Severstal has developed a Balanced Score Card as a new instrument for strategic planning. By end of 2002, it has developed indicators, which allow to evaluate the company's performance in HR, markets and clients, process, and finances. These indicators were assigned certain scores as they stand for Severstal. Employee motivation and HR productivity and employee qualifications were also assigned scores. Further, service quality and timeliness of orders were evaluated. From January 1, 2002 all indicators will be scored on a regular basis. They will serve as a basis for company's management decisions and evaluating its performance.
BSC approaches were presented and approved by Alexei Mordashov, general director of Severstal-group, and Anatoly Kruchinin, general director of Severstal. The project was coordinated by Vadim Makhov, deputy general director of Severstal-group on strategy and controlling and Igor Kostin, director of strategic planning of Severstal.
The BSC project must answer some important questions. The most important of them are: what indicators allow to evaluate company's performance, what can be improved to beat the competition, how to tie up strategy with on going work.
From the beginning of 2003 the project is being taken one step further. All indicators will have to be balanced against one another, and indicators of business units of various levels, and company as a whole, indicators for business processes must be balanced as well.
Severstal is the first company in the Group, which has applied the BSC. Its main focus now is on sharing knowledge and experience with Severstal' s personnel and other companies. Severstal will hold special workshops and have information on the BSC available through the company's interior computer network to all employees. A similar project now is initiated at CHSPZ. It is receiving support both in terms of materials and experts, who will take part in the project.
This project is a priority task for Severstal. Its implementation will help make company employees more goal-oriented, improve communications among various company units, increase company capitalization and make it more competitive.