Bob Paladino

Creating, Implementing and Managing with the Balanced

Scorecard
Hall of Fame Case Study

Bob Paladino, Managing Partner

Bob Paladino & Associates, LLC
Summerfield Commons Suite 910
Pittsburgh, PA 15241
978-857-6766 Fax 412-220-2454
Email: bobpaladino@paladinoassociates.com
Visit our website www.paladinoassociates.com

www.paladinoassociates.com

Bob Paladino &

Associates, LLC

Why Do 90% of Companies Fail to Implement Their

Business Strategies?
The Vision Barrier
Only 5% of the work force
understand the strategy
The People Barrier
Only 25% of managers have
incentives linked to strategy

9 of 10
companies fail
to execute
strategy

The Management Barrier

85% of executive teams
spend less than one hour/
month discussing strategy

60% of organization dont

link budgets to strategy
The Resource Barrier

You Cant Manage Strategy With a System Designed for Tactics

Solution: Five Principles of Corporate Performance Management (CPM)

Bob Paladino &

Associates, LLC

Principle 2. Refresh &

Communicate Strategy
Strategic Plans
Strategy Map
Budgets
Partner with Board,
Executive Team & CFO

Principle 5: Manage &

Leverage Knowledge
Best Practices,
Knowledge
Management
Partner with IT

Principle 1.
Establish & Deploy
Corporate
Performance
Management (CPM)
Office & Officer

Principle 3: Cascade
and Manage Strategy
Balanced Scorecard
Organizational
Alignment,
Personal Rewards
Partner with Executive
and Management Teams

Principle 4: Improve
Performance
Customer Programs
Process Improvement
(Six Sigma, Lean)
Partner with Marketing, Sales
3
& Quality

Bob Paladino &

Associates, LLC

Drs. Kaplan & Nortons SFO Approach Has A Long, Proven History
Hall of Fame Winner Crown Castle Case is a Best Practice Case Study
Measurement
and Reporting
1992

Enterprise-Wide
Strategy-Focused
Organization (SFO)
1996

2000

Focus On Mapping
Strategy and Hall of
Fame Achievement
2004

Alignment and
Communication
2007

Articles in Harvard Business

Review:

The Balanced

Scorecard
Measures that Drive
Performance January
- February 1992

Putting the Balanced

Scorecard to Work
September - October
1993

Using the Balanced

Scorecard as
a Strategic
Management System
January - February
1996

Acceptance and Acclaim:

The Balanced Scorecard is translated into 18 languages

Selected by Harvard Business Review as one of the most important
management practices of the past 75 years.

Bain Consulting Reports 50% of US Companies Use the Balanced Scorecard

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Bob Paladino &

Associates, LLC

Case Study: Southwest Airlines

Strategic Theme:
Operating Efficiency
Financial
Profitability
Fewer planes

More
customers

Objectives

Profitability
More
Customers

Fewer planes
Flight is on -

Customer
Flight
Is on time

Internal

Lowest
prices

time
Lowest prices

Fast ground
Fast ground
turnaround

turnaround

Target

Market Value
Seat Revenue
Plane Lease

30% CAGR
20% CAGR
5% CAGR

Cost
FAA On Time
Arrival Rating
Customer
Ranking (Market
Survey)

Initiative

#1

Quality

#1

management
Customer
loyalty
program

On Ground Time 30 Minutes Cycle time

On-Time
90%
optimization
Departure

Ground crew

Learning

Measurement

alignment
Ground crew
alignment

% Ground crew
trained

% Ground crew

yr. 1

70%
yr. 3 90%
yr. 5 100%

ESOP
Ground crew
training

stockholders

Bob Paladino &

Associates, LLC

Crown Castles Strategy Map

Note: Each Objective Has a Corresponding Measure
CCIC Strategy Map Four Major Themes
Financial Perspective
Maximize Shareholder Value
Grow Organic Revenue
Increase
BBEs

Increase
Pipeline

Optimize Capital

Expanding Recurring Revenue Margins

Increase
Recurring
Revenue

Reduce
Operating Costs

Expand Revenue (Adjacencies)

Increase
Installation
Margin

Reduce A/R,
Unbilled and WIP

Expand Revenue
Around Assets

Customer Perspective
Meet Time
Commitments

Customer
Relationship

Price

Quality

Internal Perspective -Operational Excellence

Reduce Negative
Tower Margin

Accelerate Application to
Rent Cycle Time

Reconcile
Rent Rolls

Preserve Land
Leases on
Strategic Towers

Manage Projects
Timely, Accurately &
Profitably

Increase
Understanding of
Assets

Update Drive Test

Data

Resolve
NOTAMs
Timely

Learning & Growth Perspective- Emulate Fortunes 100 Best Companies

Improve Employee
Satisfaction
Align Organization
with Strategy

Implement
World Class PM
System

Improve Global
Knowledge
Management

Promote Career
Development

Bob Paladino &

Associates,
LLC
Improve Alignment of Applications to Processes
23

Bob Paladino &

Associates, LLC

Crown Castles Many Awards

WSJ Top 25 Most Improved Companies

Bob Paladino &

Associates, LLC

Bob Paladino has Collaborated with over a Dozen Balanced

Scorecard Hall of Fame Winners
The Balanced Scorecard Hall of Fame

Chrysler Group

RCMP

USA

I'm against a homogenized society, because I want the cream to rise.

8

- Robert Frost

Bob Paladino &

Associates, LLC

Electronic Meetings Enable Strategic

and Operational Decision Making
IT: Network Availability

Engineering: Structurals Cycle Time

Finance: Fin Statement Close Cycle Time

Bob Paladino &

Associates, LLC

The Benefits of Electronic Meetings

Continued

Note Vertical
Management:
Measure design
allows for benchmark
comparisons - The
Chicago office is
underperforming on
many measures

Note
Horizontal
Management: A
systemic
underperformance in
asset return
impacting all
geographies

10

Bob Paladino &

Associates, LLC

BSC Links to HCs Rewards & Recognition

Crowning Achievement Program, Bonuses, Job Profiles

11

Bob Paladino &

Associates, LLC

BSC-Based Rolling Forecasts Migrating from

Static P&L to Rolling BSC Objective Driven Budgets
Start Doing This!
CCIC Strategy Map Four Major Themes
Financial Perspective
Maximize Shareholder Value
Grow Organic Revenue
Increase
BBEs

Increase
Pipeline

Reduce
Operating Costs

Expand Revenue (Adjacencies)

Optimize Capital

Expanding Recurring Revenue Margins

Increase
Recurring
Revenue

Increase
Installation
Margin

Reduce A/R,
Unbilled and WIP

Expand Revenue
Around Assets

Customer Perspective
Meet Time
Commitments

Customer
Relationship

Price

Quality

Internal Perspective -Operational Excellence

Preserve Land
Leases on
Strategic Towers

Reduce Negative
Tower Margin

Accelerate Application to
Rent Cycle Time

Reconcile
Rent Rolls

Resolve
NOTAMs
Timely

Manage Projects
Timely, Accurately &
Profitably

Increase
Understanding of
Assets

Update Drive Test

Data

Learning & Growth Perspective- Emulate Fortunes 100 Best Companies

Improve Employee
Satisfaction
Align Organization
with Strategy

Implement
World Class PM
System

Improve Global
Knowledge
Management

Promote Career
Development

Bob Paladino &

23

Improve Alignment of Applications to ProcessesAssociates, LLC

12

Bob Paladino &

Associates, LLC

SFO BSC Hall of Fame Program Best Practices

1. MOBILIZE CHANGE THROUGH
EXECUTIVE LEADERSHIP

2. TRANSLATE STRATEGY
TO OPERATIONAL TERMS
2.1 Strategy refreshed
2.2 Strategy map developed
2.3 Balanced Scorecard
2.4 Targets established
2.5 Initiatives rationalized
2.6 Accountability clear

1.1 Top leadership sponsorship

1.2 Case for change clear
1.3 Leadership team engaged
1.4 Vision and strategy clarified
1.5 New way of managing
1.6 Change agent identified

STRATEGYFOCUSED
ORGANIZATION
3. ALIGN THE ORGANIZATION
TO THE STRATEGY

BEST
PRACTICES

3.1 Corporate role defined

3.2 Corporate SBUs aligned
3.3 SBU Human Capital aligned
3.4 SBU Info Capital aligned
3.5 SBU Support units aligned
3.6 SBU External partners aligned
3.7 Board of Directors aligned

4. MOTIVATE TO
MAKE STRATEGY
EVERYONES JOB
4.1
4.2
4.3
4.4
4.5
4.6

5.1 Strategic review meetings

5.2 BSC reporting system
5.3 Link budgets and strategy
5.4 Strategic investments managed separately
5.5 IT planning linked to strategy
5.6 Governance process linked to strategy
5.7 Best practice sharing
5.8 Strategic Management Office

Strategic awareness
Comprehensive communications
Personal goals aligned
Personal incentives aligned
Competency development aligned
Personal accountability for results

13
Source: Drs. Kaplan & Norton

5. GOVERN TO MAKE STRATEGY

A CONTINUAL PROCESS

Bob Paladino &

Associates, LLC

Where are You in your BSC Journey?

Take a Best Practice Based Rapid Assessment

Source; Balanced Scorecard Collaborative

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Bob Paladino &

Associates, LLC

Getting Started: Streamlined Approach for Lean

Balanced Scorecard Development

Leadership
Team

Launch

Workshop No. 1

Gather input on strategic

objectives and key
strategic themes
Educate on scorecard
project and principles
Draft Model

Workshop No. 2
Finalize themes, objectives and
develop measures
Review strategic initiatives and
high level targets
Review implementation plan
Discuss implications on change
management

Establish executive
consensus on strategic
themes
Review draft Balanced
Scorecard objectives,
linkage model and high
level measures.

Core
Team Analysis &
Preparation
Step 1
Define Balanced
Scorecard
Architecture

Step 2

Step 3

Draft the Strategy

Map

Draft Balanced
Scorecard

15

Step 4
Develop
Implementation Plan
Automate Early

Bob Paladino &

Associates, LLC

About the Speaker

Firm provides Corporate Performance Management (CPM) / Balanced
Scorecard consulting services to Fortune 1000 companies
Proven experience implementing the Balanced Scorecard, Knowledge
Management, Motorola Six Sigma, Activity Based Management programs
driving financial, customer, and operations results
Hall of Fame winning clients; who have been profiled in recent best-selling
books; Harvard Business Review; Forbes; & Fortune magazines
Served as VP & Global Consulting Practice Leader for Drs. Kaplan & Norton
at the Balanced Scorecard Collaborative in affiliation with Harvard Business
School; led winning programs for Balanced Scorecard Hall of Fame Award
and APQCs Best Practice Award
Quoted and published extensively in leading journals; active speaker at
industry and trade events
CPA; dual MBA (Finance & Management) from The Wharton Graduate
School of Business at the University of Pennsylvania; member of the AICPA
and MSCPA
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Bob Paladino &

Associates, LLC