Statement of the ProblemThe California Division of Citibank has introduced a new performance scorecard to highlight the importance of a diverse set of measures in achieving the strategic goals of the division. Among the new measures introduced was a customer satisfaction indicator. Unfortunately, James McGaran, the manager of the most important branch and who consistently delivers impressive financial results scored "below par" on customer satisfaction. Frits Seeger, President of Citibank California and Lisa Johnson, area manager supervising James, are pondering what overall performance rating are they going to give to James.
Areas of ConsiderationCitibank's strategy in California was to build a profitable franchise providing relationship banking combined with ah high level of service to its customers. Financial measures had dominated Citibank's performance in the past but management felt that these measures were poor vehicles to communicate the high service strategy of the bank. Other areas to consider in this case are:Ã¢ÂÂ¢To reflect the importance of non-financial measures as leading indicators of strategy implementation, the California Division developed a Performance Scorecard which complemented existing financial measures with new measures reflecting important competitive dimensions in the bank's strategy.
Ã¢ÂÂ¢James' customers in his branch are sophisticated- they require high service quality and knowledgeable employees who could satisfy their financial needs and his performance exceeded expectations every single year by delivering impressive financial results for four years in a row.
Ã¢ÂÂ¢But when the division expanded its performance indicators to include non-financial measures, it became apparent that his branch's customer satisfaction ratings are not as good as his financial performance. His customer satisfaction was "below par" for 2 consecutive quarters.
Ã¢ÂÂ¢James discussed concerns regarding the (in)adequacy of the survey: customers rated not only their branch but also other Citibank's services such as ATMs that were out of the control of branch...