Interview with Sven Edvinsson, Senior Vice President, Head of Group Planning, Nordea
Headquartered in Stockholm, Sweden, Nordea is the leading financial services group in the Nordic and Baltic Sea region with about €325.5 billion in total assets. For 2005 it reported net profit of €2,268 million.
Nordea was inducted into the prestigious Balanced Scorecard Collaborative Hall of Fame in 2004.
How long have you been responsible for facilitating the Balanced Scorecard process within Nordea?
Since the 1st January 2002.
Are you full-time or part-time in your role?
This is a full time position. The Balanced Scorecard forms a core piece of our Planning and Performance Management Model (PPMM), for which I am responsible. When I was asked to assume the position as head of planning it was essentially to take care of the balanced scorecard implementation process, as well as other parts of the PPMM.
Who do you report to?
I report to the head of planning and control, who in turn reports to the CFO.
How did you come to be involved in the Balanced Scorecard design and implementation program?
As background, Nordea was formed in 2001 following a series of mergers between regional financial services organizations. One of which was the Swedish bank Nordbanken, which is where I was then working. In the autumn of 2000 I was asked to head a project group tasked with finding a better way to provide strategic guidance to Nordea and to replace the traditional budgeting process with something that was more action and future-oriented and that gave the management team a continuous view of performance.
In the spring of 2001 we launched the PPMM. This has three core components – the Balanced Scorecard to steer the bank strategically, rolling quarterly financial forecasts that replaces the annual budget and service level agreements to clarify and manage internal service delivery between the service provider and business area.
How were you trained in facilitating a Balanced Scorecard program?
During the project to create the PPMM I learnt a great deal about the Balanced Scorecard. This knowledge was enhanced when the group executive management team accepted the model as this led to our engaging the Balanced Scorecard Collaborative as our consultancy support in phase one of scorecard creation and rollout. We worked with them for about six months and they provided extra training and support to me and my team.
Unlike HR or Finance, as examples, there are no clear job descriptions for a ‘Balanced Scorecard’ manager. What did your organization see as the key personal and professional qualities for your role in scorecard facilitation?
Although they were looking for someone with a finance background I had previously held various director roles in other companies as well as having being a CFO for an Ericsson group company. So I had a good understanding of running businesses from different viewpoints as well as knowing the bank well.
A Balanced Scorecard has to become ‘the way we manager around here’. From where do you get the authority (for example from the CEO) to go into a team and say ‘we’re going to build a Balanced Scorecard’?
The group executive management team is fully supported of the PPMM, and continually demonstrates their commitment within the group. The model is the focus of our formal quarterly reviews in which the business heads make presentations on their performance to the CEO and CFO. Business managers are left in no doubt that the PPMM is the way we run the organizations.
What are the major challenges you face when facilitating the process of building and implementing Balanced Scorecards and how are these overcome?
Although there are challenges in the initial process of scorecard creation and implementation, the work does not end when those difficulties are overcome. There is then a raft of challenges to maintain momentum and ensure that the scorecard is a sustainable process, especially when early enthusiasm wanes.
To overcome longer-term challenges it is important to ensure the Balanced Scorecard is kept up-to-date and is reflective of the market threats and opportunities of the business areas.
Also the Balanced Scorecard is basically a change process and so there are ongoing change management challenges. Overcoming these is really about ongoing communication to keep people focused and committed.
We have also had challenges in making sure the IT infrastructure supports the scorecard needs.
Are there people dedicated full-time or part-time to the scorecard within your organization? If so, what are their roles?
At the group level there are four people working to support the business areas and other units in working with the scorecard. Within individual unit planning departments there are people facilitating the PPMM and at least one employee will be dedicated full-time to the Balanced Scorecard.
I should point out that we have about 1700 scorecards organization-wide, with about 1200 almost identical scorecards within the retail banking branches. Each business area is responsible for creating its own scorecard but my unit serves as a competency centre that facilitates the scorecarding process, with able support from local staff.
We also have regular Balanced Scorecard coordinator forums where scorecard facilitators from across the group come together to share experiences and best practices.
How do you see your role developing over the next 2-3 years?
It’s important to keep the scorecard focused on changing needs at group and local levels. For this to happen the scorecard staff have to avoid any complacency setting in and to continue to work in partnership with the business units to better understand their competitive positions and to make sure the scorecard reflects those market needs.
From your own career perspective, how do you think this role will benefit you personally in the longer-term?
Although I do not expect any significant changes in my own role over the next few years, there is no doubt that those working in my team have been afforded an excellent opportunity to gain an in-depth understanding of what’s important to the group from a strategic point of view and have learnt how to manage the implementation of that strategy. They have also gained a very good understanding of how people co-operate. These skills will place the members of my team in an excellent position to further their careers.
From your experience what are the critical success factors in succeeding as a Balanced Scorecard manager?
It’s important to understand the industry in which you work and you need very good analytical skills. It’s also very important to possess excellent communication skills. I, for instance, am often out in the group making presentations on why the scorecard is important and in running workshops. A scorecard manager has to be able to talk in compelling ways to people at different levels of the organization – from the boardroom to the frontline, and speak in a performance language that makes sense to them in their daily work.