balanced scorecard introduction
TRANSCRIPT
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Balanced Scorecard and Strategy Map
Lunch Bunch (Cabinet)August 23, 2007
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Short-Term Goal (Today)
Understand the Balanced Scorecard
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Create a Balanced Scorecard that links objectives,
initiatives (new and old), and measures to the
strategy of our organization.
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Why think strategically?
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Funding cuts (Financial)
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• Demonstrate accountability (all areas)
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• Improve our performance (Customer/Student Achievement)
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• Focus on improving our inputs (Internal processes)
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• Alignment of our PD with where we expect our employees to be headed (Learning and Growth)
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Why think strategically?• Funding cuts (Financial)• Demonstrate accountability (all areas)• Improve our performance
(Customer/Student Achievement)• Focus on improving our inputs
(Internal processes)• Alignment of our PD with where we
expect our employees to be headed (Learning and Growth)
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?
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Strategy• Strategy is how we intend to create
value for our customers
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10%It is estimated that fewer than 10% strategies that are effectively formulated are effectively implemented.
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In the majority of those cases (it is estimated to be 70%) the problem is not the strategy, but the execution of the strategy.– Forbes Magazine
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Barriers to strategic thinking
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Vision: Only 5% of workforce
understands the strategy
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People: Only 25% of managers have
incentives linked to strategy
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Management: 85% of Executive Teams spend less than 1 hour on strategy
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Resources: 60% of organizations do not
link budgets to strategy
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1 hour
It is estimated that managers and executives spend less than 1 hour per month on strategy.
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Steps in this Process• Step #1: What is a Balanced
Scorecard?• Step #2: What is a Strategy
Map?• Step #3: What method are we
going to use to create our Strategy Map?
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Step #1: What is BSC?
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What is a Balanced Scorecard?
…The BSC is a management tool that provides senior executives a comprehensive measure of how the organization is progressing towards achieving its strategic goals.
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Balanced Scorecard• The idea of the scorecard is to
describe the essential ingredients of organizational success.
• Its underlying philosophy – Provides a tool for clearly communicating the goals and priorities of the organization.
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Introduced in 1992, by Robert Kaplan and David Norton, the Balanced Scorecard is the most commonly used framework for ensuring that agencies execute their strategies. Today, about 70% of the Fortune 1,000 companies utilize the Balanced Scorecard to help manage performance.
Where it started . . .
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Some Basic Principles• Quantifies the Organizational Strategy in measurable terms• Strategy is summarized on a Strategy Map over four views of
performance (perspectives).• Must capture a cause-effect relationship between strategic
objectives over the four perspectives on the Strategy Map.• Critical Components include:
- Measurements- Targets- Initiatives
• Everything must be linked: Goals to Objectives, Objectives to Measurements, Measurements to Targets.
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Vision and Mission
Strategic Assessment
Strategy Map
Balanced Scorecard
Execution
Monitor
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When the community, students and staff are
involved, all students do learn and succeed.
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…to ensure all students will be at or above grade level
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Four Sectors for Business.
"If we succeed, how will we look to our shareholders?”
The Strategy
Private Sector Organizations
Financial Perspective
"To achieve our vision, how must we look to our
customers?”
Customer Perspective
"To satisfy our customers, at which processes must we
excel?”
Internal Perspective
"To achieve our vision, how must our organization learn
and improve
Learning & Growth
Introducing Strategy Maps
A simple model of the value creation process
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Customer• Who are our targeted customers?• What is our value proposition in serving
them?
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ProcessesTo satisfy our customers at what processes
must we succeed?
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Employee Learning and Growth
• What capabilities and tools do employees require to help then execute our strategy?
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Financial Perspective• What financial steps are necessary to
ensure the execution of our strategy?
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“Simple, not simplistic.”-Kaplan and Norton
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• Make sure relationship between point A (where we are today) and point B (scorecard) is clear
• A scorecard is a final measurement tool. To get there we need to clarify our strategy. To clarify strategy will need to spend some time analyzing strategic data and then develop a map of strategy.