Company specific problems that lead to the failure of the implementation Essay

Internal constraints that lead failure in implementing the BSC system in Tian-an Car Insurance Company were brought out when the following research question was posed: â€Å"Why did you stop to use it, is there any disadvantages you can find? † Following is a raft of company specific difficulties that the company faced during implementation as per the responses of managers S, H, F and O. †¢ An excess of indicators: poor design of the BSC resulted to so many â€Å"indicators† that others were left unaccounted for. †¢ Due to inability to synchronize available resources with demand the company could not sufficiently satisfy the requirements of all the four perspectives. That is why one manager said:† We can not spend too much time on customers and employees’ investigation. † †¢ The fear that questionnaire data collected by company employees from clients would be biased and not the true picture of the BSC perspective â€Å"how our Customers view us. † †¢ A completed balanced scorecard model for the business took too long. †¢ Expectation of Instant results: â€Å"The agent told us that it need spend some time to see the effect, I think BSC can not help in short-run decision making. † A manager said. The BSC is a performance measurement system that directs decision makers toward long-term value creating activities. It is not meant be a measure of dealing with emergencies. †¢ The problem of size: â€Å"our branch is not large enough, so the advantages were not clearly identified† Said F. â€Å"Comparing benefits against costs (to the agent fee), there was no â€Å"good value for money. † A unified approach would have given better results. The company has eight branches! †¢ Resistance: â€Å"I found that there were many complaints from our employees. Someone felt it waste their time to response each indicator† said H. A change management process would have sufficed. †¢ SBC used as a control tool: management’s lack of knowledge on how to use the BSC led to strictly following â€Å"targets†, and decreasing staff bonuses. This made â€Å"others to doubt their ability† and increased complaints. This was a case of managing staff instead of managing processes. †¢ After applying the BSC manager O could not fins any noticeable â€Å"good performance in the period† 4. 3. 8. Communication is the life blood of a successful BSC system: That poor communication contributed to the failure to implement the BSC system in Tian-an Car Insurance Company is revealed by responses obtained from the question: â€Å"Do the managers and employees communicate regularly? † The Car insurance sales manager (S) said: â€Å"Not really, because our employees are really busy. But we have employees’ meeting in each Wednesday, we could communicate at that time. † The Car insurance financial manager (F) said: No, unless at employees’ meeting, but I just report some targets and requires. Comments will not be reflected to me. † While the Human resources manager (H) said: â€Å"Yes, I communicate with employees regularly and they will have some complaints and suggestions. † This finding suggests that the communications structure in this company is flawed. It could just be that the company has a top-bottom but no bottom up, horizontal and diagonal communication. Additionally it is evident that complaints are only directed towards the human resource manager. 4. 3. 9. Tian-an Car Insurance Company management have no regrets and would consider implementing the system if given a second chance: The whole rounded nature of the BSC serves as an eye opener to any one who gets a chance to experience it. When a manager was asked: â€Å"After you quitted using the BSC, have you tried other performance measurement systems? † He answered: â€Å"No, I think BSC [introduced us to the world of] performance measurement systems. Our employees have increased their knowledge about management performance and when our company becomes large enough, we will consider using it again. † 4. 3. 10. Lessons Learnt: To appreciate the impact of implementing the BSC, Tian-an Car Insurance Company managers gave a raft of lessons learnt that shows the true extend of their new understanding of performance measurement. This was in response to the following question: â€Å"Any possible suggestions for using the balanced scorecard in your branch? † †¢ The Car insurance sales manager (S) said that: â€Å"I think each level of a company should understand their Key Performance Indicators and Targets. The training of balanced scorecard should not be neglected. †¢ Company Car insurance financial manager (F) responded: â€Å"Key Performance Indicators and Targets should be set properly† †¢ The Human resources manager (H) advised: â€Å"I think [a good] training on the balanced scorecard is more important than the other [aspects of the system]. Companies should let their employees understand the whole [BSC] process first. They should [establish] a feedback [feature to facilitate communication from all directions] so that management and employees can discuss and adjust the targets immediately. † A proper appraisal mechanism should also be in place. † The above lessons learnt are excellent and are important ingredients for best practices in the implementation of the BSC system in any company. 4. 4. Conclusion What you measure is what you get. (Kaplan and Norton 1992) Effective managers understand that performance measurement systems that focus on only one aspect like finance and production are not good enough. They realize that no single measure can provide a clear performance target or focus attention on the critical areas of the business. The balanced score card allows managers to look at the business from four important perspectives: the customer, internal, innovation and learning and financial perspectives. This checks the company from having too many or too few measures. It is a superior system. It is recommended that the Tian-an car insurance company adopts the balanced Score Card system. Tian-an Car Insurance Company structure. References: Francesco, A. M. , and Gold, B. A. (2005) International Organizational Behavior Pearson Education Inc. One Lake Street, Upper Saddle River, NJ USA. Kaplan, R. , S. , Norton, David, P. , (1992). ‘The Balanced Score Card – Measures that Drive Performance’, Harvard Business Review, and Reprint 92105.