serono

1. What was the initial attraction of the Balanced Scorecard concept, and who drove the adoption? The initial attraction is that the need of a system which top level of management of Sereno (Executive Committee) could use to evaluate performance of the overall units in both short and long-term. In the case of Serono, they basically tried to consolidate Serono to be one of the world’s top three biotechnology companies. In order to achieve it, Serono stated principles supporting strategic intent such as maintaining investment of R&D, spirit of entrepreneurial and pioneering, being leading-edge in technology, expanding growth by penetrating wider market, and developing the best talent. Thus far, Serono aimed to measure overall strategic goals beyond just financial success. Financial statement seldom captured the diverse and long standing initiatives to reposition achieve leadership in the biotechnology industry. Furthermore, lead time of approval is biotech industry is extremely long. Thus it is critical to make a system the Executive Committee (EC) could use to evaluate their short and long-term performance. The one who drove the adoption is Ernesto Bertarelli who look for a measurement system EU could use to evaluate and was implemented by small team headed by Andrew Gillbert from Strategic Business Planning Department 2. What was your assessment of Exhibit 3, The North American Commercial Balanced Scorecard? Give your specific recommendation to improve the scorecard? Existing balance score-card (financial-based) are as follow: 1. -

Becoming #1 in each of our chosen Therapeutic Area Maximize total Serono sales performance Glow global market share in each Threpeutic Area Maximize free cash flow generated by the group

2. Building superior company to work for - Commercial Excellence and Alignment of Human and Financial Resources behind revenue generating activities and resource allocations - Leadership skills and management competencies The existing balance score-card focuses on financial perspective, mainly on sales-growth only in which it should have been added productivity strategy (cost reduction), customer perspectives, internal perspectives, and learning and growth perspectives. Thus, the Balance Scorecard in Exhibit 3 requires little modification. The modification is constituted by several assumptions such as: -

Leading-edge technology Launching innovative products every year Producing unique products

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Creating preferred partnership with customers, patients, physicians, and payers Improving entrepreneurial spirit Improving working capital Focusing on niche market

Thus, additional balance score-card will be: Perspectives Financial

Key Performance Index Productivity Strategy

Customer

Price Quality

Internal

Definition The presence of technology would enable the company to generate efficient production

Service

Sales service and after sales service

Partnership

Serono committed to create strategic partnership with patients, physicians, and other customers.

Brand

Serono aimed to be leading-edge and consolidated its position to be world’s top three biotechnology companies

Innovation Process

The company currently becomes multiple products of biotechnology by leveraging the company’s scientific know-how.

Marketing Process

The company aimed to penetrate wider global market

Operation Process

Providing multiple products with affordable price and

high quality

Learning and Growth

Customer Process

Supporting partnership

Human Capital

The company aimed to become superior company to work for by providing training and development for the best recruited talent

Organizational Capital

Information Capital

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