CASE STUDY 8-2 Balanced Scorecards at BIOCO BIOCO is a profitable and growing me

Question

CASE STUDY 8-2 Balanced Scorecards at BIOCO BIOCO is a profitable and growing medium-sized biopharmaceutical company located in the southeast United States. It develops, produces, and markets vaccines and antibody-based pharmaceutical products. As part of the company's strate- gic transformation, BIOCO's CEO introduced a top-down, strategy-driven management process called the "BIOCO Way The CEO has a strong conviction that the success of a company starts with a clear vision of what the company wants to be and a corporate strategy that reflects that vision. In the BIOCO Way, the corporate vision and strategy are translated into a long-term corporate strategic plan, which in turn is used to generate the corporate strategy map. To measure progress against the strategy map, a cascade of balanced scorecards (corporate, division/department) are developed and used. As a result of the full integration of the levels of balanced scorecards into the planning process, the BIOCO Way emphasizes how the strategies and related tactics should be carried out and measured at all levels. The CEO is a strong champion of balanced scorecards and is considered an in-house guru for the method Each year, BIOCO managers at the corporate and department levels review performance and assess the appropriateness of their respective balanced scorecards for the prior year. Based on the results of the performance reviews and a short-term execution plan for the upcoming year, strategic initiatives are added, modified, or removed, and the metrics in the scorecards are adjusted accordingly. The CIO thinks that the balanced scorecards help the departments look beyond their own opera tions, and the vice president thinks they mobilize everyone in the company by setting up tangible goals that are clearly linked to the overall goals of the company. The CIO thinks the scorecard enhances communications because it "provides a focal point and common language around the key value drivers of the organization," and it helps IT understand other business areas. To overcome cultural differences among the departments, he added culture as a fifth perspective in the scorecards

Explanation / Answer

A CEO helps to set a stage for success for a company. The CEO is responsible to lead and monitor the implementation of the company’s plans are aligned with that of the strategy. If the new CEO embraces the BIOCO way and believes that the balanced scorecard will be successful, then under the new leadership the BIOCO Way will be as successful as under the old CEO. A Balanced Scorecard helps the managers to allocate the different resources based on the requirements, prioritize the decisions and enables them identify the activities or tasks that are important for the department or organization. This vision will be lost without a Balanced Scorecard. If the new CEO understands the importance of the Balanced Scorecard, then it is possible that BIOCO way will be successful.

If the new CEO does not support the BIOCO way, then there would be steady decline in the participation of the employees across all the departments. Also, it is not possible to monitor the progress of any activity without the Balanced Scorecard.

Hence, the success of the BIOCO way depends largely on the CEO’s approach to the management of the company.

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