balanced scorecard (bsc) for cultural projects and institutions

Balanced Scorecard (BSC) for cultural projects and

institutions

March 2013

Part 1

The BSC in a nutshellBenefits of implementing a BSC

Part 2

Case study: completing our own BSC

AGENDA

• Getting to know what a Balanced Scorecard (BSC) is

• The usefulness of a BSC in organizations

• Identifying the key elements and perspectives of a BSC

• BSC: applications for a cultural firm or project

• Quick case study: from theory to practice

SESSION GOALS

Part 1


Part 2


AGENDA

A GENERIC PROJECT/ORGANIZATION

values

vision

mission

strategic objectives

operating initiatives

Lifetime

> 10 years

5 - 10 years

1 - 5 years

> 1 year

Who we are?- ethics- principles- beliefs

Why we are here?- Why are we in this business?- If the market changed, what would we change?- How does this work fulfill our core values?

What do we do?- What do we want to contribute?- How can we change our world/industry?

When do we do it?- What do we want to accomplish?- When do we want to accomplish it?

How do we get there?- short term goals- projects- resources- staffing

MAIN ISSUES OF A BSC: THE 4 PERSPECTIVES

Kaplan and Norton: “Using the BSC as a Strategic Managemtn

System (1996)

The Balanced Scorecard (BSC) was first popularized in early 90s, as an approach for generating a performance report, by grouping performance measures by perspectives

A typical balanced scorecard supplements traditional financial measures with criteria that measure performance from the perspective of customers, internal business processes and innovation and learning

Vision and

strategy

Financial

Internal Business process

Learning &

Growth

Customer

• In the private sector, these measures have typically focused on profit and market share. The key question that must be answered is: How do satisfy the financial expectations of our stakeholders?

The four perspectives offer a balance between short-term and long-term objectives, between outcomes desired and performance drivers of those outcomes, and between hard objective measures and softer, intangible measures.

When using the balanced scorecard, companies articulate goals for each perspective and translate these goals into specific measures

• Every organization must know the degree of its customer satisfaction The key question that must be answered is: How do customers see us?

• The members of the organization need to focus on those critical internal operations that enable them to deliver their work program. The key question that must be answered is: What must we excel at?

• An organization's ability to innovate, improve, and learn ties directly to its value as an organization. The key question that must be answered is: How can we continue to improve and create value for our services?

Kaplan and Norton: “Using the BSC as a Strategic Managemtn

System (1996)

Translating the Vision Lofty statements such as "becoming the number one

supplier" or "best in class" are difficult to translate into operational measures that have meaning to the people at the local level.

Creating a balanced scorecard however forces management to further clarify their vision until they are able to translate the vision into a set of objectives and operational measures on the balanced scorecard, which have meaning to the people who have to realize the vision.

These objectives and measures for the four perspectives, agreed upon by all executives, describe the long term drivers of success.

Communicating and Linking

Business planning

Feedback and learning

Managers set targets for the long term objectives for all four scorecard perspectives.

In order to achieve these long term objectives, managers identify the strategic initiatives required and allocate the necessary resources to those initiatives.

Finally, managers establish short term goals (milestones) for the measures that mark progress towards achieving the long term objectives

Managers formulate a strategy based on certain hypotheses about cause-and-effect relationships

When a company implements the strategy it might find out that certain cause-and-effect relationships are not found over time.

In that case a company should reconsider the theory underlying the unit's strategy and might even conclude that it needs a different strategy.

This process of gathering feedback, testing the hypotheses on which strategy was based and making the necessary adjustments is called "strategic learning”

Implementing a strategy begins with communicating the strategy up and down the organization and educating those who have to execute it.

The strategy must also be translated into goals and performance measures on the balanced scorecard for operating units and individuals.

Rewards might be linked to these performance measures

BASIC CONTRIBUTIONS OF A BSC

1

2

3

4

COMPLETION AND MAINTENANCE OF A BSCControl of versions to monitor the ongoing progress

The 4 perspective as previously seen

Number of strategic objective

Current degree of accomplishment related to the measure

Indicator

Person or group responsible for the action

Priority keys:

p.e. A = immediate (next 6 months) B = soon (6 months to 1 year)…

Name of the project / institucion BSC Version: Mar 2013

Vision: _______________________________Mission: ____________________________

Perspective Strategic Objectives Operating iniciatives Measure Target Status Priority Champion / Responsible

Customer / Stakeholders 1 Engange all

stakeholders….

Develop and enhance corporate website

Amount of current content

100% A Council Board & Staff

Number of pages/ articles

TBD B

Part 1

The BSC in a nutshell

Benefits of implementing a BSC

Part 2


AGENDA

BENEFITS OF IMPLEMENTING A BSC

Stockholders

Operating areas (CEO)

Human Resources

Finance Communication

Objective: Long term. Based on

economic results

Objective: Middle term. Reporting to higher stockholders

and managing the lower levels

Objective: Short term.

Accomplishing the area activities

DIFFERENT OBJECTIVES FOR EACH STAKEHOLDER

LACK OF CONTROL

RISK TO MEASURE NOT CRITICAL DATA

DIFFICULT OR LATE REPORTING

WITHOUT USING A BSC

KPI’s/measures

Key considerations

Stockholders

Operative areas (CEO)

Human Resources

Financial Communication

KPI’s/measures

Objective alignment within the organization.

SEEN AS A COHERENT WHOLE

USING A BSC

SAME OBJECTIVES FOR ALL STAKEHOLDERS

CONTROL OF THE NEEDED DATA

EASY AND QUICK REPORTING

ENCOURAGES A MORE RIGOROUS STRATEGIC REVIEW OR ANALYSIS

GUIDING USERS IN DETERMINING CRITICAL SUCCESS FACTORS AND PERFORMANCE INDICATORS

Key considerations

BENEFITS OF IMPLEMENTING A BSC

Part 1


Part 2


AGENDA

CASE STUDY: A 2-DAY MUSIC FESTIVAL IN A FOREST

VALUES: who we are

Sustainable festivals are possible / Ethical behavior / Permanent innovation / Fun

VISION: what do we want to be in the future?

To become the largest event en Europe being a reference for all new festivals that want to use natural spaces. To develop environmental standards for music or art events.

MISSION: what are we?

Music festival that combines new musical talents with an amazing and natural landscape, by making compatible the environmental sustainability with having good fun.

Lifetime

> 10 years

5 - 10 years


A. Financial Perspective or how do we satisfy the financial expectations of our stakeholders?

A.1.Improve Cost Structure

A.2. Increase Asset utilization

A.3. Expand revenue

opportunities

Strategicobjectives

Reduce the energetic

supply costs

Benchmark of drinks and

spirits supplier

Sound and video

partner discounts

…

Operating initiatives

Meet new sponsors

Reach partnership agreements

… …

Key performance indicators (KPI)

Number of new sponsors contacted

% money from sponsors (over the total budget)

Number of agreements with local authorities and organizations

Use new spaces

increasing capacity

Optimize the cash

flow

… …

% Discount on watt price % non consumed drinks

already purchased (wasted fungibles)

M2 available for new activities or events

Average days to get the money


B. Customer perspective or how do customers see us?

B.1. Optimize product / service

attributes

B.2. Enhance relationship

B.3. Increase Image impact

Strategicobjectives

Simplify pricing/ticket scheme

Add new services

Increase in internationa

l artists…


Increase brand

positioning

Expand Media impact

… …


Maximize interaction in social media

Partnership

… …

Number of appearances in traditional media

Number of appearances in specialized blogs

Types of ticket packages Total number of services

offered Number of international

artists compared to the last edition festival

% Increase Facebook friends % Increase Twitter followers Number if other festivals and

events we participate Improve the statistics on

google analytics


C. Internal business perspective or what must we excel at?

C.1. Enhance artist booking

process

C.2. Innovation introduction

C.3. Regulatory and social

compliance

Strategicobjectives

Enhance artist

booking schedule

Increase of efficiency

… …


Obtain environmental

quality certification

Organic food

positioning

… …

Fostering artistic

innovation

Develop new ideas

… …


% compliance to get the ISO 14001 certification by April 15th 2013

% organic food places over the total

% of artists contracted by 20th June 2013 (deadline)

Total Number of artists/Number of festival bookers

Total number of artistic disciplines

% of new artistic disciplines over the last edition festival


D. The innovation and learning perspective or how can we continue to improve and create value for our services?

D.1. Empower Human capital

D.2. Reinforce Information

capital

D.3. Emphasize Organizational

capital

Strategicobjectives

Balance volunteers

vs professional

Increase staff skills

… …


Fostering the

teamwork…

… …

Enhance the

information of our fans

Create an improved

CRM system

Improve press data

base system…


Ratio of staff participants / committee

Number of teambuilding activities undertaken in 2013

Number of volunteers in the organization

Number of permanent staff Number of training sessions

% of visitors/fans profiles created in our databases


A. Financial A.1.Improve Cost Structure

A.2. Increase Asset utilization

A.3. Expand revenue opportunities

B. CustomerB.1. Optimize

Product / Service attributes

B.2. Enhance relationship

B.3. Increase Image impact

Global vision

C. Internal Business

D. Innovation

and learning

C.1. Enhance artist booking process

C.2. Innovation introduction

C.3. Regulatory and social compliance

D.1. Empower Human Capital

D.2. Reinforce Information capital

D.3. Emphasize Organizational

capital

THE IMPORTANCE OF USING A BSC IN A CULTURAL PROJECT

Global and instant

view of the project

The whole team share the same objectives

Helps to focus on what we are good

at

Ease to identify

and anticipate the main problems

• Due to the market financial restrictions, methodology must be implemented on cultural projects

• It enforces us to think strategically and plan our actions

• We have to understand and adapt the cultural particularities to our BSC

• It’s not the same a bank’s client than a music festival event client

• Make it simple! It’s not important to consider all dimensions. Find out which are important to your project

• Measure what you can. Don’t try to control many KPI’s

Thanks!

Further info:[email protected]

balanced scorecard (bsc) for cultural projects and institutions

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