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A Balanced Scorecard Hall of Fame ™ Profile Motorola’s Government and Enterprise Mobility Solutions HARVARD
A Balanced Scorecard Hall of Fame ™ Profile Motorola’s Government and Enterprise Mobility Solutions HARVARD

A Balanced Scorecard Hall of Fame Profile

Motorola’s Government and Enterprise Mobility Solutions

Hall of Fame ™ Profile Motorola’s Government and Enterprise Mobility Solutions HARVARD BUSINESS SCHOOL PUBLISHING

HARVARD BUSINESS

SCHOOL PUBLISHING

What is the Balanced Scorecard Hall of Fame?

The Balanced Scorecard Hall of Fame for Executing Strategy , administered by Balanced Scorecard Collaborative, recognizes organizations that have achieved breakthrough performance largely as a result of applying one or more of the five principles of the Strategy-Focused Organization. These principles, formulated by Balanced Scorecard creators Robert S. Kaplan and David P. Norton, are described in detail in their book The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment (Harvard Business School Press, 2001). BSC Hall of Fame members are personally selected by Drs. Kaplan and Norton.

To learn more about Hall of Fame selection criteria and Hall of Fame members, visit bscol.com.

The Five Principles of the Strategy-Focused Organization

Each of the five principles of the Strategy-Focused Organization include specific management best practices that contribute to the achievement of breakthrough results. These best practices—validated through ongoing research with Hall of Fame organizations and hundreds of other users of the Balanced Scorecard around the world— must be embedded in any organization that wants to make strategy execution a core competency.

Principle #1. Mobilize Change Through Executive Leadership Executive leadership, driven by a need for change, supports the drive to establish a new way of managing based on a performance-oriented culture.

Principle #2.

The Balanced Scorecard is used to translate the strategy into a language that everyone understands.

Translate the Strategy into Operational Terms

Principle #3.

The scorecard is used to cascade the strategy to all parts of the organization and align resources needed to accomplish the strategy.

Align the Organization to the Strategy

Principle #4.

The reward and recognition system is used to align individual behavior with performance objectives called for by the strategy.

Motivate to Make Strategy Everyone’s Job

Principle #5.

Strategy execution is linked to the budget, and a reporting system based on scorecard measures is used to provide feedback on strategic performance.

Govern to Make Strategy a Continual Process

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

Table of Contents

Profile Key Results, Takeaways SFO Spotlight (best practices) Strategy Map To Learn More

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ABOUT Motorola’s Government and Enterprise Mobility Solutions

Industry: Communication technology

Motorola’s Government and Enterprise Mobility Solutions business (GEMS) is one of four major businesses within Motorola (the other three are Connected Home Solutions, Mobile Devices, and Networks). GEMS was created in early 2005 from the merger of Motorola’s Commercial, Government & Industrial Solutions Sector (CGISS) and a number of other Motorola businesses.

The leader in the global radio-system market, GEMS has served the growing mission-critical requirements of its public safety, government, and enterprise customers for more than 75 years. Its portfolio of products and services provides solutions for interoperable two-way radio communications, mesh networks (a next-generation wireless technology), command and control, identifica- tion and tracking, information management for criminal justice and civil needs, and physical security and moni- toring. GEMS also designs, manufactures, and sells automotive and industrial electronics and telematics systems that enable automated roadside assistance, navigation, and advanced safety features for automobiles. Its products and services support more than 27 million users in approximately 170 countries.

GEMS maintains five call centers and 16 design centers worldwide, as well as seven manufacturing/distribution centers in five countries and numerous other major facilities worldwide. Among Motorola’s most profitable businesses, GEMS accounted for 20% of Motorola’s cor- porate sales and 40% of its operating earnings in 2004.

Headquarters: Schaumburg, IL

Total revenues: $6.2 billion (2004)

Employees:

21,000

Inducted into the Balanced Scorecard Hall of Fame:

2004

One of Motorola’s most profitable business units embeds the BSC in its already powerful Performance Excellence model—achieving startling business results and securing its position as a market leader in a volatile industry.

its position as a market leader in a volatile industry. Motorola’s role as pioneer, innovator, and
its position as a market leader in a volatile industry. Motorola’s role as pioneer, innovator, and

Motorola’s role as pioneer, innovator, and visionary in mobile communications is widely known. Originally founded as the five-employee, Chicago, Illinois–based Galvin Manufacturing Corporation in 1928, Motorola has come a long way since introducing its first product:

the battery eliminator. For more than 75 years, the company has proven itself a global leader in wireless, broadband, and automotive communications tech- nologies and embedded electronic products. It has also won recognition for its dedication to ethical busi- ness practices and its pioneering role in important innovations.

In fact, Motorola’s history is studded with celebrated milestones: the first commercially successful car radios (1930); the first portable two-way radio, for the U.S. Army Signal Corps (1943); the first large-screen, transistorized, cordless portable television (1960); the radio transponder that relayed astronaut Neil Armstrong’s historic words from the moon to Earth (1969); the first commercial handheld cellular phone (1984). And in 1988 Motorola became one of three winners of the first Malcolm Baldrige National Quality Award, which was established by the U.S. Congress to recognize and inspire the pursuit of quality in American business and which has become a hallmark of excellence.

In addition to its history of product innovation, Motorola has played a major role in spreading practice of the total quality methodology Six Sigma—originally a measurement standard in product variation that traces back to the 1920s. A Motorola engineer named Bill Smith coined the term “Six Sigma” to describe the company’s use of this methodology to drive continual process improvement. Indeed, the term Six Sigma is now a federally registered trademark of Motorola. Since the 1980s, the company has extended the practice of Six Sigma beyond manufacturing and into the design of new processes and company offerings as well as transactional customer service and life cycle support functions. Since implementing Six Sigma, Motorola has documented more than $17 billion in savings. Today, Motorola University offers classroom and online training in Six Sigma worldwide. And

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

hundreds of companies around the world have adopted Six Sigma as a way of doing business.

A Relentless Drive for Excellence

Against this storied backdrop, GEMS has demonstrated a strong track record. By regularly monitoring changing business realities, the business’s leaders have consistently sought to identify strategies for not only maintaining, but also extending GEMS’s market leadership. This is no small feat, given ongoing shifts in the industry landscape—in the form of ever- stiffening competition, rapidly changing technologies, new market opportunities and challenges worldwide, and shifting customer requirements. GEMS’s leaders are never content to rest on their laurels. And given Motorola’s reputation as an innovator, they know that all eyes are on them—from demanding customers to sharp-eyed investors and analysts.

As Mark Hurlbert of GEMS’s Office of Business Excellence puts it, “If Performance Excellence was to be our F-16 fighter jet, the BSC would become our flight plan.”

Driven to constantly improve its processes and strive for ever-higher levels of excellence, GEMS has adopted several powerful performance management approaches—including the BSC—to align its work- force behind the business’s strategic goals.

In Search of a Strategic Planning System

In 1999, GEMS began using Performance Excellence (PE) as its model for becoming a high-performing enterprise. Adapted from the Baldrige Quality Award (which the business won in 2002), PE provides organizations with a systems approach to organizational development. It’s the “glue” that holds together priorities between organizations and functions for mutual success—and it ensures the steady pursuit of continuous improvement and the realization of best-in-class processes and results. PE also emphasizes balanced value creation for all key stakeholders—from customers to communities. Moreover, this approach contains an individual Performance Management component. Through this component, managers and employees define their top personal goals supporting their organization’s

performance expectations and the behaviors they will work on to align with the company’s strategy and goals and enhance their personal development.

One of the practices that the PE model encourages

is the yearly assessment of the organization’s fulfillment

of Baldrige Award criteria. Using these assessments, GEMS executives determined that the business lacked

a sufficiently capable strategy and business-planning

process, as well as strategic alignment throughout the organization. As Mark Hurlbert, Director of Business Processes at GEMS’s Office of Business Excellence (the OBE), explains, “We scored quite low in our initial assessment of the Strategic Planning category in the Baldrige framework. We clearly lacked a systematic process for both strategy development and deployment.” According to Hurlbert, GEMS leaders benchmarked Baldrige winners to see what practices and principles they used in the category of strategy development and execution. “We found that many of them used the Balanced Scorecard,” Hurlbert says. “We decided that the scorecard methodology would be the perfect opportunity for us to fully deploy PE in our organization.” Leaders, he adds, also believed that the BSC would help GEMS to revitalize its earlier efforts to move itself further along the Business Maturity Model continuum.

GEMS leaders thus decided to make the BSC a component of the overarching PE framework. As Hurlbert puts it, “If Performance Excellence was to be our F-16 fighter jet, the BSC would become our flight plan.”

Grow the Core, Double the Score

To jump-start the BSC effort, GEMS established its Performance Measurement Council (PMC). There were about 22 members, who hailed from the business’s worldwide regions, product groups, functions (such as engineering, supply chain manage- ment, integrated solutions, and sales and marketing groups), and support areas (including strategy, the OBE, finance, human resources, legal, and information technology). Members also included directors of strategy, finance, and quality and/or “Master Black Belts” in Six Sigma. 1

PMC members are collectively responsible for GEMS’s business planning, measure and initiative alignment, scorecard development and deployment, and target- setting and creating definitions of success. They also lead GEMS’s “Digital Cockpit” (its automated scorecard reporting system). Martin Swarbrick, vice president of the OBE, and Marc Rothman, GEMS’s

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

CFO, became the BSC sponsors, backed by Greg Brown, GEMS’s president.

Council members quickly developed the broad outlines of a high-level strategy that could help GEMS realize its vision: to be the trusted integrator and leading provider of innovative communication and information solutions for the public sector and business-critical enterprise customers (those customers for whom business-data connectivity is crucial to the survival of their business). The strategy, the council determined, would also have to enable GEMS to fulfill its mission: enabling customers to achieve their own mission and improve their operational performance with integrated information and communications solutions. In addition, the strategy would need to support GEMS’s brand promise:

helping organizations move faster, reach farther, and act with confidence by expanding their possibilities through rapid, mobile intelligence.

As a final criterion, the strategy would have to support the “4e’s + always 1” leadership standards that Motorola and GEMS had established. The moniker stands for “envision (focus externally), energize (develop and deploy talent), edge (act with clarity and decisiveness), execute (execute with urgency), and ethics (communicate openly and candidly).” Ethics represents the “+ always 1” part of the standards, because GEMS’s leaders believe that without attention to ethics, all other leadership qualities will erode.

Identifying technological supremacy, customer intimacy, and operational excellence as critical success factors for GEMS, both the leadership team and the PMC laid out four major—and memorable— strategic themes:

“Grow the Core”: How can GEMS enhance our position in what we do today?

“Extend the Core”: How can we leverage what we do today to strengthen our leadership position in complementary adjacent businesses?

“Double the Score”: How can we double our served available market through a combination of internal investment and potential acquisitions?

“Improve and Do More”: How can we drive both major changes and continuous (incremental) improvement in customer loyalty as well as business effectiveness and efficiencies?

In addition to linking the BSC to its Performance Excellence model, GEMS tied it to Motorola’s Six

Sigma model—by defining the strategic objective “Make Six Sigma the way we work.” Six Sigma emphasizes “hard-coding” solutions to problems (often through software and new organizational controls) so that the problems don’t crop up again. All Six Sigma efforts at GEMS are evaluated according to their potential impact on the business’s “Big Y’s”:

• Customer satisfaction/quality

• Operating earnings

• Operating cash flow

• Strategic sales growth

GEMS’s Big Y’s are derived from the Six Sigma expression “Y is a function of X,” where “X” in GEMS’s case represents the vital few projects or activities that exert the greatest impact on the measures against which the business is trying to perform. In short, GEMS’s Big Y’s represent the most important results the business intends to achieve.

Creating and Cascading the Scorecard

By 2000, the PMC had finished developing GEMS’s corporate-level scorecard. It went on to develop GEMS’s strategy map in 2003. The architecture of the strategy map illustrated leaders’ theories about how best to achieve the high-level goal of improving shareholder value. For example, the learning and growth perspective emphasized the optimizing of information, human, and organizational capital. Above learning and growth appeared a unique fifth perspective called “Creating HR Alignment,” which contained themes such as “Leadership Talent Supply,” “High-Performance Workforce,” and “Organization Change Agenda” (today, “Change Management”). The decision to create this special perspective reveals GEMS’s understanding that a business cannot capture its people’s hearts and minds unless employees can clearly see how their actions affect the execution of the company’s strategy. Finally, the map’s internal processes perspective contained themes related to processes such as operations management, product and channel leadership, innovation, and influence management (which emphasized driving favorable standards and regulatory and legislative outcomes).

The three critical success factors that GEMS had identified—operational excellence, technology supremacy, and customer intimacy—resided in the strategy map’s customer perspective, as expressed in objectives such as “Price,” “Quality,” “Availability,” and “Selection.” And the objectives within the “Grow the Core,” “Extend the Core,” and “Double the Score”

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

themes resided in the financial perspective, linking to objectives related to productivity and revenue growth. These objectives in turn linked to the theme “Improve Shareholder Value.”

At GEMS, each member of the senior leadership team, which comprises all direct reports to the business’s president, is responsible for defining and working toward success on some component of the strategy depicted on the map. The team members are also accountable for monitoring results in the part of the strategy that they own. In addition, they’re responsible for learning from their execution of that strategic component in order to drive continuous improvement.

“Whatever your performance was last year, you anticipate improving it in the coming year, whether it’s accelerating cycle time, enhancing quality, or some other criterion. We’ve always sought big, audacious goals here.”

—Mark Hurlbert

In 2000, the PMC had cascaded the high-level scorecard to every major level within the GEMS organization worldwide—including business units/regions, partners (such as supply chain), and support functions (OBE, HR, finance, IT, and legal). The following GEMS staff-level organizations developed scorecards:

Regions: The scorecard was cascaded to four regional sub-organizations: the Americas; Europe, the Middle East, and Africa (EMEA); Asia Pacific; and Israel.

Markets/product groups/functions: The scorecard was cascaded to six sub-organizations:

Automotive, Enterprise Mobility Solutions, Global Relations & Resources Organization, Mesh & Application Solutions, Global Technology and Development Group, and Supply Chain.

Support functions: The scorecard was cascaded to four sub-organizations: HR, finance, IT, and legal.

To cascade the scorecards, PMC members helped business unit leaders translate GEMS’s high-level one-page depiction of the strategy and strategic

objectives into unit-level objectives and metrics. To ensure that objectives were aligned, the council also asked business unit leaders to use a common set of templates, such as Alignment Measure Definition Ownership Matrices and Business/Function Alignment Grids. Alignment Grids, for example, list high-level objectives in the left-hand column and show supporting business unit objectives in rows.

Alignment Grids also code each unit-level objective with a color: blue means “Wording unclear; needs to be more specific”; green indicates that the unit- level objective is acceptable; and red signals that a unit-level objective is needed. Orange symbolizes unit- level objectives for which that unit will assume the “leadership role” within GEMS. In other words, the unit will lead specific initiatives intended to achieve the targeted performance on the orange- coded objective. And all other units will support the designated leading unit.

A Cascade of Communications

Mark Hurlbert credits GEMS’s culture of codified processes and continuous improvement mindset with the relatively uneventful cascading of the scorecard. “Our culture has had continuous improvement baked in for the last 15 or 20 years,” he explains. “We’ve always lived these values.” For example, everyone at GEMS expects to have personal performance constantly evaluated and challenged. “Whatever your performance was last year,” Hurlbert notes, “you anticipate improving it in the coming year, whether it’s accelerating cycle time, enhancing quality, or some other criterion. We’ve always sought big, audacious goals here. Sure, we don’t always make them. But we do celebrate our wins.”

Still, to ensure the smoothest possible cascading process, GEMS leveraged the power of communication. The business began by overhauling the structure of its existing communication centers. Previously, GEMS’s external and internal communications teams had operated separately. In 2000, they were brought together under the same leadership—reporting to the head of strategy—for the first time. The newly integrated communications team thus began serving a central strategic function within GEMS.

This team developed an entirely new workforce communication process, through which GEMS began conveying performance expectations and updates to employees through its Quarterly Communication Cascade. This combination of one-way, two-way, upward, downward, electronic, and face-to-face

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

messages is now delivered through numerous channels and in a wide range of formats.

For example, the cascade begins with Motorola’s quarterly earnings release. This release is followed by a “state of the company” address delivered by Motorola’s chairman and CEO. The address takes the form of an e-mail and leverages Motorola’s TALKMOTO, an online MP3 download. Next, GEMS’s president issues a “state of the business” e-mail and Web cast to all GEMS employees worldwide.

Each quarter, all GEMS leaders around the world conduct town hall meetings during a designated two-week window. At town halls, leaders not only communicate the state of their organization, they also explain how their performance is tied to the objectives on their scorecard and how that performance in turn supports GEMS’s overall performance. In addition, “state of the group” and “state of the function” e-mails delivered by group and function leaders to their staffs provide employees worldwide with specific information on how GEMS’s strategy applies to them and how they can exert a positive impact on operating earnings and quality.

Additional vehicles for communicating about strategy include department meetings, articles in internal publications (such as One Motorola News), GEMS Newsbriefs (electronic news summaries), and one-on- one manager/employee discussions. According to Martin Swarbrick, most employees prefer face-to-face discussions with their supervisors about strategy and performance, indicating a high level of engagement in GEMS’s management of strategy execution. And every employee, adds Mark Hurlbert, participates in a personal discussion about performance with his or her manager at least four times a year. In addition, online 270- or 360-degree feedback assessments are conducted for all mid-level and higher managers. Through these assessments, managers learn how their superiors, peers, and direct reports view their performance on the “4 e’s + always 1” standards and how their scores compare with those of others.

To ensure consistency, all messages about strategy are developed by GEMS’s communications team. Such messages enable employees to familiarize themselves with major strategic initiatives (such as GEMS’s branding program, customer satisfaction efforts, and Six Sigma) as well as the business’s financial performance, employee survey results, incentive results, and core company values.

So, how have employees responded to the scorecard? According to Hurlbert, it didn’t take much effort to

motivate people to embrace this new component of the PE model. “People wanted a sense of direction, and wanted a line of sight between what they do and how the business performs,” he says. “The scorecard made it clear that their work matters.” Hurlbert notes that the introduction of the scorecard also improved employees’ awareness of the strategy: in 1998, “only 42% of employees understood their division’s PE goals. By 2000, that needle had moved to 66%.”

The View from the Cockpit

The Digital Cockpit has served as another important communication tool. The mechanism through which GEMS reports on its BSC, the Digital Cockpit is linked to Motorola’s knowledge management repository, known as Compass. GEMS also populates the Cockpit with performance measurement informa- tion, using various off-the-shelf business-view and project-management applications as well as its own data warehouse.

The Digital Cockpit is a standalone application that is implemented throughout GEMS. Roughly 400 people in GEMS (including the leadership team’s staff mem- bers, measure owners, and assistants) currently moni- tor their performance, provide commentary, and use the information to govern the business. All employ- ees have access to the performance data relevant to their work. The Cockpit offers many different views and contains 500 measures. It provides customized reports and Web links for users.

Using the Cockpit, measure owners can create personalized “briefing books” that quickly depict where the organization stands on key goals. Moreover, color codes indicate performance on each measure:

• Blue indicates “achieving year-to-date stretch/ benchmark goal and/or on track to achieve stretch/benchmark plan.”

• Green means “achieving year-to-date plan and/or on track to achieve or better the annual plan.”

• Yellow signifies “not achieving year-to-date plan but it is still possible to achieve the annual plan.”

• Red symbolizes “not achieving year-to-date plan, and achieving the annual plan is unlikely.”

By clicking on each measure, objective owners can “drill down” to see performance on initiatives specifically related to that measure and/or sub- measures that have contributed to good performance on a higher-level measure.

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

GEMS monitors scorecard performance throughout the year. Recipients of its performance updates include Motorola’s CEO, GEMS’s extended leadership team, and employees. Organizational performance updates include current-year initiatives related to the “Grow the Core,” “Extend the Core,” “Double the Score,” and “Improve and Do More” themes—coded blue, green, yellow, or red to indicate year-to-date and forecasted performance on each initiative. Under a section titled “Performance Measurement,” year- to-date and forecasted business results are listed— including orders, sales, operating earnings, operating cash flow, cost reductions, and customer satisfaction.

GEMS uses a Strategic Balance Sheet, a table that lists assets and liabilities across numerous categories such as leadership, markets/customers, and strategic relationships. Leaders identify gaps between targeted and actual performance, and then generate ideas for initiatives to close the gaps.

Linking Personal Goals and Incentives to BSC Performance

At GEMS, each employee’s goals are linked to BSC performance through the business’s employee Performance Management process. During the first quarter of every year, managers meet with each of their employees to define the top five individual goals that would best enable that person to execute on the scorecard of the organization (the group, region, market, function, support function, or busi- ness unit) that he or she most directly supports. At this time, employees also define the top five behaviors they need to improve in order to progress along the professional path they’ve defined. For example, an employee may decide that he needs to improve on his ability to “develop talent by coaching people or providing them with challenging work,” which would fall under the “energize” category of leadership behaviors.

At the end of the second and third quarters, managers and employees assess progress toward these defined goals and behavioral improvements. At

the end of the fourth quarter, managers determine which employees have met or exceeded their personal strategic and behavioral goals. Those individuals receive incentives, stock options, and other rewards following the close of the fiscal year. (A portion of each employee’s compensation is also based on Motorola’s companywide results.) First-level supervisors make decisions about rewards based on individual strategic performance and their overall contribution toward both team and organizational performance. Those decisions are then reviewed and approved by senior management, senior HR leaders, and senior compensation managers. This review process helps ensure that reward decisions are made within proper guidelines and within budget.

Mark Hurlbert notes that GEMS also adapts rewards systems established throughout Motorola. For example, through the Bravo Award, employees who score significant achievements in performance—such as a major engineering innovation or an important set of patents—receive financial rewards. “These kinds of programs enable us to keep our top talent and attract new talent,” Hurlbert explains, “as well as ensure that we have the right people in the right positions in the business.”

Refreshing Strategy, Managing Initiatives

GEMS refreshes its strategy through an annual trimester review cycle. From January through April, business leaders assess leadership bench strength and overall organizational performance. Between May and August, they evaluate the current strategy, make refinements as necessary, discuss the following year’s key issues, and clarify linkages to the organiza- tion’s long-range plans. From September through December, they begin implementing new strategic initiatives, finalize both the business models and budgets for the following year, and communicate strategic changes to all associates.

At these strategy review sessions, leaders discuss important emerging developments in customers, markets, and competitors. They also analyze threats emerging in the business environment and take stock of technological advances, supplier and partner relationships, and changes in functional areas such as HR, IT, and legal.

GEMS uses a Strategic Balance Sheet, a table that lists assets and liabilities across numerous categories such as leadership, markets/customers, and strategic relationships. Leaders identify gaps between targeted

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

and actual performance, and then generate ideas for initiatives to close the gaps. Anyone proposing an initiative must present a business case that demonstrates how the initiative would fill the gap and help advance GEMS’s strategy. The business case for an initiative must set forth the goal of the initiative, provide a program or project plan, and describe the opportunity the initiative presents. In addition, it must forecast the expected return on investment in the program, and define the project scope and the project team structure—including sponsor, champion, black belts, and team members.

In making the business case for an initiative, executives and managers focus particularly on how

they expect the project to affect Motorola’s “Big Y’s.” For example, the proponents of one project designed to increase market share in a particular region docu- mented the effort’s potential impact on the Big Y “operating earnings” by depicting anticipated changes

in sales; manufacturing costs; research and development

(R&D) costs; and selling, general, and administrative (SG&A) costs.

GEMS’s approach to initiative rationalization reflects practices applied at the corporate level within Motorola. A Corporate Initiatives Group works across all of Motorola’s businesses to ensure synergy among major programs—and to ensure that the knowledge created in each of the company’s businesses is leveraged across the entire organization. Individual Motorola businesses are also free to develop their own approaches to documenting the merits of strategic initiatives.

Establishing a Strategy Management Office

A key step in the evolution of an organization’s BSC

program is the creation of a strategic management office. For GEMS, this governing body takes the form of the Office of Business Excellence (OBE), estab- lished in 1999. The OBE leads the business planning

process and organizational performance management effort, and ensures strategy execution. The OBE not only helps define “the right things to do” but also

ensures that “the right things get done right.” Through 2004, the office reported to the president; today, while still accountable to the president for the BSC,

it is also accountable to the entire supply chain.

Thus the OBE helps the Performance Measurement Council team “bridge the linkages between functions that exist in many organizations which no one really owns,” maintains Swarbrick.

Scoring Successes

The BSC has helped GEMS manage change while also generating admirable results on both the financial and nonfinancial fronts. The return on net assets (for the then-Commercial, Government & Industrial Solutions Sector [CGISS]) skyrocketed from about 16.8% in 2000 to 139.2% in 2004, while sales rose 11% annually from 2002 to 2004. During those same years, GAAP operating earnings as a percentage of sales rose from 8.7% to 16.4%. Meanwhile, the business’s call centers have achieved world-class performance results. For example, they enjoy answer rates of less than 7 seconds and an abandonment rate of less than 2%. Moreover, employees’ job satisfaction, strategic awareness, and understanding of their contributory roles have all risen significantly since 2001, as measured by employee engagement surveys.

Customer satisfaction results have proved equally impressive:

• 49.6% in “top-box” results (five points on a five-point Leickert scale) and 92.5% in “top-two- box” results (four- and five-point scores) world- wide on GEMS’s customer satisfaction surveys.

• 83% of GEMS’s customers would recommend the business, and 81% would repurchase its products.

• 97.2% of the time, GEMS delivers its large-system implementations on time.

Starting in 2003, after GEMS won the coveted Malcolm Baldrige National Quality Award in the manufacturing category, the business became an ambassador for the Performance Excellence frame- work. GEMS has described its strategy management experiences and business results at conferences and venues around the world and to well over 10,000 participants—including the Quest for Excellence conference hosted by the U.S. Department of Commerce.

GEMS has also shared the BSC methodology as a best practice with other Motorola businesses. According to Mark Hurlbert, “most of the other businesses in Motorola have been using a BSC since 2000. Each of them is at a different point in their deployment of the methodology and using the score- card for organizational performance management. We’ve shared our best practices with all of them, including explaining how we’ve operationalized the scorecard.” Hurlbert says that many of these businesses have adopted elements of GEMS’s approach to the BSC and that “GEMS is acknowledged outright as the leader in these sets of capabilities.”

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

Finally, GEMS’s use of the scorecard has enabled the business to streamline and accelerate major change processes—such as acquisitions. In January 2005, for example—the time of year devoted to finalizing strategy and deciding how to deploy it during the year—GEMS absorbed several Motorola organizations, including the automotive unit. “In just two weeks,” Hurlbert says, “we integrated the new organizations’ strategic plans into GEMS’s plans, and we reconfigured the corporate scorecard in our Digital Cockpit by February.” This achievement represented a huge improvement over previous integrations, which typically required more than three months.

An Eye to the Future

In 2005, Motorola restructured its businesses to further drive its seamless mobility strategy. It had divested its former semiconductor business (now the independent, publicly traded Freescale Semiconductor) in 2004 and then realigned its remaining five businesses into four—including GEMS.

According to Russ Robinson, Director of Human Resource Strategy and Communications, the organiza- tion’s leaders recognize that competition for best practices in all facets of business performance will constantly escalate. To continue to thrive, GEMS must work relentlessly to improve—simultaneously— all processes that create value for the business. In addition, Robinson explains, “the alignment among intangible assets and business strategy is critical for this business, as we look forward to our human, organization, and information and other capital assets to differentiate us from our competitors in achieving

success for customers and shareholders alike.”

Through its thoughtful use of the BSC methodology— coupled with the disciplines of Six Sigma and the Baldrige principles—GEMS has positioned itself to strive for ever-higher levels of value creation and to continue scoring big successes in the global marketplace. In Martin Swarbrick’s words, “We view our BSC implementation as a core competency and a strategic weapon. Our people, who are our competitive advantage, are using tools such as this in ways that have enabled GEMS to experience the best business results and organizational performance in its 76-year history.”

1 Demonstrating the highest level of technical and organizational proficiency, Master Black Belts are in-house experts in Six Sigma tools and methodology. Their roles include providing coaching on Six Sigma projects, developing and delivering Six Sigma training, partnering with Six Sigma champions, and identifying and deploying best practices.

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Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

KEY RESULTS

• Return on net assets (for the then CGISS business) skyrocketed from 16.8% in 2000 to 139.2% in 2004.

• From 2002 to 2004, sales rose 11% annually, and GAAP operating earnings as

a percentage of sales jumped from 8.7% to 16.4%.

• GEMS has sustained its position as the number-one supplier of radio communications solutions worldwide.

• The business’s call centers have achieved world-class performance results, as measured by scoring consistently around 93% in “top-two-box” results on transactional customer surveys.

• Employees’ job satisfaction, strategic awareness, and understanding of their contributory roles have soared since 2001, as measured by increasingly favorable responses to survey questions assessing workers’ understanding of what the business’s goals are, how their personal goals support GEMS’s goals, and how clear their personal performance goals are.

• Employees’ confidence in GEMS’s senior management team rose 12% during 2004, as measured by favorable responses to the survey question, “My sector/organization is effectively well managed and well run.”

• Workforce retention has risen steadily since 2000, as measured by employees’ expressed intent to stay with the business until retirement.

TAKEAWAYS

• Build cross-organizational teams with representation from every region, department, function, and support area to ensure all needs, processes, and issues are addressed in BSC development and deployment—and in strategy execution.

• With rigorous improvement and performance management processes already in place, the benefits of a BSC program will be even more pronounced. And the BSC can enhance

the effectiveness of those processes, in part through the cause-and-effect relationships

it

highlights and the feedback mechanism it provides.

• human capital is a particularly crucial strategic asset to your organization (if your

If

organization, for example, is an industry innovator), consider giving HR alignment special emphasis in the strategy map, beyond its place within the learning and growth perspective. By doing so, Motorola’s GEMS, for example, makes its state of strategic readiness more visible.

• Leverage the power of your external communications team, by either integrating it or simply coordinating it with your internal communications team, to help disseminate performance and strategy-related information to the workforce. Use all media, formats, and channels available, fully and often.

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© 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company

Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

SFO SPOTLIGHT

All Balanced Scorecard Hall of Fame organizations exemplify the five principles of the Strategy-Focused Organization. Motorola’s GEMS is especially noteworthy as an exemplar of the following SFO best practices:

• Leadership team engaged: GEMS established a 22-person Performance Measurement Council (PMC), drawn from a cross-section of businesses, functions, and support areas

worldwide, to lead and oversee the Balanced Scorecard effort. The VP of Business Excellence and CFO were BSC sponsors. Council members worked to flesh out a high-level strategy that supported the business’s vision, mission, and brand promise. They also codified leadership and ethical standards and developed the enterprise BSC and strategy map. They worked to link the BSC to the company’s existing, overarching Performance Excellence and Six Sigma

models.

[Principle #1: Mobilize Change Through Executive Leadership]

Vision and strategy clarified: GEMS had a well-defined vision (to be the trusted integrator and leading provider of innovative communication and information solutions for the public sector and business-critical customers) and mission (enabling customers to achieve their mission and improve operational performance). Leaders identified four catchy strategic themes (“Grow the Core,” “Extend the Core,” “Double the Score,” “Improve and Do More”), as well as a brand promise (helping customers move faster, reach farther, and act with

confidence). [Mobilize principle]

Initiatives identified and rationalized: Using its Strategic Balance Sheet, the company identified performance gaps every year. From this, it developed a list of potential initiatives, developing a business case for each one and calculating its impact on the strategy.

[Principle #2: Translate the Strategy into Operational Terms]

Accountability assigned: Every member of the senior leadership team—the president’s direct reports—is accountable for a component of the strategy as depicted in the strategy map. These executives must monitor results in their areas of responsibility, as well as apply lessons learned to stimulate continuous improvement. [Translate principle]

Corporate–SBUs aligned: GEMS cascaded the scorecard to every major level within the organization, including business units/regions, partners, and support functions. To help align objectives, the PMC created templates, such as the Alignment Measure Definition Ownership

Matrices and Business/Function Alignment Grids. In addition, it restructured its communications centers to integrate the external and internal communications teams. The teams were responsible for a new workforce communication process, which today includes disseminating performance expectations and updates to employees. The team uses a variety of formats, media, and approaches. The company’s Digital Cockpit, through which it reports on its BSC, further

supports organizational alignment.

[Principle #3: Align the Organization to the Strategy]

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© 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company

Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

SFO SPOTLIGHT

Strategic awareness created: The Quarterly Communication Cascade to employees includes Motorola’s quarterly earnings release and a “state of the company” address from the president. Also, GEMS’s president conducts a “state of the business” Web cast and issues a related e-mail. GEMS’s leaders around the world conduct town hall meetings every quarter, in which they emphasize the links between their unit’s scorecard performance and GEMS’s overall performance. And group and functional leaders routinely issue other e-mail updates.

Other vehicles for building strategic awareness include departmental meetings, articles in the company newsletter, electronic news summaries, and one-on-one discussions between

employees and their supervisors.

[Principle #4: Motivate to Make Strategy Everyone’s Job]

Personal goals aligned: Employees’ goals are linked to the BSC through the employee Performance Management process. In Q1, every employee meets with his or her manager to define the BSC-related goals he or she supports and the top behaviors they need to improve. At the end of each quarter, employee and manager review progress. At the end of Q4, managers select an appropriate reward (e.g., praise, incentives, stock options) to those employees who have met or exceeded their targets. [Motivate principle]

BSC reporting system established: The Digital Cockpit, GEMS’s automated reporting system, is in place throughout GEMS locations. It tracks hundreds of measures and offers multiple views of performance; it also enables users to create personalized briefing books. The system is linked to Motorola’s knowledge management repository. [Principle #5: Govern to

Make Strategy a Continual Process]

Process management linked to strategy: Adopted in 1999, GEMS’s Performance Excellence framework helps the organization set key initiatives, establish priorities, and align processes, always working toward continuous improvement and best-in-class processes and results. PE also emphasizes balanced value creation for all key stakeholders. The employee Performance Management process is a component of PE. GEMS’s scorecard is linked to the PE model, as well as to Motorola’s use of Six Sigma. [Govern principle]

Strategy management office established: The cross-functional Performance Measurement Council was established in 1999 to conduct performance planning and management (through the Digital Cockpit), and to develop and deploy the BSC. From this Council emerged the Office of Business Excellence, also in 1999, which encompasses business and strategic planning, organizational performance management, and strategy execution. Until 2004, the office reported solely to the president; today, it is also accountable to the entire supply chain.

[Govern principle]

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© 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company

Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

MOTOROLA’S GOVERNMENT AND ENTERPRISE MOBILITY SOLUTIONS STRATEGY MAP

Financial

Perspective

Customer

Perspective

Internal

Perspective

Creating

HR Alignment

Perspective

Learning

& Growth

Perspective

Productivity strategy Improve the business
Productivity strategy
Improve
the business

Improve shareholder value

Grow the core
Grow
the
core
Revenue growth strategy
Revenue growth strategy
Extend the core
Extend
the
core
Double the score
Double
the
score
Customer value proposition Opera tiona l excellence Technology suprema cy Customer intimacy Price Quality Selection
Customer value proposition
Opera tiona l excellence
Technology suprema cy
Customer intimacy
Price
Quality
Selection
Features
Service
Support
Availability
Function
Partnership
Brand
 
 
 
 

Operations

management

Product and

channel leadership

Innovation

processes

Influence

management

processes

processes

processes

 
 
 
 
Cre a ting Re a diness Employee Leadership High- Change performance talent performance management management
Cre a ting Re a diness
Employee
Leadership
High-
Change
performance
talent
performance
management
management
supply
workforce
performance management management supply workforce I n f o r m a t i o n
performance management management supply workforce I n f o r m a t i o n
performance management management supply workforce I n f o r m a t i o n

Inform a tion ca pit a l

Hum a n capit a l

Orga niz a tion al capit al

• Systems

 

• Values

 

• Alignment

• Applications

• Skills

 

• Culture

• Networks

 

• Behaviors

 

• Leadership

• Security

• Knowledge

• Teamwork

* Each key business process in the internal perspective contains several specific objectives. Due to space constraints, these could not be included.

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© 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company

Balanced Scorecard Hall of Fame Profile:

Motorola’s Government and Enterprise Mobility Solutions

TO LEARN MORE

To learn more about Motorola’s GEMS and its Balanced Scorecard program, see:

• The Balanced Scorecard Report article “Communication and Education to Make Strategy Everyone’s Job,” by Robert S. Kaplan, BSR March–April 2000 (Reprint #B0003A)

Balanced Scorecard Hall of Fame Report 2005, which features a brief profile on Motorola’s GEMS (then CGISS) and the 17 other Hall of Fame inductees from 2004 (Product #9157)

• The BSC library: BSC portal members with access to the library can search the keyword “Motorola” for a complete list of resources, including conference presentations and executive video interviews. (For information on becoming a BSC Portal member, go to www.bscol.com)

• Web site: www.motorola.com

ADDITIONAL RESOURCES

• For more information on the Strategy- Focused Organization (SFO) principles, visit BSC Online. Membership is free. Go to www.bscol.com/bsc_online.

• For additional guidance on the SFO principles, and to learn about best practices in use at other organizations that have successfully executed strategy, go to www.bscol.com/toolkits. Here, you’ll find many resources available for purchase, including Strategy Execution Toolkits.

• For access to the largest compilation of published materials on the Balanced Scorecard and the Strategy-Focused Organization, visit www.sfo.harvardbusinessonline.org.

Editorial Advisers Robert S. Kaplan Professor, Harvard Business School

David P. Norton President, Balanced Scorecard Collaborative

Edward D. Crowley Executive Director–HBR Specialty Publications

Publisher Robert L. Howie Jr. SVP, Balanced Scorecard Collaborative

Director of Research Randall H. Russell Balanced Scorecard Collaborative

Editor Janice Koch Balanced Scorecard Collaborative

Writer

Lauren Keller Johnson

Design

Robert B. Levers

About Balanced Scorecard Collaborative

Balanced Scorecard Collaborative (BSCol), a Palladium company, is a global family of professional service firms that helps clients use the Balanced Scorecard to successfully execute strategy. BSCol offers a wide range of services, including education (conferences, publications, research), training (public seminars, in-house, online), consulting (strategy, performance, change), and technology (“BSC Portal ,” “BSC First Report ,” toolkits). To learn more, visit www.bscol.com, or call 781.259.3737.

About Harvard Business School Publishing

Harvard Business School Publishing is a not-for-profit, wholly owned subsidiary of Harvard University. The mission of Harvard Business School Publishing is to improve the practice of management and its impact on a changing world. We collaborate to create products and services in the media that best serve our customers—individuals and organizations that believe in the power of ideas.

Ordering Information

To order additional copies of this profile (in print or by download), click here or call HBSP at 1-800-668-6705 (617-783-7474 outside the U.S.) and request product #1304. Or visit www.sfo.harvardbusinessonline.org and insert the product number into the search field, or type in “Hall of Fame.” Here you’ll find a list of all available Hall of Fame profiles and other products for the Strategy- Focused Organization.

© 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company. Quotation is not permitted. Material may not be reproduced in whole or in part in any form whatsoever without permission from the publisher. Balanced Scorecard Hall of Fame for Executing Strategy™ and Balanced Scorecard Hall of Fame Profiles™ are trademarks of Balanced Scorecard Collaborative. The trademarks referenced in this publication are the property of their respective owners.

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© 2005 by Harvard Business School Publishing and Balanced Scorecard Collaborative, a Palladium company