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RE: Chemical Bank: Implementing Balanced Scorecard Case

The banking industry has changed over the years in areas relating to technology, asset quality and regulations. It has transformed from physical banking where customers would walk into a bank and conduct certain transactions to more branchless banking with the assistance of technology. Similar to other industries, the banking sector faces challenges of competition, emerging technology, and increase customer demands, which change at a much faster rate than before. There is also greater demand for convenience within the banking industry.

The Chemical Bank viewed the Balanced Score Card as one of the main tools to improve the performance of the organization and subsequently giving the company a competitive advantage. Implementing a Balanced Score Card model will help the Chemical Bank survive. While other performance evaluation methods may provide only a financial approach to evaluate performance, the Balanced Score Card may also provide a non-financial method of evaluation.

Implementing a Balanced Score Card model can help the Chemical Bank to track the quality of the services provided, align the goals of the company with roles of employees, recognize and reduce inefficiencies. The following benefits from the implementation of the Balanced Scorecard were revealed in the case study:

• It enabled the Chemical Bank to stay focus on performance
• The measurement facilitated learning and renewal of company vision
• It was useful to integrate two different management teams after the merger
• It kept employees motivated and on track in terms of performance
• It helped with a better understanding of the key drivers of the business (for example knowledge of customers segments and customer profitability)
• It was instrumental in identifying priorities and allocating resources
• It provided useful feedback on strategies

Some roadblocks that Chemical Bank may face during the implementation process of the Balanced Scorecard are:

• Willingness or commitment of senior managers to use the Balanced Scorecard
• Communication of the strategy to rank and file employees
• Difficulties to acquire data for some performance measures
• Difficulties tailoring the BSC to the organization's strategy
• Poorly defined matrix