerspectiveTheobjectivesweretranslatedintointoasetofkeystrategicmeasuresProvidesuperiorvaluetoourcustomersbysupplyingthemwithproductsandservicesthatmeettheirneeds(totalvaluepackage).Formrelationshipswithcustomerswhichallowustofullyunderstandandaddresstheirneeds.C1 ProvideCustomerValueC2 DevelopTotalBusinessRelationshipsSH1 DeliverResultstoShareholdersSH2 BuildFinancialStrengthSH3 AchieveProfitableGrowthDefinitionStrategicPriorityDevelopanduseourleadershiptoempowerandgaincommitmentfromallemployeesthusachievingexceptionalbusinessresults.ImproveourskillsandknowledgebydevelopingpeopleandadaptingbestpracticesfoundwithinChemCoandfromexternalsourcestorealiseallofourpriorities.Bealeaderinourindustrybyourachievementsinsafety,health,environmentandriskmanagement.Qualifyasanindustryleaderbydevelopingmutuallysupportiverelationshipswiththecommunitiesinwhichweconductbusiness.Integratehealth,safety,environment,economic,andethicalconsiderationsateverystageinthelifecycleofourproducts.Effectivelymanagetheselectionofcustomersandproductofferings(includingtechnology&service)soastomaximisemargins.Bethelowcostproviderofproductsandservicesbyachievingcompetitiveexcellenceinallourbusinessprocesses.ContinuouslyseekwaystoimproveandsimplifyChemCo’sprocessestoachieveourstrategicbusinessobjectives.Manageourbusinessestoachievethereturnsexpectedbyshareholders.ManageourbusinesssothatwearecashpositiveandabletomeetcapitalfundingrequirementstosustainChemCothroughthebusinesscycle.Achieveincreasedsizeinourbusinesstoprovideincreasedvaluetoshareholders.E1 CreateaClimateforResultsE2 DevelopaLearningOrganisationS1 ChampionResponsibleCareS2 DemonstrateCommunityLeadershipS3 FosterProductStewardshipI1 FocusonMarginEnhancementI2 EffectivelyManageValueAddingProcessesI3 StriveforContinuousEnhancementShareholderCustomerInternalProcessesSocietyEmployeeLearningandGrowthCustomersatisfactionindexRetentionoftargetedcustomersMeasuresLeadershipeffectivenesssurveyratingcommunicationsEmployeesatisfactionBestpracticesidentifiedEmployeecontributionSafety,health,environment&riskresults.CommunityopinionratingProductstewardshipparticipationContributionmargin

CashflowcycletimeCostexcellenceratingFixedcostproductivityProductdevelopmentcycletimeBusinessTransformation/SAPbenefitsReturnoncapitalemployedEconomicvalueaddedNetcashflowTotalrevenueExampleBSC:ManCoClientKeyIssueManCorequiredatooltofocusandaligntheorganisationLargepetrochemicalmanufacturer.BSCwasacomponentofalargetwoyeartransformation™project.Significantcostreductionrequiredtomaintainprofitability.Needtofocusandaligntheorganisation.AccountabilityandtargetsareseenaskeycomponentsofManCo’sBSCShareholder/FinancialCustomerGrowth/LearningInternalProcessesKPI(Area)ATargetCommentsReturnonNetAssetsPBIT/Netassets(Qtr)ProfitaftertaxCashflow4-12monthsprojection(Mth)UnitcostKPI(Area)ATargetCommentsCustomersatisfactionindex%Conformancetoagreedofferingpercustomer.(Qtr)ProductMixOptimisationKPI(Area)ATargetCommentsValuecreatedbyProjectPortfolioNPVof

newanddevelopingprojectsat22%discountrate(WACC)vstargetNPV(Qtr)

CorecompetenciesTakenoffuntilasuitablemeasureisdefinedKPI(Area)ATargetCommentsProcessefficiency

EnvironmentIndex:releases,resourceconsumptions,re-mediation&compliance(Mth)SafetyandHealthProductionValue(Mth)DIIRincludingoccupationaldiseasesTotalCostpertonofproduct(Mth)%AdherencetoTargetMix(Mth)Tonmarketableproductpergigajoule(Mth)Actualvstarget(Mth)PeopleKPI(Area)ATargetCommentsEmployeesatisfaction/climatewindowAffirmativeActionIndex:Leadershipvalues,JobsatisfactionandDevelopmentProductivity(Qtr)AAspectrum%(Qtr)ProductionTechnicalIntegrityIndex:tobedefinedNote:Accountabilitiesandtargetsnotshowntomaintainclientconfidentiality.BenefitsConcernsCommentsonManCo’sBSCSignificantmanagementbuy-inanduseoftheBSC.TwoyearsafterintroductiontheBSCremainthekeyfocus/managementtoolfortheexecutivecommittee.‘People’dimensionaddedtoindicateakeyfocusarea.BSCfocusedonmeasuresnotobjectives.Aftertwoyears,executivesconsiderfifteenobjectives/measurestoomanytofocusonsimultaneously.BalancedScorecardCommentsExampleBSC:OilCoClientKeyIssueOilConeedtoaddressinternalsoftissuesSignificantplayerinthedownstreamoilbusiness.Successfulorganisationlookingtomaintainandgrowposition.Lowemployeemoralandlackofconfidenceinleadership.Lackofunderstandingoforganisationsvisionandstrategy.Growthinmarketplace.VisionBSCofalargedownstreamOilCompanyFinancial/ShareholderObjectivesCustomersandPartnersObjectivesInternalProcessesObjectivesLearningandInnovationObjectivesMaximiseshareholdervalue.Realgrowthinoperatingprofitwithalongtermobjectiveof10%.Keepunitcostincreasebelowinflation.IncreaseMarketShareAddsignificantvaluetocustomers.Ensureclearroles,responsibilitiesandaccountabilitiesforallourpeople.Mobilisetheorganisationtowardsthevision.EnsurestrategicadvantagethroughIT.Ensureeffectiveperformancemanagement.Increasediversityintheworkforce.Empowerouremployees.Stimulatecreativityandinnovate.BenefitsConcernsCommentsonOilCo’sBSCHalftheobjectivesfocusonsoftissues,toaddresscurrentinternalissues.Reducednumberofobjectivestoallowforgreaterfocus.Noobjectivetodetermine/focusoninternalefficiencies.BalancedScorecardCommentsOilCodesignsmeasuresandassignedaccountabilityforalltheirobjectivesLearningandInnovationObjectiveMeasuresAccountable

PersonEnsureeffectiveperformancemanagement1) Employeeswithdevelopmentplans(lead)2) Levelofacceptanceofmeritappraisalsystem(lag)3) Percentageofemployeesreceivingquarterly

performancereviews(lead)4)