Indianapolis Life Insurance Company Enterprise Level Balanced Scorecard Workshop I Strategies

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Indianapolis Life Insurance Company
Enterprise Level Balanced Scorecard Workshop
I Strategies Critical Success Factors

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Agenda

• Balanced Scorecard Overview 130 - 200
• Vision and Objectives Confirmation 200 - 215
• Breakout Session I Critical Success
  Factors 215 - 330
• Breakout Groups
• Coffee Break
• Reconvene Present
• Breakout Session II Measures 330 - 415
• Breakout Groups
• Coffee Break
• Reconvene Presentations
• Discussions Next Steps 415 - 500

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Why Measure?

• Provide a vehicle to communicate and gain
  consensus on the vision and strategies
• Identify roles, responsibilities and
  accountabilities throughout the organization
• Assist in prioritizing initiatives to optimize
  resource allocation
• Help identify what should be focused on
• Identify areas for improvement
• Provide information to support decentralized
  decision making You cant manage what you
  cant measure Bill Hewlett, Hewlett
  Packard

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Balanced Scorecard Process
The Balanced Scorecard is a Continuous Process
Measurement Definition
What measures reflect strategy execution?
Reporting Analysis
How to report analyze performance measures most
effectively?
Stakeholder Value
Evaluation Improvement
Given performance signals, what can be done to
improve results?
Quick
Continuous
Re-engineer
Focus
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Translating the Vision Strategy
A Good Balanced Scorecard Tells the Story of Your
Strategy and Vision
Tracking Measuring the Vision Requires...
The Vision
?
describing the destination with much greater
precision.
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Identifying Critical Success Factors
Strategy Revenue Growth
Improve Returns
Financial Perspective
(A Set of Cause and Effect Relationships)
Broaden Revenue Mix
Increase Customer Confidence in our Advice
Customer Perspective
Cross-Sell the Product Line
Understand Customer Segments
Develop Offerings
Internal Process Perspective
Employee Satisfaction
Employee Innovation Perspectives
Improve Customer Information
Align Reward Systems
Broaden Skills (Financial Planning)
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Identifying Performance Measures
Strategy Revenue Growth
Financial Perspective
Every Measure Ultimately Ties to a Financial
Result
Improve Returns

• Return on Investment
• Revenue Mix
• Revenue Growth

Broaden Revenue Mix
Customer Perspective
Increase Customer Confidence in our Advice

• Customer Satisfaction Survey
• Customer Retention
• Depth of Relation

Cross-Sell the Product Line
Understand Customer Segments
Develop Offerings
Internal Process Perspective

• Share of Segment
• Product Development Cycle Time
• Revenue from New Products
• Hours with Customers
• Cross-Sell Ratio

Employee Satisfaction
Employees Innovation

• Employee Satisfaction
• Revenue per Employee
• Training Development Index
• Compensation Benchmark
• Strategic Information Availability

Improve Customer Information
Align Reward Systems
Broaden Skills (Financial Planning)
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Developing a Scorecard
Step 1 Confirm/Define the Shared Vision Step 2
Clarify/Articulate Strategies to Achieve the
Vision Step 3 Define Critical Success Factors
(CSFs) for Various Perspectives Step 4
Determine Performance Measures Step 5 Establish
Short Long Term Measure Targets Step 6 Define
Initiatives to Reach Targets
The Vision
Strategy
Financial Perspective
If we succeed, how will we look to our
shareholders?
CSF
Initiative
Target
Measure
Improve Returns ROI Diversify Mix
Revenue Mix Shareholder Value EVA
Customer Perspective
To achieve our vision, how must we look to our
customers?
CSF
Initiative
Target
Measure
Delivery Time Cycle Time Quality
Quality Index Price Competitive
Price Benchmark
Internal Process Perspective
To satisfy our customers, in which business
processes must we excel?
CSF
Initiative
Target
Measure
New Products Prod. Development Cycle
Time Efficiency Non-Value
Added/Value Added Cross-Selling
Cross-Sell Ratio
Employees Innovation
To achieve our vision, how will we sustain
innovation, change develop our people?
CSF
Initiative
Target
Measure
Retention Retention Ratio New
Products Revenue from New
Productslt2yrs High Morale
Absenteeism
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Measurement Logic
Communicating
Supporting
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Enterprise Scorecard Development
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Defining Measures
Design Team Findings Recommendations
Long Term Vision of Performance Management across
Indianapolis Life
Quigley Analysis
Executive Interviews Facilitated Sessions
Performance Scorecards
AffiliationImpact
Rollout Philosophy
Business Unit Strategic Plans
E Y Insurance Annuities Databases
IS/IT Implications
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Confirming the Vision Strategies
Definition Longer-term direction of where
Indianapolis Life aspires to be, how and on what
basis to compete. Inspirational, and
understandable throughout the organization

• Key Worksteps
• Review current vision and strategy statements
• Revise vision and strategies
• Present findings to group

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Scorecard Template
To be an innovative, growing, high performance,
public financial services enterprise that makes
the future better for all our stakeholders.
Our Vision
Create value for all stakeholders
Win through people
Grow profitably

• Attracting
• Connecting
• Developing
• Empowering

• Building new and existing distribution systems
• Co-marketing, private label relationships
• Affiliations and acquisitions
• Pricing, persistency, mortality, investments,
  expenses

• Create economic value for investors
• Products and services to meet customer needs
• Productive, mutually beneficial relationships
  with distribution partners
• Employee owners
• Good corporate citizens

Our Objectives
Our Measures of Success
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Determine Critical Success Factors

• Definition
• What needs to happen to execute strategy
  successfully. CSFs must be
• Actionable
• Associated with Business Decisions
• Specific and
• Measurable

• Key Worksteps
• Review Strategies
• Establish Agreed Upon List of CSFs Necessary to
  achieve the objective
• Narrow CSFs

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Areas Critical from a Financial Perspective

• Growth
• Revenues
• Operating Earnings
• Capital
• Profitability
• ROE
• ROA
• EPS
• Consistency in results
• Quality earnings (GFO)
• Clearly articulated strategies

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Areas Critical from a Customer Perspective

• Accuracy
• Quality
• Timeliness
• Cost effectiveness
• Support
• Handling customers with multiple products

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Areas Critical from a Process Perspective

• Business Fundamentals
• Issuing
• Billing
• Paying commissions
• Calculating policy values
• Time, cost and quality
• Production costs

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Areas Critical from a Development Growth
Perspective

• Empowered personnel
• Maintaining and enhancing the culture
• Education and training
• Retention and development
• Management skill sets
• Communication and information sharing
• Accountability

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Exercise - 60 Minutes (CSFs)

• Breakout Groups
• 3 Groups
• Complete Cause Effect Diagrams
• Narrow CSFs to Vital Few
• Return to facilitator
• 10-Minute break
• Group Reporter Present Findings

Questions 1) What must be done to reach our
objectives?2) What is the relationship between
financial and non-financial factors?3) Are
these CSFs measurable3) Are these complete and
accurate?
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Breakout Groups
1 - Sun Room
3 - Board Room
2 - Library

• Jim
• Steve
• Jack
• Karla

• Greg
• Larry H.
• Linda
• Gene

• Gary
• Marc
• Jon
• Lisa

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Critical Success Factors Group 1
Objectives Win through people, Grow profitably,
Create value
Critical Success Factors
Financial
Customer
Processes
Learning Growth
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Critical Success Factors Group 2
Objectives Win through people, Grow profitably,
Create value
Critical Success Factors
Financial
Customer
Processes
Learning Growth
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Critical Success Factors Group 3
Objectives Win through people, Grow profitably,
Create value
Critical Success Factors
Financial
Customer
Processes
Learning Growth
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Next Steps

• Enterprise Scorecard
• Refine measures of success
• Complete data dictionary
• Formula
• Availability
• Data Source
• Missing Measures Program
• Frequency of reporting
• Responsibility
• Establish targets
• Align initiatives (tactics) to measures
• Cascade Measures
• Determine entities for scorecard (measurement
  logic)
• Develop measurement package for defining
  measures
• Reporting
• Identify reporting package (Manual vs. Automatic)
• Identify reports (drilldown, composition)