Balanced Scorecard at the USPS 1 KEY ISSUES FOR DISCUSSIO !" For a lot of companies such as the United States Postal Service, Voice of the Business (VOB) represents projects or initiatives that are initiated from within the business which tend to start from either a need to improve efficienc, reduce cost or ultimatel to respond to a historical customer re!uirement or problem" #t $encompasses the primar needs of a business and its sta%eholders, includin& profitabilit, revenue, &rowth and mar%et share, and can be used to establish &oals and define success within a life ccle map"' ( Understandin& the voice of the business assists in identifin& potential projects to aid in movin& an or&ani)ation closer to its &oals and objectives, and properl initiatin& the voice of the customer identifies needs and re!uirements that feed into project selection" *he Voice of the +mploee (Vo+) is ver important to the lon&, term viabilit of a compan" $-o or&ani)ation can survive without &ood people. people who are improvin& to carrin& out the messa&e and mission of the compan,' / to satisf customers, the wor%force must first be satisfied and b &ivin& the emploees a voice throu&h informal and formal means, and b allowin& emploees to participate in influencin& corporate decision ma%in&, can have a positive impact on the financial results of a compan" *he emploees0 voice brin&s about personal ownership and a sense of responsibilit that emploees are directl contributin& to the business0s success" 1n en&a&ed wor%force is %e to strate& and process desi&n, their insi&hts can help to drive the value levers and mappin&, and define value,added services and products to provide effective customer satisfaction" *o &et the most out of customers, a compan needs to have in place an orderl, outbound, offensive mar%etin& plan that includes a well,defined Vo+, desi&ned not onl to retain customers but also to increase the amount of business each customer does with the compan b tappin& into customer loalt" *he Voice of the 2ustomer (VO2) provides valuable insi&ht into what about the product or service that customers find valuable, and what the find annoin& or useless and throu&h Vo+, emploees can provide a dialo&ue with mana&ement that sheds li&ht on 1 http://www.businessdictionary.com/definition/voice-of-business-VOB.html 2 (ana!in! for "uality and #erformance $%cellence& 'th $dition. (outh )estern $ducational #ublishin!& 1/2**+. p. 2,2-. 2 how the will appl the compan vision to their dail tas%s and how the will en&a&e within the project selection processes" #n summar, or&ani)ations need to understand the importance of balancin& VOB, VO2 and Vo+, once these concepts have been full inte&rated. a compan will be able to establish a process to monitor and control process performance also ma3imi)e the value of their customer satisfaction measurement investment" 4evelopin& these three senses, helps improve a compan0s mar%et share and profits b $understandin& the relationship between business activities and the customer0s perceived value from those activities' 5 " B focusin& on what customers found valuable and removin& or reducin& what the found annoin&, these small businesses could accumulate financial success and customer loalt" 66666 #" 7easurements and indicators provide a scorecard of business performance that can be used at all levels of the or&ani)ation" 8hat ou measure is what ou &et, a balanced scorecard is a measure that drives performance in an or&ani)ation" *he balanced scorecard allows mana&ers to learn to loo% at the business from four perspectives. internal processes, customer satisfaction, product innovation and financial perspectives, and minimi)es information overload b limitin& the number of measures used" #t brin&s toðer a lot of the seemin&l disparate elements of a compan0s strate&ic priorities and focuses on the importance of mana&in& these components to achieve them, such as, 9i*, *:7, emphasi)in& teamwor%, becomin& more customer,oriented, lon& term mana&ement &oals, etc," *he Balanced Scorecard (BS2) was created b ;arvard Business School Professor, 4r" <obert =aplan, and his partner, 4r" 4avid -orton" > 1ccordin& to #rv Beiman and 2hristian 2" 9ohnson, the US Postal Service (USPS) first implemented the BS2 in (??@" Since then, USPS has been able to increase on,time deliver of mail b /AB, increase productivit b almost 5B per ear while decreasin& overall emploment b full,time e!uivalent (F*+) of @A,AAA, . http://www.competitive%pert.com/webstrate!y.php / http://www.adb.or!/0ocuments/Boo1s/Balanced-(corecard/chap2.pdf . increase emploee and customer satisfaction, and deliver mail at rates a about half those of Cerman or 9apan" *he metric core strate&ies of USPS. financial stabilit, customer focus, operational efficienc, human capital, is a tailored balance scorecard somewhat similar to the conventional =aplanD-orton desi&n" USPS0s simplicit of strate&ic focus provides a powerful messa&e for those or&ani)ations that believe that the re!uire a lar&e number of strate&ic objectives and metrics on their scorecard" *he cornerstone of a &ood balanced scorecard is the selection of the ri&ht objectives and metrics to measure the performance of the or&ani)ation" E *o tailor the perspectives to the USPS0 objectives, the financial perspective should not be the top of the hierarch, instead, value creation process tar&etin& customers and ta3paers0 satisfaction should be paramount" #n essence, both financial and customer perspectives should be placed at the top a co, e!ual status, because the successful fulfillment of the mission of the or&ani)ation is dependent on both" *he balanced scorecard of the USPS should thus emphasi)e both perspectivesF Financial Pers$ecti%e & 'o( do (e loo) to resource $ro%iders* Custo+er Pers$ecti%e & 'o( do custo+ers see us* Profitabilit , B e3cess revenue and B of net revenue +fficienc , retail inventor turnover Gevera&e , total debt to total assets Understand needs +ase of orderin& products VarietDavailabilit Professionalism and 2ourteousness Internal Process Pers$ecti%e & ,re (e $roducti%e and e--ecti%e* Personnel e3pense as a percenta&e of net sales -et salesDs!uare foot sellin& space -et salesDstudent full time e!uivalent (F*+) Inno%ation and .earning Pers$ecti%e & 'o( do our e+$loyees -eel* #nfluence in the communit =now how,to use tools 7ana&e wor%load 1dvancement opportunities, valuable trainin& *he balanced scorecard method is ver useful due to the fact that b loo%in& at four aspects of a companHs performance, ou reall do &et a balanced view of compan performance and unli%e traditional methods of trac%in& the financial health of a business, the balanced scorecard &ives ou a full picture as to whether our compan is meetin& its objectives" 1 compan can be sure that an strate&ic action implemented 2 http://www.bri!hthub.com/office/finance/articles/,./**.asp% / matches the desired outcomes" -ow these four areas do not paint the whole picture, however" *he financial information included on the scorecard is onl trul beneficial when it is full inte&rated into a full sstem of accountin&, due to the fact that it is sometimes limited and can be otherwise detrimental if ta%en as the whole bi& picture instead of bein& loo%ed at as just a part of a bi&&er strate& for compan &rowth that includes meticulous accountin& methods" 2