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Business Excellence and the Balanced ScoreCard
"Information should support process management". With this bold statement, Etienne Scholl of Vodafone Quality Management starts his lecture about application of the balanced scorecard in this fast-growing telecom company. Scholl immediately gives some startling figures about Vodafone’s growth in the Netherlands: "In less than five years, Vodafone’s client base grew from none to 2,3 million customers and our workforce from 0 to 3000".
From mission to results via business excellence
Obviously, such growth rates cause frictions. According to Scholl, it is of the utmost importance that quality does not suffer because of rapid growth. "Our competitive spirit at Vodafone prevented this", says Scholl.
This achievement-oriented spirit is also present in Vodafone’s mission statement. This states that people of Vodafone are convinced that one should never be satisfied with existing quality, service and performance levels, but should always strive for performance improvement.
This conviction has paid off: "Revenues of Vodafone in the Netherlands already by 1998 totalled 1,2 billion, we won the customer care award three times, and independent research by Kema showed that we run the best mobile network of The Netherlands".
In the process of translating the mission statement in these staggering results, Vodafone benefited from process performance measurement. The "Business Excellence" model was the basis for performance measurement. "Business Excellence is about professionalism, it means doing your job well. What is meant by “well”, is determined by our stakeholders", explains Scholl.
The initial interpretation of the Excellence-model got form by self evaluations in 86 different entities in the Vodafone Network Organization (which together with Sales & Services and Data traffic makes up the Vodafone Group). "In support of this, the excisting company processes were audited. These audits made it possible to employ focussed, crucial tools and measurements." As examples of these, Scholl names a performance tool, a tool for overall process descriptions, strategic and tactical planning, inquiries into customer satisfaction, loyality and workforce motivation, and the use of the intranet as a means of uniform communication.
Business excellence and the balanced scorecard
Next, Scholl explains why the balanced scorecard is the perfect tool to be integrated with the Business Excellence model. "The perspectives of the balanced scorecard can be compared to the result fields in the Business Excellence model. The "Company results" field overlaps the "Financial" perspective of the scorecard, the "Customer" field and the "Customer" perspective are of course identical, the "Co-worker" field can be compared to the "Internal" perspective and the "Society" field and the "Innovation" perspective share the same indicators."
Apart from these overlaps of the balanced scorecard and the Business Excellence-model, Scholl sums up other reasons why Vodafone decided to start using the Balanced Scorecard: "First, there was a need for operational performance management and feedback. Second, the increasing complexity of systems and organization as a consequence of our rapid growth, led to decreasing coherence between different management reports. Besides, the business dynamics cause continuously changing external factors which in turn influence decision making. Finally, as a consequence of the big number of operational issues it had become difficult keeping focus."
Implementation of the balanced scorecard
In order to meet the desired needs and obstacles, Vodafone chose to implement the balanced scorecard. Scholl describes the process of implementation: "First, a uniform report layout was designed. Next, all performance indicators relevant for business were measured, without limitations as to the number of indicators. As a consequence, scorecards were developed with eighty and even up to one hundred indicators".
Scholl states that this was no problem: selection of the most key performance indicators was the next step. "The monthly reports of the MT were first cleared and automated using Bizzscore. One by one, the 34 underlying scorecards were synchronised with the MT scorecard and entered in Bizzscore." A team of Vodafone was trained in order to be able to maintain and administer the scorecards.
The result of the implementation was in line wit its objectives: “It led to more uniform reports containing relevant information and the whole reporting process is simpler and faster”, Scholl assures.
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