Chemical Bank case
Case 1: Chemical Bank: Implementing the Balanced Scorecard see page 233-252
Questions for the case:
1. What does Mike Hegarty want to accomplish with the BSC ?
2. Comment on the BSC implementation at Chemical’s Retail Bank ?
3. What pitfalls need to be avoided for a successful BSC project?
Balanced Scorecard Implementation Pitfalls to Avoid
There are many Balanced Scorecard implementations where companies don 't seem to get all the benefits described above. Research and experience have identified various traps and pitfalls; main ones to avoid are listed below.
Taking Strategy Design shortcuts.
Many companies take a balanced scorecard that has been designed by a similar organisation in their industry and just copy it. Others take the four box BSC model and hold a brainstorm session to map objectives into each of the perspectives without ever reflecting on the strategy. Both of these can lead to a BSC that does not reflect your strategy. Creating and agreeing on your own strategy requires efforts, discussions and thinking.
Designing your strategy should involve all key stakeholders and ensure that you have a unique set of interrelated objectives that reflect your business at this point in time. Initial external facilitation often helps and allows to overcome internal politics and power struggles.
Not Creating a Strategy Map.
Missing out strategy maps is one of the biggest mistakes any organisation can make. Having one integrated set of objectives on one piece of paper is such a powerful tool and the process of designing a strategy map tend to yield some of the biggest benefits. This is supported by research with 157 companies conducted by the Wharton School which finds that only 23% of companies consistently built, analysed, and tested causal models. However, the survey also finds that those organisations which used strategic maps had a 2.95% higher ROA and 5.14% higher ROE than companies that didn 't use cause-and-effect models.
BSC may not be
Questions for the case:
1. What does Mike Hegarty want to accomplish with the BSC ?
2. Comment on the BSC implementation at Chemical’s Retail Bank ?
3. What pitfalls need to be avoided for a successful BSC project?
Balanced Scorecard Implementation Pitfalls to Avoid
There are many Balanced Scorecard implementations where companies don 't seem to get all the benefits described above. Research and experience have identified various traps and pitfalls; main ones to avoid are listed below.
Taking Strategy Design shortcuts.
Many companies take a balanced scorecard that has been designed by a similar organisation in their industry and just copy it. Others take the four box BSC model and hold a brainstorm session to map objectives into each of the perspectives without ever reflecting on the strategy. Both of these can lead to a BSC that does not reflect your strategy. Creating and agreeing on your own strategy requires efforts, discussions and thinking.
Designing your strategy should involve all key stakeholders and ensure that you have a unique set of interrelated objectives that reflect your business at this point in time. Initial external facilitation often helps and allows to overcome internal politics and power struggles.
Not Creating a Strategy Map.
Missing out strategy maps is one of the biggest mistakes any organisation can make. Having one integrated set of objectives on one piece of paper is such a powerful tool and the process of designing a strategy map tend to yield some of the biggest benefits. This is supported by research with 157 companies conducted by the Wharton School which finds that only 23% of companies consistently built, analysed, and tested causal models. However, the survey also finds that those organisations which used strategic maps had a 2.95% higher ROA and 5.14% higher ROE than companies that didn 't use cause-and-effect models.
BSC may not be