Case studies · Steel · 2011
A Balanced Scorecard for each division at a steel company
Two divisions of a steel company turned the corporate strategy into their own Balanced Scorecard, with objectives, measures, and initiatives, supported by AVILA® consulting between 2004 and 2011.
- divisions with their own Balanced Scorecard
- 2
- consulting engagement
- 2004–2011
The challenge
In a large company, strategy is often set by top management and stays there. Each division has its own goals, reports, and priorities, and it isn't always clear how each area's work contributes to what the company set out to do. The result is familiar:
Measures tracked out of habit, even though they no longer say anything about the strategy.
Projects competing for resources with no shared criteria to decide which goes first.
Results meetings that review last month's financials but not the drivers behind them.
Teams that don't see how their daily work connects to the company's objectives.
In a steel company, where operating, maintenance, and investment decisions involve long timelines and large amounts, this disconnect is costly. Two of its divisions needed a method to bring the strategy down to their own scope and follow it up with discipline, without losing alignment with the rest of the company.
The solution
AVILA®'s Business Consulting Unit worked with these two divisions, between 2004 and 2011, to build a Balanced Scorecard (BSC) for each division. The Balanced Scorecard organizes strategy into four perspectives (financial, customer, internal processes, and learning and growth) and links them through cause-and-effect relationships.
The work with each division followed the logic of the method:
Strategy map. The division's objectives across the four perspectives, linked to the company's objectives.
Measures and targets. For each objective, how it is measured, how often, and what the target is.
Initiatives. The projects that move each measure, so priorities are set with shared criteria.
Follow-up. Regular reviews where the conversation shifts from "what number did we get" to "why did we get it and what do we do about it."
Giving each division its own BSC, aligned with the company's, lets strategy be managed at the level where it is executed. A BSC pays off when it's reviewed consistently, which is why the engagement didn't end with the scorecard design but continued over several years.
If your organization wants to bring its strategy down to every area, see our strategic planning with the Balanced Scorecard and our organizational and IT assessment.