Question

How does a company use a balanced scorecard approach to translate its strategy into performance measures? Pick a well-known company not already selected by a classmate (e.g., Target, Starbucks, Walmart, etc.), how does the chosen company translate strategy into performance measures using the balanced scorecard approach?

Answer 1

The Balanced Scorecard is a framework for formulating and implementing your strategy.

The Balanced Scorecard allows the organization to have a holistic view of the business by focusing on the following perspectives:

1. Financial Perspective - speaks to the voice of the shareholder
2. Customer Perspective - the voice of the customer
3. Internal Process - the business engine where all process and systems are optimized
4. Learning and growth - What do we require from our people in order to drive the strategy of the business.

It is essentially a framework that helps you translate top level strategy into specific objectives, a set of measures, indicators and actions. It is called balanced because it adopts a “balanced” (case/effect) view with a measuring/tracking approach.

The new management team at VW do Brazil develops and deploys a strategy map and Balanced Scorecard to accomplish a turnaround and cultural change after eight consecutive years of financial losses and market share declines. The team uses the strategy map to align financial and project resources to the strategy, and to motivate its more than 20,000 employees by communicating the strategy in multiple ways and installing reward and recognition programs. It also establishes new programs to align the extensive networks of suppliers and dealers to the strategy. But after a sharp decline in sales triggered by the global financial crisis of 2008, the executive team faces a dilemma: should it cut back production levels and funding for strategic initiatives until sales recover, or should it continue to invest for the future