Innovative cases of improving property efficiency

Germination period (1987- 1989)

Before Robert S. Kaplan and David P. Norton studied the balanced scorecard, ADI first tried the balanced scorecard in 1987.

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ADI is a semiconductor company, which mainly produces analog, digital and digital-analog mixed signal processing devices. Its products are widely used in the fields of communication, computer and industrial automation. Like most other companies, ADI adjusts its strategic plan every five years, and reviews the implementation of the original plan while making a new strategic plan. However, just like the strategic problems that managers often encounter, after "making a strategic plan" is regarded as a "task", the documents formed are shelved and cannot be implemented in the daily production and operation of the company. 1987, ADI began to adjust the strategic plan again. Different from before, this time, the decision-makers of the company realized that the strategy should not only pay attention to the formulation process itself, but also pay attention to the implementation of the strategy. They hope that through face-to-face communication with employees, they can fully understand and agree with the company's strategy. At the same time, the company's top management also hopes to closely implement the strategy in daily management to promote the implementation of the strategy. This time, ADI's strategic document has changed greatly in form. They abandoned the previous dozens or even hundreds of pages of strategic documents and compressed all the strategic documents into a few pages. In the process of formulating the strategy, ADI first identified the company's important stakeholders as shareholders, employees, customers, suppliers and communities. Then, under the company's mission, values and vision, Adi set strategic objectives and defined three key strategic priorities according to the "interests" of the above stakeholders.

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In order to ensure the realization of the strategic objectives, especially the three key strategic objectives, ADI has implemented a subproject called "Quality Improvement Process", or QIP for short. At the same time of the project, ADI continuously transformed the key success factors to achieve the strategic objectives into the annual business performance plan, thus deriving the prototype of the world's first balanced scorecard: ADI's first "balanced scorecard". In the process of implementing total quality management in ADI, the company specially invited some management scholars to participate in the implementation of activity-based costing (ABC). Professor Robert S. Kaplan of Harvard Business School is one of them. He himself described how he discovered Adi's scorecard: "In the process of visiting and sorting out cases, we also textualized a scorecard used by an executive to evaluate the overall performance of the company. In addition to the traditional financial indicators, this scorecard also includes customer service indicators (mainly related to delivery time and timely delivery), internal production processes (output, quality and cost) and new product development (innovation) ┅ ┅ "In the process of helping ADI implement ABC, Kaplan discovered ADI's balanced scorecard and realized its important value. Although Kaplan and Nolan Norton deepened their academic knowledge in the later period and extended it to enterprises all over the world, Adi's contribution to the balanced scorecard is still something we can't avoid and ignore. When I provide balanced scorecard consulting services for enterprises all over the country, I often ask myself: If there were no prototype of Adi's scorecard, would there be today's balanced scorecard?

BSC case

A bank occupies 30% of the market share of major depositors in its region, but due to intensified competition and low interest rate environment, it cannot maintain its original income level. According to the analysis, the bank found that the income of the bank depends largely on the interest rate of residents' deposits, but its cost structure makes it unprofitable to serve sporadic depositors, so it put forward two strategies to increase income and improve efficiency. Increase income-expand income sources by providing additional services to existing customers to make up for the decrease in income; Improve efficiency-improve efficiency by transferring unprofitable customers to lower-cost service channels (for example, replacing face-to-face service of bank staff with e-banking business). In the process of establishing a balanced scorecard, banks turn these two strategies into objectives and evaluation indicators, focusing on the understanding and description of strategic causality. The causal relationship is shown in Figure 2. Here, the increasing revenue strategy is taken as an example to illustrate the design process of BSC.

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The goal of increasing income is clear, that is, expanding the variety of income. Strategically speaking, banks will focus on existing customers, identify those customers who may become the service targets of new business varieties, and finally provide new services to these target customers. After the financial management goal is determined, the premise of achieving this goal is to improve the trust of the target customers in the financial management advice put forward by the bank. Therefore, the design process of balanced scorecard has turned to the internal operation process of enterprises, and the realization of strategic objectives can be ensured through the improvement of internal processes. There are three overlapping processes related to this: understanding customers, developing new business and cross-service. The so-called cross-service means that the same customer accepts multiple banking services at the same time. The above process needs to be reorganized to adapt to the new strategy. Banks require business people to spend more time building good relationships with customers and become their financial advisors. There are two indicators in BSC that reflect this process. One is the "cross-service rate"-refers to the average number of times each household receives banking services. This is a "lag" indicator, indicating whether this process has played a role. Another indicator is "time spent with customers". Only face to face with customers can make them understand, trust and accept new business. Therefore, this is an "advanced" indicator to promote the realization of strategic objectives. The improvement of internal processes will eventually lead to the realization of financial goals. Learning and innovation in BSC determine the conditions that should be met to realize internal process improvement, including skill improvement and information acquisition. Among them, the "ahead" index pays attention to the changes of the labor force: the improvement of people's skills and quality-work coverage (referring to the scope of work that an employee can be competent for), information availability (referring to the ability of employees to obtain information by using information technology) and personal goal connection rate (referring to the connection of employees to corporate strategy and personal development goals). The "lag" index includes labor productivity and work attitude. Table 1: The BSC table 1 of a bank is the BSC of the bank. As can be seen from the table, both financial and customer aspects are basically lagging indicators, while leading indicators mainly appear in internal processes and learning innovation.