Bychowski Associates is an independent insurance agency that sells business, automobile, home, and life insurance. Myra Bychowski, senior partner of the agency, recently attended a workshop at the local university in which the balanced scorecard was presented as a way of focusing all of a company’s functions on its mission. After the workshop, she met with her managers in a weekend brainstorming session. The group determined that Bychowski Associates’ mission was to provide high-quality, innovative riskprotection services to individuals and businesses. To ensure that the agency would fulfill this mission, the group established the following objectives:

● To provide a sufficient return on investment by increasing sales and maintaining the liquidity needed to support operations

● To add value to the agency’s services by training employees to be knowledgeable and competent

● To retain customers and attract new customers

● To operate an efficient and cost-effective office support system for customer agents To determine the agency’s progress in meeting these objectives, the group established the following performance measures:

● Number of new ideas for customer insurance

● Percentage of customers who rate services as excellent

● Average time for processing insurance applications

● Number of dollars spent on training

● Growth in revenues for each type of insurance

● Average time for processing claims

● Percentage of employees who complete 40 hours of training during the year

● Percentage of new customer leads that result in sales

● Cash flow

● Number of customer complaints

● Return on assets

● Percentage of customers who renew policies

● Percentage of revenue devoted to office support system (information systems, accounting, orders, and claims processing)

Required

1. Prepare a balanced scorecard for Bychowski Associates by stating the agency’s mission and matching its four objectives to the four stakeholder perspectives: the financial, learning and growth, internal business processes, and customer perspectives. Indicate which of the agency’s performance measures would be appropriate for each objective.

2. Manager Insight: Bychowski Associates is a member of an association of independent insurance agents that provides industry statistics about many aspects of operating an insurance agency. What is benchmarking, and in what ways would the industry statistics assist Bychowski Associates in further developing its balanced scorecard?