Magnitogorsk Iron & Steel Works (MMK) is currently implementing a new technique known as the Balanced ScoreCard System

It took the company’s experts, assisted by CIFT and Deloitte Touche representatives, two years to develop this innovation that is still widely underused by Russian industrial enterprises. Launching BSC means MMK and the country’s metallurgical industry in general are improving on their management and approaching the international standards. MMK’s PR Department reports BSC makes it possible to set a company’s strategic goals in very clear figures, so every employee’s everyday activity is distinctly connected with the whole company’s strategy and adds to the final result. This is particularly important in terms of the growing value of intangible assets like brain capital, innovation, and goodwill. The existing standards (that is, GAAP and IAS) do not cater for these economic conditions; EVA, EBITDA, and TSR give a more detailed picture of things, but this isn’t enough for effective management.

The BSC system allows a company to analyze four basic aspects of its activity, that is, the financial field, customer communication, technological processes, and staff training. To measure these, special efficiency indicators exist, with the heads of corresponding departments responsible for achieving them. The company’s strategic goals and cause-effect relations are presented in special strategic maps. In addition, a staff motivation system is provided.

This approach will allow MMK to control its goal-achieving process, define tasks clearly, and focus its efforts on the most important developmental aspects.