Gruner AG is a global player specialized in the integrated manufacture of relays, magnets and actuators. A family-owned medium-sized enterprise, Gruner is based in the Swabian town of Wehingen and designs a variety of products for applications in automotive markets, smart metering, building management and automation technology. Gruner currently employs around 800 people worldwide at sites in Germany, Tunisia, Serbia and India. As part of his studies towards his Master of Business Engineering at the School of Management and Technology at Steinbeis University Berlin, Martin Spreitzer was asked to identify a way to steer future business developments and develop – and then introduce – a strategic management system based on the principles of the Balanced Scorecard (BSC).
The primary aim of Martin Spreitzer’s project was to improve his company’s ability to implement strategies. It should also simplify management processes, break down corporate goals in a systematic manner and improve process and customer orientation. There is broad agreement among scientists that to integrate the BSC into business processes successfully, strategic goals, key performance indicators and targets need to be derived from the company vision and departmental strategies. This has to be charted on a strategic roadmap. Also central to the success of the BSC: the definition of the strategic steps to be undertaken to achieve business goals, and the documentation of correlations between the causes and effects of strategic goals.
Apart from looking at finances, Spreitzer also examined customers, processes and potential. After a strong period of growth in recent years it would be necessary to restore a sense of equilibrium and expand management horizons. To gain as much acceptance as possible for the new target-setting system, Spreitzer involved managers – early on and from a variety of departments. After setting up a company-wide BSC, each unit within the organization was aligned with the corporate strategy.
At this point, the need for more focus on processes and customers meant that it was necessary to adapt the standard BSC model. So corporate goals were not broken down directly by area or department. Instead, to cascade the scorecard down the business, Gruner inserted a new level between the company scorecard and departmental scorecards. This consisted of two further BSCs which were derived from Gruner’s actual core processes. This made it possible for Spreitzer to break down the organization into functional segments and improve the process of reconciling dottedline goals between areas and departments in advance. Strategically aligning the organization through the innovation process and the supply process also helps simplify collaboration at crossover points pivotal to success, based on common goals. This step towards “departmentalized thinking”, turning the spotlight on the whole functional chain. The result of this is that workers become more aware of what is happening and the actual value-added, i.e. actual value for the customer.
In keeping with this awareness, Spreitzer translated the strategy into action, topdown throughout the entire organization such that it became part of everyday business. Using the BSC as a channel of strategic communication conveys a uniform message regarding the strategy to employees. It also helps managers translate management tasks into their area, a key factor in successfully implementing strategies. The BSC also performs an important role at Gruner as a management reporting tool, keeping recent and future business trends transparent for decision-makers. The BSC thus makes a significant contribution to management decision-making. As well as reacting to a given situation, managers can actually start working proactively and thus achieve better results.