Introduction
The essay aims to attempt the examination of the process of strategy mapping and the ways it relates to the establishment value proposition and performance management. For the successful completion of the task, it has been decided that the comparison between BAA’s approach to the balance scorecard with other traditional approaches of balance scorecard is presented. In addition, Glacier Inn case study is decided to use as an example for supporting the ideas of balance scorecard.
Strategy mapping is a visual framework that is used for the integration of organization’s objectives within four balanced scorecards’ perspectives that include Financial, Customers, Learning Growth, And Internal Processes. The aim of the balanced scorecard is to present the cause and effect relations exist within the business, and how linking these activities can help businesses in generating desired outcomes (Mackay, 2004). Several steps are involved in strategy mapping that includes the overriding goals and objectives, selecting a financial strategy, selecting value proposition, and selecting a customer strategy. When organizations attempt to select these strategies, they actually create a way of managing and measuring their performance. The visible example of creating a value proposition and enhancing performance through balanced scorecard strategy mapping is Glacier Inn, an ice hotel. After the opening of the hotel, the manager recognized the unsatisfactory performance, decided to use strategy mapping and balanced scorecard to attain the strategic goals and objectives and derive the performance of the organization. Glacier Inn utilized strategy-mapping technique with a balanced scorecard and integrated the financial strategies with a value proposition that served the organization with desired outcomes (Armitage & Scholey, 2006).
Analysis
The balanced scorecard has been a wildly used approach for quality management and strategic planning in various industries and businesses. However, applications of balanced scorecard became wider with the aim of catering unique requirements and circumstances of projects. The balanced scorecard approach of BAA (British Airways Authority) in the manufacturing of terminal 5 projects that was placed at Heathrow is an example of the broader application of balanced scorecard. BAA’s Terminal 5 project at the Heathrow airport in London was one of the largest construction projects in Europe. The organization explores the dynamic applications of the balanced scorecard in its Terminal 5 project. The project with the utilization of traditional approaches also used additional indicators that prioritized the efficiency, productivity, quality, and partnership. The modern adjustments in the project made the terminal 5’s balanced scorecard unique.
The terminal 5’s performance management system was based on the traditional approach of the balanced scorecard because all traditional balance scorecards include plans, project objectives, requirements, and molding of the vision and mission of the project into eventual results through actual processes (Armitage & Scholey, 2006). A traditional balanced scorecard helps in defining the teams that what are the factors that are essential to do well for the attainment of higher-level goals. In this regard, these balance scorecards used to generate multiple measures for the monitoring of progress and processes (Murby & Gould, 2005). BAA also utilized the similar approach of measuring key performance indicators time to time for the assessment of the direction of the project and extent to which the project had reached. British Airways Authority (BBA) used the balanced scorecard to measure the gap between the actual and forecasted performance. Behaviors, attitudes, and knowledge of all people associated with the project are the part of the traditional approach of the balanced scorecard. British Airways Authority (BAA) adapted this approach of traditional balanced scorecard as well because the balanced scorecard system of terminal 5 worked on influencing the attitudes, knowledge and behavior of people (Basu, Little & Millard, 2009). For example, British Airways Authority (BAA) formed an environment in which it promoted the efficiency and cooperation for the production of required quality by encouraging stakeholders to raise questions at the initial opportunity. In this way, BAA used to get help in discussion and to report on non-conformance and performance issues. The company introduced the four-tier approach that was based on workshops and group discussions. The organization supported the commitment and engagement process of stakeholders. The traditional balanced scorecard for determining the desirability of results in association with the expected or planned outcomes measures the performance through the utilization of scales. However, consistent with the established approach of the balanced scorecard, British Airways Authority (BAA) also utilized the green, amber, and red color coding as key performance measures for the assessment of the level of quality and performance attained by every team based assignment (Basu, Little & Millard, 2009).
BAA wanted to complete the project according to the plan and for the successful delivery of the project, the company made some adjustments in traditional balanced scorecard approach. It has been examined that organizations that internally share the goals used balanced scorecards frequently, but in the case of BAA Terminal 5 project, the balanced scorecard was used to incorporate the different teams including suppliers and external contractors. Here, the traditional application of balanced scorecard has been analyzed differently by the organization. Unlike traditional balanced scorecards, BAA Terminal 5 project used the rigorous process of tests and studies on different projects with the aim of ruling out the errors and solving the predictable issue in time (Basu, Little & Millard, 2009). The perspective of internal processes also looked completely unusual because the BAA created teams from diverse companies that were contacted for the project. Since the organization took several steps for ensuring the uniformity in interpreting and understanding the project’s objectives and goals. Even a workbook was created by the organization for providing the guideline to all teams working on the project. Directors actively contributed in ensuring the free communication environment, ideas’ expression for different members, and partnerships. All these were the aspects that do not go with a traditional balanced scorecard and thus make the BAA’s balanced scorecard unique. Another unique point of the balanced scorecard of BAA was that the balanced scorecard aligned the recognized best practices with quality non-conformance reports and key performance indicators for ensuring the accurate monitoring and measurements of project’s performance (Basu, Little & Millard, 2009).
Conclusion
It has been determined that a balanced scorecard is an important tool for the assessment, measurement, and monitoring of the progress of projects. It helps companies in bridging the gap between the actions and strategy, reflecting important business aspects, and responding rapidly to the changing conditions. The learning that has been gauged from the essay is that the balanced scorecard can be used with some adjustments for confirming the unique requirements of the project. Making adjustment will not affect the effectiveness of the tool; the case of BAA showed the versatility of the tool and revealed that the balanced scorecard can be used by all organization. The balanced scorecard does not have a limited approach since should be used massively for its versatility.
References
Armitage, H., Scholey, C., (2006). Using strategy maps to drive performance. Society of Mgt. Accountants of Canada. Retrieved March 4, 2016, from http://www.cimaglobal.com/documents/importeddocuments/tech_mag_strategy_mapping_march07.pdf
Basu, R., Little, C., & Millard, C. (2009). Case study: A fresh approach of the Balanced Scorecard in the Heathrow Terminal 5 project. Emerald Group Publishing Limit. 13(4). 22-33. Retrieved March 4, 2016, from http://www.perf-ex.co.uk/wp-content/uploads/2012/04/T5-case-study-MBE-papaer.pdf
MacKay, A., (2004) A practitioners guide to the balanced scorecard: A practitioners’ report based on Shareholder and stakeholder approaches to strategic performance measurement using the balanced scorecard. Chartered Institute of Management Accountants. Retrieved March 4, 2016, from http://www.cimaglobal.com/Documents/Thought_leadership_docs/tech_resrep_a_practitioners_guide_to_the_balanced_scorecard_2005.pdf
Murby, L., & Gould, S., (2005). Effective Performance Management with the Balanced Scorecard: Technical Report. Chartered Institute of Management Accountants. Retrieved March 4, 2016, from http://www.cimaglobal.com/Documents/ImportedDocuments/Tech_rept_Effective_Performance_Mgt_with_Balanced_Scd_July_2005.pdf
