Novo Nordisk

Background

Headquartered in Denmark, Novo Nordisk manufactures and markets pharmaceuticals products focused mainly on diabetes care, haemostasis management, growth hormone therapy and hormone replacement therapy.

Novo Nordisk has more than 16,000 employees, about two-thirds of whom work in Denmark. The company reported net turnover of DKK 23,776 million (approximately US$2,900 million) in 2001 and an operating profit of DKK 5,614 million (approximately US$670 million). Both figures represent a 17 per cent increase on the previous year, beating its growth target of 15 per cent.

Moreover, the company is a member of the Dow Jones Sustainability Group Index (companies that place significant emphasis on ensuring the best environmentally). Representing more than 200 companies from 64 industries in 33 countries, this index comfortably outperformed the Dow Jones average return on investment in the period 1995-2000.

Environmental and social performance indicators are widespread within the company and some are captured within the company's balanced scorecard.

The Balanced Scorecard Explained

Novo Nordisk's present balanced scorecard has been in place since 1995. Inspired by the original Kaplan/Norton model, it houses the four perspectives of financial, customer, process, and people & organization. Each perspective includes strategic objectives, key performance indicators (KPIs), targets and initiatives.

The corporate level scorecard is cascaded down to business unit/function level. Targets may be identical throughout the organization, such as ensuring all employees are aware of patients' needs (see below), or may be tailored to local needs.

Peter Moeller (Novo Nordisk's vice president, organizational development) recalls that the key reason for implementing a balanced scorecard was that it provided a vehicle for focusing on the critical few performance objectives and targets that would make a difference. He also says: "It was an excellent way to systemize the company's tradition of focusing on much more than financial measures."

If you are a subscriber, click here to read the full case study.

Click here to find out how to subscribe.