Learning from Tesco Strategy Map and Scorecard

Great lesson of how Balance Scorecard works can be learned from global retailer Tesco. This company is known for its state of art Business Intelligence (BI) system. Balanced Scorecard is published yearly on tescoplc.com as a part of Tesco’s BI system and is a must-see business performance tool. It even has its own name, “steering wheel.”

Learning Balanced Scorecard lesson from Tesco steering wheel

Source: www.tesco-careers.com

In this article, I’d like to review the Tesco’s BSC for the year 2013 and suggest some insights that any business professional might adopt in his business.

It is not classical BSC

If you ever start discussions about BSC or what BSC is, you’ll end up with some expert saying that BSC is not what you have in your company, because you don’t have some important component. As was discussed before, there is no fixed recipe for the BSC.

Companies use this framework and modify it according to their needs. What is more important is that company sees the improvement in business performance.

Tesco did the same trick. Taking classical Balanced Scorecard as a framework method and adopting it to needs of the company.

Tesco's Balanced Scorecard

Source: tescoplc.com

Let’s have a quick look on what was modified and what is missing:

  • In the very beginning, it is stated that there are five perspectives: community, operations, people, finance, customer. Remember that classical Balanced Scorecard suggests four perspectives that are a little bit different.
  • Another difference from the classical BSC is that strategy map is not included. If checking  the BSC on Tesco’s website, it is not possible to learn what strategic objectives company has and how it going to achieve them. Obviously, that strategy map just was not published here and one can find so called “7 part” strategy of Tesco with strategic objectives and target measures.
  • Finally, as we know in classical BSC, any business objective should be aligned to KPI and action plan. It is easy to see that publically available BSC of Tesco does not contain all the details, such as action plan, but comments tell us what is general vector of the company and for sure make more sense for employee.

Let’s continue the review and find best practices that one can adopt in his own business.

From my viewpoint, one of the most important innovation is that the Balanced Scorecard (well, at least some significant part of it) is publically available. It makes sense for company employees, it makes sense for partners and clients. I believe publishing BSC online in public access is the best way to declare that BSC is important for your company, and you are using it for performance management.

Achievement marks

Now let’s pay attention to marks used in the BSC. Achieved or unachieved targets are marked with tick or cross that gives a quick picture of what is doing well and what need to be improved.

Achieved or unachieved targets are marked with tick or cross

Source: www.tescoplc.com

Also, minor feature, but I think it is really nice – when the first value is introduced for year 2008 it is not marked with tick or cross, it is just said that it is “new”.

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Conclusions

  • It is not 100% classical BSC
  • Strategy map with objectives is available apart from BSC
  • It is published online
  • Simple marks are used to display current state and progress

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Strategy and KPIs Scorecard Expert | Speaker | CEO. Aleksey Savkin (LinkedIn, @bscdesigner) is helping companies to better formulate their strategies and make the process of strategy execution more tangible with KPIs. His areas of expertise are Balanced Scorecard, Key Performance Indicators, business performance management. Aleksey is a frequent speaker at conferences; the author of a number of articles and books on Balanced Scorecard. New book by Aleksey: 10 Step KPI System

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