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Before 2007, if a tension existed between volume and quality, the culture tilted towards maintaining production volumes. We wanted to instill a new culture for employees to solve problems as they arose, eliminate defects, and reduce health and safety incidents even if these actions cost money and decreased short-run production output.
tC
Carsteen Isensee, 50, became VWB’s CFO in 2007. He had worked in planning and finance throughout his VW career, including joint venture projects in China and as plant controller in
Slovakia and South Africa. Isensee commented on VWB’s situation when he arrived:
It was a period of cost cutting and workforce reduction, low corporate morale and the constant threat of having its unprofitable operations shut down by the German head office. We had to reeducate the VWB management team to spend money wisely so that we could afford to enlarge markets, improve processes and innovate on new products.
No
Schmall included Senn and Isensee within an 11 person Executive Committee that would lead
VWB’s transformation (see Exhibit 3).
Using a Strategy Map and Balanced Scorecard for Cultural and Strategic Change Do The Executive Committee understood that to change VWB’s bureaucratic and slow moving company culture required new relationships with key stakeholders: employees, suppliers and dealers. Schmall and Senn had prior experience with the Balanced Scorecard and believed its introduction into VWB would accelerate the adoption of the new strategy and culture. Senn commented: We needed a tool that could change the mindset of the company, something that could help us communicate our objectives down to the factory floor. This would require a new approach from top management, and a dedicated and empowered team responsible for implementing and controlling this effort. 4 This document is authorized for use only by Juan Pablo Pimiento at UNIVERSIDAD AUTONOMA DE BUCARAMANGA UNAB until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860. 111-049 rP os t Volkswagen do Brasil: Driving Strategy with the Balanced Scorecard Schmall wanted the tool to become VWB’s primary management system. He appointed Senn’s department to lead the project with Isensee’s Financial and Planning departments providing analytic support. The initial task force, called the Strategy/BSC Committee, developed a strategy map based on four Challenging Dimensions: Finance, Customer, Internal Process, and Potential and Growth. (Exhibit 4 shows VWB’s Strategic Map for 2009, unchanged from the initial 2007 map, except for the addition of a sustainability objective in the Potential and Growth dimension.) op yo The strategy map’s Customer objective, “Satisfy the Customer’s Expectations,” encompassed dealers, VWB’s immediate customer, and consumers, the ultimate purchasers of VWB’s vehicles. …show more content…
The second Customer objective, “Improve Company Image,” signaled the importance of rebranding VWB as an innovative producer of high-quality vehicles. The Process objectives stressed developing a more service-oriented culture among dealers, reducing costs while improving the quality and delivery performance of suppliers, and, especially, improving the efficiency, cost, and flexibility of the workforce and production system. The foundational Potential and Growth Challenge objectives emphasized achieving a high-performance culture, developing an attractive and innovative mix of products and a long-term commitment to sustainability. Collectively, the executive team expected that achieving the objectives in the four challenge areas would enable the company to regain its #1 market position in Brazil.
Schmall commented on the reasons for developing the strategy map:
tC
The map describes the strategy in a consistent and clear manner. The cause and effect relations defined in the map clearly demonstrate how intangible assets, such as our employees, get converted into tangible financial results. The map also translates the strategy into a language that everyone can understand. It has the power to decode high-level objectives into operational terms that mobilize our employee teams and enable them to monitor their results. It establishes a direct relationship, from the CEO to shop floor employees. He added: No We started by identifying, within the four BSC dimensions, the limited number of objectives that would reflect the company’s strategic priorities. More than 20 would make the map look like a forest and our employees would get lost. Developing the right metrics to translate the strategic objectives was as important as defining the objectives themselves. And, we had to establish challenging, yet attainable, targets for each metric to
tC
Carsteen Isensee, 50, became VWB’s CFO in 2007. He had worked in planning and finance throughout his VW career, including joint venture projects in China and as plant controller in
Slovakia and South Africa. Isensee commented on VWB’s situation when he arrived:
It was a period of cost cutting and workforce reduction, low corporate morale and the constant threat of having its unprofitable operations shut down by the German head office. We had to reeducate the VWB management team to spend money wisely so that we could afford to enlarge markets, improve processes and innovate on new products.
No
Schmall included Senn and Isensee within an 11 person Executive Committee that would lead
VWB’s transformation (see Exhibit 3).
Using a Strategy Map and Balanced Scorecard for Cultural and Strategic Change Do The Executive Committee understood that to change VWB’s bureaucratic and slow moving company culture required new relationships with key stakeholders: employees, suppliers and dealers. Schmall and Senn had prior experience with the Balanced Scorecard and believed its introduction into VWB would accelerate the adoption of the new strategy and culture. Senn commented: We needed a tool that could change the mindset of the company, something that could help us communicate our objectives down to the factory floor. This would require a new approach from top management, and a dedicated and empowered team responsible for implementing and controlling this effort. 4 This document is authorized for use only by Juan Pablo Pimiento at UNIVERSIDAD AUTONOMA DE BUCARAMANGA UNAB until August 2013. Copying or posting is an infringement of copyright. Permissions@hbsp.harvard.edu or 617.783.7860. 111-049 rP os t Volkswagen do Brasil: Driving Strategy with the Balanced Scorecard Schmall wanted the tool to become VWB’s primary management system. He appointed Senn’s department to lead the project with Isensee’s Financial and Planning departments providing analytic support. The initial task force, called the Strategy/BSC Committee, developed a strategy map based on four Challenging Dimensions: Finance, Customer, Internal Process, and Potential and Growth. (Exhibit 4 shows VWB’s Strategic Map for 2009, unchanged from the initial 2007 map, except for the addition of a sustainability objective in the Potential and Growth dimension.) op yo The strategy map’s Customer objective, “Satisfy the Customer’s Expectations,” encompassed dealers, VWB’s immediate customer, and consumers, the ultimate purchasers of VWB’s vehicles. …show more content…
The second Customer objective, “Improve Company Image,” signaled the importance of rebranding VWB as an innovative producer of high-quality vehicles. The Process objectives stressed developing a more service-oriented culture among dealers, reducing costs while improving the quality and delivery performance of suppliers, and, especially, improving the efficiency, cost, and flexibility of the workforce and production system. The foundational Potential and Growth Challenge objectives emphasized achieving a high-performance culture, developing an attractive and innovative mix of products and a long-term commitment to sustainability. Collectively, the executive team expected that achieving the objectives in the four challenge areas would enable the company to regain its #1 market position in Brazil.
Schmall commented on the reasons for developing the strategy map:
tC
The map describes the strategy in a consistent and clear manner. The cause and effect relations defined in the map clearly demonstrate how intangible assets, such as our employees, get converted into tangible financial results. The map also translates the strategy into a language that everyone can understand. It has the power to decode high-level objectives into operational terms that mobilize our employee teams and enable them to monitor their results. It establishes a direct relationship, from the CEO to shop floor employees. He added: No We started by identifying, within the four BSC dimensions, the limited number of objectives that would reflect the company’s strategic priorities. More than 20 would make the map look like a forest and our employees would get lost. Developing the right metrics to translate the strategic objectives was as important as defining the objectives themselves. And, we had to establish challenging, yet attainable, targets for each metric to