Famous BSC implementations

 

Since it was launched in early 1990s, the Balanced Scorecard (BSC) has had a considerable impact on organizations worldwide. Research evidence generally shows that the Balanced Scorecard has applicability in a wide range of business sectors and that many organizations that were early adopters of the Balanced Scorecard have shown impressive results to date. Among the organizations who successfully implemented BSC  are included Mobil Oil Corporation, Chemical Retail Bank, Sears Roebuck, Advanced Micro Devices, Centerlink Australia, Philips Corporation or AT&T. (Kaplan and Norton, 2001; Singh and Kumar, 2007). The following case study examples illustrate the power of the BSC approach.

 

Centrelink Australia

The BSC was first introduced to Centrelink in 1997. The development and implementation of the BSC in Centrelink was a complex tax, due to the large number of client agencies and stakeholders, the agency was serving. Among these three were included, the Parliament, the Minister and the Centrelink Bank. The BSC at Centerlink was introduced and fine tuned over several years and is considered a successful implementation. As the Australian National Audit Office acknowledges, the Centrelink’s BSC was focused on operational effectiveness and achieving client departments’ key performance indicators and that in many respects it brought elements of better practice. (ANAO, 2003)

 

Sears Roebuck

Sears Roebuck is considered another success story of BSC implementation. In 1992, before implementing the BSC, the company reported a net loss of $3,9 billion. After two years of implementing the BSC, Sears reported a 4 percent increase in employee and customer satisfaction, which also lead to a $ 200 million increase in revenue (Singh and Kumar, 2007). The company registered a significant increase in stock price during this period from $8 dollars per share in 1992 to $20 per share in 1995, and to $50 per share a decade later in 2005.

 

Mobil Oil 

The BSC was introduced in 1993 to help manage Mobil’s transformation from a highly centralized, production-driven oil company to a decentralized, customer-driven retail organization. The results were rapid and dramatic. By 1995, Mobil had moved from last place to first in industry profitability. It maintained this number one position for five consecutive years, through its merger with Exxon in October 1999. From a negative cash flow of $500 million (all currency in U.S. dollars) in 1992, Mobil USM&R recorded a positive cash flow of $900 million in 1998. (Kaplan, Norton, 2001).

 

Cigna Insurance

The BSC was introduced in 1993; one year after Cigna P&C had been the most unprofitable company in its industry segment. Its new CEO used the BSC to help manage Cigna’s transformation from a money-losing generalist to a “top-quartile specialist,” focusing on niches where it had a comparative advantage. Again, the results were rapid and dramatic. Within two years, Cigna had returned to profitability. This performance was sustained for four consecutive years; in 1998, Cigna P&C’s profitability placed the company in the top quartile of its industry. The division, nearly bankrupt five years earlier, was sold to an international insurance firm in December 1998 for more than $3 billion. (Kaplan, Norton, 2001).

 

Brown & Root Energy Services

 The division president introduced the Balanced Scorecard to the management team in 1993 to help clarify and gain consensus on the strategy for two newly merged engineering companies. The new strategy transformed the division from one competing solely on price, selling engineering hours on construction projects, into one that could formulate price, based on the value it contributed to its targeted customers.

The scorecard-design process built the new management team, identified attractive new customer segments, new views of the customer value proposition, and gained consensus on the new approach for moving forward. By 1996, Rockwater was first in its niche in both growth and profitability. (Kaplan, Norton, 2001).

 

Chemical Retail Bank (now Chase Bank)

The BSC was introduced in 1993 to help the bank assimilate an acquisition, to introduce more integrated financial services, and to accelerate the use of electronic banking. The BSC clearly defined the strategic priorities and provided a structure to link strategy and budgeting. In the space of three years, profitability increased by a factor of 20. (Kaplan, Norton, 2001).

 

References

BSC concept : Results

 

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