$ Bsc strategy english-longversion_1310

Titel

Name and surnameCompany

Titel „I have a dream…“Martin Luther King, 1963

Titel A dream, a vision is the beginning

of a strategic process

© Friedag 2013 4

independent consultant specialised in:

Implementation of the Balanced Scorecard in companies

Practice-orientated Balanced Scorecard workshops

20 years leader of the public relations board of the ICV

Lecturer at the Humboldt University Berlin and at Donau Universität Krems (Austria)

Hobbies: moving in nature, volleyball, sailing

Dr. Herwig R. Friedag

Dr. Herwig R. Friedag Friedag Consult

Beskidenstr. 33, D 14129 Berlin Fon +49 30 80 40 40 00Fax +49 30 80 40 40 01

[email protected]

Born in 1950, graduate economist

… and travelling to Croatia

© Friedag 2013 5

Publications

Total number of copies >

85.000 in CZ, D, FIN, PL, RUS

1999, 2000, 20022001

2003

2005

2004

2002, 2003, 2005, 2011

2009

2000, 2002, 2004

6

Combine Your Balanced Scorecard with a strategy

Agenda

6© Friedag 2013

01 Introduction

02 Strategy - the bases of securing the company’s future

03 Organising the work with a BSC

04 Conclusions

© Friedag 2013 7

„Whatever will be, will be…“

We can, we have to do something today for our future.

Therefore, we should

at least meet the requirements of the future

or better: set standards

or best: try to influence the changes in society

We want to realise our dreams, so we have to prepare our future,

even though it is not a 100% controllable !

We want to realise our dreams, so we have to prepare our future,

even though it is not a 100% controllable !

© Friedag 2013 8

Why could a BSC make sense for your company?

We achieve joint objectives

We translate strategies into action

By communication we achieve thinking, responsibility, objective-orientated action of our employees and partners

We assure sustainability of our company

© Friedag 2013 9

Is the BSC sensible for Your company ?

52% of the Germans have secluded with their employer.

Responding to the question in a representative study, whether they would presumably be working at their current company next year, they answered:

„No way - as soon as I find a job in a different company, I will be leaving the firm!"

Source: Financial Times Germany, June 02 2004, page 2

© Friedag 2013 10

Requirements to start the process of strategy implementation Willingness for change

Reduce Blame-Culture – learning to learn from mistakes:“no mistake is the biggest mistake”

Willingness of management to work out and discuss together strategic objectives

A strategy !

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Agenda

12© Friedag 2013

01 Introduction



04 Conclusions


13

Strategy

What is the strategic objective of a company / an organisation?

The basic strategic objective is that of securing the sustainability of a company/organisation.

Sustainability can be achieved only on the condition that all relevant stakeholders can benefit from it.

Consequently the objective of a strategy is that of generating a dynamic equilibrium of the benefits which can accepted by all the

relevant stakeholders.

Consequently the objective of a strategy is that of generating a dynamic equilibrium of the benefits which can accepted by all the

relevant stakeholders.

13© Friedag 2013

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Expenditures

Growth of money

develop exploit

Orders / Sales

Use capacities

Quality assurance

Employee engagement

Safeguarding liquidity

Partner engagement

Marketing

Develop capacities

Quality potential

HR competences

Investor Relations

Partnership

strategic operational

PotentialsPossibilities

+competencies

What is strategic, what is operational ?

Growth of potentials

to do ?

to do nothing ?

long-term ?

short-term ?

© Friedag 2013 15

Kaplan/Norton

Balanced Scorecard:translate strategy into action!

Only the one who possesses a strategy, can implement it.

Therefore: The one who wants a Balanced Scorecard has to start with a strategy!

Only the one who possesses a strategy, can implement it.

Therefore: The one who wants a Balanced Scorecard has to start with a strategy!

© Friedag 2013

Seven strategic questions

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Business-idea

Orientation

Business-model

Concretion

Medium term planning

Budget / Liquidity

Balanced Scorecard

Future orientation

Business processes

Reporting

1. Do we know the business-idea of our company ?

2. Is it possible to earn enough money with this business-idea ?

3. What kind of corporate policy orientation follows our business-idea ?

4. Do we have concrete ideas to reach the orientation ?

5. With which strategic projects do we want to start now ?

6. How do we connect these strategic projects into our business plans ?

7. How can we finance the planned strategic projects ?

© Friedag 2013

1 – 3 years

current year

Business-model

running business(Integration into the management cycle)

middle term planning / Budget / Profit / Liquidity

Balanced Scorecard

Intermediate-term planning

Strategic HouseReporting-Scorecard

StrategicProjects

balanceof goals

Strategic concept

Strategy develop-

ment

Strategy imple-

mentation

Use of strategic potentials

Strategic dimensions and how we proceed

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Business-idea

3 – 10 years

Corporate Policy Orientation Concretion

“timeless“

© Friedag 2013 18

1. Business-idea

2. Business-model

3. Corporate Policy Orientation (CPO)

4. Concretion

Balanced Scorecard

Four steps to create a strategy

© Friedag 2013

Business-Idea

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values (Identification)

Vision

(basic goal)

Mission (corporate, social purpose)

The reason to be proud

What is our goal ?

For whom are we working ?

What could for us be always a challenge ?

No target, but a motivation for us, to form always new goals !

Our dream !

What is our unique contribution for other people, for our society ?

Who is missing what, if we would not be there ?

20

Example: business idea

Company producing rear-view mirrors for cars

The values of this company are: innovation trust respect

the dream, the challenge, the very long-time interior goal, the “vision” of this company: the leading car-manufacturers are our clients

The unique contribution for our society, the corporate social purpose: Our “mission”: we produce highest-tech safety

© Friedag 2013

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1. Business-idea

2. Business-model


4. Concretion

Balanced Scorecard

Second step to create a strategy

© Friedag 2013 22

The business-model

Uniqueness

Customer needs

Kind of client

Core competence

Which customer needs can we manage with our core competence

better tha anybody else ?

Do we match this kind of client ?

Which needs do we really manage with our offer?

Do we have the right kind of clients ?

Which products / abilities/ tech-nologies can we manage really good ?

Do we have proper deliverers and Cooperation-Partners ?

What makes the clients tick ? Are these the clients, whose needs

we intend to manage ?

Do these clients match to us ?

Which sales- and margin potential can we expect with this business-model ?

The business-model is a plausibility check for the

business-idea

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Business-model

Who is our customer ?Kind of clients

How can we find a cost-covering solution for that? Core

competence

What are the needs of our customer?Customer need

How can we be better than the competitors?Uniqueness

23© Friedag 2013

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Example: business-model


Kind of clients:Developer of the leading car-manufacturers

Core competence:we can develop new technologies and we can produce these innovative items with best quality

Customer need: to be with high-tech rear-view mirrors more innovative and safe than other car manufacturers

Uniqueness:secure processes in innovation - and then production

© Friedag 2013

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1. Business-idea

2. Business-model


4. Concretion

Balanced Scorecard

Third step to create a strategy

© Friedag 2013

Corporate Policy Orientation (CPO)

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Question (strategic challenge)

Answer(strategic activity)

Which level we want to reach until when?

To reach this level, which

main problem we have to

solve ?

How do we want to solve this

main problem ?

CPO (Corporate Policy Orientation)

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Example: Corporate Policy Orientation


the Corporate Policy Orientation, defined by the owners, the board of directors:- target-year: 2025

- Patent applications: 10 p.a.- Sales: from 750 Mio € to 2.500 Mio €- Profit-margin: 7%

© Friedag 2013

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1. Business-idea

2. Business-model


4. Concretion

Balanced Scorecard

Fourth step to create a strategy

© Friedag 2013

Concretion

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For doing the first step You should know what will happen in the future – but not in detail

Idea: What goals could be achieved in the years 8 – 15 ?

Conception: What has to be prepared for the years 3 – 7 ?

Connection: What has to be defined for the next 2 years ?

Form an idea

Give a conception

Connect the BSC with the corporate planning

© Friedag 2013

Concretion

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For doing the first step You should know what will happen in the future – but not in detail




Form an idea

Give a conception

Connect the BSC with the corporate planning

© Friedag 2013

Example: Concretion

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The Concretion until 2015 could be:




Idea until 2025: - most new cars are equipped with our rear-view mirrors- all innovative companies are developing together with us

Conception until 2019:- having development-projects together with clients- built up six sigma-oriented production

Connection until 2015: - built up capacities for development - internationalisation of the company

© Friedag 2013

Example: Concretion

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© Friedag 2013

Example: Concretion

33








© Friedag 2013 34

1. Business-idea

2. Business-model


4. Concretion

Balanced Scorecard

Next: implement your strategy with the BSC

© Friedag 2013 35

Strategic planning is worthless, unless there is first a strategic vision.

___________________

John Naisbitt, american author

Strategic planning is worthless, unless there is first a strategic vision.

___________________

John Naisbitt, american author

36

Agenda

36© Friedag 2013

01 Introduction



04 Conclusions


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The Balanced Scorecard is a universal tool to align the acting of a group of people toward

a joint objective.

The Balanced Scorecard is a universal tool to align the acting of a group of people toward

a joint objective.

subjective: What are we ready to do and will we take

over the responsibility?

subjective: What are we ready to do and will we take

over the responsibility?

objective:What objectives and tasks do we want to

commit ourselves to?

objective:What objectives and tasks do we want to

commit ourselves to?

What is a Balanced Scorecard ?

© Friedag 2013 38

I. Identification of objectives(Guideline, intention,

leading indicator)

I. Identification of objectives(Guideline, intention,

leading indicator)

II. Develop strategicaction frame

II. Develop strategicaction frame

III. Complete action frame with actions (collect ideas)

III. Complete action frame with actions (collect ideas)

IV. Bundle actions into strategic projects

IV. Bundle actions into strategic projects

V. Reporting with the Balanced Scorecard

V. Reporting with the Balanced Scorecard

VI. Arrange the BSC into the process of leading

VI. Arrange the BSC into the process of leading

VII. Organize learning process

VII. Organize learning process

Communication

Implementation steps for a Balanced Scorecard

Guideline = Mission intention = vision for the next 1-3 years …

39

Kaplan/Norton

Translate strategy into action!

It is only through the concrete, daily actions of all the employees in a company that potentials can be developed.

39© Friedag 2013

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Per

spec

tive

s

worldwide innovative supplier

we start to be atechnological market leader

number of jointly developed innovations

higher revenue

extension of sales dept.

sale potential

objective

Strategic topic

Indicator

Per

spec

tive

s

Cost consciousnessfin. & controlling

Cash Flow

ReliabilityPartners

Audits

dedicationemployeesCIP-Groups

Customer retentionCustomers

New contracts

image

jointly develo-ped innovations

# of projects

Objective Project Indicator

ObjectiveProjectIndicator


development

Recruitement of internat. oriented

engineers# of employments



House of the Balanced Scorecard – what we are doing

Leadership-Scorecard

© Friedag 2013 41

The most important things:

Don‘t look for perfect solutions!

Delegate responsibilities and competences, demand and support consequence!

Organise the things that can be already done.

The sooner the first success appear, the greater the acceptance of Balanced Scorecard will be.

Implementation the strategy by BSC-projects

© Friedag 2013 42

having objectives only is not enough – we have to want to do it !

assign clear responsibilities

achieve early wins

develop adjuvant rituals

train consequent leader behaviour

pay attention: time is a critical resource

- time cannot be stored

- each process needs sufficient timing

- point in time as important as the period of time

… and organize active doing

© Friedag 2013 43

Reporting components of the BSC

Project-indicators

Indicators of the BSC-house

strategic and operational indicators for internal control

strategic and operational indicatorsfor external reporting

Leadership-Scorecard Reporting-Scorecard

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Reporting - ScorecardReporting with the four fields matrix

ProblemsActivities

Need of decisions

Scorecard based on the„One-Page-only-Princip“Scorecard based on the„One-Page-only-Princip“

Countable goals strategic operative

Who is responsible for the figures of the reporting scorecard ?

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Agenda

45© Friedag 2013

01 Introduction



04 Conclusions


© Friedag 2013 46

Your strategy is a basis for Your balanced scorecard

You have joint and clearly defined operative and strategic objectives – longterm and for the milestones

By communication You achieve thinking, responsibility, objective-orientated action of all of Your employees and partners

Better transparency creates confidence at internal and external partners

Conclusion

successful with a strategy-based Balanced Scorecard ?

Strategy is the first task of leaders !Strategy is the first task of leaders !

© Friedag 2013 47

Make your dreams come true -

Strategy development and -implementation with the

Balanced Scorecard [BSC]

© Friedag 2013 48

Welcome to the Future!

Strategy development and -implementation with the

Balanced Scorecard [BSC]

$ Bsc strategy english-longversion_1310

Business

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strategic process

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