The Balanced Scorecard (BSC) John Gedeon University Office of Planning & Development November 25, 2011

Transcription

1 The Balanced Scorecard (BSC) John Gedeon University Office of Planning & Development November 25, 2011

2 Introduction Objective: To understand the need for, operation of, and benefits of the BSC in the UWI strategic planning and execution process. Presentation time: Appx. 30 minutes Please note your questions and slide number for Q&A after presentation (up to 30 minutes) 2

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4 Why BSC? Would you measure a child s success in life by their report card alone? Other important factors: Physical health Emotional health Social adjustment For organizations = Financial Health (alone) 4

5 Performance Chain Financial Returns (Repeat) Customers Products/ Services Capitals Processes 5

6 The Capitals Driversof Performance 6

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8 Overcoming Barriers To Strategy Implementation The Vision Barrier Only 5% of the work force understands the strategy The People Barrier Only 25% of managers have incentives linked to strategy 9 of 10 companies fail to execute strategy The Management Barrier 85% of executive teams spend less than one hour per month discussing strategy 60% of organizations don t link budgets to strategy The Resource Barrier Today s Management Systems Were Designed to Meet The Needs of Stable Industrial Organizations That Were Changing Incrementally You Can t Manage Strategy With a System Designed for Tactics 2011 Palladium Group, Inc. 7 8

9 BSC: A Definition a framework that expresses an organisation s strategyas a set of measurable goals from the perspectives of owners/investors, other external stakeholders, and the organisationitself. If these goals and associated measures, and targetsare well chosen, the Balanced Scorecard will help managers focus on the actionsrequired to achieve them, so helping the organization achieve its overall strategic goals and realiseits strategic visions (Kaplan & Norton, 1996) 9

10 In English BSC Linkages: GOAL OR ISSUE > STRATEGY > MEASUREMENT (KPI) > TARGET > INITIATIVES (DEV. PROJECTS) EXAMPLE: Poor student achievement > Improve teaching > % Faculty with Teaching Certificates > 90% > Create a Teaching Certificate Program 10

11 Materials Process vs. Project INPUTS Ingredients Construction Project SERIES OF TASKS Process Food Production Hospital Deliverables OUTPUT Product Soup Improved Health Care OUTCOME Nutritional Needs 11

12 Process & Project Types PROCESS TYPES PHYSICAL PRODUCTS CAR FURNITURE CLOTHES INFORMATIONAL PRODUCTS REPORT COURSE BUDGET PLAN PROJECT TYPES MAINTENANCE REPAIR ROOF REPLACE PLUMBING PAINT BUILDING DEVELOPMENTAL TRAINING NEW COMPUTERS PERF MGT SYSTEM NEW FACILITIES ENTERPRISE SOFTWARE 12

13 Vision/Mission vs. Project/Process 13

14 Four Interrelated Perspectives Clarify And Explain Strategy BSC MODEL FOR BUSINESSES Mission & Vision Enabling us to achieve our mission Ensuring stewardship of the trust and assured financial strength Financial "To satisfy stakeholders, what financial objectives must be accomplished Mission-based entities reinvest their cash into their organization (processes, people and technology) That provide a uniquely satisfying customer experience Customer "To achieve the financial objectives, what customer needs must be met? Outcomes (Outward Focus) To deliver the Strategic Processes Internal Process "To satisfy customers, and stakeholders, which internal organizational processes are critical? Drivers (Inward Focus) We will enable our People Learning & Growth "To achieve these goals, how must the individuals be enabled? 2011 Palladium Group, Inc

15 STRATEGIC FRAMEWORK The Strategy Map Tells The Story Of The Strategy Financial F2 - Generate revenue from markets and services with favorable margins Customer Revenue / Funding C1 - Provide me with the highest quality of care in a safe and respectful environment that is easy to navigate F3 - Generate revenue from innovative products and services F1 Build a strong financial base to achieve our mission & vision C2 - "Provide easy access to excellent service for me and my patients" F4 - Expand funding from grants, investments and philanthropy C3 - "Provide me with an excellent learning environment to enhance my development as a health care professional" Productivity / Expense F5 - Reduce costs and increase efficiencies while ensuring quality Patients & Families Referring Physicians Academia Community C4 - "Understand our community health care needs and work with us to address them" Processes Strategic Theme: Customer Relationships Strategic Theme: Operational & Clinical Excellence Strategic Theme: Academic Innovation Strategic Theme: External Relationships P01 Assure service excellence & optimize the customer experience by continuously improving process flow and interaction P04 Achieve exceptional outcomes through coordinated, evidence-based care, health promotion & improved clinical processes P08 Excel in research & clinical innovations in partnership with major universities P10 Proactively ensure compliance and transparency within our internal and external environment P02 Build a meaningful partnership with physicians to enhance the continuum of care P05 - Achieve outstanding patient safety and quality of care P09 Become the leading innovator in clinical education among academic health care systems P11 Working with community partners & government, influence issues and drive change relevant to health & wellness P03 - Communicate our brand & capabilities as an academic health center to meet the community s health care needs P06 Optimize utilization of our capital & human assets to operate efficiently P07 - Improve efficiency and reduce cost of non-clinical processes Learning & Growth Skills Culture Information / Tools L1 - Recruit, retain, develop and reward the best people for the right job L2 - Develop a common understanding of our strategy and communicate it effectively L3 - Foster a culture of ownership, pride, collaboration and trust L4 - Provide technology, tools, and education in a timely fashion to manage the information environment for sound decision making 2011 Palladium Group, Inc

16 Causes: Systems or People? SYSTEM PROBLEMS The goals, structure, policies, processes, procedures, or rules are: missing dysfunctional/outdated conflicting disconnected or unclear Lack of resources, tools, or information No incentives or consequences PEOPLE PROBLEMS INDIVIDUAL Lack of skill, knowledge, capacity, improper attitudes, or discipline CULTURAL Dysfunctional work culture, poor leadership, management, corruption, etc.

17 University of Leeds 17

18 STRATEGIC OBJECTIVE STRATEGIC GOAL T H E M E FINANCE AS MEANS 18

19 Strategy Map 19

20 Why Strategy Map? Establish causal/influential relationships of objectives and determine: What is missing? What is redundant? What is conflicting? What has more priority? Communicating strategy to all employees in a visual manner on one page 20

21 Strategic Objectives for Customer Level has Objectives but no direct developmental projects why? The objective may state Provide customer with What provides the product/service? The process! 21

22 What happens after objectives? How do we attain them? How will we know when we attain them? 22

23 The Balanced Scorecard Is An Aligned Set Of Objectives, Measures, Targets And Initiatives That Describe The Strategy Components Of The Balanced Scorecard Financial Customer Strategic Theme: Revenue Growth Build a strong financial base to achieve our mission & vision Generate revenue from markets & services with favorable margins Objective What the strategy is trying to achieve Measure How performance against objectives is monitored Target The required level of performance or rate of improvement Initiative An action program to achieve target Provide me with the highest quality of care in a safe and respectful environment that is easy to navigate Objective Measure(s) Target(s) Initiative(s) Internal Learning & Growth Assure service excellence & optimize the customer experience by continuously improving process flow and interaction Provide technology, tools, and education in a timely fashion to manage the information environment for sound decision making Assure service excellence & optimize the customer experience by continuously improving process flow and interaction # of patients admitted to hospital 500 patients Q1 525 patients Q2 600 patients Q3 600 patients Q4 New patient scheduling & planning, budgeting & forecasting system rollout 2011 Palladium Group, Inc

24 Old & New Projects We have 2007 Initiatives (projects) We have new Initiatives How do we merge them? 24

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26 Example of Aligning Initiatives to Strategic Objectives Procurement Redesign Emerging Markets Strategy Partner with the Winners Res sec and W&L and Hurricane Quality Needs Identification Quality proc for root cause elim Reformulation SV commercialization/facilities Customer complaint tracking pro Develop VP for partnerships IT Enhancement in Value Chain SCOP Implementation ABM Develop/cascade BSC Communicate vision Asia reformation facilities IT strategy alignment Scrap rework process improv Yield improvement program Facilities upgrade ISO NA resin mfg. cer Expert systems Rewards development/implem Global communications Training strategic skills Strategic Initiatives Strategic Objectives Economic Value Added Financial Grow revenue Be the lowest cost producer Pick the winners globally These two initiatives serve no objectives This initiative serves three objectives Create new market demand Customer Price performance Partnering Integrate and align resources Internal Learning & Growth Sales and customer development Focused technology development Perfect manufacturing People and change management Strategic competencies Individual and team performance Customer sensitive culture These two objectives have no initiatives Perfect manufacturing has ten initiatives 2011 Palladium Group, Inc.

27 Project Specifications 1. Title / Code 2. Purpose (supports what objective & KPI?) 3. Scope (university-wide or campus specific?) 4. Project Objectives 5. Project Deliverables 6. Duration / Deadline 7. Cost / Resources 8. Team Leader / Members 9. Dates: started, completed, etc. 27

28 Strategic Plan Strategic Goal Strategic Objective Initiatives /Projects Not matched to objectives 28

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30 BSC Report -UNDP 30

31 Dashboard-1 31

32 Dashboard-2 32

33 Dashboard-3 33

34 Performance Indicators Laggingindicators (KPI s or Outcomes- After the Fact ) Customer Satisfaction Index Leading Indicators (Predictive of Outcomes) On time deliveries Correct orders Quality of product 34

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38 Lightbulbvs. Laser: Alignment SILO-ISM 38

39 Stalagmites and Stalactites 39

40 Align what? Strategies (horizontal) Strategies (vertical) Initiatives (projects) sequence and priority Operational Plans & Budgets Measurements Cascaded Downwards Incentive Systems Requires: Interactive Communication Plan Theme Teams that cut across silo s 40

41 Six Blind Men & Elephant 41

42 Learning Organization a Definition A community of leaders and professionals-- at every level--that share common, but always evolving vision, governing principles, and values, working in an individual and collaborative learning culture that unleashes all members intellectual capital and passion, through an alignment of strategies, structures, and systems to create value for all stakeholders now and in the future.

43 Kaplan & Norton BSC Books 43

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