Relationship between BSC and OKRs:
BSC provides a framework for setting strategic goals and measuring performance.
OKRs can be used to translate BSC goals into actionable steps and track progress.
IS6640
IS Planning and Strategy
Lecture 10 ‐ Balanced Scorecard Analysis &
OKRs
Balanced Scorecard
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Balanced Scorecard A balanced scorecard is a performance metric used to identify,
improve and control a business's various functions and resulting
outcomes
Balanced Scorecard
Strategic planning and management system to
communicate and align around strategy,
prioritize, and measure performance
Looking at strategic measures, in addition to
traditional financial measures to get a more
“balanced” view of performance
Ref: Balancedscorecard.org 3
Balanced Scorecard
(Dashboard View)
Bain & Company’s 14th Management Tools & Trends survey
1,208 global executives interviewed
Balanced Scorecards is one of the five tools used most often
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Four Perspectives
Financial Perspective
Goals Measures
Customer Perspective Process Perspective
Goals Measures Goals Measures
Learning/Innovation Perspective
Goals Measures
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Strategy Operationalization with BSC
Strategy
Financial Perspective
“How do we look to our
shareholders?”
Measurement is the
language that gives clarity Customer Perspective
to vague concepts. “How must I look to my
customers?”
Measurement is used to Process Perspective
communicate, not to "To satisfy my customers,
control. at which processes must
I excel?”
Learning and Innovation
Strategy can be described “How must my
as a series of cause and organization learn and
improve?”
effect relationships
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Financial Perspective
Goals Measures
Survive Cash flow
Succeed Quarterly sales growth and operating income by division
Prosper Increased market share and ROE
Example of a semiconductor company
Source: Kaplan and Norton, “The Balanced Scorecard: Measures that Drive
Performance.”
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Customer Perspective
Goals Measures
New products Percentage of sales from new products
Percentage of sales from proprietary products
Responsive supply On‐time delivery
(defined by customer)
Preferred suppliers Share of key accounts’ purchases
Ranking by key accounts
Customer partnerships Number of cooperative engineering efforts
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Internal Process/Business
Perspective
Goals Measures
Manufacturing excellence Cycle time, unit cost, yield
Design productivity Silicon efficiency, engineering
efficiency
New product introduction Actual introduction schedule versus
plan
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Innovation and Learning Perspective
Goals Measures
Technology leadership Time to develop next generation
Product focus Percentage of products that equal
80% of sales
Time to market New product introduction versus
competition
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HSBC Balanced Scorecard
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The researcher wants to highlight:
A. Financial Perspective
B. Customer perspective-which is an approximation of HSBC s efforts to reach target groups
The Balanced Scorecard in HSBC
C. Business Process perspective shows an alignment of key business processes from HSBC
D. Lessons and prospects for growth shows an approximation of the learning curve HSBC
Customer
Learning and
Vision
Financial and Growth
Strategy
Internal Business
Systems and Processes
It is more than just the financial results
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Strategy Map/Objectives ‐ illustrative
Increase in
Clearwater Growth
gap in
Control Beat the revenue
of costs plan
Financial
Increase
market
Management share in
of resource target gps
Integrated
Customer
Increased & seamless
Customize customer customer
d needs Accessibility satisfaction
efficiency Value for service
based money Product &
solutions service
differentiation
Community/ Regulatory Operational Efficiency Customer Intimacy Product Innovation
Business re-
engineering /
Improve/ centralization Customer
develop segmentation
profile Operations Develop
Process
Internal
center Sales & new
Risk service products
management quality
Leverage Shift to m’ment
Cross
HSBC appropriate sell
brand channels
Learning &
Strong Robust
Growth
performance Talent Skills/ Develop
Mgt Improve knowledge sales
culture morale
strategy development culture
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BSC Implementations
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Example: SAP Strategy Map
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Example: SAP Performance Overview
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OKR:
Objectives and Key Results
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Source: https://www.whatmatters.com/faqs/okr‐meaning‐definition‐example 18
OKR
Objectives and Key Results
Example of a personal OKR: Individual who wants to run
a 10K marathon:
O Run a 10K in under 50 minutes by June.
KR1 Go for a run 3x/week for at least 30 minutes.
KR2 Increase distance of run by 1 mile every week.
KR3 Increase mile speed by 5 seconds every week.
Source: https://www.whatmatters.com/faqs/okr‐meaning‐definition‐example 19
OKR
Objectives and Key Results
Example of OKR for a museum development team to grow its
membership base to a new generation of museum-goers:
O Attract younger, more diverse season ticket holders.
KR1 Increase out “$30-under-30” membership enrolment by
100%.
KR2 Land mentions on the accounts of 5 local Instagram
influencers.
KR3 Get 25% response rate from a direct mail campaign to
diverse ZIP (postal) codes.
KR4 Attract 75 non-members per month to live artist talks.
Source: https://www.whatmatters.com/faqs/okr‐meaning‐definition‐example 20
Reference
• Corporate Information Strategy and Management:
Text and Cases (8th edition), Applegate, L.M., R.D.
Austin and E.W. McFarlan, 2009, McGraw‐Hill. ISBN:
9780073402932. Chapter 4.
• Kaplan, R.S. and Norton, D.P. (2005), “The Balanced
Scorecard: Measures that Drive Performance,”
Harvard Business Review, 83(7), 172‐180.
• More information about Balanced Scorecard,
http://www.balancedscorecard.org/
• OKR: https://www.whatmatters.com/faqs/okr‐
meaning‐definition‐example
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Class Activity
• For each team
• In the context of a company of your choice,
conduct a Balanced Scorecard Analysis
• Explain the rationale for the measures in each
of the 4 Perspectives
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