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Analog Devices: 1986-1991

The First Balanced Scorecard


Arthur M. Schneiderman

Setting the Context:

The 1988-1992 Strategic Plan

I joined Analog Devices, a mid-sized semiconductor company, in June of 1986.  I initially reported to Jerry Fishman, the Group Vice-President of the Components Group.  Jerry was in effect the Chief Operating Officer of Analog and is currently (2000) its President and CEO.  My title was Group Director, Quality and Productivity Improvement.  One of my first assignments from Jerry (based partly on my previous experience in strategy consulting while at Bain & Company) was to facilitate the Group's Strategic Planning process as we embarked on the preparation of the 1988-1992 Strategic Plan.  

At that time, ADI updated its strategic plan once every five years and spent the ensuing years in its implementation.  With the departure of those "good-old-days," Analog, like most other companies today, has moved to more frequent strategic plan updates and currently uses what is essentially a continuous strategic planning process.

I also had a dotted line  reporting relationship to Ray Stata, the company's visionary co-founder, and then its Chairman, President and CEO (following my promotion to Vice President, this became the solid line and the one to Jerry dotted).  His first assignment for me was preparation of the Quality Improvement Process (QIP) Five Year Plan for integration into the strategic plan.  Out of these two assignments, the first balanced scorecard emerged in 1987.

The strategic planning process at Analog was a massive effort, to say the least: it extended over an 18 month period and involved several hundred of our business and product line managers (Analog then had around 4500 employees worldwide).  To assure cross-functional integration, we utilized existing groups such as the Technology, Manufacturing, Human Resources and Marketing Councils as well as ad hoc groups and Strategic Planning Councils.  We also created Product Strategy Task Forces (PSTF's as they were called) to provide cross-divisional integration.  All of these groups had broad functional and divisional membership.

Like many organization's, Analog's written strategies quickly became dead documents.  Even finding old copies turned out to be a major chore.  So learning from the past, we formally acknowledged that the benefit would be derived from the strategic planning process itself, not any resulting output documents.  Instead, we relied on verbal presentation to all employees and tight integration of the plan into the ongoing annual business planning process.  The written documentation was limited to a four page flier (see the relevant part below).

The plan was completed in the fall of 1987, approved by the Board of Directors on January 29, 1988, and rolled out to the entire Corporation on March 1, 1988.  That event was an all day strategy meeting attended by over 500 Analog Devices managers from around the world.  This was followed by a similar session in Europe (February 23-24, 1988) for managers who were not at the US rollout.

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1999-2006, Arthur M. Schneiderman  All Rights Reserved

Last modified: August 13, 2006