ATP'S Strategic Balancing Act

The Danish federal government has set up a committee that is considering how individuals can have greater freedom in selecting and managing their pension savings. In fact, the whole Danish pension system is being debated, including the ATP (the Supplementary Pension Fund), which has historic roots among a broad majority of the population.

In general, there are several possible future scenarios for the organization of the ATP:

• Business as usual, where the ATP both carries out its statutory tasks and obtains work under market conditions; and
• Total deregulation, where ATP has to bid for various administrative contracts together with other groups.

The fund is administered in the ATP offices under the management of director Lars Rohde. "For about 40 percent of the Danish population, the ATP will play a major part in their pensions, as it has done for about 40 years, and it therefore makes good sense for society to keep it going strong. Ultimately, everyone has a major interest in retaining the ATP, because the alternative is to finance much of our pension schemes through taxes," says Rohde.

The ATP reflects what's happening in the overriding debate on pension policy. The ATP is performing a balancing act between life as a statutory administration and a role in the open market. ATP's management is therefore gearing up for the future with a management system based on the principles of balanced scorecard. The aim is to prepare for every conceivable future scenario, as well as to ensure low costs, a high level of efficiency, a focus on customers and that ATP should be an attractive company to work for.

Balanced Scorecard for a Competitive Edge
"It is possible that eventually the tasks and the institution will be separated, and that the ATP organization will not, by definition, administer the ATP scheme in the future. If this happens, we must and will be competitive. We have already obtained several extra assignments by cultivating our core competence, which is mass administration.

"I regard it as a management task to get the organization to see itself as being part of the competitive world," continues Rohde. "It is not easy because, in practice, ATP is a company whose costs are covered and which is without real competition. We have neither the obligation nor the right to market ourselves, and our statutory origin means that we have no sales culture. But, nonetheless, we have to be competitive through our quality and our low costs, or else we have nothing to offer. Luckily, our staff has an old-fashioned humility when it comes to the task of managing other people's money. This humility is not just based on morality – it is also reflected in their understanding and respect for our customers."

All future scenarios for ATP feature a high level of efficiency and low costs. On an operational level, IT plays a key role in optimizing the administration of the pensions for four million people. The aim in 2003 is to improve operations by five percent, corresponding to DKK 30 million (US$4.5 million). The ATP is also introducing new management systems based on the balanced scorecard to ensure its maneuverability in the future. To this end, the ATP relies on the SAS Strategic Performance Management solution.

From Strategy to Reality
"What is new is that we are gearing up our management system so that we get the information in real time and become more energetic in managing the company," explains Rohde. "We are also building on a long tradition of planning, with the focus on the four key factors of customers, staff, processes and economics. Personally, I'm not very keen on buzz words, but our management system is a balanced scorecard from SAS."

The ATP has broken down its strategic objectives into business areas and staff areas. The three business areas are ATP, Pension Service and security schemes (this area includes, for example, FerieKonto [holiday account], Arbejdsgivernes Elevrefusion [the employers' student reimbursement scheme] and Arbejdsmarkedets Erhvervssygdomssikring [Danish occupational disease insurance]). For staff, every department and every employee now have objectives related to the strategic plan for ATP. The various schemes that ATP manages each have their own politically elected committee, and one of the most important aims of the balanced scorecard is to retain the company's focus on goals across the different business areas.

Finance Director Lars Damgaard Sørensen is responsible for the project: "Having a balanced scorecard establishes a continuous thread from the management objectives through to personal staff objectives. What we want is for the individual employees at ATP to understand our situation and to know the strategy, so that everyone is working toward the same goals. The system is new, and we are looking forward to the year's first quarterly reporting, and we know that getting the greatest possible value out of the system will be an ongoing process. We have also announced openly that we are all part of a search-and-learn process in this field."

Facing the Future with SAS
All the managers at ATP have learned how to use the system and how to link the balanced scorecard together with employee interviews. For many employees, the targets were something new and strange that they did not accept without some criticism. Implementation means that the ATP now has a far greater awareness of its objectives, which are more clearly defined and measurable than before, and strategic plans are now more important in the organization's day-to-day work. For the finance department, the project has given it a role as a sparring partner, with the aim of helping other parts of the organization to set up measurable targets.

ATP wants to hold on to its most hard-working staff so that it can cope with competition in the future. The balanced scorecard therefore focuses strongly on the working environment, employee well-being and skills development, which are part of the tradition at ATP. For example, ATP was the first office setting in Denmark to be certified under the "Danish standard" for the quality of its working environment. In the same way, ATP is incorporating its experience and the results of earlier staff satisfaction surveys and customer satisfaction surveys into the new system.

"We have come a very long way, and we are therefore expecting great things of this system. We will be facing some major management challenges in the future, and the SAS solution gives us the ability to navigate this path confidently," concludes Rohde.

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