Bae Using Balanced Scoreboard

BAE Systems is one of the world's top defense contractors that operates on a global basis with over one hundred thousand employees in a number of key markets when this case was written.

However, currently, the company states that it has just over eighty thousand people who are working in over forty countries and the states that: "Working with customers and local partners, we develop, engineer, manufacture and support products and systems to deliver military capability, protect national security and people and keep critical information and infrastructure secure (BAE Systems, N.d.)." When the company was developing it decided that it needed to implement a balanced scorecard to help turn strategic objectives into more tactical metrics that could help manage the company.

Since the company is large, complex, and diverse, the balanced scorecard approach allows the company to design a program that can serve as a control system to help manage this complexity in a dynamic market. This paper will discuss some of the key points relative to BAE's implementation of the balanced scorecard approach. Case Discussion The case focuses on the Customer Solutions and Support business unit at BAE which is a critical division for BAE because it is responsible for customer support for clients among other functions.

The division was tasked with a culture change program that tackled many deficiencies in the operating system and the ways that the organization dealt with client feedback, changing customer needs, and changes in the market and related markets. Given that there are many intangible aspects to accomplishing these objectives, the balanced scorecard approach helped the company account for many factors that could not be accounted for under traditional metric systems.

Furthermore, the company was also assisted by advances in technology, mainly an ERP system, which allowed the company to design metrics across divisions in a more holistic manner that allowed the company to develop a traffic light reporting system. BAE's chief executive designed a seven step system to implementing the cultural and system changes based on the balanced scorecard perspective. The first step was to review the competitive position and devise a high level strategy.

The next step was then to disseminate the high level objectives to a broader group to further refine them on a high level. A group known as the 130 Group was created for this task which involved key line managers (CIMA, 2005). In my opinion, this step was one of the most important steps to ensure that the BAE employees would be receptive to the cultural changes.

By involving a broader group of employees from a diverse sample that represented the key line managers of all the relevant divisions, BAE did not only ensure that they acquire more feedback, but there was also a greater chance that the line managers would have a greater buy-in in regards to the project and work as change agents in their specific divisions.

Robert Kaplan stated that "I see the scorecard as a strategic measurement system, not a measure of our strategy" and there must be a balance of the interaction between the short and the long-term (Kaplan & Norton, 1993). By creating the balanced perspective, management is able to push division managers to choose measures that will require them to create change, for example, penetration of key markets in which we are not currently represented (Kaplan & Norton, 1993).

Therefore, by involving key line managers in the entire process, the likelihood that the metrics that they help produce will be more relevant to the desired outcomes. They can provide the insights necessary to apply the broad strategy to their specific divisions on a more tactical level in general. The next step was to have the 130 Group to create a shared vision to determine how the change effort could be organized and which direction the company needed to move (CIMA, 2005).

The next step involved the communication of this vision which was developed based on the consensus of the entire 130 Group. To create this vision, the company had to first decide what the value statement for BAE should be based on the balanced scorecard which served as the foundation for the overall vision. From this position, the vision could then be further refined and then translated into both short- and long-term goals.

Since BAE is a large and complex organization, these goals were based on specific projects that were mostly division specific. The final steps involved processing the desired cultural change and building the objective measures it would use to.