Describe the efforts put forth by BAE in implementing the BSC approach in their organization from an implementation perspective.
The implementation of the BSC approach in BAE started with the review of its competitive position. This was done by looking into its present position compared to its competitors, its financial performance and the current trends in the industry.
The next step undertaken towards the BSC approach is the involvement of senior employees, the so-called 130 Group, in the change programme, . The Group is composed of five company directors and the heads and direct management of BAE
Systems’ divisions and joint ventures . This 130 Group was instrumental in coming up with the five fundamental areas which were included in the vision of the company. These are people, performance, partnerships, customer and innovation and technology. With the vision as a guide, BAE translated the long-term goals into short-term goals . BAE segmented their strategy and objectives on a per project basis. Project reports were given more importance.
With regards to performance reporting, BAE executed the modified version of the traffic-light system per project. The new scorecard that BAE developed does not only consider the usual accounting performance measures. It also gave importance to non-financial value drivers.
What efforts did they make to assure employees would be receptive to, and accept the BSC initiative?
Realizing the value of line managers in the implementation of the change, BAE included the line managers of the various divisions and joint ventures in the 130 Group. The chief executive knows that the line managers are instrumental and vital in influencing the lower level employees. The inclusion of line managers in strategy formulation guarantees that the strategy becomes a job of every employee in the company. Line managers are able to convey these strategies effectively for proper implementation.
Another step which BAE adopted to ensure that the employees accept the BSC is to share with them the information on the monthly results of the balanced scorecard. This makes them aware of how they have contributed to the performance of their business unit and to the company as a whole.
Describe to what extent you believe their efforts paid off.
One believes that the efforts of BAE paid off because their employees valued their work more because through the scorecards they are able to see their contributions to the company. One views this as a very effective non-monetary incentive for employees. It boosts their morale and is therefore encouraged to work even harder. BAE’s value scorecard shows how the company gives significance to its employees by including people as one of the fundamental aspect of its scorecard.
With the use of individual scorecards, deviations from expected performance can be immediately pinpointed; therefore, problems can be addressed right away. This is advantageous for BAE because individual performance affects a business unit’s operations.
The involvement of senior employees and line managers in instituting the change paid off for BAE because the modifications were easily communicated and explained to the employees. Any resistance to the change is addressed immediately because the line managers are directly in contact with his subordinates.
BAE benefited from the implementation of the BSC because it was able to link the values measured in the scorecard to the financial success of the company. This linkage is essential; otherwise, the commitment to the change will not be viewed as relevant.
In order to reach the highest potential of the BSC approach, one believes that BAE should make sure that each member of the organization fully understands it to ensure its proper and appropriate implementation. Strategies should be aligned with the scorecards developed and must take into consideration all the stakeholders of the company. Lastly, the scorecards created must reflect the values that BAE believes in and must further uphold their company’s vision.
Murby, L., & Goulf, S. (2005). Effective performance management with the balanced scorecard. Retrieved from cimaglobal.com: http://www.cimaglobal.com/Documents/ImportedDocuments/Tech_rept_Effective_Performance_Mgt_with_Balanced_Scd_July_2005.pdf