Introduction
Nowadays, many companies are observing the operating environment of their sectors and think of some strategies and adopt them to raise their operational and financial performance and let them to survive in their own sector when there is an intense competition on that sector. The famous US Telecommunication company, Verizon, is using Balance scorecard (Management accounting and performance measurement) to measure their performance in different perspectives after executing various strategies.
Balance scorecard is framework that provides measurement to measure the financial and nonfinancial performance after executing various strategies and based on these evaluation to refine or strengthen the existing strategies. Verizon choosing this for tracking progress and managing the implementation of strategies to achieve their goals in the financial and non- financial aspects. Verizon effectively applies the concept of balance scorecard to achieve their objectives and change the mindset of employees. Before using balance scorecard, Verizon face the threat of its competitors and there is an risk in the operation. After adoption of balance score card, Verizon can effectively manage the company’s cash flow, raise the workers’ morale by engaging them in the work and change the workplace’s culture become more diversified.
In 1996, after enforcing the Telecommunication Act, Many Telecommunication companies try to promote and render consolidated services to enhance their existing revenue source and satisfy with the needs of every customers.
Under such circumstances, Firstly, Verizon starts to recruit more talents. After recruiting more talents, talents use their expertise to innovate more featuring products and services to meet the needs of the customers (internal business process) Besides, the organization’s operation efficiency can be enhanced continuously (Operation Process). Furthermore, the policy of retention of employees improves, the turnover rate will become lower and save enormous cost in severance payment and administrative works (financial perspective) Regarding the company performance, since more value on the goods and services are created, It successfully draw customers’ attention and boost the sale revenue. The cost has been saved a lot and boost the profit directly.
Secondly, train them become potential leader (learning-growth perspective). If Verizon fails to train the new employees to become leaders, once the old leader resigns, the progress of achieving the objectives will be hindered and drag the company’s development. Therefore, it ensure that all operation will run smoothly (internal business-process perspective).
Regarding the company, training them become new leader will not let the Verizon’s operation become stagnant as the next successor have equipped some necessary skills to be capable of doing his tasks well and continuously facilitate the development of Verizon under the new leadership.
Thirdly, supporting employee engagement (Learning and Growth Perspective), employee will become motivated and engaged to actively create more value to meet the needs of customers (Internal-business-process perspective),efficiency to achieve the goals will be more higher( operation process) and the turnover rate of employee will be lowered for stabilizing the company’s development (Financial perspective).
For the company, with the high contribution and efficiency by employees, the goal with different aspects has been achieved easily, the reputation of company has been more better than before as goods and services has become more featured and diversified to draw customers’ attention and favor by many customers.
Finally, Investing in the technology innovation, it will help company to create competitive edge to against the threat of the competitors and cost of HR operation can be saved (Financial Perspective).
For the company, Verizon can build the good relationship with customers as customers think that using technology is more convenient to communicate with company nowadays. Besides, employees in Verizon can utilize technology to speed up the working efficiency and raise the overall productivity for the company. Furthermore, the internet service provided to customers will be more rapid than before and favored by customer to subscribe the plan.
With the balance scorecard, Verizon can clearly understand and visualize that which perspective should be strengthened or which strategy should be refined to improve the existing financial condition. Besides, Verizon can use this method monitor their respective department’s performance, eg sales report, which product or services can cater for the needs of customers and generate more income for company, which product or service is less attractive and cannot generate income for company. Therefore, company can adjust the marketing strategies to sell their products and services to become more profitable.
As balance scorecard indicate that the repeated call rate is one of measurements to measure the customer satisfaction (customer perspective). There is an article that the amount of repeat call for inquires has been reduced by 43% as the enquiries has been responded in first call. Besides, the process of analyzing customer’s issues is faster, the time of analysis is reduced by 50% compared to the previous analysis by investing the technology called Tableau (the software company) Therefore, with using balance scorecard, Verizon can use the indicators( the amount of customer repeat call and the service response time) shown in the balance scorecard to measure the customer satisfaction to improve company’s performance. The company can immediately refine or further strengthen the strategies after the viewing the balance scorecard’s result.
Based on the information, after exercising the balance scorecard, The company clearly knows the reason why employees were dissatisfied with the company and led to an high employee turnover rates afterwards. Therefore, Verizon launch the policy of retention of talent and support the employee engagement to keep employee engaged and more willing to dedicate their labor and spirit to make their own contribution to help achieving company’s goals. Therefore, the total turnover rate dropped from 20% to 1% and save the total amount of US$23.6million in cost eventually.
Secondly, prompting Verizon to be more profit-oriented as Verizon has learnt that tightly controlling their cost by prudently utilizing their cash to deal with their transactions and other administrative affairs is conductive to a company’s financial position. Thirdly, the result also indicated that the employees’ perception is fully changed and willing to accept different views, culture, behaviors of people who come from different background, countries and ethnic groups and ultimately become the culture-diversified workplace.
To conclude, Verizon ultimately met their objectives, lowering the employee turnover rate, letting the company become profit-oriented and changing the workplace culture.
