The Balanced Scorecard in Practice.docVIP

The Balanced Scorecard in PracticeHBSWK Pub. Date: Oct 12, 1999  CIGNA PC A Turnaround Vision: Moving from the Bottom to the Top Turning strategic vision into reality is a full-time job — for everyone in the organization. The story of how CIGNA PC achieved its vision is a classic tale of focus and alignment. When Gerry Isom became president of CIGNA Property and Casualty (PC) in 1993, he faced a formidable challenge: a very numbers-driven company that seemed unable to influence the direction the numbers were heading — down. During the four years before Isom came on board, the company had lost more than $1 billion, and the combined ratio was 140%. (For every $1 premium coming in, the company was paying out $1.40 in losses and expenses.) In 1993 alone, CIGNA PC lost $275 million. It was at the bottom of the fourth quartile in the PC industry. Isom resolved to take the company into the top quartile. His strategy for getting there? To reshape CIGNA from a generalist insurance company, willing to underwrite a risk in any sector, to a specialist company that would underwrite only when it could be assured of better-than-average results. Leading Strategic ChangeGerry Isom came to CIGNA with a strategic vision in mind, but he still had to make several important changes before he could build a scorecard. He had to restaff, reorganize, and revisit the market segments CIGNA was servicing. Starting at the top, Isom reinvigorated the executive council by bringing in four new hires to join the six members already on board. Twenty of the top performers, from the business and from the IT organization, were also brought together to create a transformation team. In addition, the position of transformation officer was created. Distribution management, underwriting, and claims management — the three components of PCs value chain — were redesigned to make them more responsive to changing market conditions. These changes set the stage for the leadership team to begin focusing on the