Budget
Tri-Cities Community Bank – A Balanced Scorecard Case
By Tom Albright, Stan Davis, and Aleecia Hibbets
Case A. Balanced Scorecard Development
Tri-Cities Community Bank (TCCB) is located in the Midwest US and has a total of 10 branches grouped into two divisions, the southern division (SD) and the northern division (ND). Each division consists of five branches; each branch employs a branch president, branch vice-president/chief loan officer, customer service representatives, loan representatives, mortgage loan originators, head tellers, tellers, and administrative assistants. All branches are located within a 60-mile radius. TCCB has enjoyed strong financial success over the past few years but continues to look for ways to improve its performance. The strategic direction of the bank is reviewed annually at a meeting of top bank officials and outside consultants. The purpose of the meeting is to outline the vision and mission of the bank and to ensure all top managers understand and agree on the direction of the organization. In 1997, TCCB management adopted the master strategy of balancing profits with growth to ensure the bank remains an independent entity existing to provide quality service and products to an increasingly diverse customer base. Chris Billings recently was promoted from marketing director to SD president. The promotion came just as Chris finished her evening Masters of Business Administration degree in December 1999. As part of her graduate studies, she was introduced to the balanced scorecard (BSC), a performance measurement system that directs decision-makers toward long-term value-creating activities. Chris thought the BSC could be used to improve the financial performance of TCCB. In late December 1999, she approached the chief executive officer (CEO) and requested permission to implement the new program. TCCB’s CEO was apprehensive about the new program. His reluctance stemmed from his own
By Tom Albright, Stan Davis, and Aleecia Hibbets
Case A. Balanced Scorecard Development
Tri-Cities Community Bank (TCCB) is located in the Midwest US and has a total of 10 branches grouped into two divisions, the southern division (SD) and the northern division (ND). Each division consists of five branches; each branch employs a branch president, branch vice-president/chief loan officer, customer service representatives, loan representatives, mortgage loan originators, head tellers, tellers, and administrative assistants. All branches are located within a 60-mile radius. TCCB has enjoyed strong financial success over the past few years but continues to look for ways to improve its performance. The strategic direction of the bank is reviewed annually at a meeting of top bank officials and outside consultants. The purpose of the meeting is to outline the vision and mission of the bank and to ensure all top managers understand and agree on the direction of the organization. In 1997, TCCB management adopted the master strategy of balancing profits with growth to ensure the bank remains an independent entity existing to provide quality service and products to an increasingly diverse customer base. Chris Billings recently was promoted from marketing director to SD president. The promotion came just as Chris finished her evening Masters of Business Administration degree in December 1999. As part of her graduate studies, she was introduced to the balanced scorecard (BSC), a performance measurement system that directs decision-makers toward long-term value-creating activities. Chris thought the BSC could be used to improve the financial performance of TCCB. In late December 1999, she approached the chief executive officer (CEO) and requested permission to implement the new program. TCCB’s CEO was apprehensive about the new program. His reluctance stemmed from his own