Balance Scorecard

Nun
Karya Nun  Kategori Ekonomi
dipublikasikan 29 April 2017
Balance Scorecard

 

VUCA becomes so popular in this 20 era. It’s short for volatility, uncertainty, complexity, and ambiguity, which have effects for the world especially for corporate/business. Many example for that VUCA fenomenas e.g nowadays, people fight for food, energy and territory; people are greedy; we have minimum engineers while our economic growth is 5,1% and so on.

The existing of VUCA makes us compulsory to prepare BALANCE SCORECARD. It is created to minimize VUCA risks with continuous SWOT review, commited restructuring, balancing financial and nonfinancial, and basically that’s all was a basis to improve culture.

To see how Balance scorecard works at the real life, let’s take 3 firms which becomes a  study in this semester. PT EL-Nusa Tbk, PT Tugu Pratama Indonesia, and Chrysler Group. As we know, PT El-Nusa is an oil and gas services company in Indonesia, PT Tugu Pratama Indonesia is a general insurance company in Indonesia, and Crhysler Group is auto industry which was built in US.

Those three example above, was given by Mr.Sabam Hutajulu as our Lecture in the guest lecturing. Based on his explanation, both PT El-Nusa Tbk and PT Tugu Pratama Indonesia faced the similar culture. Inferiority inside and arrogant outside, also management in boxes. In the company, Leader is king and he never wrong, if he is wrong go back to the first rule that King never wrong. Then Blaming game, it doesn’t show the responsibilities of each employee.  Too much time in comfort zone, Mr.Sabam describe this terminology with “Belanda masih jauh”so they are never have a significant progress. Also gossips culture.

In the April 2011, PT El-Nusa Tbk has the cash gone by 111 billion IDR. Also there is a window dressing that holding cost and make as if they have a profit for 60 billion IDR. The other serious condition, they face negative OCF at 200 bio IDR. About 1.4 trilliun IDR were not accountable since 2007, share price at IDR 170/share and they have a huge debt, it’s Bullet loan 50 mio USD at 9% interest. Mr.Sabam said it’s the worst condition ever of those company.

Then what Mr. Sabam and team do was make a balance scorecard. The textbook teach us with American style that balance scorecard consist of four perspective. They’re financial perspective, customer perspective, internal business process, and learning-and-growth perspective. But that’s all not applied directly in Indonesia context especially for these two cases company (El-Nusa and TPI). 

      The balance scorecard done by Mr.Sabam and team focuses on the culture itself. Then from the culture, he gets to improve other aspects such as financial, cutomer, etc. First he selecting the employee, which one was he said as a people who have a heart. The result was 220 people out from PT El-Nusa. He chooses people first of all based on their integrity/attitude. Then just followed by  knowledge, speeds, and guts. El-Nusa also make El-Nusa Petroleum School to discuss a case studies about their company. Besides that, BOD and top down involves in collection (KPI), So all the part of these company has a responsibilities about the sustainability of PT El-Nusa. What actually done by the team was improve culture environment in the company.

Then the turnaround from doing balance scorecard in PT El-Nusa at April 2013, Elnusa won at MA level although the cash yet to arrive, share price from 170 to 400 IDR/share, positive OCF 750+ billion IDR and profit 242 billion, refinancing 113 million USD, almost identified major issues, and the most important is people with attitude & integrity. Just at the 2 years range time.

While PT Tugu Pratama also faced almost similar case/problem i.e about culture. PT Tugu Pratama Indonesia, in August 2015,was a sleeping giant. Sub optimal cash and net income at a long O/S AR, the danger of captive mkt, rating Fitch AA domestic cannot cover overseas eg Pertamina assets, power distance; inferiority vs. arrogance, IPO trial 2 x but failed.

What Mr.Sabam and team doing was actually the same with the way he treat PT El-Nusa Tbk. Focus on selecting people firstly by integrity and dignity then followed by knowledge, speed and guts, made a school to discuss studi cases, and Openbook manangement (give a transparency to all stakeholders). And with the same range, i.e 2 years,       PT TPI gets their turnaround at 2017. It’s awarded with Rating A- AMBest International, the only insurance company in Indonesia, better cash flow & more transparent; ready for IPO, more people with integrity & attitude, best general insurance for assets > 3 Tril IDR, and best financial & management reporting.

            And the last is Chrysler Corp. The problem interested me is they have recognize Balance scorecard but it was only a statement. Their fault also too much focusing themselves at the financial aspect. What they do just doing a balance scorecard for real . Such as More non financial measures, delight the customers, optimize employee satisfaction index, deliver aspirational products: Consumer Reports, achieve lean processes: fixed cost & material cost, increase shareholder value: free cash flow, considering five critical factors: transparency, accountability, leadership, alignment, comprehensiveness, one level below BOD as LEADER: Strategist, score keeper & gate keeper, discipline & commitment: all levels via monthly meeting. It was also straight at the culture area of company, same with the two companies before.

            In a result, their attainment exceeds what they do with focusing on the financial aspects. Balance Scorecard Hall of Fame, expected operating loss US5 bio loss while realization only US2 bio, Q2 of 2002: profit vs. expected BEP, and better quality and customer satisfaction

So, overall I conclude from Mr. Sabam presentation that more competitive or willingness to open the environment and human capital (that has a dignity and integrity) were a key factors to prohibit the company breakdown so that it becomes a living company.

 

*open critics and suggestions..

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