The Financial Perspective

Posted: September 6th, 2013

The Financial Perspective

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The Financial Perspective

Introduction

In any given contemporary business environment, the implementation of BSC’s (balanced scorecards) offers the contribution of improving the performance of the organization consistently. For any company using the balance scorecard, this gives it an opportunity of understanding the needs and wants of its customers. Consequently, having a better understanding of these needs and wants allows the company to identify the proper strategies it should implement to help improve its position in its respective market. Putting this into consideration, I found it possible to consider the Saatchi and Saatchi company experience; one that ended up being successful after the company decided to implement the balance scorecard (Greenhalgh, 2004). Therefore, I established that it is possible to put forward an estimation of the consistent improvement an organization’s performance can undergo if a balance scorecard was implemented, as well as its possibility of defining new opportunities of developing better strategies. These strategies look to improve the companies marketing position as well as expanding its market share by attracting more product or service consumers and optimizing marketing performance.

Analysis

Primarily, Saatchi and Saatchi company has proven that it is capable of becoming a successful business entity that can demonstrate the effectiveness of implementing the balance scorecard in its organization performance. At the same time, with a view of understanding the driving forces behind the success of Saatchi and Saatchi Company, it is prudent to analyze briefly the relevance of the balance scorecard. Regarding this aspect, it is necessary to mention that specialists maintain that, balanced scorecards allow a firm to better measure its capabilities of creating prolonged value through the identification of this particular value.

In this regard, adequately measuring a company’s capability of creating prolonged values is fundamental in particular because it allows the company to establish a long-term development strategy. Notwithstanding, it is also prudent to mention that factually, the balance scorecard assists in the improvement of the relations between a company and its customers because it broadens the opportunities of understanding what customers need and want (Kleinman, 2007). This point makes it worth mentioning that developing an effective marketing strategy is achievable provided a company correctly implements the balance scorecard. Putting into consideration the statement above, it makes it possible to refer to the Saatchi and Saatchi company experience that correctly and successfully implemented the balance scorecard. In precise words, on implementing the balance scorecard, the Saatchi and Saatchi Company incorporated into its operations structural changes that eventually led to the de-merger of the entity and its further restructuring (Greenhalgh, 2004). Regarding the de-merger and restructuring strategy, Saatchi and Saatchi Company split its agencies into three separate entities, the lead, drive, and prosper agencies.

The first agency type the company formed was the prosper agency that included less than fifty employees under its operations where most agencies also fell under this category. From the company’s view, these agencies were created separate to enable better other agencies to focus on their progress and development. In this case, prosperous agency would be merged or sold out in the future. The other type of agency Saatchi and Saatchi Company created was referred to as a ‘drive’ agency. Primarily, this agency was designed to contain between fifty and one hundred and fifty employees and was mandated with the task of slightly growing or maintaining the company’s revenue base as well as increasing its margin. These agencies were designed to with the sole purpose of contributing to the development and growth of Saatchi and Saatchi Company in the coming future.

Primarily, the agencies established should be considered the means by which Saatchi and Saatchi Company intended to lay its foundation on the ground for developing and keeping track of its intended steady progress. Nevertheless, the third agency formed by the company was the largest compared to the other two agencies. The third was referred to as the ‘lead’ agency such as China, New York, and the United Kingdom were assigned. It was at this agency rapid growth was expected to manifest and the largest shares of investment were supposed to be allocated. For the Saatchi and Saatchi Company, these agencies were considered most prospective (Greenhalgh, 2004). However, one should not overlook the high risks associated with these agencies and the possible losses the company could have incurred in the future. Nevertheless, their prosperity outweighed the possible risks and the company went on to invest a mammoth of its financial resources with a view of gaining a high return of investments. Ultimately, the company took a risk and it paid off.

Conclusion

To conclude, it is fundamental to emphasize on the fact that the Saatchi and Saatchi Company experience was an excellent testament the success associated with the balance scorecard and its capability of improving the organizational performance of a company, provided it is correctly implemented. The de-merger strategy implemented by the Saatchi and Saatchi Company played an important part in contributing to the overall improvement of the company’s organizational performance (Fendley, 2005).

Evaluation

The balanced scorecard gave Saatchi and Saatchi Company an opportunity of implementing the de-merger strategy. However, this move put the company at risk of losing its high profile employees working in the ‘prosper’ agency. In this kind of situation, the company should look to recruit well-qualified employees from the ‘lead’ agency. I consider this a viable solution because that agency possesses the company’s best professionals who are capable of accelerating the development of the other agencies.

Reference

Fendley, A. (2005). Commercial break: The inside story of Saatchi & Saatchi. London: Hamish Hamilton.

Greenhalgh, C. (2004) Building a Strategic Balanced Scorecard: Saatchi & Saatchi Complementary Case Study. Business Intelligence Company. Retrieved July 13, 2012, from http://www.business-intelligence.co.uk/PDFdownloads/strat_bsc/Saatchisr.pdf

Kleinman, P. (2007). The Saatchi & Saatchi story. London: Weidenfeld and Nicolson.

Robin, D. (ND) Vision, Mission and Values: Management Tools for Building a Better Workplace. Daniel Robin & Associates. Retrieved July 13, 2012, from http://www.abetterworkplace.com/027.html