the balanced scorecard the california state university quality improvement programs presented to...
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The Balanced ScorecardThe Balanced Scorecard
The California State UniversityQuality Improvement Programs
Presented To
John SandersPresented By
Finance and Administrative Services Division
Introduction to the Balanced ScorecardWhat is it? Why do it?
Balanced Scorecard FundamentalsThe Four Perspectives Measures, Targets and InitiativesRoles and Responsibilities
The CSUSM Finance & Administrative Services Strategy Map
Using the BSC as a Management System
Seminar Outline
The Balanced ScorecardWhat is it?
Definition: The Balanced Scorecard is a
management tool that provides stakeholders with a comprehensive measure of how the organization is progressing towards the achievement of its strategic goals.
The Balanced ScorecardWhat is it?
The Balanced Scorecard:
Balances financial and non-financial measures
Balances short and long-term measures
Balances performance drivers (leading indicators) with outcome measures (lagging indicators)
Should contain just enough data to give a complete picture of organizational performance… and no more!
Leads to strategic focus and organizational alignment.
The Balanced ScorecardWhy do it?
• To achieve strategic objectives. • To provide quality with fewer resources.• To eliminate non-value added efforts.• To align customer priorities and expectations with the customer.• To track progress.• To evaluate process changes.• To continually improve.• To increase accountability.
The Balanced ScorecardWhy do it?
It works!
In just 90 days, Sandia Labs was able to redirect $190,000 in savings by dropping initiatives that didn’t fit their overall strategy.
“The BSC has forced our management team to focus beyond financial measures… too often in the past we would get sucked into short-term thinking.”
“The BSC dramatically improved our data analysis… we don’t overreact nearly as much as we used to.”
The Balanced Scorecard and The CSU Campuses currently working on the
BSC San Luis Obispo Pomona San Jose San Marcos Sonoma Fullerton Long Beach Chico Northridge San Bernardino Chancellor's Office
Mission – What we do
Vision – What we aspire to be
Strategies – How we accomplish our goals
Measures – Indicators of our progress
The Strategy Focused Organization
Environmental Scan
Strengths Weaknesses
Opportunities Threats
Values
Mission &Vision
Strategic Issues
Strategic Priorities
Objectives, Initiatives, and Evaluation
A Model forStrategicPlanning
The Five Principles
1. Translate the strategy to operational terms.
2. Align the organization to the strategy.
The Strategy Focused Organization
Source: The Strategy Focused Organization, Norton & Kaplan
The Five Principles (cont.)
3. Make strategy everyone’s job.
4. Make strategy a continual process.
5. Mobilize change through executive leadership
The Strategy Focused Organization
Source: The Strategy Focused Organization, Norton & Kaplan
The Balanced Scorecard and The Big Picture
•Activity Based Costing•Economic Value Added•Forecasting•Benchmarking•Market Research•Best Practices•Six Sigma•Statistical Process Control•Reengineering•ISO 9000•Total Quality Management•Empowerment•Learning Organization•Self-Directed Work Teams•Change Management
Missionand
Vision
BalancedScorecard
StrategicPlanning
Strategic DirectionCreate Environment
For ChangeStrategic Performance Management
System
Linking it all together….
Communicate StrategiesDefine ObjectivesImplement BSC
Balanced ScorecardMeasure Performance
Improve Processes
Evaluate and AdjustContinuous Improvement
Redefine Initiatives
FINANCIAL/REGULATORYTo satisfy our constituents, what financial & regulatory
objectives must we accomplish?
CUSTOMERTo achieve our vision,
what customer needs must we serve?
INTERNALTo satisfy our customers and
stakeholders, in which business processes must we excel?
LEARNING & GROWTHTo achieve our goals, how
must we learn, communicate and grow?
THE BALANCED SCORECARDTHE BALANCED SCORECARD
Customer Perspective
o Customer Satisfaction (Average)
o Satisfaction Gap Analysis (Satisfaction vs.
Level of Importance)
o Satisfaction Distribution (% of each area scored)
Possible Performance MeasuresPossible Performance Measures
To achieve our vision, what customer needs must we serve?
Financial / Regulatory Perspective
o Cost / Unit
o Unfunded Requirements or Projects
o Cost of Service
o Budget Projections and Targets
Possible Performance MeasuresPossible Performance Measures
To satisfy our constituents, what financial and regulatory objectives must we accomplish?
Internal Perspective
o Cycle Time
o Completion Rate
o Workload and Employee Utilization
o Transactions per employee
o Errors or Rework
Possible Performance MeasuresPossible Performance Measures
To satisfy our customers, in which business processes must we excel?
Learning and Growth
To achieve our goals and accomplish core activities, how must we learn, communicate and work together?
Possible Performance MeasuresPossible Performance Measures
o Employee Satisfaction
o Retention and Turnover
o Training Hours and Resources
o Technology Investment
Why Measure?
• To determine how effectively and efficiently the process or service satisfies the customer.
• To identify improvement opportunities.
• To make decisions based on FACT and DATA
Measurements Should:
• Translate customer expectations into goals.
• Evaluate the quality of processes.
• Track our improvement.
• Focus our efforts on our customers.
• Support our strategies.
Targets
“If you don’t know where you’re going, you’re probably not gonna get there.”
Forrest Gump
Targets• Targets need to be set for all measures
• Should have a “solid basis” • Give personnel something for which to aim
• If achieved will transform the organization
• Careful not to develop measures/targets in a fragmented approach:
i.e. Asking people to increase customer satisfaction has to be backed up with the knowledge, tools, and means to achieve that target.
Initiatives
Once measures and targets are established, it is the responsibility of management to determine HOW the organization will achieve its goals.
Measures are used to determine the effectiveness of strategic initiatives.
The Leadership Team Develops the division’s vision,
strategy and goals Develops organizational objectives
and targets Provides leadership, endorsement
and vision for the project Clears barriers to scorecard
progress
The Core Team Drafts the strategy map and scorecard
Works with employees to develop measures supporting strategic objectives
Works with the Leadership Team to plan and implement the Balanced Scorecard in the FAS Division
Finance and Administrative Services
Strategy Map
FINANCIAL CUSTOMER INTERNAL PROCESS
LEARNING & GROWTH
Hum. Rscrs. Univ. Police Facilities
Police Parking
Link it together….
Measure: Satisfaction IndexCurrent: 3.0 Target: 4.0
DIV
ISIO
ND
EP
T.
FU
NC
TIO
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The Balanced Scorecard as a Management System
BSC reviewed regularly to enhance operational decision-making
Success of initiatives assessed based on DATA… not opinions
Leading indicators evaluated to confirm accuracy of assumptions
The Balanced Scorecard as a Management SystemThe BSC is a “Living Document” that
requires regular revision of objectives, measures and initiatives:
How are we doing? Are we measuring the right things? What initiatives do we need to get us
where we want to go? Have our organizational goals
changed?
Advantages to this Approach
Simple to Use and Understand Based on Vision and Strategy Multidimensional
•Quantitative and Qualitative Measures•Current and Future
Provides Measurement of and Method for Improving our Services Ties QI initiatives together Serves as a Communication Tool
Kaplan, Robert and Norton, Edward. The Balanced Scorecard.Harvard Business Publishing, 1998
Kaplan, Robert and Norton, Edward. The Strategy-Focused Organization.Harvard Business Publishing, 2001
Buckingham, Marcus and Coffman, Curt. First, Break All the Rules The Gallup Organization, 1999
Brown, Mark. Keeping Score. Mark Graham Brown, 1996
http://www.afd.calpoly.edu/afd/Strategic_plan/
http://cqi.csusb.edu/
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