Porsche - Balance Scorecard

Case Analysis: the Balanced Scorecard

Snapshot:

Porsche, the German sports car manufacturer, faced a crisis in the early 1980s. In order to re-conquer its position as one of the world’s leading companies in the industry, it decided to implement what they called “an innovative modernization process”: KPI or Porsche Key Performance Indicators. KPI was a balanced scorecard that was supposed to revolutionize the international Porsche Sales Organization. It helped the company measure dealership performance all around the globe. The implementation of this business tool was expected to turn the international dealer network into a learning organization. “The goal was to make efficient use of the vast store knowledge in the different dealerships and subsidiaries of the major markets around the world and turn this knowledge into profit.”

After going through quite some resistance within the company, a pilot was launched in three major markets chosen by their proximity to the headquarters: POF (France), PIT (Italy) and PCGB (United Kingdom). Although the three markets were on different levels of dealership sophistication, they all had basic IT infrastructure as well as communication technologies. When the pilot trial ended and the company had an understanding of the goals, they sought assistance of an automotive IT consultancy that helped with the development of the software, its structure and contents.

The KPI turned out to be a PDF report adapted for individual markets only showing the data of a respective dealership. The reports would contain almost 40 front-page indicators distributed across four key categories of the KPI: “Financial”, “Customer/Market”, “Internal Processes” and “Staff and Learning”.

On the first pages the figures would be marked according to a traffic-light scheme: with red lights indicating that urgent action was required. With all this data available, the regional managers could compare dealerships, their performance, and...