Implementation & the Internal Business Process Perspective

Implementation & the Internal Business Process Perspective

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Implementation & the Internal Business Process Perspective

Efforts Put Forth by BAE in Implementing the BSC Approach

In 1994, Battle Area Evaluation (BAE) embarked on a cultural change project. To carry out the changes, the UK aerospace company focused on five key values: performance, customer, people, partnership and information technology. The projects involved the use of balanced scorecard system (BSC) to measure performance based on these five values. BSC supported cultural change by reinforcing the five values and encouraging practices that were consistent with the company’s objectives. The creation of ‘130 Group’ ensured the full implementation of the BSC approach.

The change process began with the chief executive, Sir Richard Evans, assessing the organization’s environment. He conducted strength, weakness, opportunity and threat (SWOT) analysis. This was to identify the competitive advantages the company had and the changes necessary to improve operations. The chief executive secured employee involvement and was actively involved in motivating and making the workforce recognize the problems that faced the company. Niven (2006), states that without the participation of all employees, all efforts to implement the BSC approach would be futile.

The chief executive also engaged outside consultants who helped senior management to effectively implement the cultural changes. He assembled the ‘130 Group’ which included senior employees who would be actively involved in the change process. The group comprised of the board’s five directors, all senior managers of the company’s divisions and some from its joint ventures. This group included senior managers who had the ability to lead the change process, mobilize and motivate all employees to work as a team. Each member of the 130 Group had an influential role to play and was expected to significantly contribute to the process. This team later formulated a shared vision to act as a guide to the change process. The simple but ambitious vision clarified the direction the company needed to move and the changes that were to be adopted. From the vision statement, the 130 Group drafted a value statement that addressed five key issues. They included performance, customer, people, partnership and information technology. These values were to be the main tools used by BAE to deliver its vision.

Since organizational transformation takes time, the 130 Group consistently drafted short-term goals. These goals ensured that the cultural change process maintained its momentum. The long-term goals were converted into a series of short-term ones that focused on individuals’ objectives and behavior to achieve business targets. Each BAE’s project was linked to a strategic objective that focused on achieving the company’s objectives.

‘Value Teams’ were set up to develop and reinforce the five key values. Each team was led by a managing director of a significant business unit and a coach drawn from 130 Group. They were tasked with maintaining the momentum and addressing any resistance from employees who were opposed to the cultural changes. The final step involved articulating the linkages between the cultural change projects and organizational competitive success. According to Evans and Prince (1999), engaging employees in cultural change is vital since it makes them feel that they have a significant impact on objective measures and performance.

Efforts by BAE to Ensure Employee Participation

To mobilize changes through executive leadership, the management emphasized on employee participation or involvement, communication and employee incentives (Murby & Gould, 2005). In order to guarantee employee receptiveness and acceptance to BSC initiative, it was necessary to encourage participation by all stakeholders. All employees had to feel that they were contributing to the implementation process. If they did not, they would have lost faith and the implementation efforts would have lost momentum.

Another effort that was made by BAE was ensuring effective communication. The 130 Group drafted a value statement that created consensus around the company’s shared vision. Communication was used as an internal marketing campaign tool. Communicating the vision to the employees was necessary since it provided a road map to business performance and management. This allowed employees to align their visions to the company’s vision. Communication also necessitated employee education on BAE’s strategies and BSC implementation. Communicating company’s strategic objectives across all business units should be carried out within 60 days of BSC implementation (Kaplan & Norton, 1996).

The third effort was making strategy everyone’s job. In order to fully implement the BSC approach, it was necessary for the management to ensure that all employees understand the strategy and conduct all their duties in way that will contribute to the accomplishment of the company’s mission and objectives. The company’s strategic goals were first translated into business-unit goals. Thereafter, business-unit goals were cascaded down into personal performance objectives. Based on a clear understanding of BAE’s objectives, the employees could formulate their performance objectives to match with company’s strategies.

The forth effort was introducing employee incentives. It was used by the management to ensure that all employees participated in the change process. Rewards and recognition programs for individual and team performances were based upon their contribution to implementation process. It was very vital for all BAE’s employees to know how performances were being evaluated. In this way, they were able to track their individual contribution to divisional objectives and eventually to the attainment of BAE’s strategic goals, mission and strategy.

The balanced score card helped BAE’s management to secure employee involvement in the change process. Employees could see the linkages, integration and incentives introduced by the management during the implementation of balanced scorecard system. These factors ensured employees’ participation and maximum input to achieve performance targets.

Impacts of BAE’s Efforts

The efforts by 130 Group had tremendous impact on the company’s operations. The cultural change process signified that the Board of Directors was committed to creating a better management system. The introduction of a shared vision and five key values led to improved management focus. For example, the BSC drove the management into examining underlying problems. The chief executive and other senior management became more focused on factors that were most important and they could control or influence.

These efforts also led to a better management processes. BAE system enhanced communication between internal and external stakeholders. The wider involvement improved decision making by top managers. This is because it promoted sharing of information relating BAE’s management. In addition, the company benefited from advices contributed by experts from external consulting firms. It was also a good learning process for senior managers since they were heavily involved in the implementation process.

Finally, BSC helped in establishing a performance metrics. The five key values became the perspectives for BAE’s balanced scorecard. These values facilitated the development of a clearer performance measurement tool that incorporated the company targets and performance indicators. By improving or replacing existing performance monitoring system, the management was able to monitor and predict risks and underperformance.

Reference

Evans, R., & Price, C. (1999). Vertical take-off: The inside story of British Aerospace’s comeback from crisis to world class. London: Nicholas Brealey Pub.

Kaplan, R., & Norton, D. (1996). The balanced scorecard: Translating strategy into action. Boston, Mass: Harvard Business School Press.

Murby, L., & Gould, S. (2005). Effective Performance Management with the Balanced Scorecard: Technical Report. Chartered Institute of Management Accountants. Retrieved from: http://www.cimaglobal.com/Documents/ImportedDocuments/Tech_rept_Effective_Performance_Mgt_with_Balanced_Scd_July_2005.pdf

Niven, P. (2006). Balanced scorecard step-by-step: Maximizing performance and maintaining results. Hoboken, N.J: Wiley.