The Hindu : Business : Balanced Scorecard adoption can benefit Indian industry

Online edition of India's National Newspaper
Friday, Jan 27, 2006

Business

Business

Balanced Scorecard adoption can benefit Indian industry

R. Gopalakrishnan

It looks beyond the traditional financial measurements of performance

CHENNAI: There are "exciting opportunities" in India at present for promoting the concept and practice of the Balanced Scorecard (BSC), the methodology pioneered by Robert Kaplan of Harvard University and corporate consultant David Norton to enable companies to align their operations totally to their business strategy, according to Matt(hew)Tice, Managing Director of the Balanced Scorecard Initiative Inc (BSCol)-Asia Pacific.

Mr. Tice, who was in Chennai recently and works closely with the Confederation of Indian Industry (CII) in spreading awareness of the BSC, said India, with its liberalised economic policy regime, had reached a stage where competitive cost and quality are the "price of entry into the market" and not a winning proposition by themselves. The BSC would help companies make a difference to the consumer and the market, he said, pointing out that more than 60 per cent of Fortune 1000 companies had adopted the system.

Talking to The Hindu, Mr. Tice said the balanced scorecard looked beyond the traditional financial measurements of performance and examined the organisation's operations from the perspective of the customer, the shareholder, internal processes and organisational learning. It took care of the long-term health of the organisation and change management. Companies' business strategy was "fine tuned", communicated and implemented through a Strategy Map involving quantitative measurements, focussed communication and employee empowerment.

"Every company has a business strategy, implicit or explicit, and the BSC helps businesses identify gaps in their strategy and align the goals of all parts of an organisation as also individuals to the business strategy", said Mr Tice. While quality improvement techniques like TQM, TPM and Six Sigma were helpful for any company to implement balanced score-card, they were not indispensable.

The BSC was relevant to both manufacturing and service sector companies and similarly to both large and small organisations. The U.S. army, with one million people, and a printing press in Sydney with hardly ten employees, were both practitioners of the programme. Similarly, governments and local bodies could benefit by implementing the balanced scorecard, he said, and added that city governments of Brisbane in Australia and Charlotte (North Carolina) in the US were well-documented cases of effective implementation of BSC in the sphere of public governance.

An African country had drawn up a plan to implement the BSC in its governance system to achieve its vision for 2020, said Mr. Tice, while declining to identify the nation. In many countries in East Asia, including Singapore, implementation of the BSC or strategy-based performance management system was a mandatory requirement for the public sector. BScol operated in China, too with a local partner.

Several companies in India were implementing the BSC, while Tata Motors' commercial vehicles division and Trent Ltd, the retailing arm of the Tata group, had already entered the Balanced Scorecard Hall of Fame, which had only about seventy companies from all over the world.

Customer Lab Solutions Pvt. Ltd, with offices in India (at Bangalore), the UAE, Singapore and the U.S., is BScol's partner in offering strategy implementation programmes in India. Its clients worldwide include leading names in manufacturing, services and non-profit sectors. Among its clients are Eli Lilly, GlaxoSmithKline, Procter and Gamble, Unilever, Deutschebank, Wells Fargo, Motorola, Canon, Korea Telecom, Sony, Hilton Hotels, UNICEF, IBM, SAP, Vogue magazine, Royal Canadian Police, Mobil, Ministry of Defence U.K., Wal-Mart and WITCO, according to Muhamed Muneer, CEO.

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