Balanced Scorecard Cs.pdf

BUILDING AND
IMPLEMENTING A BALANCED
SCORECARD
CASE STUDY: UNUM CORPORATION
Summary
Disability and special risk insurer UNUM Corporation has used a balanced
scorecard to drive pany towards its strategic vision. Crucially, the
five-year scorecard was devised to meet specific performance targets to the
year 1998. A near-obsessive focus on munications and an
pensation scheme have proved intrinsic to pany’s
ess.
Introduction
Headquartered in Portland, Maine, USA, UNUM Corporation provides dis-
ability and special risk insurance solutions to individuals and businesses.
UNUM (which means ‘one’ in Latin) has about 7200 employees and opera-
tions in the US, Canada, the UK, the Pacific Rim, Europe, Bermuda and Latin
America.
Reporting total revenues of $4,076,700 in 1997 e of $ mil-
lion, pany’s subsidiaries include UNUM Life pany of
America, First UNUM Life pany; Commercial Life Insurance
Company; Duncanson & Holt, Inc; panies, Inc and Colonial Life
& Accident pany.
‘61592’ Corporate Goal
Founded in 1848 with the principle to ‘find a better way’ UNUM was listed on
the New York Stock Exchange in November 1986. At that time pany,
under the direction of chairman and chief executive James Orr III, set its first
corporate-wide goal, articulated as 61592 - to earn six dollars a share with 15
per cent return on equity by 1992. This was achieved one year ahead of sched-
ule, largely because, as Eileen Farrar, vice president, human resources, states,
“We have a mitted and motivated workforce who saw the 61592
goal as a powerful rallying point.”
Setting ‘Balanced’ Goals
With the goal achieved, and recognizing the power of goals as mechanisms for
breakthrough performance improvement, James Orr and his team set out to
© BUSINESS INTELLIGENCE 1999 1
Building and Implementing a Balanced Scorecard
develop new goals for the corporation. However, this time there would be a sig-
nificant difference in how the goals would be focused and artic