Futura Industries Implemented the Balanced Scorecard Approach

¶ … Futura Industries implemented the Balanced Scorecard approach and its apparent effects

At some companies, the Balanced Scorecard approach is solely used to improve the company's financial 'bottom line' and to set benchmarks for financial performance. However, the innovative organization Futura Industries has taken a different approach. The company sent benchmarks for success in three specific quadrants: "customer service, financial, and internal operations," resulting in "50% increase in revenue without adding personnel from 1996 to 1999" (Gumbus & Johnson 2003). Before it embarked upon using the BS, the aluminum manufacturing company was well-known for its use of financial and customer metrics. It already "had internal processes focused on quality," but felt that the way it used its employees was lacking and that it did not fully capitalize upon its human assets (Gumbus & Johnson 2003). Even its website reflects this stress upon quality improvement: the surfer is greeted with the message: "98.7%pass yield and .02% returns for 2010" (Futura, 2012, Official Website).

Of course, all companies state in words that they value their people. But Futura's use of the Balanced Scorecard ensured that this goal was translated into real, measurable data: "In order to focus on recruitment and retention, Futura measures turnover, which the company has decreased by 33% since 1998, and in an industry with norms of over 50%, Futura has a rate of 10.7% turnover YTD" (Gumbus & Johnson 2003). As well as improving employee productivity, Futura also resolved to improve employee satisfaction, with employee friendly-programs like the "Birthday Review, Leadership Survey, certification and a Training Matrix, and an Annual Performance and Personal Development Review" (Gumbus & Johnson 2003). Employees received real, meaningful feedback in terms of how they were performing and meeting company standards, and the company made a commitment to developing talent over time.

As part of the implementation of the BS, employees are also solicited for feedback that can improve the company and increase accountability. On an annual basis, employees fill out a survey on Employee Friendly Initiatives, in which they rate which company 'perks' are most important to them. The Birthday Review is not directed at the employee, but rather "takes place during the month of the employee's birthday and consists of an HR representative interviewing the employee on work climate, communication, and achievement. On a scale of 1 to 4, the target is 3.2 for employee satisfaction, and YTD they've achieved a 3.26" (Gumbus & Johnson 2003). During these sessions, employees are asked such questions as "do you have materials and equipment to do the job? Have you received recognition in the last seven days? Does someone encourage your development? Do you have an opportunity to do what you do best every day?" (Gumbus & Johnson 2003). These questions solicit information that can improve the service of the company as well as help the individual. The queries are also highly specific, once again highlighting the principle of the Balanced Scorecard, regarding the need for directly-measurable metrics.

Futura introduced a method of ensuring that workers have a concrete sense of 'progressing' in their development as professionals at the company by creating levels of certification. Going higher in certification levels ties compensation to measurable, concrete factors, and gives employees something to strive for. "Factors such as corporate citizenship, inter-departmental collegiality, and cultural maturity are monitored-with a goal of 80% of employees moving to the next level during their performance review" (Gumbus & Johnson 2003). Given its commitment to diversity, Futura also uses a Cultural Maturity Profile when assessing certification levels to measure employee adaptability and receptivity to foreign cultures.

Strong performance of loyal employees is linked to great service of customers and thus increases the company's bottom line. An additional metric was used to measure the employees specifically charged with interacting with the public and presenting the 'face' of Futura to the world. "Good customer service lies in hiring people aligned with company values and retaining people who deliver outstanding customer service. At Futura key customer service attributes include urgency and responsiveness, speed, and quality. The customer service dimension has four key measures: customer satisfaction, customer complaints, on-time delivery, and return materials rate" (Gumbus & Johnson 2003). To measure customer satisfaction, the company randomly selects ten customers and asks them questions using both a quantitative and a qualitative approach, to gain an assessment of how the customer service division is fulfilling company goals.