chapter four within case analysis:...

Chapter Four

WITHIN CASE ANALYSIS: PART-I

CASE OF EXPLORATION & PRODUCTION (E&P) AND AVIATION

Contents

4.1. An Introduction to Unique Petroleum Corporation Limited .......................... 70

4.1.1. Genesis of BSC in UPCL ............................................................................... 75

4.1.2. Top Management Approach to BSC Implementation .................................... 77

4.1.3. Outcomes of BSC Implementation at UPCL ................................................. 80

4.1.4. Implementation Challenges – The Top Management Perspective ................. 84

4.1.4.1. Getting Buy-in for BSC Implementation ....................................................... 84

4.1.4.2. Aligning SBUs, Policies, Systems and Structures ......................................... 85

4.1.4.3. Managing PSU Related Constraints ............................................................... 87

4.1.4.4. Managing Culture ........................................................................................... 88

4.2. CASE ONE: UPCL, EXPLORATION AND PRODUCTION SBU ........ 89

4.2.1. Status of BSC Implementation in E&P .......................................................... 91

4.2.2. The Challenges- The Leaders’ Perspective .................................................... 93

4.2.3. Challenges- Employees’ Perspective ........................................................... 100

4.2.4. Challenges- Facilitators’ Perspective ........................................................... 108

4.2.5. Factors Driving Employee Buy-in for BSC ................................................. 110

4.2.6. Outcomes of BSC Implementation at E&P .................................................. 111

4.3. CASE TWO: UPCL’S AVIATION SBU ................................................. 115

4.3.1. Status of BSC Implementation in Aviation .................................................. 117

4.3.2. Challenges- The Leaders’ Perspective ......................................................... 119

4.3.3. Challenges- The Employees’ Perspective .................................................... 126

4.3.4. Challenges- The Facilitators’ Perspective .................................................... 133

4.3.5. Factors Driving Employee Buy-in for BSC ................................................. 137

4.3.6. Outcomes of BSC Implementation at Aviation ........................................... 137

4.4. Summary ...................................................................................................... 139

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Chapter Four

WITHIN CASE ANALYSIS: PART-I

CASE OF EXPLORATION & PRODUCTION (E&P) AND AVIATION

There were changes in a number of areas. Terms and conditions for purchase

was revamped and simplified. Project implementation and monitoring

streamlined and we started completing projects much faster than we ever did.

All financial transactions are now done electronically. All employee services

are computerised bringing much joy to everyone. Bill tracking ensures timely

payment to vendors. Dividend payments reach shareholders within a day of

declaration. Customers book their LPG Cylinders by SMS from their mobile

phones. There are many more like that.

- Ex-C&MD of UPCL

This chapter introduces Unique Petroleum Corporation Limited (UPCL) and discusses

the case of two of its strategic business units (SBU), one of whom is involved in

Exploration and Production (E&P) and the other in the Aviation business. It describes

the cases and analyses the emerging themes pertaining to challenges of BSC

implementation from different perspectives. Overall, the discussions and analysis of

the case is holistic and interpretations are drawn suitably.

4.1. An Introduction to Unique Petroleum Corporation Limited

Unique Petroleum Corporation Limited (UPCL) is a Government of India Enterprise

with a Navratna Status. It is listed in Fortune 500 and Forbes 2000. UPCL is engaged

in the business of refining and marketing of petroleum products with a turnover

exceeding Rs. 1.88,130 Crores (US $ 36.975 Billions) during financial year (FY)

2011-12, crude throughput of 16.19 MMT, market sales including exports of about

29.48 MMT and a market share of about 20 percent among petroleum PSUs in India

(during FY 2011-12). The business is managed through eight independent strategic

business units (SBUs). These SBUs are Exploration and Production, East Coast

Refinery (ECR) with refining capacity of 6.5 MMTPA, West Coast Refinery (WCR)

with refining capacity of 8.3 MMTPA, Retail, Liquefied Petroleum Gas (LPG), Direct

Sales (DS) for lubes and institutional customers (I&C), Projects and Pipelines (P&P)

and Operations and Distribution (O&D). All SBUs are supported by corporate

71

functions such as HR, legal, finance, and corporate strategy and planning. The SBU

structure of UPCL is given in Figure 4.1, 4.2 and 4.3.

In addition to the existing refineries at Mumbai and Vishakapatnam, UPCL has

constructed a 9 MMTPA refinery at Bhatinda in a joint venture with Mittal Energy

Investments Pte. Ltd. Besides, it holds an equity stake of 16.95 percent in Mangalore

Refinery & Petrochemicals Limited. It also owns the largest lube refinery in the

country which contributes about 40 percent of the total lube oil production. The vast

marketing network (as of FY 2011) consists of 13 Zonal offices in major cities and

101 Regional Offices facilitated by a Supply & Distribution infrastructure comprising

Terminals (31), Pipeline networks, Aviation Service Stations (31), LPG Bottling

Plants (44), Inland Relay Depots (70) & Retail Outlets (9785), Lube distributors (186)

and LPG Distributorships (2505).

UPCL came into existence after the takeover and merger of Esso Standard and Lube

India in 1974; and further amalgamation of Caltex Oil Refining (India) ltd. in 1978 as a

fall out of the Government of India Act on nationalisation of oil companies. In 1979

Kosan Gas Company was also merged with UPCL. Thus, UPCL is a conglomerate of

four different entities coming together at different points of time.

In the following two decades, it enjoyed monopoly in the oil market along with other

nationalised oil marketing companies (OMCs). The Government of India (GOI)

controlled the prices of petroleum products such as petrol, diesel, LPG, kerosene etc

through administrative pricing mechanism (APM).1 The APM regime continued from

1970s to mid 1990s, until the explosive growth in petroleum sector compelled the GOI

to seek funds from private and international investors. Eventually, GOI decided on

phased deregulation of petroleum sector over a period of four to five years and

completely de-regulate the oil sector by 2002. Nevertheless, OMCs started incurring

heavy losses on account of under recoveries leading to huge fiscal deficits. Eventually,

in 2001, the GOI decided to divest the stakes in the oil PSUs. Also, opening up of the

petroleum industry witnessed the entry of private players.

1 Administred Pricing Mechanism (APM) is a mechanism to regulate domestic prices of

some of the petroleum products by a system of cross subsidy. http://www.financialexpress.com/news/administered-pricing-regime-for-psu-gas-being-

phased-out/617058 http://www.thehindubusinessline.in

Source: Adapted from the Manual of Organisation Charts Maintained by

72

Figure 4.1

Organisation Structure of UPCL

Source: Adapted from the Manual of Organisation Charts Maintained by HR Department

HR Department at UPCL

Organis

Source: Adapted from the Manual of Organisation Charts Maintained by HR Department at UPCL

73

Figure 4.2

Organisation Structure of Marketing SBUs of UPCL



Organisation


74

Figure 4.3

ation Structure of Exploration and Refining SBUs of UPCL



75

The oil PSUs now faced a changed business scenario and they realised the need to be

competitive if they had to survive and succeed in the changing business scenario post

liberalisation. Consequently, a number of initiatives were introduced in UPCL, with a

view to develop a customer-centric business outlook and required organisational

transformation. Balanced scorecard was one such initiative introduced.

Balanced Scorecard, in addition to building the strategic intent also helped UPCL to

focus on MOU objectives. The Indian Government as the owner and the management of

the Public Sector Enterprises negotiates and signs an agreement with public sector

enterprises (PSE), with respect to their performance management. This negotiated

agreement is called as the Memorandum of Understanding (MOU). This system of

signing MOUs was introduced in early 1990s in an attempt to move the PSEs from

management by control to management by results and objectives. BSC approach helps

strike a balance between both lead and lag objectives.

4.1.1. Genesis of BSC in UPCL

In the changed business scenario, UPCL began introspecting over their vision and

appropriate strategy. ‘It was time when the UPCL needed to learn and evolve into a

competitive and efficient organisation’ (EX-C&MD). The then HR Director (now EX-

C&MD of UPCL), took initiatives to provide strategic HR support to the marketing and

refining business lines of the organisaton. He initiated a number of HR initiatives to

make UPCL a learning organisation. Prime initiatives of HR were Learning

Organisation (LO), Acquiring Continuous Excellence (ACE), Balanced Scorecard

(BSC), and Competency Mapping and Development Center (CMDC).

Learning Organisation

LO workshops were conducted to sensitise employees on the need for continuous

learning and transforming. Visioning workshops were conducted giving employees a

feel of what the organisation shall aspire to be. The human resource team owned up the

process of organisational transformation and adopted the HR business partner model

(Ulrich, 1997) as their guiding philosophy. These learning endeavors started bringing in

transitions in the way of working and gradually UPCL evolved into a tech savvy

forward looking learning organisation.

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Under project Acquiring Continuous Excellence (ACE), a team of coaches with active

support of top management facilitated the co-creation of a vision for the organisation.

The next obvious thing after creating an inspiring vision was to determine what each

one must do in order to achieve the vision. This led to the adoption of BSC.

The Balanced Scorecard team (BSC team) facilitated translation of organisational

strategy into operational objectives. It also cascaded strategy to employees in the forms

and frames that were understood and achievable at their levels. BSC templates and

employee performance goals and targets templates were inter-linked. Each one was

expected to indentify his individual goals and targets, including his learning objectives,

in line with the four perspectives of balanced scorecard. Commenting on the necessity

of aligning employee performance management with BSC, the Executive Director-HR

of UPCL observed:

The spirit of BSC has to be integrated at the level of supervisor and

subordinate. It is at that point that the rubber meets the road in performance

management.

As strategic partner, HR introduced an organisation-wide intervention - Competency

Mapping and Development Centre (CMDC). The objective of this initiative was to

identify and develop the potential of employees. The team steering this initiative

worked with the strategic intent of building people’s capabilities in line with future

business requirements, aligning individual competencies and performance to the

Corporation’s business strategies, facilitating individuals to identify competency gaps

between existing and desired levels, building in-house expertise in all aspects of

competency development process and make these activities and processes a ‘Way of

Life’. Assessment Centers (AC)1 created healthy stress levels among employees

inspiring them to adopt relevant learning endeavors. Their Individual Development Plan

(IDP) was also created in the assessment center itself. These strategic organisational

development interventions entwined well with each other as shown in Figure 4.4.

UPCL, thus, transformed into a Learning Organisation (LO) aspiring to become a

business leader. SBUs started focusing on learning endeavors that were strategically

1 Assessment centre (AC) is not a place but a process to assess the competencies of the

employees based on standardised techniques under controlled conditions.

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relevant. Employees took interest to learn as it helped in their professional and personal

growth.

Figure 4.4

Balanced Scorecard and Learning Organisations

Source: Upadhyay, A.Y.A. 2012. ‘Balanced Scorecard- Fostering Learning Organisations

Towards Achieving Strategic Results: A Case Study of Oil PSU in India’,

Development and Learning in Organisations, 26 (4): 15

The ex-chairman of UPCL, who inspired and steered these multifaceted initiatives,

mentioned in his interview:

We introduced these initiatives at the right time. Everyone in the

organisation knew that we will be left behind if we didn’t change. People

were talking privately in despair. But they really did not know what was

wrong and what was needed to be done. The visioning exercise showed the

way. Competency studies showed what we need to have and BSC showed

how to go about it.

4.1.2. Top Management Approach to BSC Implementation

BSC was introduced in UPCL towards the end of year 2005. The steering committee

was constituted of all directors including the Chairman and Managing Director. The

Director of Human Resources was the BSC project sponsor. Core and support teams

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were set up to steer the BSC project. The Core team of BSC implementation facilitators

comprised of officers from across functions. The support team consisted of scorecard

managers from each SBU who were expected to work with their respective teams to

foster BSC implementation. KPMG was engaged as consultants for a period of one

year. They developed scorecards for corporate, marketing and refinery SBUs and

provided implementation support for two quarters. Once the overall organisational

vision and strategy was developed; it was translated into corporate balanced scorecard,

which then was cascaded to all the SBUs and support functions and further down to the

next levels till the location heads in marketing and functional heads in the refineries.

The BSC project was executed by the consultants in three phases:–

1. Revalidating strategy and designing scorecards. 176 unique scorecards applicable to

a total 424 positions were designed.

2. Providing implementation support to the scorecard owners.

3. Assessing ERP and IT capabilities to support the BSC initiative and suggesting the

Best Fit solution as and where needed.

The BSC project was initiated with a kick off meeting with senior management for

familiarisation and formally obtaining their buy-in. Extensive workshops were

conducted to build awareness and one-on-one meetings were organised between the

directors and the SBU/ function heads.

A major step was to integrate employee performance management system with BSC and

link the individual performance to unit/ department performance. In the financial year

2005-06, online employee appraisal module was rolled out and the template for writing

the yearly goals and targets was modified to incorporate the four perspectives of BSC.

The template became the Individual Balanced Scorecard (IBSC) for each officer. For

senior officers –DGM/CM to the ED- their team scorecard also became their individual

scorecard. All other officers in the team developed their IBSC in line with the objectives

of the team.

In 2007, after the consultants ended their engagement, the BSC project appeared to lose

vigor. By 2008, the UPCL management decided to revive the BSC project, and this time

the internal core team of BSC facilitators shouldered the responsibility of

institutionalising BSC. They stressed upon building awareness and engaging employees

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in the process of strategy implementation through BSC implementation. Management

approach (as understood from observations, documents and in-depth interviews of

twelve directors and executive directors) included:

1. Co-creation of organisational vision by involving employees- and unions- across

the hierarchy. Development of visions for teams and functions which were derived

from the overall organisational vision.

2. Involvement of employees in developing strategy map and scorecards for their

teams, followed by the development of their personal scorecards, specific

objectives, measures, targets and initiatives thereby bringing in the required clarity

and focus for everyone to know exactly what they needed to do.

3. Highlighting competency gaps to employees in assessment centers and helping

them to develop individual development plan.

4. Integrating learning endeavors of employees, mentioned on their Individual

Development Plans (IDPs), which were developed in the Assessment Centers, with

performance management system and team scorecards. When linked with

scorecards, the learning endeavors of the employees’ were aligned with

organisational requirement and the application of learning is immediate.

5. Providing learning support through relevant training workshops, libraries, online

training and learning portals, mentoring and coaching etc.

6. Linking employee performance management system (EPMS) with SBU and

individual scorecards.

7. Linking productivity incentive with BSC through EPMS i.e. with the performance

ratings of the SBU and the individual employee.

UPCL believed that it was important to establish proper alignment between the

personal and organisational objectives. If this link is properly established, employees

would completely and effectively be engaged. Hence, all the balanced scorecard

designing workshops at UPCL began with developing personal vision followed by

organisational vision and then followed by highlighting the link between the two. This

process enabled employees to see how they achieve their personal objectives while

working towards organisational goals. The schematic in Figure 4.5 shows UPCL’s

integrated approach to BSC implementation.

UPCL’s Integrative

4.1.3. Outcomes of BSC Implementation at UPCL

Selection of appropriate performance indicators for BSC implementation is a complex

task. This may be particularly true in case of an organisation where

nascent stages of development. In such instances Kaplan and Norton advocate the use of

narrative as a substitute. The expectation is that over time the narrative will embark

highlighting what are perceived to be the key issues in relati

against the relevant strategic issue. The narrative would thus harden into measurable

data over a period of time.

given as narratives with respect to the transitions in the wor

employee behaviours wherein hard data is not maintained.

Srinivasan (1999) emphasises the need for the Balanced Scorecard to be balanced.

Whilst mentioning particularly the ‘financial’ versus ‘non

‘results’ versus ‘performance drivers’ or ‘process’ dimensions

80

Figure 4.5

Integrative Approach to Balanced Scorecard Implementation

Outcomes of BSC Implementation at UPCL


task. This may be particularly true in case of an organisation where



highlighting what are perceived to be the key issues in relation to the performance


data over a period of time. Accordingly, the outcomes of BSC in the studied cases are

given as narratives with respect to the transitions in the working environment and

employee behaviours wherein hard data is not maintained.


Whilst mentioning particularly the ‘financial’ versus ‘non-financial’, and ‘outcome’ or

’ versus ‘performance drivers’ or ‘process’ dimensions. He

Implementation


task. This may be particularly true in case of an organisation where BSC is still in its



on to the performance


Accordingly, the outcomes of BSC in the studied cases are

king environment and


financial’, and ‘outcome’ or

e considers that all

81

aspects of the organisation’s strategy need to be balanced, if a successful scorecard is to

be constructed. Nair (2004) provides a simple mechanism to help ensure that scorecards

are properly balanced; using graphical presentational techniques on four different

competing perspectives. A Brown (1998) also highlights the need for cognitive and

behavioural changes if individuals are to be actively involved in supporting cultural

changes. Such transitions were visible in the studied cases and they are being listed with

respect to each studied case.

a) Transitions in Working Environment and Employee Behaviours

Introduction of BSC resulted in several transitions in the organisation. These were

enumerated from interviews with top management, functional and team heads, as well

as employees.

Organisation vision and strategy were discussed in the BSC awareness and designing

workshops. For the first time, SBU heads reached out to the employees and personally

explained the SBU strategy. Employees came up with feasible and innovative ideas

which, in turn, identified as initiatives to achieve the strategic objectives. The entire

team worked on developing their team scorecard and cascaded this to their personal

scorecards in joint meetings. Accountability was clearly differentiated among

employees and there was increased role clarity.

The internal business processes were reviewed, and the value propositions to be

offered to external and internal customers were jointly discussed. Thus, began a culture

of seeking feedback from internal and external customers about the job or services

being provided by a team. Such transitions were evident in certain teams while in some

others the changes were yet to set in. The pace of BSC implementation and successes

varied among SBUs and teams.

Interviews of employees indicated transitions in employee experiences, attitudes and

behaviours. Some such common observations across the respondents were as under:

1. Enhanced sense of ‘Togetherness’ among the team and belongingness to the

organisation.

2. Better understanding of the ‘Big Picture’, overall vision and strategy of the

organisataion.

82

3. Enhanced meaning and value for one’s job and how it impacts the strategic

outcomes.

4. Better clarity about one’s role and accountabilities with knowledge of specific

deliverables.

5. Sense of ownership towards organisation.

6. Enhanced communication and information sharing among employees and leaders.

7. Enhanced focus on involving and engaging leaders and employees in pursuit of

strategy implementation.

8. Enhanced collaboration among employees and departments.

9. Improved interpersonal relationships among team members.

10. Renewed sense of customer, both internal and external customers.

11. Improvement in internal business processes.

12. Improved customer satisfaction.

13. Enhanced focus on competency development:

14. Improved discipline among employees and managers.

15. Systematic, focused and effective performance review meetings

16. Enhanced empowerment of frontline officers.

17. Better resource mobilisation for achieving strategic objectives.

18. Strategic orientation among employees and leaders due to continued focus on

vision and strategy.

19. Better understanding of BSC, performance outcomes and performance drivers.

20. Enhanced focus on practicing values of transparency, justice, fairness, respect for

employees and other such values in management

b) Business Performance Outcomes

Within five years of formally introducing BSC concept in UPCL, there were

noteworthy improvements in UPCL’s overall performance. In the year 2011, it was

proud recipient of the ‘Hall of Fame’ award by Balanced Scorecard Palladium. Some

of the major achievements listed in the Hall of Fame report, 2011, were as under:

1. Within five years of adopting BSC, UPCL’s revenue jumped from approximately

Rs. 795 billion ($14.4 billion) to approximately Rs. 1380.23 billion ($ 25 billion).

2. Company’s retail outlets grew by 30 percent from 6667 to 8539.

83

3. Dealer supply time (the time between the receipt of purchase order and shipment)

improved from 24 hours to just 2 hours for high volume ‘category A’ dealers.

4. Refinery project delays fell from nearly 24 months to on time completion.

5. New pipeline throughput in 2010 was 11.95 million metric tons (MMT) as

compared to 6.14 MMT in 2004. The length, too, increased from 730 KMs to be

2130 KMs.

6. In 2009, the major government owned companies went on strike to protest the delay

in pay increases. During the three day long strike, UPCL officers, who declined to

join the strike, served the customer around the clock averting the crisis of complete

shutdown of the nation’s transportation infrastructure. This incident provided UPCL

a winning edge over its competitors by enhanced customer trust and gratitude.

UPCL could achieve many objectives on its scorecard, which is shown in Figure 4.6.

Figure 4.6

Balanced Scorecard of UPCL

Source: Adapted with permission from BSC documents maintained with BSC Team.

(commonly referred as Corporate Scorecard of UPCL)

The company received several awards to in praise of the success achieved. In 2008, it

received NDTV Profit Business Leadership Award. It became the only Indian aviation

fuel company to win the Golden Peacock Award in environmental management. HPCL

Learn

ing

an

d G

row

thIn

tern

al

Pro

cess

Cu

sto

mer

Fin

an

cia

l/F

idu

cia

ryC

orp

ora

te

Ob

jecti

ves

Domestic market

transformation

Conscious Corporate

Citizen

Increase value and growth

Increase value and achieve growth in

existing businessesIncrease value

and growth from new

businesses

Manage risks Optimize costs Introduce fuels of future

Improve customer/

Dealer satisfaction

Improve market

share

Increase profitability of

dealers

Increase brand

value

Effective resource allocation

Ensure Inter-SBU

coordination

Continuous benchmarking

Effective project

monitoring and implementation

Effective Joint ventures/

Alliance management

R&D and

innovation

Ensure SHE and corporate

governance

F1

F3

C1

P1

F4 F5 F6

C2 C4 C5

P2 P3 P4 P5 P6 P7

Pursue progressive oil

and gas reforms

Increase focus on

premium products

F2

F7

Improve focus on institutional

customers

C3

Attract talent

and build a high performance

culture

Increase quality of information

Improve strategic thinking

capabilities

Improve and retain domain

skills

L1 L2 L3 L4

Sustained Profitability Continuous Growth

84

refineries have been the fist in the country to produce EURO-IV MS (petrol). The HR

initiatives also received national and global accolades and awards such as World HRD

Congress and the American Society of Training and Development.

4.1.4. Implementation Challenges – The Top Management Perspective

Changes are often resisted at first and UPCL was no exception. The implementation

process faced challenges from various sources. The study and in-depth interviews with

twelve top management personnel, including the retired chairman, showed that the

challenges could be grouped in four major themes and seventeen prominent sub-

themes. These are shown in Table 4.1.

Table 4.1

BSC Implementation Challenges – The Top Management’s Perspective

THEME CODES I Buy-In for BSC

Implementation 1. Enhancing BSC Understanding

2. Cascading and Dissemination of BSC

3. Managing Skepticism

4. Commitment and Sponsorship of BSC

5. Competence of BSC Consultant and Facilitator

6. Linking IBSC with OBSC

II Aligning SBUs, Policies, Systems and Structures

7. Challenges of EPMS and Bell Curve

8. Quality and Consistency of Reviews

9. Linking Incentives with BSC

10. Modifying Systems and Procedures

11. Conflicts and Interdependency Issues Among SBUs

III Managing PSU Related Constraints

12. Bell Curve De-link from BSC

13. Competency Issues with Personnel

14. PSU Work Culture

15. Transfer and Placements

16. Political Interference

IV Managing Culture 17. Performance Oriented Work Culture

18. Values in Management Practices

19. Engaging Employees

4.1.4.1. Getting Buy-in for BSC Implementation

The first and foremost challenge for the top management was to get the buy-in of the

employees and the leaders i.e. the function heads and team heads. UPCL is a

mammoth organisation with over 11000 employees spread across the nation. Ensuring

85

that everyone understood the concept of BSC, its benefits, the design intricacies and

implementation techniques was a challenging task which called for clear

communications about the matter to the last employee. This required competent and

committed BSC facilitators who could enable employees to develop their own IBSC

and understand its linkage with OBSC.

In order to ensure buy-in, a number of communication strategies were introduced such

as chairman’s web casts, corporate e-mails, fliers, in-house magazines, blogs, speeches

and town hall meetings. Skepticism was addressed in one-on-one discussions. BSC

vision and awareness workshops aimed at aligning employees’ personal aspirations to

organisational aspirations worked best to create employee buy-in. To quote the

Director –HR:

When you educate more and more people about the system, and they see it

bringing transformations, and employee feels it beneficial for him (or her)

and the organisation, that would be a major step to the success of any

change.

Nevertheless, it was observed that only when the team leader was committed to BSC,

some actual action towards implementation could happen. By itself, employee buy-in

was not enough to start the implementation process. The management approached this

through a process of learning and discussion and finalised action plans accordingly.

BSC reviews were put in place.

4.1.4.2. Aligning SBUs, Policies, Systems and Structures

Upon introduction of BSC, the management modified existing policies, structures and

systems to harmonise with BSC. However, it was extremely challenging to get the

existing EPMS with bell curve aligned to BSC.

See, that is where the challenge is to synchronise. The bell curve is not

emerging out of BSC. It is emerging out of the DPE guidelines. And how to

synchronise Bell curve philosophy vis-à-vis BSC and the performance

management is a big challenge. This challenge is not only for HPCL, but it

is a challenge for the entire public sector on which a lot of discussions is

going on. Yes it is no way related to BSC because the bell curve is a system

such that it is implemented by the percentages and not the BSC standards. (Ex-Director, HR)

DPE guidelines for Memorandum of Understanding (MOU) between CPSE and

Government Department /Ministry, while talking on performance assessment targets

86

and their determination, lay emphasis on using ‘Balanced Scorecard’ approach.

Accordingly, both ‘financial’ and ‘non-financial parameters have equal weights of 50

percent each. On the other hand, the DPE guideline1 pertaining to employee

performance management system expects central public sector enterprises (CPSEs) to

have a robust and transparent performance management system using ‘Bell Curve

Approach’ and moderate employees performance ratings accordingly.

The management found it extremely challenging to strike a balance between the two

approaches. When employee performance ratings are based on the performance on

their individual scorecards, there needs to be a strong ground for moderating employee

performance ratings to fit in the bell curve. Also, it becomes extremely difficult for

management to convincingly explain the basis for the changes done in the performance

ratings to the supervisors and the employees.

If the employee performance is strictly assessed against their IBSC objectives, it

should naturally occur. Forced distribution of performance ratings to form the bell

curve in line with the percentages given in DPE guidelines would make it difficult to

explain the assessment to the employees as well as to their supervisors; and more so

when regular performance feedback and open discussions on performance is not

entrenched in the culture of the organisation.

The performance related pay was linked to both the SBU performance and the

performance rating of the employees. The employees’ performance ratings considered

for PRP were subsequent to the process of moderation to fit in the bell curve. Barring

employees rated as top performers, others felt it was not a fair representation of their

performance. This created a feeling of unjust treatment and demoralised the

employees.

While systems, policies and manuals could be modified after some effort; the major

difficulty was managing conflicts and interdependency issues among SBUs and

functions. Their focus was limited to the achievements of their respective teams.

1 DPE Circular No.2(70)/08-DPE (WC), Annexure III, (iii), dated 26-11-2008, Government

of India, Ministry of Heavy Industries & Public Enterprises, Department of Public Enterprises, (MOU Division). Available at

http://dpe.nic.in/important_links/dpe_guidelines/wage_policies/glch4aindex

87

Management addressed this challenge by introducing the concept of Service Level

Agreements (SLA)1. The BSC facilitator coordinated with SBUs and SLAs were

drawn among marketing SBUs and also with refineries. These SLAs clarified

accountabilities of each SBU. Many of the differences got resolved during the

discussions over SLAs. Also, SBUs were required to incorporate the dependencies of

other SBUs and functions while developing their SBU scorecards.

4.1.4.3. Managing PSU Related Constraints

As stated earlier, delinking the bell curve and BSC posed a major challenge to top

management. Additionally, the interviews indicated the challenges of PSU work

culture. Though many of the respondents began by denying that being a PSU was a

challenge, in the course of interviews they admitted and highlighted challenges that

were specific to PSU culture. For example, one Executive Director remarked:

Nothing stops us because we are PSU. We have this habit and brand

ourselves as PSU, feel pitiable and feel constrained. There are very small

areas where we are bound by government directives. Say for example

recruitment […]. But yes, there is a mindset issue here; an attitudinal

problem. That puts off. PSU has become a culture. It has become an

attitude. It has transcended everything else. Bachha Bachha bolta hai - PSU

hai isleyae hum join karna chahtein hai. Secutity hai, chinta nahi hai, job

security, Pahunch hoga to posting acchi milegi, secure future hai…

advantageous status for marriage etc. It has become an attitudinal issue.

Such a culture also ‘breeds incompetence and complacency’. Another ED cited the

demerits of the internal promotion policy:

Unfortunately, in our setup most of these managers are from the ranks. Our

HR promotion policy is such that we get 51 percent of the internal promotes.

They don’t have required competencies and don’t even know how to

communicate. They will never understand concepts like BSC. Fresh talented

engineers reporting to some these promotee managers–– who are terrible at

knowledge and even communication and other capabilities–, get really

frustrated. I don’t understand why this 50-50 internal promotion policy is

there. It’s an HR decision. Oh, it can be 70-30. This is actually creating

huge problems. You promote him if he’s suitable, not because non-

management pressurises that numbered promotions has to come.

1 SLA: Service Level Agreement (SLA) at UPCL was a document of agreement between SBUs

on the areas of interdependencies. Through SLAs, the concerned parties agreed upon specified level of services to be extended to each other.

88

Instances of political interferences were observed in transfers and also in the

engagement of vendors. The following response highlights some transfer related

concerns:

People, who have contacts at senior positions or in ministries, try to

manipulate postings at convenient locations. They avoid difficult locations.

Another menace of transfers is that people know they have short tenure at

one location so they focus on things that would give them immediate results

and they try to get promotions on those short term benefits and avoid

difficult projects that need long term investment and that which won't lead

results in their short term tenure.

4.1.4.4. Managing Culture

Emphasising the need to build performance oriented work culture, the present Director

of HR mentioned that:

There is positivity about BSC. It is not that it (BSC) is not integrated by

design. It is not integrated by default. It is not that somebody doesn’t want to

do it. It’s just that there is no culture around this and there is no compelling

reason to do this. At the end of the day in any function, there has to be

assessment and compelling reasons for doing this. It is not connected with

any kind of contract.

Additionally, individual values were observed to be vital to the success of any

performance management system, as the employee behaviour and priorities are

constantly guided by criterion on which the supervisor would assign performance

ratings to the employee. Thus, even when the incentives are linked to performance,

what actually gets done is what gets rewarded. The management acknowledged the

importance of practising fundamental values such as trust, justice and transparency in

the management practices and how lack of values can lead to corruptions and other

malpractices.

Eventually, it required engaging employees in strategy implementation by using BSC:

Engaging employees is the most important factor. While ensuring that

employees are engaged, we ourselves have to be good role models. The

entire dynamic of engagement is a two way relationship. It’s about

relationships. How much do we understand our people and understand what

would motivate them to give in their best. The better we understand this,

better we are in engaging them. All these relationships have ‘Values’ at

their foundation. We need to make sure there are honesty, transparency,

89

trust and good intentions. If our people trust us they wouldn't be offended

even if they are chided for something.

The top management did not find resources as a challenge and mentioned that, for a

Navratna PSU, arranging resources was not at all a challenge. Some SBUs and teams

implemented all stages of BSC, and observed transformational benefits; while some

other were able to implement it only transactionally or not completely. The degree of

dissemination and integration of BSC varied across the organisation.

4.2. CASE ONE: UPCL, EXPLORATION AND PRODUCTION

(E&P) SBU

UPCL depended heavily on the import of crude oil from Middle East countries, and

the cost of crude procurement itself amounted to nearly 85 percent of the

organisational cost. Hence, it made logical and strategic sense to the organisation to

get into upstream integration. E&P SBU was formulated in the year 2007 as an

endeavor towards upstream integration. It had acquired participating interests (PIs) in

25 assets in exploration stage, and exploration initiatives were in progress. Headed

with an agile and dynamic leader, this SBU had a vision to be a ‘World Class &

Technically Proficient, with Global presence, delivering Superior Returns from a

Sustainable Balanced Portfolio with highest commitment to HSSE* and Society’.

(HSSE* = *Health, Safety, Security and Environment). In order to accomplish this

Vision, a four-pronged approach was adopted:

1. Develop and Build a Strong Foundation: To become a successful E&P operator

and take a lead role in subsurface and resource management

2. Divestment of High Risk Exploration Blocks: to re-utilise resources for low risk

acquisitions and have a balanced portfolio

3. Acquisition of Development Stage or Producing Assets: to have incremental

value growth

4. Diversification into Unconventional Resources: CSG and Shale Gas in USA &

Australia

The E&P function was new to the organisation and, to begin with, the prime focus was

to understand the dynamics of the business environment and build relevant

competencies. The SBU head strengthened the team by hiring experts in the area of

90

exploration and geophysics, training and field exposure to the employees, ensuring a

performance driven, disciplined, fair and caring work environment. The structure of

E&P SBU is given in Figure 4.7.

At the time of study in early 2010, E&P was a 26 member team of highly qualified

petroleum engineers, geophysicists and geologists with an average age of just 33 years.

Study inputs were received through different modes from 19 members (7 personal

interviews and 12 responses through 3 different group interviews). The findings of

various aspects of BSC implementation in the SBU was based on triangulated data from

observations, documents and employee responses.

Figure 4.7

Organisation Structure of Exploration and Production (E&P) SBU

Source: Adapted from the Manual of Organisation Charts Maintained by HR

Department at UPCL

GM/ED – E & P

Head -Commercial

Head Technical

– International

Head Technical –Domestic

Head –Business Development

Sr/Ch.Mgr.- Geologist

Sr/Ch.Mgr.- Geophysicist

Pool of Geoscientists (Geophysicist, Geologists, Petroleum Engineers)

Sr/Ch.Mgr.- Drilling / Production

Sr/Ch.Mgr.- Petroleum

Drilling / Production Engineer

Manager Procurement

Executive Purchase

Sr./Ch.Manager -

Finance Procurement

Manager Procurement

Manager –Business Development

Company

Secretary

Manager

– HSE

Executive -

Legal

Executive –

Human Resources

Confidential

Secretary

4.2.1. Status of BSC

E&P introduced BSC in

and team members followed

participated. The strategy

two levels i.e. the function

were expected to refer

indicators (KPIs) based

yearly goals and targets

system. Thus, BSC was

The strategy map for the

Balanced Scorecard

Source: Adapted with permission from BSC documents maintained

Exploration and & Production SBU (now transferred)

There was not much involvement

lost interest in BSC. Nevertheless,

targets of each employee

reviewed business performance

BSC template. In the small

91

BSC Implementation in E&P

the year 2008. The SBU vision was co-created

followed by strategy session in which all senior

strategy then was broken down into a SBU scorecard

function head’s levels and team heads. Employees

their respective scorecards and draw their

on the distribution of work. These KPIs formed

set by the employees for employee performance

was linked with the employee performance manageme

the E&P SBU is given in Figure 4.8.

Figure 4.8

Scorecard of Exploration and Production (E&P

Source: Adapted with permission from BSC documents maintained with

Exploration and & Production SBU (now transferred)

involvement of the facilitator, and hence, after

Nevertheless, the SBU head personally ensured

employee were in alignment with the SBU vision and

performance regularly; though without specifically

small team of twenty six people, even though

created with all leaders

senior functionaries

scorecard was cascaded to

Employees in each section

key performance

formed a part of the

performance management

management system.

E&P) SBU

with SBU Head of

a while, the team

ensured that goals and

and strategy. He also

specifically referring to the

though the BSC was not

92

much discussed, everyone understood and discussed strategy. The commitment of the

SBU head to pursue the strategy inspired everyone to work towards it. By the end of

year 2011, the team reached very close to the basic strategic outcomes they had

identified for themselves as shown in Table 4.2. Table 4.2 shows the status of BSC

implementation at the time of study i.e. during May-June, 2011.

Table 4.2

Status of BSC Implementation in E&P SBU

Mile Stone BSC Implementation Status

I Pre-Implementation Stage : BSC Awareness and Buy-in

1 Awareness about the BSC Concept

The SBU and function heads understood the concept and appreciated its utility. However, the majority of the employees perceived it as something complex, however important it was, particularly for the senior & top management

2 Leaders Buy-in SBU-Head had already implemented BSC in his previous SBU and appreciated the concept well. Other leaders in the team too found it logically appealing and sensible.

3 Employee Buy-in

Since the SBU-Head was committed to implementing BSC, everyone in the team adopted it. However, the technical experts in the field observed that quite a few objectives and measures on the BSC didn’t really appear to be realistic and appropriate. This disillusioned them.

II BSC Implementation Stage: BSC Designing, Cascading, Aligning and Reviewing

1 Designing Strategy Map & BSC Template

The SBU, function and team scorecards were collectively designed. Further, the individual employees in the team were expected to draw their KPIs by referring to the team scorecards. The designing of BSC, however, was not up to the mark as observed by some technical experts in the team.

2 Cascading While the scorecards were formally cascaded down the line, however, the support functions like legal, HR and Finance didn’t have the formally designed BSCs for their teams

3 Alignment with Vision and Strategy

Support functions, though not having any specific BSC, were included in all business discussions and were very much aligned with the overall SBU. The budgets, resources, employee training and competency building and even the organogram of the SBU were well aligned. The EPMS has been structurally integrated with SBU BSC as per the organisational policy, and thus, each one’s target setting templates were like their personal mini BSC. The KPIs were aligned with SBU strategy though not necessarily with the team BSC.

P

S

P

P

P

S

93


4 BSC Review The study of the SBU revealed an interesting phenomenon. Though the reviews were regular and frequent, the BSC as such was not being referred for the SBU performance. The SBU head often had strategic meetings with his team leaders and at times with all the employees together, (as it was a small team), and they deliberated upon their performance and progress against their four pronged strategy.

III Post BSC Implementation – Sustenance Stage

1 Adapting BSC to Modified Strategy

The SBU head could manage communicating the modifications by directly addressing his small team. Subsequent to the SBU transforming into a fully owned subsidiary of the organisation, it is now planning to have a revised vision, strategy and balanced scorecard that are realistic and have no design flaws.

2 Integrating BSC as an Ongoing Management Process

In a small team, the SBU head could easily manage the strategy implementation and management process.

Successful Partially Successful Not Successful

Source: Triangulated information from BSC documents, presentations, and from

interviews of leaders, facilitators and employees.

As is obvious, the strategy implementation was leader driven and BSC was referred to

only for identifying goals and targets. The SBU head observed:

The BSC in itself can’t motivate and engage employees in the strategy

implementation process. The transactional implementation of the BSC is not

enough to ensure results. It has to be coupled with astute strategic decisions,

competent people, enabling work environment, efficient work systems

resource availability and an insightful review process that encourages

issues to be brought and addressed. Also, the cultural aspects of the

organisation dominate and define the success that can be achieved using

this tool. The organisational culture can work either as a barrier or as a

facilitator for the successful implementation of BSC. It is up to the leaders to

create that culture. Balanced scorecard tool can however, be used to

transform the culture itself, when backed by the leaders’ conviction and

continuous effort.

4.2.2. The Challenges- The Leaders’ Perspective

Initially, the SBU head tried to implement BSC; however, after a while his attention

was concentrated on achieving strategic objectives without much reference to BSC

N

P

S

P

P N

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implementation. The challenges faced by the leaders in this new SBU were many.

They are listed in Table 4.3.

Table 4.3

BSC Implementation Challenges – The Perspective of Leaders in E&P SBU

Challenge Category Challenging Factors Severity

I Developing an Appropriate E&P Business Strategy

1 Understanding Macro Business Scenario

2 Identifying Strategic Objectives

3 Identifying Strategic Competencies

4 Business Foresight

5 Resource Availability

Designing Balanced Scorecard, Cascading and Aligning

6 Understanding and Designing Scorecards

II 7 Competence of the BSC Facilitator

8 Commitment and Support of BSC Facilitator

9 Dissemination and Cascading of Scorecards

10 Bringing Alignment to Become Strategy Focused

11 Strategic Networking

III Structural Inadequacies of BSC

12 Validating Causal Relationships

13 Finding BSC Framework Not Enough for Achieving Objectives

IV Inspiring and Engaging the Leaders and Employees in the Pursuit of Business Results

14 Personal Involvement – Leaders’ Own Buy-In for Strategy and BSC

15 Managing Employee Buy-In

16 Instilling Hope and Optimism

17 Appealing to Intrinsic Motivation

H

H

L

H

H

M

H

H

M

N

M

H

N

M

H

H

H

95


18 Developing and Nurturing Relationships

19 Developing Positive Work Environment

20 Institutionalising Work Systems

21 Employee Placements

22 Transfers

23 Objectivity in Performance Reviews

24 Coaching and Mentoring Leaders and Employees

25 Ensuring Value Based Management

26 Political Interferences

V Developing Internal Business Capabilities

27 Proactive Learning Initiatives linked with Strategy to Build People Competencies

28 Adopting New Technologies Proactively

VI BSC Reviews 29 Ongoing Parallel Reviews

30 Avoiding BSC Format for Reviews

VII Change Management 31 Structures and Policies

32 Being a PSU

33 Managing Resistance to Change

High Challenge Moderate Challenge Low Challenge No Challenge

The SBU head and other senior leaders highlighted some specific challenges:

N H M L

N

M

M

N

N

M

M

M

M

H

H

H

N

N

N

N

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I. Developing an Appropriate E&P Business Strategy

1. Understanding the Macro Business Scenario: Being a completely new business,

developing an understanding the business, building a team of experts and

positioning the SBU in E&P business was the first and foremost challenge.

2. Identifying Strategic Objectives: Being a new business, the team had to explore

and establish a strategic thrust area. After studying the business scenario, SWOT

analysis, and the available blocks, most of which did not have a high probability of

discovery, the SBU decided to explore ‘non-conventional energy sources such as

coal bed methane and Shale Gas’ as well.

3. Identifying Strategic Competencies: As it was a completely new business, the

SBU head took the help of consultants to identify the strategic competencies and

the existing gaps.

4. Business Foresight: The biggest challenge they faced was timely and prudent

strategic decisions because of which they lost whatever possible opportunity came

their way. Lack of business savvyness came as a barrier to be able to compete in

the market and worked as de-motivating factor for the team members.

5. Resource Availability: The parent organisation had become conservative with

respect to expenses, considering its financial condition; and hence E&P business

did not receive enough resources.

II. Designing Balanced Scorecard, Cascading and Aligning

6. Understanding and Designing of Scorecards: There weren’t enough BSC

workshops to ensure that the understanding needs of BSC were complete and fully

disseminated. The scorecards were prepared in a workshop by senior leaders who

had partial understanding of the tool.

7. Competence of the BSC Facilitator: SBU head sought support of BSC facilitator

to co-create the vision & strategy and also the BSC. Some technical experts

however, felt that on account of lack of knowledge of the technicalities involved

in E&P function, the facilitators couldn’t really do much justice to the process of

translations of strategy into operational objectives and selection of right measures

and targets.

97

8. Commitment and Support of BSC Facilitators: Initial workshops were

conducted by them; however, further follow up and implementation support was

lacking from the BSC implementation support.

9. Dissemination and Cascading of Scorecards: It was a small SBU. Cascading of

scorecards up till departments were done in one sitting, However, dissemination f

the concept further down to the junior positions was not found enough.

10. Bringing Alignment to Become Strategy Focused: SBU head personally

ensured alignment of organisation structure, work systems, policies and the

support functions. Aligning each team towards strategy implementation was the

priority and he achieved this by clear communications, thoughtful proactive

planning and regular structured strategic reviews.

11. Strategic Networking: The leaders also had the challenge of developing

professional networks for business development and partnerships. The SBU head

developed professional relationships with potential partners in London, Africa and

Australia.

III. Structural Inadequacies of BSC

12. Validating Causal Relationships: There was no way the leadership team could

be sure of the causal relationships among lead and lag objectives. They lacked any

previous experience of business to bank on.

13. Finding BSC Framework Not Enough for Achieving Objectives: Leaders felt

that BSC alone cannot guide the strategy implementation. Herein, SBU head was

an astute strategist and executer and hence, he could get things happening even

without referring to BSC. The SBU head, as mentioned earlier, has been more

focused on implementing strategy. In his words:

Implementing strategy is an art. It’s not just about strategic thinking, it also

about getting your people think the same way and see the same destination

as you see and passionately traverse the same way you do to reach the final

destination. It’s all about engaging your people in the melodrama of the

strategic pursuit.[…]. It requires high degree of emotional intelligence and

it’s all about relationships.

IV. Inspiring and Engaging the Leaders and Employees in the Pursuit

of Business Results

14. Personal Involvement – Leader’s Own Buy In for Strategy: The SBU head was

of the opinion that it is absolutely essential for the head to be involved personally

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and ready lead from the front. The leader’s commitment and drive inspires the

team work towards achieving the objectives. Also, when a leader takes personal

interest in the SBU’s working he’s better aware of the ground realities, can take

better decisions and not allow slack to set in.

15. Managing Employee Buy-In: Just a handful of BSC workshops were conducted

and BSCs designed. Conscious effort for creating buy-in was not there. However,

it was not difficult as the SBU head was already well versed with the concept.

16. Instilling Hope and Optimism: The E&P SBU has so far not made any

significant discovery and every instance of a block with no discovery tended to

demoralise the team. The SBU head made sure that team morale remained high.

He ensured that the team did not lose hope and remained committed to the

evaluation of potential and exploration.

17. Appealing to Intrinsic Motivation: Even though the EPMS was linked with

productivity incentive, and outstanding achievement award, there was no other

policy linking performance with rewards and incentives. Besides, in the given

environment, with no significant discovery, the SBU head believed it was only

self-motivation that can get the team going.

18. Developing and Nurturing Relationships: The SBU head truly cared for the

people and treated them like his own family. His empathetic and caring nature

enabled him develop strong personal bonds with the team members. He said:

Developing relationships always starts from appealing to the emotions. I

reach them on their festive occasions, on their small emotional moments,

make things happy and enjoyable for them and slowly develop great and

good relations. It takes a lot of patience and I have that. As leaders we

must be able to touch the hearts. Be it customers, business partners or our

employees.

19. Developing Positive Work Environment: The SBU Head was watchful about

team dynamics and wherever necessary, he intervened to ensure positive work

environment.

20. Institutionalising Work Systems: Being a new SBU, all work systems were at

the nascent stage. Relevant benchmarks in the industry were referred to while

setting up the work systems.

21. Employee Placements: The role & responsibility of each person/position was

identified as per the qualification/position/stream and their contribution towards

meeting the SBU objective.

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22. Transfers: The SBU had just taken shape and this problem had not arisen so far.

23. Reviewing Performance Objectively: In the words of SBU head:

Employee performance is a very sensitive issue and also very powerful. It is

the way we appraise their performance that they judge our righteousness, and

what management values. Their beliefs and behaviors towards their work are

further driven by this. Hence, I make sure that in my team employee

performance appraisal is done as objectively as possible. Actually, we don’t

wait till the quarter end. All team heads are required to continuously give

feedback, both good and bad to all their team members on every little work

done and may be record it, just as I do for them. Continuous feedback ensures

timely correction in the performance and makes an objective ground for the

leaders to assess their people objectively with facts, and rate them

accordingly in the performance review.

24. Coaching and Mentoring Leaders and Employees: There was no formal

system of coaching and mentoring. However, the SBU head had informally

initiated and supported a culture of coaching and mentoring, thereby addressing

the personal development of his team leaders and team members.

25. Ensuring Value Based Management: According to the SBU head,

When values like justice, transparency, commitment to organisation, truth,

integrity respect for everyone, are being practiced, it creates an environment

wherein everyone can trust each other and collaborate towards common

organisational objectives. The relationship bonds are stronger and this for

sure binds people together to the organisation.

Hence, the SBU head made sure that values are practiced and any deviation was

severely punished.

26. Political Interferences: Some internal politics was mentioned. Such interferences

however, were being managed by the SBU head as he was adept at dealing with it.

V. Developing Internal Business Capabilities

27. Building People Competencies Proactively in Line with Strategy & Expected

Business Scenario: Employees were sent for relevant training and exposure to

field conditions in spite of resource constraints.

28. Adopting New Technologies Proactively: Building SBU capability with the

latest technology is the cutting edge in a competitive business. Adapting to the

new technology posed some challenges, especially of resources, but the team

could tide over that.

100

VI. BSC Reviews

29. Ongoing Parallel Review Systems: The system of earlier EC and CFD reviews

continued, and BSC reviews came up as additional reviews.

30. Avoiding BSC Format for Reviews: Initially these reviews were expected in

BSC format. However, gradually, the top management did not seem to insist upon

using the BSC format and the usual system of business councils (BC) and

executive councils (EC) reviews continued. When the old was acceptable there

seemed no need for a different way of doing things.

VI. Change Management

31. Structures and Policies: Corporate policies applied with respect to this SBU as

well however, it was not observed as any challenge.

32. Being a PSU: The general perception of PSU culture is that of bureaucracy and

complacency. The SBU head kept the team on engaged in work and never had any

such issues in his team.

33. Managing Resistance to Change: It was a new SBU being formed in a new

environment with BSC in place. There was no change happening hence no question of

change.

Change management was not an issue in this SBU as it incorporated BSC in the

inception stage itself. Nevertheless, most of the members were from the same

organisation, and any mindset issues resisting the BSC way of working were effectively

addressed by the SBU head.

4.2.3. Challenges- Employees’ Perspective

The challenges as perceived by employees are broadly classified in Table 4.4

101

Table 4.4

BSC Implementation Challenges – The Perspective of Employees in E&P SBU

SN Challenge Category Challenging Factors Severity

I Understanding of the BSC Concept, Strategy Maps and BSC Template

1 Understanding of BSC Perspectives-Putting Thoughts in the BSC Format

2 Identification of Strategic Objectives

3 Quantifying Intangibles

4 Forced Irrelevant Objectives & Targets

II Leaders’ Competence, Commitment and Involvement

5 Technical Expertise at Senior Positions

6 Leaders’ Engagement Levels-(Discussing Vision, Strategy and Initiatives with Employees)

7 Supervisor Prioritising on Personal Goals

8 Faith in Leadership – (Perception of Leaders’ Accountability and Transparency )

9 Leaders’ Seriousness About Using BSC – BSC Just a Formality

III Facilitators’ Competence, Commitment and Support

10 Facilitators’ Competence

11 Facilitators’ Commitment and Support

12 Facilitators’ Knowledge of Business Complexities

IV Overall Alignment 13 Alignment of the Organisational Structure

14 Alignment of Support Functions / Other functions

15 Alignment of Policies: Employee Performance Management System (EPMS)

16 Alignment of Training & Development Initiatives

17 Alignment of Budget and Resources

18 Alignment of Rewards and Incentives

V Review Related Challenges

19 Data and Information Availability

20 Time Constraints

L

L

H

L

L

L

L

L

L

L

H

H

H

H

H

L

L

N

N

M

102

SN Challenge Category Challenging Factors Severity

21 IT or BSC Software

22 Representation of Operational Complexities

23 Comprehensive Representation of all Work Done

24 Consistent Performance Feedback

VI Cultural and Other Organisation Specific Challenges

25 Communication

26 Information Sharing

27 Decision Making

28 Conflict Resolutions

29 Work Systems

30 Employee Morale

31 Dissemination of BSC to Non-Management Staff

32 Perception about Organisational Care

33 Perception about Top Management Sponsorship

34 Perception about Supervisor Dominance

35 Ownership and Responsibility

36 Role Clarity


Each of the challenges listed in Table 4.4 are described below with interview quotes:

I. Understanding of the BSC Concept and Designing of the Strategy

Map and BSC Template

1. Understanding BSC Perspectives - Putting Thoughts in the BSC Format:

Employees faced difficulty in understanding the BSC perspectives and causal

N H M L

L

L

N

N

N

N

N

N

N

L

N

M

M

M

N

H

103

relationships. The team depended on discussions and brainstorming process to

identify objectives and processes. To quote a response:

Most of the works we do in E&P are very difficult to measure and usually

R&D work. Hence, we face difficulty in building BSC.” We faced difficulty

in translating our thoughts in BSC format. Nevertheless, after a number of

discussions with experienced people and with the team, we established the

way of setting up BSC and identifying measures.

2. Identification of Strategic Objectives (in new business of E&P): E&P was a new

activity. Leaders and employees themselves were not very knowledgeable about the

business and the BSC facilitator had little knowledge. The team felt the need for an

expert consultant.

3. Quantifying Intangibles: Many activities in E&P are intangible and being a new

activity, they did not really know which measure should be selected.

4. Forced Irrelevant Objectives and Targets: Some technical experts in E&P could

not really understand why an objective was placed in a particular perspective. In

one particular team, sufficient discussions did not take place and overall consensus

was missing.

II. Leaders’ Competence, Commitment and Involvement

5. Technical Expertise at Senior Positions: Only a few leaders, who had insufficient

domain expertise in E&P seemed to be posing this problem.

6. Leaders’ Engagement Levels-Discussing Vision, Strategy and Initiatives with

Employees: On various occasions, team leaders discussed SBU vision and strategy.

A few employees, however, pointed out that though the SBU head unfailingly

discussed strategy, their team head showed no interest never talked discussed

strategy nor cared about implementation.

7. Supervisor Prioritising on Personal Goals: Only a few employees mentioned this

with specific reference to their team head. They quoted:

If someone takes the initiative, the higher authorities will suppress him/her

will discuss only those matters with the head of department which will help

them to achieve their personal goals

The SBU generally had a good profile of leaders except one, who appeared more

interested in his personal career progression. He tended to steal credit for the good

work performed by someone else, prevented interaction of his team members with

the SBU head, and abused his hierarchical powers with threats of transfers and

104

spoiling the performance ratings. The following response from a newly joined

recruit reveals this reality:

People are given threats by his boss that if they will not do his personal

work, they will be transferred to very remote location; their probation

period will be extended. They would be given goals that are difficult and

cannot be achieved practically.

8. Faith in Leaders – Perception of Leaders’ Accountability and Transparency:

Members of this particular team felt that there was no transparency and

accountability. The supervisor was pursuing his personal agendas only. However,

they could relate well with SBU head and this kept them motivated. To quote:

It is quite a good relief that our head of department (he meant SBU head) is

very engaged and ensures things get done.

9. Leaders’ Seriousness About Using BSC – BSC Just a Formality: Employees

who quoted this were from a particular team and it was in reference to one leader

only. These employees in particular stated that BSC was just a formality being

completed as the top management talked about it. Other team members referred to

their HRD templates as their BSC

As implementation of BSC is top driven, employees and teams adopt BSC only if their

leaders are serious about it.

III. Facilitators’ Competence, Commitment and Involvement

10. Facilitators’ Competence: Employees were not very convinced about the

translation of E&P strategy into scorecard and felt that the facilitator needed to be

more competent.

11. Facilitators’ Commitment and Support: The facilitators for this SBU was

involved only with conducting three BSC design workshops after which he did not

seem to play any role by way of follow-up, inquiry into implementation status,

clarifying doubts, resolving issues or offering support in any manner.

12. Facilitators’ Knowledge of Business Complexities: Nearly all respondents

expected the BSC facilitator to be knowledgeable. This expectation was not

fulfilled.

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They should not just disappear. Their monthly presence and guidance is

required. […].They must educate on concept, monthly follow up on

implementation and create a drive towards strategic results.

BSC facilitator should understand various functionalities associated with

the SBU and their interconnections etc. to depth and based on that the BSC

should be building up.

IV. Overall Alignment

This team was small and located at one place. Timely and frequent communications

and information sharing, steered by the SBU head could ensure alignment in the team.

13. Alignment of Organisation Structure: As this was a new SBU, the organogram

was in a state of flux. Nevertheless it was well aligned with SBU strategy.

14. Alignment of Support Functions: The support functions were involved in all

business decisions and even though they did not have formally designed BSC for

themselves, their role and responsibilities were very much aligned to strategy.

15. Alignment of Policies- Employee Performance Management System (EPMS):

The SBU followed the EPMS of the parent organisation as many of its employees

were on deputation from the parent organisation. Structurally, EPMS had been

completely aligned to BSC, requiring employees to write their yearly goals and

targets in the BSC format on what they called HRD-I, i.e. the online template in

which employees fill their goals and targets in the year beginning. However, the

real challenge was the actual content that employees entered in templates and the

considerations of bosses who reviewed employee performance.

In this SBU, performance feedback was regularly given to employees and they

were generally happy. However, some employees felt that in their team

performance ratings were more a function of personal rapport one shared with the

boss than the actual performance at work and capabilities.

16. Alignment of Training & Development Initiatives: The SBU head ensured that

everyone received training in their respective areas. This was not at all a

challenge. Employees felt they received good training and their SBU head

encouraged learning and development.

17. Alignment of Budget and Resources: The SBU head personally ensured that the

budget and resources were aligned to strategy and were available. At times he felt

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constraint in getting the appropriate amounts as investments in E&P are huge.

However, employees never faced any challenge with respect to resources.

18. Alignment of Rewards and Incentives: There were no specific rewards linked to

BSC performance. Most employees opined that their performance was

acknowledged with verbal appreciations and this was rewarding in itself. Most

employees seem to be fine with their performance evaluation, however, some had

very strong feelings and felt performance evaluation was biased.

V. Review Related Challenges

19. Data and Information Availability: As SBU head constantly reviewed the

SBU’s strategic performance, relevant data was maintained systematically. Some

employees mentioned data availability as a challenge. They referred to the fact

that, since the SBU so far didn’t have any major breakthrough in discovery of oil

or gas, there was not much data to be reported in the review.

20. Time Constraint: Since the business performance reviews were an expected

routine function, people planned accordingly and faced no time constraints except

for the few who felt that they were overburdened with other administrative

activities.

21. IT or BSC Software: The team was managing data in Excel files. However, they

there was also a lot of technical. Having BSC software would have made the MIS

and reviews even more perfect.

22. Representation of Operational Complexities: During reviews, SBU head would

go to the necessary level of detail to understand the ground situation. Every issue

got his attention.

23. Comprehensive Representation of all Work Done: Employees felt that,

although the major work was reviewed, they did much more than what was

discussed in the review. .

VI. Cultural and Other SBU Specific Challenges

During the BCS implementation, while the team worked towards achieving the

objectives, many soft factors posed challenges. For example, the attitude and approach

of the supervisor, boss- subordinate relationships, work culture aspects etc. Some such

challenges which were evident were:

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25. Communication: The SBU head ensured frequent, timely and effective

communications and also a congenial environment to ensure two way

communications. Thus, he could develop strong emotional bonds which are very

much essential engaging the team members.

26. Information Sharing: Some leaders, due to lack of ability or intentionally, were

found wanting in information sharing and clear communication. The SBU head

filled this loophole by regular information sharing and strong emotional bonds of

relationships with his team mates. An employee commented as under:

All the time comments are given very vague and subjective by the bosses.

We feel at loss to understand what to do. Only when SBU head addresses

us there is some clarity.

SBU head scheduled regular information sharing meetings and even e-mail

communications, thus ensuring everyone remains informed. He tried to inculcate

these qualities in his leadership team as well.

27. Decision Making: It was not the issue within the team. All decisions were timely

and expeditious.

28. Conflict Resolution: The support functions were included in all meetings and

decisions, and there were not many conflicts.

29. Work Systems: While forming the SBU, work systems were well defined and

being followed.

30. Employee Morale: When after hard work on the blocks no discoveries could be

reported, the team would feel de-motivated. These were times when they would

feel that they were not getting attention or that their work was not being

recognised.

31. Dissemination of BSC to Non-Management Staff: There were no non

management employee in this SBU and hence, this was not an issue here.

32. Perception about Organisational Care: The SBU head took care of the entire

team as a family. The employees felt that, they were ‘looked after’.

33. Perception about Top Management Sponsorship: The team felt the need of top

management support and encouragement and resources too. As regards BSC, not

many employees were aware or convinced of top management’s commitment and

interest in implementing BSC.

34. Perception about Supervisor Dominance: Employees in one team strongly

reported this about their boss.

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35. Ownership and Responsibility: There were few leaders lacking this and this

created moderate challenge.

36. Role Clarity: It was made very clear to everyone.

Overall, the SBU seemed to have a professional work culture. The exception was one

team whose head had an autocratic style of functioning and preferred to pursue his

personal goals over the organisational objective. Here, the team members felt that BSC

was a mere formality and promotions or career progressions were actually more a

function of favoritism, personal relationships and favors showered by bosses rather

than competence and actual work performance. Some people of this team held back

their responses to some probing questions while a few willingly share information on

the assurance of confidentiality. Disappointment and frustration was evident in this

team even though all of them believed that their SBU head is deeply engaged and

cared for all of them.

Thus, an intensive analysis of the challenges indicated that while leadership and the

alignment were not major issues, it was the facilitator’s competence, commitment and

involvement which posed a major challenge in this SBU. Accordingly, the knowledge

of the BSC concept, designing of scorecards and its implementation suffered a setback.

Also, with no breakthrough achievements to show for in exploration, the morale of

employees in this SBU was always challenged.

4.2.4. Challenges- Facilitators’ Perspective

The facilitator for this SBU could not be interviewed. However, on observing the team

a few facts became clear. Some insights could also be gained from interviews with

other facilitators.

The corporate BSC facilitator felt that there was too much work to be handled and this

prevented proper attention to all SBUs. As E&P was located in a different city, the

facilitator felt that physical distance came in the way of better involvement in the

implementation process.

The scorecard manager from the SBU worked in close association with the SBU head

for strategy implementation, but he was not an authority on the subject of Balanced

Scorecard. He was not properly trained in implementation, nor was role properly

clarified. His comments:

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Yes, I think I am the assigned scorecard manager. However, there is no

specific role or defined for me. Nor have accountabilities clarified. I do

what my boss says. I have a very clear goal and target which is in line with

the role I have in this SBU; but there is no specific goal and target that I

have with respect to BSC implementation. Isn't that the responsibility of the

BSC team? We give them all the support that they need from us; however,

we hardly see them taking any interest.

The BSC team expected the SBU heads to take keen interest in BSC implementation

and believed that as facilitators their role was only to provide support. SBU Head,

leaders and employees however felt exactly the opposite and considered BSC project

the responsibility of the BSC team. These challenges are being summarised in Table

4.5.

Table 4.5

BSC Implementation Challenges – The Perspective of BSC Implementation

Facilitators for E&P SBU


I Team Structure and Size

1 Size of the Team

2 Work Load

3 Location of the Team

4 Reporting of the BSC Team

5 Hierarchical Issues

II Role Clarity 6 Accountabilities of the BSC Team

7 Role and Accountabilities of Scorecard Managers

8 Training of Scorecard Managers

III Competency Development

9 Training of Facilitators on BSC Concept and Implementation

10 Competencies to Conduct Training and Workshops

11 Knowledge of Business Complexities

IV Commitment and Ownership

12 Competence of Facilitator

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13 Commitment of SBU Heads

14 Buy-in of Leaders and Employees

V Cultural 15 Communications

16 Enforcement of Decisions

17 Culture of Appeasing Supervisors

18 Willingness for the Change

VI BSC Review 19 Reviewing Abilities of the Leaders

20 BSC Software for Information Collation

21 Time and Data Constraints

VII Transfers 22 Integrating New Incumbents into BSC

23 Change in Leadership Approach to BSC


4.2.5. Factors Driving Employee Buy-in for BSC

Both leaders and employees touched upon this aspect in direct or indirect ways. Major

leading factors that emerged were:

1. Boss’s commitment to implement BSC framework

2. Desire to bring in positive changes in the working environment

3. Expectation of objective and fair assessment during performance appraisal

4. Nature of work

5. Personal value towards work

6. Relationship bond with boss

7. Team environment and morale

Employees expected BSC to result in positive transformations and also ensure

objective and fair assessment of their performance at work. The nature of work,

N H M L

L

N

N

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relationship with boss, overall team environment and employees own personal value

about how to approach work were other determinants that motivated employees to give

in their best at work.

4.2.6. Outcomes of BSC Implementation at E&P


The SBU implemented BSC right from its inception and hence, transition was not the

outcome to be assessed. The researcher looked into the characteristics of the team that

engaged and motivated employees to give in their best performance at work place.

Range of responses was as under:

1. A Passionate Leader Committed to Business Success: When the team members

saw the SBU head working so hard, they too felt inspired to work with same

commitment.

2. Faith in the SBU Head’s Competence and Values – The SBU head treated his

team as family. His past record showed he was a task master and invariably had a

remarkable success in all his previous assignments. The team felt inspired and had

tremendous faith in his abilities as is obvious from the following quote:

He is very much approachable and available to his team members and

facilitated the teams to have a professional working environment.

3. A Deep Personal Bonding with Leader: The SBU head gave personal attention

to all his team member, knew their strengths and weaknesses and without being

judgmental related with them at a personal level, thus getting a better

understanding of his people. Though he maintained a very strict discipline, he

could still manage deep personal bonds allowing the other person to share freely

with him and he supported them in their personal and professional endeavors.

4. Being Informed about Business Happenings Both at Micro- and Macro-

Levels: The SBU head emphasised the need for information sharing and would

personally share important business events at various forums i.e. meetings, review

meets, Independence Day celebration etc. He communicated by direct addresses,

e-mails, letters and memos, and reached out to the last employee in the hierarchy,

including the non-management employees. People appreciated feedback on

business performance. To quote:

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Feedback on overall performance is shared with all employees. Thus, all are

kept mentally stimulated. Modeling; simulation and evaluation etc. are used.

Feedback on performance is great.

5. Involvement in Business Meetings: The SBU head involved all his team

members in meetings by directly or indirectly seeking suggestions, giving them

business related projects to work upon and in various discussions. At no point of

time, did anyone ever felt left out.

6. Acknowledging for Their Work: Appreciation and acknowledgement of the

good work done was immediately placed. This compensated for the lack of direct

performance linked rewards which was not possible as pay and incentives in the

SBU were in line with corporate policy and guidelines. Such acknowledgements

made them feel good and rewarded and they continued their efforts to perform

well.

7. Work Allocation Considering Interest and Competence: Due consideration

was given to interest, talent and qualification while allocating work to the team

members. People appreciated this and worked with zeal. As the leader said:

First I want my people to learn and develop practical expertise in the

area in which they are professionally qualified. Hence, we have tied up

with ONGC for their training and on field exposure. This entire rigor will

pay off when we hit upon a yielding block or a business opportunity.

8. Overall Culture of Performance: The SBU head was very strict and valued hard

work and performance. As the SBU head quoted:

Once it gets in to the blood line of the organisational culture people

continue to perform and value performance. Everyone who joins the team

even later gets molded in to the existing culture of the team. It is at this

stage that I need to set up the foundation for the culture of the E&P SBU,

and I am doing it by ensuring that everyone has a lot of work, their

performance is reviewed regularly and people get rewarded on the basis

of their performance at work. Those who are not able to match the

standards are exposed to further rigor and training.

Most employees enjoyed working in such an atmosphere. They got to learn and

hone their skills and it was intrinsically very satisfying.

9. Support from All Functions Including ‘Support Functions’: The support

functions were involved in all the business meetings and discussions. SBU head

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always emphasised on overall collaboration. In such a working environment,

where support is readily available employees felt their work moved faster.

10. Employees’ Personal Value to Give in Their Best Performance at Work: This

has been a near unanimous response from the employees. Everyone has his or her

own set of beliefs and values and normally, all behavior is guided by this. Indian

culture and philosophy emphasises upon doing excellent work without expectation

of reward, (teachings from The Bhagwat Geeta). Many employees reflected this

philosophy.

11. Clearly Defined Work Systems and Work Discipline: Representing the general

view, an employee quoted that:

Clearly defined work systems were one of the factors that enabled them to

give their best performance.

12. Just and Fair Treatment (Value Based Management): Values are at the

foundation of any relationship. Relationships are so very important in running an

organisation and engaging the employees in pursuit of business objectives. The

SBU head appreciated this fact and ensured a value driven management. To quote

the SBU head:

I am very much particular about fair performance assessment, transparency,

and just and fair decisions. These values help develop a working

environment wherein employees feel like giving their best performance.

Hence, it is important to ensure value based management practices.

The above factors enhanced the quality of inner work life dynamics of employees

resulting in enhanced performance.


E&P SBU initiated steps to critically review the existing blocks as a part of ‘Portfolio

Optimisation’ in order to have a balance portfolio and minimize exploration

investment risks. It attempted to foray in CBM and Shale Gas opportunities to support

the Gas business strategy.

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The achievements with respect to the strategic objectives on the SBU scorecards are

depicted in Table 4.6

Table 4.6

Business Performance Outcomes of E&P SBU (as of December, 2011)

SN Strategic Theme Strategic Outcomes Status

1 Developing Strategy for Emerging as a Successful E&P Operator

The SBU acquired Prize Petroleum, an already existent E&P Operator

2 Divestment of High Risks Blocks

Divested 3 blocks, after the study. Savings were to the extent of Rs. 240cr.

3 Low Risk Acquisitions with Balanced Portfolio

Acquired partnership in 1 block in India, Rajasthan

4 Acquisition of Development Stage or Producing Assets

Developed business relationships with other operator companies in this business and are expecting profitable joint venture and partnership deals mainly in Australia and Africa

5 Diversification into Unconventional Resources

Getting into CSG and Shale Gas in USA & Australia

6 Cost Saving In all their endeavors they have been extremely cost conscious. Savings in two years were up to the extent of $8.5 million.


Source: Data collected and compiled from the information provided by the SBU head,

E&P, performance reports and presentations made to the top management

team

The strategic focus enabled the team to save up to nearly Rs.425crores ($8.5 million)

by way of prudent decisions and technological know-how. Rs.240 crores was saved by

simply divesting wisely (strategic review report, 2011 submitted to EC). Strategic

networking was initiated for developing appropriate tie-ups with successful companies

to forge way into business of coal bed methane (CBM) and shale gas in addition to

conventional oil and gas.

The study of this case brings forth the vital role of leader. Leaders’ ability to involve

and engage all his people in the strategy implementation process is essential for the

strategic success.

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4.3. CASE TWO: UPCL’S AVIATION SBU

In 1992 the airline industry was opened to private participation under the category of

‘air Taxi Operators’. This marked a new chapter the country’s aviation industry. The

first private commercial airlines were East West and Modi-Luft which operated in the

early 1990s. Further, Air Deccan pioneered the concept of budget air travel. Air

Deccan introduced the concept of low cost air travel (and low cost carriers) and started

operations in 2003. Domestic passenger traffic grew at well over 30 percent in the

succeeding years. The open skies policy of the government also led to growth in

International Operations. UPCL viewed these developments as an opportunity and

established a separate SBU for its Aviation Business.

With the new policies and the introduction of Open Access model at major airports

like Bangalore, Hyderabad, Delhi, Mumbai etc., the jet fuel business is also

undergoing a sea change. In this model the airport storage facilities are owned and

operated by an independent entity or a joint venture (JV). All eligible suppliers are

given access to position product at the facility.

An ‘Into-Plane’ service provider carries out the Aircraft refueling operations.

Therefore, the oil company’s role ends with positioning product at the storage. This

arrangement rids of the monopoly of the oil companies over the last link in the Jet Fuel

Value chain. But the Aviation SBU is fully cognizant of the new developing scenarios

and is prepared to face the challenges of competition and seize the opportunities.

The focus of the Aviation SBU was, in stages, on formulating strategy, increasing

market share, strengthening networks, logistics and operations capability,

Simultaneously, UPCL-Aviation entered into a techno-commercial agreement with

Chevron Global Aviation which, while enabling technical inputs for operations up-

gradation and equipment design, also boosted the Corporation’s marketing reach to the

world’s major International Airlines. Figure 4.9 gives the SBU structure.

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Figure 4.9

Organisation Structure of Aviation SBU

Source: Adapted from the Manual of Organisation Charts Maintained by HR Department

at UPCL

UPCL-Aviation had been a success story considering the strides it made since its

inception. The current trends in the Indian Aviation Market are in sync with global

recessionary trends. The trends point to a churn in the sector and may result in

consolidation among the leading players. At the time of inception, the Aviation SBU

was a compact, cohesive team which expanded rapidly. By the time of study the SBU

had 131 management employees dispersed across 32 locations in the country. The

average employee age was 36 years.

About 75 percent of the employees were qualified professionals and the others had

risen from the ranks. Since 2005, when BSC was initiated, many people had been

transferred to and out of the SBU. The information and data was collected from

archived documents, and in- depth interviews (11 employees and 4 leaders). Besides,

group interviews (5 employees in two groups), and 1 focused group discussions

(consisting of 5 employees, but treated as one response). Thus, 17 employee responses

and 3 leader responses were received. One of the leaders was also the Scorecard

Head Aviation SBU

Ch/Sr. Manager

-Commercial

Ch/Sr. Manager

– Opns. Engg. &

Purchase

Ch/Sr. Manager

– Mktg. Opns. Ch/Sr. Manager –

Business Devpt.

Executive-

Commercial

Executive

-Branding Manager-

Customer Relation

Manager- QC,

Insp. & Trng

Manager- Opns,

Logistic & SHE

Manager- Engg.

& Purchase

Executive- QC,

Insp. & Trng Executive- Engg.

& Purchase

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Manager for the SBU. The facilitator originally attached with the SBU provided details

and two out of three SBU heads who headed this SBU were interviewed. Subsequent

to his transfer, the first SBU head of Aviation was heading the E&P SBU at the time of

study. Thus, he was a common respondent for both the SBUs.

4.3.1. Status of BSC Implementation in Aviation

The recently updated scorecard of the SBU as developed in December 2011 is given in

Figure 4.10.

Figure 4.10

Balanced Scorecard of Aviation SBU

HPCL

STRATEGY MAP – TARGET SHIKHAR -AVIATION SBU

Significant

Financial Contribution

Strategic Relationship

with alliance Partner

Strategic

Theme

Improve Cost

Effectiveness

Customer

Financial /

Fiduciary

Internal

Processes

Capability

Building /

L&G

Superior

Sales Performance

Adoption of New

Business Model

Punctuality, Quality,

Reliability, Safety

Most Preferred

Supplier

Superior Performance With Transformation of

HP Aviation Business

Selective Network

Expansion

Balance Portfolio

Domestic/International

Competency &

Team BuildingCreating High

Performance Culture

Leveraging

Technology

Operational

Excellence

Source: Adapted with permission from BSC documents maintained with SBU Head of

Aviation SBU (scorecard made in 2011)

With the introduction of BSC in the year 2005, consultants helped design the SBU

scorecard and cascaded it to two levels till the position of in charges at locations based

aviation service facility ASF. The consultants also provided implementation support

by helping the SBU prepare BSC review reports. Nevertheless, the interaction of

consultants was mostly limited to the SBU heads and senior management at HQO.

Overall awareness about BSC among employees, especially at some remote locations,

could not be gauged, while the senior managers at HQO showed fairly good

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understanding of the concept (as evident from the interviews). Table 4.7 describes

implementation status of BSC at Aviation SBU.

Table 4.7

Status of BSC Implementation in Aviation SBU


I Pre-Implementation Stage : BSC Awareness and Buy-in

1 Awareness about the BSC concept

Senior managers and officers in HQO office were well versed with the concept and implementation of BSC. But officers at locations, particularly junior management did not seem to know much about BCS. However, they were aware about the focus BSC Strategy.

2 Leaders Buy-in

BSC was regarded as a useful tool for strategy implementation by the leaders. Leaders’ buy in for BSC across the hierarchy was very good.

3 Employee Buy-in

Employees in junior management were inquisitive about BSC. Those who had a high level of awareness were very much in favor of implementation and integrating BSC into management processes.

II BSC Implementation Stage: BSC Designing, Cascading, Aligning and Reviewing

1 Designing Strategy Map & BSC Template

Initially, SBU initially had a well- designed BSC which was developed jointly with the consultants. However, later revisions were still being discussed.

2 Cascading Employees based at HQO locations were aware of their individual roles and responsibilities in the implementation process. This awareness was lacking among employees at other locations. There was little awareness of cascaded scorecards outside HQ.

3 Alignment with Vision & Strategy

Leaders and employees were aware and aligned with SBU strategy. Aligning support functions was a challenge. Budget & Resources too needed to be more aligned.

4 BSC Review Reviews were regular feature however. However they were not sufficiently structured along the themes, perspectives or objectives of BSC.

III Post BSC Implementation – Sustenance Stage

1 Adapting BSC to Modified Strategy

The first leader of the SBU made it a strategy focused SBU; however, not much publicity or reference was attributed to BSC. Although he followed all steps as mentioned in BSC implementation, however, he did not name it as BSC implementation.

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2 Integrating BSC as an Ongoing Management Process

Integration of BSC in management processes was gradual and it was impacted by the change in SBU leadership.


Source: Triangulated information from BSC documents, presentations, and from

interviews of leaders, facilitators and employees.

The SBU leadership changed twice from the time BSC was introduced. It was evident

from the interviews with employees that the different leadership styles of the three

SBU heads impacted BSC implementation. The first Aviation SBU head was a

dynamic man and had a flair for leadership. He led his team through the

implementation process. The BSC facilitator at that time was equally capable and

committed. However, in 2007, the facilitator was assigned to other SBUs and, about

the same time, the SBU head, too, was transferred.

In 2008, when implementation was revived, both facilitator and the SBU head were

different. Many employees had also been transferred out and there were new managers

in the Unit. At the time of study in August, 2011, the HQO Aviation team was working

on reviewing their scorecards. By December 2011, they finalised a revised scorecard

which is shown in Figure 4.9.

By this time the SBU had become bigger and consisted of many ASFs located across

the country. People had changed. Many leaders had been transferred except the

scorecard manager who actually remained the saving link to ensure the continuity of

the scorecards. The SBU head that brought up the SBU to a high functioning status

was changed. The facilitator who initially supported the BSC implementation in the

SBU too was replaced by another facilitator. In fact, by the time of study, two SBU

heads had changed, and two facilitators had changed.

4.3.2. Challenges- The Leaders’ Perspective

The SBU had three heads from the date of inception till the time of study. In this study,

only the first and the present incumbent-the third-were available for discussions and

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data gathering. Most of the leaders interviewed had worked with all three heads. The

challenges faced by leaders after BSC revival in 2008 are described below and listed in

Table 4.8.

Table 4.8

BSC Implementation Challenges – The Perspective of Leaders in Aviation SBU


I

Developing an Appropriate SBU/Department Business Strategy

1 Understanding Macro Business Scenario

2 Identifying Strategic Objectives

3 Identifying Strategic Competencies

4 Business Foresight

5 Resource Availability

Designing Balanced Scorecard, Cascading and Aligning

6 Understanding and Designing Scorecards

II 7 Competence and Commitment of the BSC Facilitator

8 Involvement and Support of BSC Facilitator

9 Dissemination and Cascading of Scorecards

10 Bringing Alignment to Become Strategy Focused

11 Strategic Networking

III Structural Inadequacies of BSC

12 Validating Causal Relationships

13 Finding BSC Framework Not Enough for Achieving Objectives

IV

Inspiring and Engaging the Leaders and Employees in the Pursuit of Business Results

14 Personal Involvement – Leaders’ Own Buy-In for Strategy and BSC

15 Managing Employee Buy-In

16 Instilling Hope and Optimism

17 Appealing to Intrinsic Motivation

18 Developing and Nurturing Relationships

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19 Developing Positive Work Environment


21 Employee Placements

22 Transfers

23 Objectivity in Performance Reviews

24 Coaching and Mentoring Leaders and Employees

25 Ensuring Value Based Management

26 Political Interferences

V Developing Internal Business Capabilities

27 Proactive Learning Initiatives linked with Strategy to Build People Competencies

28 Adopting New Technologies Proactively

VI

BSC Reviews

29 Ongoing Parallel Reviews

30 Avoiding BSC Format for Reviews

VII

Change Management

31 Structures and Policies

32 Being a PSU

33 Managing Resistance to Change


I. Developing an Appropriate Aviation SBU Strategy

SBU heads and leaders are primarily responsible for developing a business strategy

that works. The challenges of developing the strategy were minimal. Translating it in

the BSC, with the first SBU head and the first facilitator was a minimal challenge.

1. Understanding of Macro Business Scenario: This was a major challenge at the

time of inception of the SBU. The first SBU head, an astute strategist, knew how

to maneuver the competition in his favor and made this SBU a business leader.

Under him. The leaders too developed good sense of business.

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2. Identifying Strategic Objectives: These objectives were clear and were

communicated to everyone in the SBU.

3. Identifying Strategic Competencies: Initially, the SBU head would personally

assess competency gaps. Later, as the SBU grew in size, the competency

development team helped assess the gaps and relevant training was given to the

employees.

4. Business Foresight: As expected from an astute strategist, the business moves of

the first SBU head were accurate and timely. He felt completely empowered and

did not feel hindered by procedures and bureaucracy. Thus, high standards of

performance were set for his successors. This became a challenge for them

5. Resource Availability: Aviation was a rapidly expanding business which brought

substantial profits to the corporation. Resources were made easily available to the

SBU. But later, as the market scenario started changing, investments were made

with greater caution. But manpower however was a constraint as in the words of

the SBU head:

We could manage all resources. However, manpower figured as a major

constraint. We were growing and there was always a lag period between our

request and the time when the manpower physically arrived.

II. Designing Balanced Scorecard, Cascading and Aligning

6. Understanding and Designing of Balanced Scorecards: The team which

worked on BSC in 2006 had almost completely changed except for the scorecard

manager. The new team had to be educated on the concepts.

7. Competence of BSC Facilitator: The fist BSC facilitator who initiated BSC and

SLAs in the SBU was perceived to be competent and inspiring. The facilitators

that followed were not considered competent:

He gave us examples that were not really referring to our kind of business.

This fellow gave us the example of the aviation company not the airline

fuel company. Our kind of case, would have given us better idea.

8. Commitment and Support of BSC Facilitator: Talking about the first facilitator,

most responses were:

She almost became a part of our team; understood our business and

supported BSC implementation […]. This kind of involvement was missing

in others.

123

9. Dissemination and Cascading of Scorecards: The non-management staff of the

SBU had no awareness or knowledge of BSCs. There was no visible linkage

between their performance rewards and the scorecard objectives. The frontline

management staff had great difficulty getting the non-management staff oriented to

the urgency of achieving strategic objectives.

10. Bringing Alignment to Become Strategy Focused: The first SBU head exhibited

dynamic leadership qualities by reaching out to and communicating with all team

members. He had succeeded in getting them aligned with strategy. The later heads

found it a challenge to maintain these standards of leadership. Even though SLAs

were signed, they could achieve the same levels of coordination and alignment with

other SBUs. The present head stated that:

Even in review, we see individual department trying to push their causes.

Getting them aligned with strategy is a challenge. Secondly, cross

functions are not able to appreciate the aviation related issues. For

example, within the SBU itself, finance guy talks only finance, operations

is try to push their agenda and so on. It is the individualistic objectives and

performance vis-a vis the overall SBU objectives. BSC talks in theory.

Tanslating it in to reality is a tough job. There is a considerable difference

between theory and what exists in reality.

11. Strategic Networking: The succeeding Business Heads could not emulate the

success of the first SBU Head with respect to networking with other industry men

and stakeholders. Such networking impacted business performance.

III. Structural Inadequacies of BSC

12. Validating Causal Relationships: Identifying and validating causal relationships

was a challenge. While designing their BSC, the team based their findings of

causal relationships their experience and wisdom.

13. Finding BSC Framework Not Enough for Achieving Objectives: The Leaders

and managers felt that even with a well designed BSC, it alone was not enough.

The framework was a useful strategy guide, but a driving force was necessary to

make it happen.

124

IV. Inspiring and Engaging Leaders and Employees in the Pursuit of

Business Results

14. Personal Involvement – Leaders’ Own Buy-In for BSC and Strategy: The

degree of personal involvement varied based on their personal values; however, this

was not a challenge to implementation.

15. Managing Employee Buy-In: Employees in this SBU were open to new

initiatives. Only the buy-in of the non-management staff was not good enough.

16. Instilling Hope and Optimism: Initially the Aviation industry was expanding and

growing business bred optimism. Later, when the business scenario changed,

leaders found it a challenge of keeping the team the team optimistic and hopeful.

17. Appeal to Intrinsic Motivation: Leadership quality determined motivation

levels. Some leaders were successful in ensuring high motivation within the team,

others not quite so.

18. Developing and Nurturing Relationships: Relationship bonds were strong

during the tenure of the first SBU head. However, it was apparent from interviewee

responses that these bonds have not sustained in the later years.

19. Developing Positive Work Environment: A performance oriented work culture

was instilled by the first SBU head. This legacy has continued. The scorecard

manager who was also the second- in- command has ensured that this has sustained.

20. Institutionalising Work Systems: Work systems were well defined and

institutionalised during the initial days of the formation of the SBU. These systems

have also continued.

21. Employee Placement: Competency fit and motivational fit were considered

placing employees on a particular job.

22. Transfers: Transfers disrupted the momentum of implementation. Integration of

BSC with this system too hadn’t happened well. Upon transfers the BSC were not

being handed over formally. Further, the new incumbents invariably requested for

several changes in the scorecard of the previous incumbent for the same position.

The system of employee transfers was perceived as a challenge even by the leaders.

23. Objectivity in Performance Reviews: Regular performance and feedback had

become an integral part of the SBU culture.

24. Coaching and Mentoring of Leaders and Employees: There was no formal

coaching or mentoring system in the organisation. However, the first head

125

introduced a culture of coaching juniors which continued over years. Employees felt

that formalising the coaching culture would be a good idea.

25. Ensuring Value Based Management: The first SBU head consciously created a

culture of valuing the values. He said:

Values form the foundation of any relationships and are depicted in any

human interaction. Right from the beginning I had visualised a culture

wherein performance is valued, and people are happy. This is something a

leader has to be on continuous vigil, or else it can slip.

26. Political Interferences: Such interferences were not many, though they were not

absent as well.

V. Developing Internal Business Capabilities

27. Proactive Learning Initiatives to Build People Competencies: The leaders could

identify the training and developmental needs of the team members with

experience and with the help of competency mapping and development center

(CMDC) team. Many of the technical and on the job trainings were carried out

internally by the seniors themselves.

28. Adopting New Technologies: Latest know-how was adopted and such moves

were always encouraged. The necessary support and back-up were available.

VI. BSC Review Related Challenges

29. Ongoing Parallel Reviews: As the SBU had a good system of information flow,

they could deal all types of reviews; nevertheless they also felt that a separate

review for BSC was repetition of other reviews and viewed such reviews as a

waste of time.

30. Avoiding BSC Format for the Review: By not focusing on the BSC format,

many strategic thrust areas got were getting ignored as the review then was totally

depended on the wisdom of the reviewer.

VII. Change Management

31. Structure and Policies: It was observed as a low challenge and mainly by the

frontline officers in the junior grades. They felt employee oriented welfare policies

and schemes immediately rewarding performance would be better.

126

32. Being a PSU: Being a PSU did not make much difference to the working culture

of the SBU. However, bureaucracy and short span of top management was quoted

as challenges coming in the way of a more professional working environment.

33. Managing Resistance to Change: Leaders and employees embraced BSC and

there seemed no resistance to change.

4.3.3. Challenges- The Employees’ Perspective

The challenges as narrated by employees in the journey of BSC implementation are

listed in Table 4.9

Table 4.9

BSC Implementation Challenges – The Perspective of Employees in Aviation SBU


I Understanding of the BSC Concept, Strategy Maps and BSC Template

1 Understanding of BSC Perspectives-Putting Thoughts in the BSC Format

2 Identification of Strategic Objectives

3 Quantifying Intangibles

4 Forced Irrelevant Objectives & Targets

II Leaders’ Competence, Commitment and Involvement

5 Technical Expertise at Senior Positions

6 Leaders’ Engagement Levels-(Discussing Vision, Strategy and Initiatives with Employees)

7 Supervisor Prioritising on Personal Goals

8 Faith in Leadership – (Perception of Leaders’ Accountability and Transparency )

9 Leaders’ Seriousness About Using BSC – BSC Just a Formality

III Facilitators’ Competence, Commitment and Support

10 Facilitators’ Competence

11 Facilitators’ Commitment and Support

12 Facilitators’ Knowledge of Business Complexities

H

M

N

M

N

N

N

N

M

N

H

M

127


IV Overall Alignment 13 Alignment of Organisational Structure

14 Alignment of Support Functions / Other functions

15 Alignment of Policies: Employee Performance Management System (EPMS)

16 Alignment of Training & Development Initiatives

17 Alignment of Budget and Resources

18 Alignment of Rewards and Incentives

V Review Related Challenges

19 Data and Information Availability

20 Time Constraints

21 IT or BSC Software

22 Representation of Operational Complexities

23 Comprehensive Representation of all Work Done

24 Consistent Performance Feedback

VI Cultural and Other Organisation Specific Challenges

25 Communication

26 Information Sharing

27 Decision Making

28 Conflict Resolutions


30 Employee Morale

31 Dissemination of BSC to Non-Management Staff

32 Perception about Organisational Care

33 Perception about Top Management Sponsorship

34 Perception about Supervisor Dominance

M

M

M

M

M

L

L

M

M

H

N

L

H

M

L

L

N

H

H

M

M

H

128


35 Ownership and Responsibility

36 Role Clarity


In the year 2005, a formal cascading of BSC carried out by the consultants. However,

not everyone was adequately educated on the subject. As the SBU grew and with

leadership changes, the element of personal touch gradually reduced. Though the

strategy focus was sustained through various communications, the awareness about the

BSC concept could not be sustained among the junior management. This was obvious

from the following response:

We know there is something as target ‘Shikhar’, we know about the

operational excellence framework on which we keep working; are they the

by-products of BSC? We don’t know if there is any linkage of all this to

BSC. […] Who is a BSC coordinator? No one ever explained that complex

looking diagram. It is confusing and people don’t want to look at it.

Obviously, the importance and objectives of BSC had not reached the lower echelons

of the hierarchy. Some of the challenges employees faced were as under:

I. Understanding the BSC concept and Designing of the Strategy Map

and BSC template

The understanding of BSC concept and its components was clear to a majority of the

employees at locations.

1. Understanding of BSC Perspectives - Putting Thoughts in BSC Perspective:

The officers lower in the hierarchy and based outside HQO locations were not

sufficiently exposed to BSC workshops. They could not think in terms of BSC

perspectives.

2. Identification of Objectives: Objectives were identified by leaders based at HQO

and percolated to lower levels in HRD templates at the time of writing employee

goals and targets. Employees followed the priorities as advised.

3. Quantifying Intangibles: Employees found the abstractness of L&G perspective

to be a challenge. They did not know how to make it measurable

N H M L

L

L

129

4. Forced Irrelevant Objectives and Targets: The cascading was top down.

Objectives and targets identified on BSC made sense to all employees, though

some felt that a few targets appeared extremely stretched.

II. Leaders’ Competence, Commitment and Involvement

5. Technical Expertise at Senior Positions: Leaders at senior positions were

experts in their domain areas. They guided the team well.

6. Leaders’ Engagement Levels-Discussing Vision, Strategy and Initiatives with

Employees: The SBU did not face any challenge in this respect. Leaders were

committed and discussed strategy frequently.

7. Supervisor Prioritising on Personal Goals: Leaders were more focused on job

priorities. Their personal progress in the hierarchy was their focus area. However,

they achieved this through teamwork.

8. Faith in Leadership – Perception of Leaders’ Accountability and

Transparency: Employees did not see this as a challenge.

9. Leaders’ Seriousness about Using BSC – BSC just a formality: In the absence

of sufficient support from BSC facilitators, the leaders themselves advised on

relevant goals and targets, aligned them with strategy, and to the roles of team

members. However, BSC was never discussed as a tool. This is perhaps one

reason why employees could not relate sufficiently h with BSC.

III. Facilitators’ Competence, Commitment and Support

10. Facilitators’ Competence: The SBU had so far three BSC facilitators. Referring

to the first one, employees mentioned;

Our BSC facilitator was very good. She invariably kept a good follow up

and made sure we understood each and every concept.

As regards the other facilitators, employees expected more involvement and

support.

11. Facilitators’ Commitment and Support: Facilitator’s support diminished with

change of facilitator. Referring to the present situation, some employees

mentioned:

Presently, we don’t even know who our BSC coordinator is.

130

12. Facilitators’ Knowledge of Business Complexities: Pointing out the behavior of

the current facilitator, employees mentioned:

BSC Coordinator wants to be away from decision making as he is not aware

of the facts existing in the SBU. Efforts should be made to have one BSC

Coordinator for each SBU to be part of discussions and guide the process.

IV. Overall Alignment

13. Aligning of Organisational Structure: The organisation structure of Aviation

SBU was well regarded and there were no issues.

14. Alignment Support Functions / Other Functions: While coordination within the

Unit was good, the support functions and other SBUs weren’t perceived to be

sufficiently aligned.

15. Alignment Policies- Employee Performance Management System (EPMS):

Organisation wide EPMS was aligned with BSC. Employees HRD template was

their PBSC. However, employees’ performance rating especially after moderation

could not directly be aligned to the performance on respective scorecards. Some

extreme response with respect to EPMS were:

Unlike earlier days, now there is no focus on the core activities and any

clarity and purpose in goal setting. Everything is being done for the sake of

formality only.

16. Alignment Training and Development (T&D) Initiatives: T&D initiatives were

well aligned during the initial years of the SBU formation. However, in the later

years, this alignment was somewhat disturbed and employees could not relate

properly with it.

17. Alignment Budget and Resources: The SBU faced no constraint of budget and

resources. Leaders however, cited manpower constraints.

18. Alignment Rewards and Incentives: Performance related pay (PRP) was based

on employees appraisal ratings. Further, HR instituted awards such as ‘outstanding

achievers1’ and ‘UP-Icon2’. However, employees did not perceive it to be having

real motivating effect. The following quote shows the supremacy of the leaders’

inspiration over these formally constituted rewards:

1 Outstanding Achiever:The award instituted to recognise outstanding contribution of

junior management. 2 UP-Icon: The award instituted to recognise the great contribution and outstanding

leaders in middle and senior management.

131

Other rewards, like Outstanding Achievement Award etc. have actually got

no meaning for us… Even PMS was never a motivator for us. It was the

encouragement from SP (the first SBU head) that mattered most. Pivotal

role was played by the enthusiasm and the passion of our leader SP. He

inspired all of us.

V. Review Related Challenges

19. Data and Information Availability: Earlier in a smaller team data and

information flowed in both directions- top-down and bottom up. Later, in the

interviews, it showed up that locations were not getting feedback and information

about reviews from the HQO.

20. Time Constraints: Manpower Constraints meant increased workload for

employees and hence, not much time was available at their disposal as highlighted

here,

21. IT or BSC Software: Employees with little knowledge of the concepts could not

comment; however those at HQO strongly felt that introduction of BSC Software

was the need of the hour.

22. Representation of Operational Complexities: Employees felt that, ground

realities were being discussed in the reviews. Most review presentations attempted

to project a positive picture.

23. Comprehensive Representation of all Work Done: While referring to reviews,

employees mostly referred to their HRD review. A common observation was:

While writing the quarterly reviews it is felt that many of the activities carried out

are not part of KPI hence do not form part of review. May lead to reviews with

total justice not been done.

24. Consistent Performance Feedback: It was in the culture of the Aviation SBU.

VI. Cultural and Other Organisation Specific Challenges

25. Communication: Initially communications were open and effective. Later there

was a diminution of these characteristics.

26. Information Sharing: Information sharing had been the norm. However, recently,

employees at locations felt that they were not getting enough information about

reviews at HQO and personnel feedback from these reviews. They felt this need as

many of them were used to getting such information by e-mails and through other

channels during earlier days.

132

27. Decision Making: Both leaders and employees saw it as a challenge. Employees

opined that upon change in plan changes abruptly, constraints arise. Suddenly,

there is a lot of chaos.

28. Conflict Resolution: Conflicts were evident wherever there were

interdependencies on other SBU and functions. As confirmed by some managers,

Though SLAs were in place, they were not being invoked or executed.

29. Institutionalising Work Systems: The work systems were well defined and

instituted by the first SBU head and it had got into the culture of the SBU.

30. Employee Morale: Recently, with the changing business scenario, aviation

industry started facing challenges and market shares started dropping. The de-

motivating impact of this was visible to some extent.

31. Dissemination of BSC to Non-Management Staff: BSC had not percolated to

the non-management employees even though they were considered an important

link in the execution of business. The frontline officers observed:

Our non-management is not involved in BSC so far. They do the ground

work. Without them it won’t happen. Non management too needs to be

involved. Without their cooperation, it is very difficult for us to give results.

32. Perception about Organisational Care: Some of the youngsters expressed that:

The organisation is less concerned about its employees. I was sent to a

jungle for training. There is no point in making employees sad. Salaries,

benefits and transfers should be compassionately considered.

33. Perception about Top Management Sponsorship: Even though most people

observed their leaders to be committed to the organisation, some even observed:

My feeling is that the BSC has become one of the activities which is being driven by

top management with the frontline having very little role to play. They have not

been able to involve the front line which comprises of junior officers and non-

management staff.

34. Perception about Supervisor Dominance: In Aviation SBU leaders were

generally perceived to be supportive and involved employees in all activities.

35. Ownership and Responsibility: Some employees pointed out this issue with

non-management staff.

36. Role Clarity: Senior leaders ensured role clarity for everyone in the team.

133

Overall employees who were aware of the concept felt that BSC is definitely required

and all metrics should be business centric. They opined that BSC aims at measuring each

and every KPI in scientific way and sends alerts wherever performance falls short.

Corrective action can be initiated in time.

4.3.4. Challenges- The Facilitators’ Perspective

As such, the BSC facilitators did not face many major issues in the Aviation SBU. The

first facilitator was very much optimistic about the success of BSC in this SBU as the

SBU head was supportive. Leaders and employees too showed enthusiasm about BSC.

She managed to develop the challenges narrated here were mostly from the point of

view of the first and the second facilitator. Table 4.10 lists the challenges and their

severity.

Table 4.10

BSC Implementation Challenges – The Perspective of BSC Implementation

Facilitators for Aviation SBU


I Team Structure and Size 1 Size of the Team

2 Work Load

3 Location of the Team

4 Reporting of the BSC Team

5 Hierarchical Issues

II Role Clarity 6 Accountabilities of the BSC Team

7 Role and Accountabilities of Scorecard Managers

III Competency Development

8 Training of Scorecard Managers

9 Training of Facilitators on BSC Concept and Implementation

10 Competencies to Conduct Training and Workshops

11 Knowledge of Business Complexities

H

L

H

M

M

H

L

L

M

M

M

134


IV Commitment and Ownership

12 Competence of Facilitator

13 Commitment of SBU Heads

14 Buy-in of Leaders and Employees

V Cultural 15 Communications

16 Enforcement of Decisions

17 Culture of Appeasing Supervisors

18 Willingness for the Change

VI BSC Review 19 Reviewing Abilities of the Leaders

20 BSC Software for Information Collation

21 Time and Data Constraints

VII Transfers 22 Integrating New Incumbents into BSC

23 Change in Leadership Approach to BSC


I. Team Structure and Size

1. Team Size: It was a small team of 2 to 5 members at any point of time.

Coordinating for eight SBUs and Corporate Scorecard was difficult.

2. Work Load: Every member had multiple responsibilities. The workload prevented

them from giving their best attention. The first BSC facilitator who initiated BSC

implementation at Aviation SBU said:

Aviation was a wonderful team. They were so receptive and cooperative.

Had I not to attend to corporate scorecards, SLAs pertaining to other

SBUs, and all other equally important chores of the BSC team, I would

have made sure everyone in the SBU would have known and designed their

own BSC. Cascading then could have been far better.

3. Location of the Team: BSC team was based at HQO in Mumbai. Visiting distant

locations to conduct BSC workshops became difficult for the facilitators.

N H M L

H

L

N

N

L

N

N

L

H

N

L

L

135

4. Reporting of the BSC Team: The BSC team reported to the office of C&MD

through Director Marketing. Thus, they had direct access to top management to

appraise them on the status of BSC implementation and seek necessary support.

However, they had to deal with SBU heads who were usually EDs for coordinating

BSC implementation, and hierarchy sometime posed a challenge.

5. Hierarchical Issues: BSC facilitators were mostly dealing with people senior to

them. Considering the open and inclusive culture of Aviation, authority and

hierarchy did not pose much challenge.

II. Role Clarity

6. Accountabilities of the BSC Team: The BSC team felt that the SBU heads should

be driving the BSC implementation. The facilitator’s role should be limited to

educating users on the concepts and scheduling reviews. On the other hand, SBU

heads expected initiative and guidance on implementation to come from the BSC

Team.

7. Role and Accountabilities of the Scorecard Manager: When BSC was first

introduced in the SBU, the SBU head realised the importance of specifying the role

of the scorecard manager. The scorecard manager mentioned:

Though there was no formal communication on the role of the scorecard

manager, the SBU head understood the need of it and the expectations

from him were made clear. It was also included in his HRD goals and

targets.

Later, SBU heads changed and also many employees got transferred, but the

scorecard manager remained the same till the time of study.

III. Competency Development

8. Training of Scorecard Managers about BSC: The scorecard manager had basic

necessary exposure to the concept which he developed on his own initiative.

Hence, for him, there were no challenges.

9. Training of Facilitators on BSC Concept and Implementation: The facilitators

were given relevant training and exposure to understand the concept.

Understanding was not an issue.

10. Competency to Conduct BSC Workshop: Facilitators were provided ‘train the

trainer’ and other such learning opportunities to help them become good trainers.

136

11. Knowledge of Business Complexities: The first facilitator had a almost become a

part of the team, and knew everything that was going on. Later facilitators were not

so involved.

IV. Commitment and Ownership

12. Competence of Facilitator: Not every facilitator felt really committed to

implementation. The later ones were discouraged by the responses of senior

personnel.

13. Commitment of SBU Heads: All three SBU heads appreciated the concept;

however, the first one was more aggressive on strategy implementation.

14. Initiatives of Leaders and Employees: Various initiatives were taken up by the

leaders and employees to meet strategic goals, but these initiatives were taken

keeping in view business imperatives.

V. Cultural

15. Communication: Facilitators did not see communications as a challenge in SBU.

16. Enforcing Decisions: All decisions taken in the meetings were actually followed

up and things got done in this SBU. This, too, was not a problem.

17. Culture of Appeasing Boss: While boss’s instructions were valued, employees

could easily put forward their views. One of the employees of the SBU shared:

The culture of the aviation SBU was consciously built by the SBU head

while it was being shaped. He believed in the inherent capacity of each

individual and therefore promoted a culture wherein everyone can

express themselves freely and frankly.

Thus, by keeping everyone involved and respecting their opinions, suggestions

and participation, he could also get the entire team engaged.

18. Willingness for the Change: Employees and leaders in this SBU came across as

willing to bring in positive changes.

VI. BSC Reviews

19. Reviewing Abilities of the Leaders: SBU head and the Scorecard manager

ensured in depth reviews. The culture of the SBU allowed employees to come up

with issues that needed attention.

137

20. BSC Software for Information Collation: BSC software would have been

beneficial, however, in the absence of it, the scorecard manager managed with the

help of excel files.

21. Time and Data Constraints: Facilitators were given sufficient time and data for

the Corporate Scorecard Reviews.

VII. Transfers

22. Integrating New Incumbents into BSC: Aviation SBU had three heads and

several managers and employees were transferred between the years 2007 to 2010.

To integrate the new incumbents in BSC implementation was a challenge.

23. Change in Leadership Approach to BSC: The change in leadership did not pose

much challenge as all three leaders supported BSC implementation.

4.3.5. Factors Driving Employee Buy-in for BSC

Some of the major factors impacting the employee buy-in for BSC were as under:

1. Boss’s Commitment: Employees’ decision to adopt BSC was primarily motivated

by the commitment and involvement of their bosses to implement BSC.

2. Facilitators’ Involvement, Support and Inspiration: As discussed earlier, the

first facilitator was held in high regard for her commitment and involvement. This

made acceptance and implementation easier.

3. Expected Benefits: When the results start showing up the motivation to continue

with BSC is sustained. If there are no visible benefits, interest and motivation die

out quickly.

4. Expected Objectivity in Appraisals of Employee Performance: Employees

perceived BSC as a tool that could ensure objective and fair assessment of their

performance and hence, appropriate performance ratings.

4.3.6. Outcomes of BSC Implementation at Aviation


BSC bound the entire Aviation team into one close unit and aligned them towards

achieving strategic objectives. Motivations were very high in the initial phases when

the business was growing. Leaders asserted that BSC enhanced their focus on strategy

138

and competency development both of self and their team members. Employees too

affirmed that shift in focus towards building strategic competencies. The process of

developing SLAs brought clarity about SBU accountabilities and the support that they

needed from each other.

In order to enhance the performance of the Aviation SBU, the team developed SLAs

with Quality Control (QC), Projects and Pipelines (P&P), and Refineries. These SLAs

included clauses wherein the accountabilities were clarified. The process of developing

SLAs was very sensitive and the discussions on the conflicting points were very

delicately handled by the facilitator. Eventually, as the SBUs agrees on specific

clauses, they started getting implemented in practice, though formal reviews of SLAs

were not systematically done. These SLAs were the major transitions observed.


Looking back, the organisation takes pride in the outstanding achievements of the

Aviation business unit, some of which are summarised as below for the period up to

2010.

Table 4.11

Business Performance Outcomes of Aviation SBU (as of December, 2011)

SN Strategic Theme Strategic Outcomes Status

1 Enhancing Market Share The market share increased from 9.8% to 18%

2 Expansion of Aviation Service Facilities (ASF)

Number of ASFs increased from 9 to 31

3 Increase in Sales Volumes

Sales volume increased from 225 TMT to 744 TMT

4 Expansion of Customer Base

Customer Base increased from 5 to over 60 major airlines

5 Increase in Profits Profits increased from Rs. 49 Crores to Rs. 195 Crores.


Source: Data collected and compiled from the information provided by the SBU Head of

Aviation, performance reports, presentations made to the top management team

and as published in ‘UPCL Foundation Day’ book.

S

S

S

S

S

S P N

139

The SBU head however, opined that it was difficult to isolate the impact of BSC alone

from other factors such as growing aviation market etc. on the business performance.

These enhancements in performance were results of strategic focus in a growing

market. Leaders and employees seized every opportunity and worked diligently

towards achieving strategic objectives. The overall culture of the team was carefully

nurtured by the SBU heads and the leaders so as to ensure that the team remains happy

and engaged.

This case also highlights that changes in the team profile due to transfers of leaders,

key employees and BSC facilitator, and the existent culture of the SBU has an impact

on the BSC implementation process. In the later years, though BSC appears to have

become a mere formality, the work culture of the SBU kept the employees engaged in

the pursuit of objectives given by senior management.

4.4. Summary

Study of the two cases in this chapter highlights the significant impact of leadership on

successful implementation of BSC. The leader of E&P SBU happened to be the first

leader of the Aviation SBU. In both cases, he built the SBU from the conception stage

to a reality. He was an agile leader committed to achieving strategic results and he had

uncanny ability of engaging employees in the strategic pursuit. When he moved out

from Aviation SBU in the year 2007, momentum of the strategic pursuit dampened. In

the E&P SBU that he established in the year 2007, the BSC was introduced under his

leadership with a focus on engaging employees to implement strategy. These cases

indicate how change of leadership impacts the momentum of implementation; and that

the leadership alone can be a defining factor in the success of BSC implementation.

The quintessence of the study of the top management perspective, and the case of E&P

and Aviation can be summarised in the following statement by one of the EDs:

To include the employees in, it is important to engage them. Give them an

idea of what they are expected to be doing and then monitor their

performance. Provide them resources and keep them engaged emotionally.

Encourage them when deserved and discipline when required.

chapter four within case analysis:...

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