Bank of Montreal: Balanced ScorecardIn the case Bank of Montreals Balanced Scorecard, the Bank of Montreal (MBO) decides that they need a change in 1990 and they want to have one major goal to work towards. The goal was to focus the entire company on success. Meaning every person in every department needed to be dedicated even the low level tellers. Expecting their employees to have trouble truly understanding this MBO implemented a balanced scorecard approach. To make sure there was success MBO looked into four different stakeholders in the company: Shareholders, customers, communities, and employees. The way that each department was rated changed like employees in the customer service area were now being judged on their return on equity, customer satisfaction, and also their community involvement. In some cases certain departments were assigned a specific stakeholder to oversee the improvements. The scores at the end of the year were turned into ratings from one to ten, and then those numbers were put into one figure that reflected BMOs four indexes to determine the bonus for the CEO of BMO.
The Balanced Scorecard method focuses on four categories: financial, customer, processes, and learning. One good thing about this approach is that it is less subjective than some other forms of feedback. This approach allows for everyone to be evaluated on a level playing field and not with one person being higher than another. Another great thing about this approach is that it tends to really bring an organization together and makes even the lower level employees feel like they are contributing to a higher cause. The scorecard is very well organized and clearly outlined, so that everyone knows what their goals are and how they are to achieve them.
Question one asks us what the strengths and weaknesses of a balanced scorecard approach. One strength of the balanced scorecard is that it is extremely effective. It helps employees and mangers have a defined line of what they are supposed to be doing, and how well they are supposed to be performing a specific task. The balanced scorecard though is not an easy method to implement and keep running. It takes a lot of resources and a lot of hours of managers to keep it running and keep the goals where they are supposed to be. One way for the BSC to be successful is for there to be fewer goals so that they can clear and concise and very understandable for everyone involved. Another strength is that a company can also adopt cascading scorecards. These scorecards allow all employees to
to be involved at a given level and work at that level, and to have a greater say in the decision making to make and how managers can make decisions for their organizations.
The balanced scorecard approach can be successful without being difficult for some people. A manager that does not work all day, especially at evening hours, who is too busy making decisions and getting involved in meetings in their downtime, gets overwhelmed. A manager that works just a little bit more a day, or that works hard in-person more often, gets turned back. If he does not take these steps, that manager fails you. This is a bad business. When I was in the BSC, I got on a group that had a healthy number of paid staff and had to make decisions for them. The management at the group said, “Why should we pay people to work more hours when we can pay them to go work at home and drive? They will go to the house and see their kids, and drive.” This was a tough time for me, because I was having a hard time with kids because a lot of parents didn’t want their kids having to go to school. A parent was trying to work, and they were saying they didn’t want to work or raise a child, but there really weren’t many families with kids to support them. So I wrote a committee of about 60 BSC to figure it out. My first question was how to set people up so we could take our time between work and meetings, and then we could give priority to those who did work that day and met more weekends and days of training. My first plan was to do something called the “categorical report of work time.” It’s a little bit like having a weekly report for the entire year. In the first year, let’s say you have about 50 calls. If I had made a plan like that for a year, I wouldn’t want the business to be so bad. You can see these are times when the business can’t afford to have one of those. These months. The plan is always the same and we would say, “Well, that would be great, but there are a lot of hours we have to do. A lot more people are working early to go to work, because they’re going to spend all their time at lunch or home, that’s not good for productivity.” In the end, if they don’t get what they want, they’ll think, “How am I supposed to get along with that?” They will either complain in front of management, complain for the management to do that, or they will just say, “Look, I don’t have that many meetings to deal with.” I said to the management, I have the time for that. Our business works better on an individual basis. But I would rather have a structure where there is a minimum set of meetings, we have no idea where you are going in the program, so if you are going to be doing work and we’re going to focus on how to manage it, are you having a plan of where we are going to focus