howard rohm vice-president, the balanced scorecard institute
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Improve Public Sector Results With A Balanced Scorecard: Nine Steps To Success. Howard Rohm Vice-President, the Balanced Scorecard Institute Director, U.S. Foundation for Performance Measurement - PowerPoint PPT PresentationTRANSCRIPT
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Howard RohmVice-President, the Balanced Scorecard InstituteDirector, U.S. Foundation for Performance Measurement
Internet: www.balancedscorecard.org e-mail: [email protected] Phone: (919) 859-0084
Improve Public Sector Results With A Balanced Scorecard: Nine Steps To Success
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Seminar Objectives
Describe a framework for building and implementing public-sector balanced scorecard performance systems
Understand how a scorecard system can help align organization effort with agency mission and strategy
Share best practices and lessons learned
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Basic Design Of A Balanced ScorecardPerformance System
VisionVision&&
StrategyStrategy
Customers/CitizensMeasure Target InitiativeObjective Customers
Measure Target InitiativeObjectiveLearning & GrowthLearning
&Growth
Objective Measure Target InitiativeBudget
Financial
Measure Target InitiativeInternal Business Process
ObjectiveInternal BusinessProcesses
Source: Kaplan & Norton
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Public-Sector Balanced Scorecard
MissionMission
Customers/CitizensMeasure Target InitiativeObjective Customers & Stakeholders
Measure Target InitiativeInternal Business Process
ObjectiveInternal BusinessProcesses
Measure Target InitiativeObjectiveLearning & GrowthOrganization
CapacityObjective MeasureTarget
Budget
Financial/Budget Strategy
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Balanced Scorecard (BSC) System Components
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Balanced Scorecard Logic
Phase II: Strategy
CustomerCustomerRequirementsRequirements
Phase I: Strategic Foundations
Phase III: Performance Measures
Phase IV: New Initiatives
• BudgetBudget• ActivitiesActivities
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• Customer ValuesCustomer Values• Organization PainOrganization Pain• Organization ValuesOrganization Values• Vision & MissionVision & Mission
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• ThemesThemes• Strategic ResultsStrategic Results• StrategiesStrategies
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• Strategy ElementsStrategy Elements
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• Performance DriversPerformance Drivers• EnablersEnablers• Causal LinksCausal Links
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• Performance MeasuresPerformance Measures• TargetsTargets• BaselinesBaselines
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• New ProjectsNew Projects
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• SoftwareSoftware• Performance Performance Reporting Reporting• Knowledge Knowledge SharingSharing
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• AlignmentAlignment• Business & Business & Support Support Unit Unit ScorecardsScorecards
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• Performance ResultsPerformance Results• Revised StrategiesRevised Strategies
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Building & Implementing A Balanced Scorecard
• Customer ValuesCustomer Values• Organization PainOrganization Pain• Organization ValuesOrganization Values• Vision & MissionVision & Mission
• Performance ResultsPerformance Results• Revised StrategiesRevised Strategies
• SoftwareSoftware• Performance Performance Reporting Reporting• Knowledge Knowledge SharingSharing
• New ProjectsNew Projects• Performance MeasuresPerformance Measures• TargetsTargets• BaselinesBaselines
• Performance DriversPerformance Drivers• EnablersEnablers• Causal LinksCausal Links
• Strategy ElementsStrategy Elements
• ThemesThemes• Strategic ResultsStrategic Results• StrategiesStrategies
• AlignmentAlignment• Business & Business & Support Support Unit Unit ScorecardsScorecards
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
StrategyStrategy MappingPerformance MeasuresImplementation
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
““People and their managers are People and their managers are
working so hard to be sure working so hard to be sure things are things are
done rightdone right, that they hardly have time , that they hardly have time
to decide if they are to decide if they are doing the right doing the right
thingsthings.”.” Stephen R. CoveyStephen R. Covey
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Focus On Organization Strategy
ContinuousLeadership
DevelopStrategy To
Support Mission
Manage ForPerformance
Make StrategyActionable
Align Work With Mission
Budget ForPerformance
Strategy =Our Approach To Accomplishing
Our Mission
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Mission: Provide information services to citizens
Strategic Themes: Build the information infrastructure Improve operational efficiency and effectiveness
Vision: Enable Internet access to all available information
Strategies: Develop an on-line, 24/7capability to access information services
Build knowledge and skills, to cross-sell new banking products
Call Center Strategies:Provide caller support on an exceptions basisProvide critical customer intelligence to Web site designers
Define StrategiesStep Two
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Strategy Translates What Customers Want Into What We Must Deliver
BusinessStrategy
Support Units
Operations
Business UnitsBusiness Units
CustomerCustomerRequirementsRequirements
Mission
Vision
Values
OrganizationResults
Teams&
Individuals
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Strategy Translates What Customers Want Into What We Must Deliver
BusinessStrategy
Support Units
Operations
Business UnitsBusiness Units
CustomerCustomerRequirementsRequirements
Mission
Vision
Values
OrganizationResults
Teams&
Individuals
BestBestPracticesPractices
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
StrategyStrategy MappingPerformance MeasuresImplementation
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Strategy Is A Hypothesis About What Drives Organization Success
Service Quality
Customer Confidence
ProgramEffectiveness
Customer Satisfaction
Training
InformationTechnology
Identify the key performance drivers that lead to successful strategy execution
Adapted From: John Krieger, Paramount Consulting
Leadership
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Reduce Costs
Citizens
Budget
Internal Business Process
OrganizationCapacity
Public Sector Strategy Map
IncreaseSatisfaction
IncreaseNetworkCapacity
ImproveSkills
ReduceProcurement
Steps
LowerWait Time
Step Four
LowerCycle Time
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Reduce Costs
Citizens
Budget
Internal Business Process
OrganizationCapacity
Public Sector Strategy Map
IncreaseSatisfaction
IncreaseNetworkCapacity
ImproveSkills
ReduceProcurement
Steps
LowerWait Time
Step Four
LowerCycle Time
BestBestPracticesPractices
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
StrategyStrategy MappingPerformance MeasuresImplementation
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Performance Measures Should Help Us Decide:
Input: Resources, including cost and workforce Process: Activities, efforts, workflow Output: Products and services produced Outcome: Results, accomplishments, impacts
Are We Doing The Right Things?(What?)
Are We Doing Things Right?(How?)
Step FivePerformance Measures
OutputOutputInputInput ProcessProcess OutcomeOutcome
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Performance Measures Should Help Us Decide:
Input: Resources, including cost and workforce Process: Activities, efforts, workflow Output: Products and services produced Outcome: Results, accomplishments, impacts
Are We Doing The Right Things?(What?)
Are We Doing Things Right?(How?)
Step FivePerformance Measures
OutputOutputInputInput ProcessProcess OutcomeOutcomeOutputOutputInputInput ProcessProcess OutcomeOutcome
Performance Measures
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Develop Performance Measures
Inputs Process/System Output Intermediate
OutcomesEnd
Outcome
Program Logic Model
Source: Gardner Shaw & Howard Rohm
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Develop Performance Measures
DesiredOutcome
Causal Analysis
Inputs Process/System Output Intermediate
OutcomesEnd
Outcome
Program Logic Model
Source: Gardner Shaw & Howard Rohm
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Develop Performance Measures
DesiredOutcome
Causal AnalysisProcess Flow
ResultsOf
Testing
Not AcceptableAcceptable
PrototypeProduct
Back to LaboratoryTo Market
Inputs Process/System Output Intermediate
OutcomesEnd
Outcome
Program Logic Model
Source: Gardner Shaw & Howard Rohm
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Balanced Scorecard Performance Measures
Customer/Stakeholder
Internal Business
Processes
Financial / Budget
OrganizationCapacity
Results
Process Activities(Quality, Quantity, Timeliness, Efficiency)
ResultsOr
Inputs
What We Want To MeasureWhat We Want To Measure
Behavior ChangesKnowledge, Skills, & AbilitiesEfficiency
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Balanced Scorecard Performance Measures
Customer/Stakeholder
Internal Business
Processes
Financial / Budget
OrganizationCapacity
Achievement of Strategic ResultsBusiness Impacts
Changes in Process Efficiency
Changes in Employee Knowledge, Skills, Attitudes, Behavior, and Abilities
Service Efficiency/Effectiveness Measures
Infrastructure Capacity Gain Measures
Return on Investment (Program/Service Effectiveness) OrInput Measures (Resource Adequacy)
Measurement Categories
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Balanced Scorecard Performance Measures
Customer/Stakeholder
Internal Business
Processes
Financial / Budget
OrganizationCapacity
Achievement of Strategic ResultsBusiness Impacts
Changes in Process Efficiency
Changes in Employee Knowledge, Skills, Attitudes, Behavior, and Abilities
Service Efficiency/Effectiveness Measures
Infrastructure Capacity Gain Measures
Return on Investment (Program/Service Effectiveness) OrInput Measures (Resource Adequacy)
Measurement Categories BestBestPracticesPractices
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
The Finished BSC Tells Our Story
Infrastructure PerspectiveProcess Perspective
Financial Perspective
Objectives MeasuresCustomer Perspective
Initiatives
Strategy:Our Approach To Accomplishing
Our Mission
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Putting It All Together – Federal Government Logistics Center
World-class, Customer Driven; Providing Quality Services Worldwide
Provide Logistics Support and Products to Assure Safety for the Flying Public
S1: Become more customer-drivenS2: Increase business opportunities
S1-01: Assure timely delivery (Customer)S1-02: Raise quality level (Customer)S1-03: Reduce cycle time (Internal)
S1-O1-M1: % on-time deliveryS1-O2-M1: % defective productS1-02-M2: % defective shipments
S1 S2
O1 O2 O3
M1
M1
M2
Objectives
S1-O1-M1-T1: 100% in 2002S1-02-M1-T1: Zero in 2002S1-02-M2-T1: Zero in 2002
T1
T1
InitiativesS1-I1: Re-engineer delivery
processS1-I2: Six Sigma training
T1
I1
I2
Mission
Vision
Strategy
Measures
Targets
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Putting It All Together – Local Government
Be the Best Local Government Service Provider
Serve County Residents by Helping ImproveTheir Lives and Community
S1: Increase value by providing more cost-effective servicesS2: Reduce violence, harm & injury through
community partnershipsS1-01: Optimize organization (Internal)S1-02: Identify service & resource gaps (Employee)S1-03: Survey citizens (Customer)
S1-O1-M1: Skills match indexS1-O2-M1: Cost per unit serviceS1-03-M1: Citizen satisfaction rating
S1 S2
O1 O2 O3
M1
M1
M1
Objectives
S1-O1-M1-T1: Skills index = 80% in 2002S1-02-M1-T1: 7% improvement above baselineS1-03-M1-T1: 95% in 2002
T1
T1
Initiatives S1-I1: New outreach programS1-I2: Communications plan
T1
I1
I2
Mission
Vision
Measures
Targets
Citizen Needs & Desired Outcomes
Strategy
MARINE CORPS SYSTEMS COMMMANDCOMMAND BALANCED SCORECARD – DESIRED OUTCOMES VIEWOPS EFFICIENCYGOAL: Improve operating efficiency through streamlined and innovative business systems
LIFE CYCLE MANAGEMENTGOAL: Deliver highly effective systems and equipment using Life Cycle Management
QUALITY SYSTEMSGOAL: Improve quality of systems and equipment provided to operating forces
HI-PERFORMANCE ORGGOAL: Become a proud, high-performance, team-based learning organization in a professional environment
WARFIGHTER/STAKEHOLDER
(BETTER)
FINANCIAL
(VALUE)
WORK SYSTEM
(FASTER)
HUMAN SYSTEM
(SMARTER)
Acquire Best-Value
ProductsImprove Delivery
TimeImproveExternal
Communications
Increase Internal Process Efficiency
Improve Command Planning & Resource
Allocation Improve Systems
Integration
Understand and Meet Explicit & Implicit
Customer Requirements
Increase CollaborativePartnerships
Improve LCMFocus
Identify & Meet Future Skills
Requirements
Improve Infrastructure
SupportImprove InternalCommunications
Improve WorkforceSatisfaction &Commitment
Improve WorkforceKnowledge, Skills
& Abilities
Improve Team-based Workforce Competency
Equip the Warfighter to Win
Se m p e r Fi id l seS em p e r F i id l se
OptimizeOperating
Budget
Increase FinancialEfficiency
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
StrategyStrategy MappingPerformance MeasuresImplementation
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
SAS Institute
iDashes
pbVIEWS
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Automation
EnterpriseRequirements
Time and Cost to Implement
• Few measures• Basic tracking• Small office
Step Seven
COTS Data Base
Software Solution Space
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Automation
EnterpriseRequirements
Time and Cost to Implement
• Few measures• Basic tracking• Small office
• Numerous measures• Visualization & charting• Multiple locations• Web input & publishing• Commentary
Step Seven
COTS Data Base
PMIS
Software Solution Space
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Automation
EnterpriseRequirements
Time and Cost to Implement
• Few measures• Basic tracking• Small office
• Numerous measures• Composite measures• Visualization & charting• Multiple locations• Web input & publishing• Commentary
• Links to legacy systems• Composite measures• Many data/reporting locations• Integrate with enterprise systems• Advanced executive reporting• Web input & publishing• Advanced analysis
Step Seven
COTS Data Base
PMIS
Data Warehouse
Software Solution Space
Data Warehouse Features: Strategic Performance Management
Collect and transform data from virtually any data source and manage the process
Fully automated solution Communicate on strategy, provide early indicators Collaborate on knowledge and share best practices enterprise-wide Integrate with any performance framework Robust analytics, including predictive analysis, cost analysis,
correlation/impact analysis, trend analysis, and data mining Dynamic, customizable strategy maps Ability to integrate with other enterprise solutions One consistent Intelligence Architecture across the enterprise
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Align The Enterprise View With Business And Support Units
Strategy
Agency
Department
Team/Individual
Measures Objectives
Vision: Be The Best Local Government Service Provider
Step Eight
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Align The Enterprise View With Business And Support Units
Strategy
Agency
Department
Team/Individual
Measures Objectives
Vision: Be The Best Local Government Service Provider
Step Eight
BestBestPracticesPractices
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Goal: Performance-Based Budget
RecipientsRecipients
Suppliers
Contractors
CitizensMEASURES
Program 3
BudgetBudget
Program 5
Program 4
$ xx M
$ xx M
$ xx M
$ xx M
$ xx M
$ xx M
$ xx M
$ xx MProgram 1
Program 2 $ xx M
$ xx M
InfrastructureOther Indirects
$ xx MProgram 6
BalancedBalancedScorecardScorecard
StrategicStrategicGoalsGoals
Goal 1
Goal 2
Goal 3
Goal 4Goal 5
Goal 6
Goal 7Goal 8
Goal 9
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Summary
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Typical Timeline – Building The Corporate Scorecard
GettingStarted
Set Strategic Context
Develop Strategy & Objectives
Define Performance Measures
Develop New Initiatives
Design Performance Reporting
Adapt Management Review Process
Executive Sessions
1 2 3 4 5 6 7 8 9 10-16
Week
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
Balanced Scorecard Implementation Challenges
• Fear of measurement and new systems
• Lack of common definitions and terms
• Inconsistent or weak buy-in, and lack of understanding
• Visions and strategies that are poorly defined and understood, not actionable, and not linked to individual actions
• Treating budget development separately from strategy development
• Measures set independently of a performance framework, or measures with no ownership
• Loosing momentum
• No performance targets, or targets set too high or too low
• Little or no strategic feedback
• Lack of meaningful employee involvement
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
The Balanced Scorecard Is (Is Not)
A performance measurement tool
An EIS for executives only
A project
Easy
“Business as Usual”Putting your existing metrics into 4 bins
Tighter individual controlA TQM, Six Sigma, or reengineering project
IS: IS NOT:
A strategy-based management systemA communications tool for the whole organization
A journey
Hard workA change initiativeBalancing non-financial, efficiency, infrastructure, & financial views of performance
Increased accountability
Aligning vision with operations
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
““Mr. Rohm:Mr. Rohm:
I am new to BSC. Could you I am new to BSC. Could you
email me a list of measures for email me a list of measures for
each of the four perspectives?”each of the four perspectives?”
(Name withheld to protect the poor man!)(Name withheld to protect the poor man!)
Getting Quick Results
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
“It’s about management and change first; measurement
and technology are second ”Howard Rohm
Internet: www.balancedscorecard.orge-mail: [email protected]
Phone: (919) 859-0084
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute
References
A Balancing Act: Developing and Using Balanced Scorecard Performance Systems, Howard
Rohm, Perform, June 2002
Building & Implementing A Balanced Scorecard: Nine Steps to SuccessTM, Howard Rohm, U.S.
Foundation for Performance Measurement
Performance Scorecard ToolkitTM, Howard Rohm, U.S. Foundation for Performance Measurement
How To Measure Performance: A Handbook of Techniques and Tools, Performance-Based
Management Special Interest Group, U.S. Department of Energy
Keeping Score, Mark Graham Brown, Quality Resources
Performance Drivers, Niles-Goram Olve, Jan Roy and Magnus Wetter, Wiley
Operational Performance Measurement: Increasing Total Productivity, Will Kaydos, Saint Lucie Press
The Balanced Scorecard, Robert Kaplan & David Norton, Harvard Business School Press
The Strategy-Focused Organization, Robert Kaplan & David Norton, Harvard Business School Press
“Performance Counts…”™ © 2003 by Howard Rohm. All rights reserved.
The Balanced ScorecardInstitute Information Clearing House
Balanced Scorecard Training, Coaching & Consulting (GSA Schedule)
Performance Measurement Development and Training (GSA Schedule)
The Balanced Scorecard Institute
Upcoming Events:
Web: www.balancedscorecard.orgE-Mail: [email protected]
Phone: (919) 859-0084
Balanced Scorecard Workshop: March 2003; Brussels, BelgiumBalanced Scorecard Workshop: April 2003; Washington, DC
Performance Measures Workshop: May 2003; Washington, DCBalanced Scorecard Workshop: Summer 2003; Minn.-St. Paul, MN
Balanced Scorecard Workshop: Fall 2003; Washington, DC