Client Situation

A large and rapidly growing retailing company with businesses in apparel, grocery retailing had internally designed their Corporate Scorecard. The organization was looking at significantly improving effectiveness, utilization and communication of the Scorecard and improve the linkages to the department cascades

Cedar assisted a large apparel retailing company realign and enhance their existing corporate and cascaded Scorecard designs which subsequently lead to creation of a new HR cascaded Scorecard aligned with the other Scorecards

Cedar’s Approach

The senior management believed that the organisation faced a few critical issues when it came to understanding, implementing and getting full value out of the existing Balanced Scorecards.

  • Understanding of the strategy, obtaining clarity on the strategy, ownership of the strategic objectives, relating to the strategy and understanding its implications on the day-to-day job
  • Balanced Scorecard as a concept and understanding its importance as a strategy implementation and Enterprise Performance Measurement tool and NOT just a reporting format
  • Implementation of the Scorecards
  • Alignment of strategic objectives across financial and non-financial perspectives

Hence there was strong need felt to focus on three key areas in the Valuescan

  • Enhancement of Corporate Scorecard
  • Significant improvement of Cascaded Scorecards
  • Communication and Ownership across the organisation

Cedar Valuescan

Hence there was strong need felt to focus on three key areas in the Valuescan

Cedar identified a multitude of issues in design, implementation and communication after conducting 20+ senior and middle management meetings over a 1.5- 2 week period.

Design issues

  • Lack of understanding of the concept of the balanced scorecard, value it brings to the organisation, utility in the strategy planning process
  • Its usage as an Enterprise Performance Measure (EPM) tool
  • Lack of strategic focus in the objectives – many objectives were actually measures
  • Objectives not collectively describing the strategy of the organisation
  • Absence of linkages– No Strategy Maps (except for corporate)
  • “Customer” perspective not formulated from “customer” viewpoint
  • Confusion regarding objectives, measures, targets and action plans
  • Inappropriate measures / Incorrect definition of the measures
  • “Unbalanced” scorecards on objectives and on type of measures
  • Lack of clarity in the action plans: “operational actions” vs. “strategic”
  • Lack of alignment of action plans to deliver strategic objectives

Implementation issues

  • Inadequate discussion and consensus building on the scorecard implementation among key senior managers
  • Balanced Scorecard communicated as a tool to monitor individual performance
  • Implementation lacked milestones and deliverables
  • Ownership of objectives, action plans undefined
  • Templates for objectives, measures and action plans not developed.
  • Target setting not completed/aligned to the Annual Business Plan
  • No periodic review/ monitoring mechanism to track progress

Communication issues

  • After initial “Scorecard Introduction” presentation, no communication
  • No clear understanding of implementation schedule and departments to be covered

Outcome

Having assessed the issues on the existing Scorecard designs, Cedar enhanced various aspects of the Scorecard architecture and recommended the appropriate ways and means to successfully implement and communicate the Scorecard process. Key recommendations were

  • Corporate and department Strategy Maps were realigned with a balanced articulation of the strategic objectives across the four perspectives
  • Linkages were drawn across the perspectives on all Scorecards
  • 69 measures were modified/added across 5 Scorecards
  • 22 strategic initiatives were identified at the Corporate level
  • 6 initiatives were identified for Category Management
  • 3 initiatives were identified for Operations
  • 6 initiatives were identified for Manufacturing
  • 6 initiatives were identified for Supply Chain
  • Measurement and initiative templates were defined for the client teams
  • Reporting process was documented with a schedule and milestones

At the end of the entire exercise, the client had 5 well defined, aligned Scorecards with a roadmap for implementation. Since the business needed to enhance skill sets and align human resources with the rearticulated strategic objectives, a new HR Scorecard was developed for the client addressing HR policies, organization structure alignment, allocation of costs, enhancement of skill sets, improving internal customer relationship among others.

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