Bank of Montreal: Balanced Scorecard

In the case Bank of Montreal's Balanced Scorecard, the Bank of Montreal (MBO) decides that they need a change in 1990 and they want to have one major goal to work towards. The goal was to focus the entire company on success. Meaning every person in every department needed to be dedicated even the low level tellers. Expecting their employees to have trouble truly understanding this MBO implemented a balanced scorecard approach. To make sure there was success MBO looked into four different stakeholders in the company: Shareholders, customers, communities, and employees. The way that each department was rated changed like employees in the customer service area were now being judged on their return on equity, customer satisfaction, and also their community involvement. In some cases certain departments were assigned a specific stakeholder to oversee the improvements. The scores at the end of the year were turned into ratings from one to ten, and then those numbers were put into one figure that reflected BMO's four indexes to determine the bonus for the CEO of BMO.

The Balanced Scorecard method focuses on four categories: financial, customer, processes, and learning. One good thing about this approach is that it is less subjective than some other forms of feedback. This approach allows for everyone to be evaluated on a level playing field and not with one person being higher than another. Another great thing about this approach is that it tends to really bring an organization together and makes even the lower level employees feel like they are contributing to a higher cause. The scorecard is very well organized and clearly outlined, so that everyone knows what their goals are and how they are to achieve them.

Question one asks us what the strengths and weaknesses of a balanced scorecard approach. One strength of the balanced scorecard is that it is extremely effective. It helps employees and mangers have a defined line of what they are supposed to be doing, and how well they are supposed to be performing a specific task. The balanced scorecard though is not an easy method to implement and keep running. It takes a lot of resources and a lot of hours of managers to keep it running and keep the goals where they are supposed to be. One way for the BSC to be successful is for there to be fewer goals so that they can clear and concise and very understandable for everyone involved. Another strength is that a company can also adopt cascading scorecards. These scorecards allow all employees to