329
million euro
of Ebitda generated by shared value
activities, 1/3 of total Ebitda
(+10% compared to 2016)
200
million euro
for shared value investments,
41% of total investments
70/100
customer satisfaction
The annual customer satisfaction
survey confirms the quality of Group
services

The balanced scorecard of the Hera Group

The balanced scorecard approach enables us to assign “balanced” objectives to our management team, distributed over four areas: development, quality and corporate social responsibility, organisational integration and efficiency upgrading.

It provides a methodology pinpointing strategy which it translates into objectives and day-to-day actions. The innovation of this approach consists of considering the achievement of objectives of social and environmental sustainability as a condition for the achievement of the economic and financial objectives over the medium and long term.

What is the balanced scorecard?

The balanced scorecard is a strategic control system which is based on the connection between strategy and the day-to-day running of the company. It was devised in the early 1990s by the American academics, R. Kaplan and D. Norton. It has generated an immense following among leading corporations in the USA and is now being taken up by major European players.

The Strategic Map is updated every year based on the contents of the business plan: it provides a summary of the Group’s strategic objectives and its commitments to stakeholders set forth in the sustainability report.

During the 2017 budget process, 46 priority projects were defined to achieve the strategic objectives set out in the Map aimed at creating long-term value for the company and the stakeholders.

The priority projects were assigned to members of the Management Review Committee.

All of the projects planned within the 2017 balanced scorecard system were assigned to a manager and included in the bonus system for Group managers and middle managers.

Each project identified:

  • the process and result indicators with goals in line with the budget of the Group and the corporate departments required for their achievement;
  • the key action plan for achievement of the project objectives in terms of time and cost.

The objective projects identified were monitored on a quarterly basis by the Hera Spa Management Review Committee and in the individual budget units.

The definition of objective projects and the related quarterly monitoring system of the project elements are a significant strategic management instrument that ensures:

  • integration of the several perspectives for the evaluation of corporate performance, in addition to traditional economic and financial measurements;
  • integration of business plan objectives into the daily management of managers and middle managers;
  • implementation of a continuous improvement process for strategic objectives and the relative projects and indicators;
  • formalisation and tracking of both actions and sub-objectives required to achieve the targeted results;
  • highlighting and analysis of critical situations and the definition of speedy corrective actions.

In 2017, in line with the new strategic guidelines outlined in the 2017-21 Business Plan that take into account the new strategic approach to Shared Value defined in the 2016-17 period, the 3 drivers for the creation of shared value (CSV) explained for the first time in the 2016 Sustainability Report were introduced in the new 2018-21 Strategic Map, namely:

  • Efficient use of resources;
  • Smart use of energy;
  • Innovation and contribution to the development of the area.

Furthermore, the strategic objective Risk analysis and management in ERM logic was included in the Learning and development perspective, with direct effects on Internal processes, in keeping with the strategic importance of the Group’s commitment in this area.

 

The commitments to stakeholders listed in this report (“What we will do…”) are contained in the Hera balanced scorecard. This guarantees consistency among the various instruments used for managing and achieving the Group strategy (business plan, sustainability report, management reporting, bonus system).