improve public sector results with bsc
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Improve Public Sector Results With BSC by BSC InstituteTRANSCRIPT
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Howard RohmVice-President, the Balanced Scorecard InstituteDirector, U.S. Foundation for Performance Measurement
Internet: www.balancedscorecard.org e-mail: [email protected] Phone: (202) 251-7676
Improve Public Sector Results With ABalanced Scorecard: Nine Steps To Success
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
People and their managers are working soPeople and their managers are working so
hard to be surehard to be sure things are done rightthings are done right, that, that
they hardly have time to decide if they arethey hardly have time to decide if they are
doing the right thingsdoing the right things..Stephen R. CoveyStephen R. Covey
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Seminar Objectives
Introduce a framework for building and implementing a
public-sector balanced scorecard performance
management system
Learn how to use a balanced scorecard in a managing-
for-results environment Understand how a scorecard system can help align
organization effort with strategy
Learn best practices, and how to overcome obstaclesand challenges
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Definitions
Mission: What we are about (e.g., Our mission is to provide )
Vision: What we want to be in the future (e.g., Our vision is to be the leading provider of )
Perspectives: Different views of our organization (e.g., customers/stakeholders, employee & capacity, financial,
internal processes)
Customers: Direct beneficiaries of our services or products (e.g., citizens)
Stakeholders: The universe of people with an interest in our products and services (e.g., Board of County
Commissioners, press, vendors, regulators)
Outcomes: What results are desired; our planned accomplishments (e.g., Improve citizen satisfaction)
Goals: What we want to achieve by a certain time (e.g., reduce no. of repeat offenders by 10% next year, increase
participation by 25% over two years, reduce annual crime rate per 100,000 people by 10%)
Strategies: How we intend to accomplish our vision and goals; our approach, or game plan (e.g., acquireadditional parkland, develop new faith-community and business partnerships, reduce taxes)
Objectives: Strategy components; action items that must be done (e.g., improve processing time, increase
employee skills, develop a new claims process)
Strategic Map: Cause-effect relationships among strategy components
Outputs: What is produced (e.g., no. of vaccinations given, no. of claims accurately processed)
Performance Measures (Lagging): Indicators of success (e.g., no. of citizens served last month)
(Leading): Predictors (performance drivers) of future success (e.g., increase in employee knowledge)
Target: Desired level of performance for a performance measure (e.g., customer satisfaction target = 95%)
Initiatives:Action programs that will achieve our performance goals (e.g., license renewals via Internet)
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Basic Design Of A Balanced Scorecard
Performance System
VisionVision&&
StrategyStrategy
Customers/CitizensCustomers/CitizensMeasureMeasure TargetTarget InitiativeInitiativeObjectiveObjectiveCustomersCustomers
MeasureMeasure TargetTarget InitiativeInitiativeObjectiveObjective
Learning & GrowthLearning & GrowthInnovation
&Learning
Innovation
&Learning
ObjectiveObjective MeasureMeasure TargetTarget InitiativeInitiativeBudgetBudget
FinancialFinancial
MeasureMeasure TargetTarget InitiativeInitiativeInternal Business ProcessInternal Business Process
ObjectiveObjectiveInternal BusinessProcesses
Internal BusinessProcesses
Source: Kaplan & Norton
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Public-Sector Balanced Scorecard
MissionMission
Customers/CitizensCustomers/CitizensMeasureMeasure TargetTarget InitiativeInitiativeObjectiveObjectiveCustomers & StakeholdersCustomers & Stakeholders
MeasureMeasure TargetTarget InitiativeInitiativeInternal Business ProcessInternal Business Process
ObjectiveObjectiveInternal BusinessProcesses
Internal BusinessProcesses
MeasureMeasure TargetTarget InitiativeInitiativeObjectiveObjectiveLearning & GrowthLearning & GrowthEmployees
&Organization Capacity
Employees&
Organization Capacity
ObjectiveObjective MeasureMeasure TargetTarget InitiativeInitiative
BudgetBudget
FinancialFinancial StrategyStrategy
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Balanced Scorecard Logic
GoalsGoals
Vision
Customers
MeasuresMeasures
InitiativesInitiatives
Strategic MapStrategic Map
MissionMission
Core ValuesCore Values
TargetsTargets
Perspectives Focus AreasFocus AreasSTRATEGYSTRATEGY
ObjectivesObjectives
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Committing to Performance-based
Management
From:
Control andCompliance Rules-governed
Limited flexible
Non-preventive (rework
based on feedback) Negative focus
Control of individuals
Toward:
PerformanceAccountability Mission driven
Customer driven
Employee responsive
Flexible
Preventive
Positive, team focus
Required a significant cultural change!Required a significant cultural change!Required a significant cultural change!
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Balanced Scorecard Methodology:
Nine Steps To Success
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Organizational Assessment
Step One
SWOTSWOT
CapacityBuilding
Strategy
ValuesVision
Mission
ValuesValuesVisionVision
MissionMission
NeedsNeedsOutcomes
GoalsOutcomesOutcomes
GoalsGoals
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Achieving Customer Satisfaction:
The Citizen Value Proposition
GoalSelf-sufficient residents with equal access to services
Efficient, effective and inclusive servicesSafer and healthier community through high quality, cost-effective and
accessible services
Vibrant and diverse economy, enhanced quality of life, and protected
natural resources
Focus Areas1. Socio-economic Opportunity
2. Good Government3. Community Health & Safety
4. Smart Growth
A: Develop Goals
Product (Service) Features Relationship Image++
Citizen Needs & WantsNecessary, efficient services; effective management; accountability to citizens; healthy
community; safe community; clean air, water, and land; access to parks, open spaces, greenways,
and recreation opportunities; affordable housing; education and literacy; diversity; self-sufficiency;
safe, secure, economical energy availability
B: Determine Citizens Needs and Wants
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Define Strategies
Mission: Manage the Nations space program in acost-effective and safe manner
Strategic Themes:1) Develop safe launch and reentry vehicles2) Maintain a ground infrastructure
Vision: Land on the moon and return safely to earth
Step Two
Strategies: Develop shuttle capable of sustaining multiple earth orbits and re-entries Develop materials capable of surviving multiple earth re-entries Develop reusable landing craft
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Reduce
Costs
Customers
Budget
Internal Business Process
Learning and Growth
Strategic Objectives
Increase
Satisfaction
Increase
Involvement
Improve
Cycle Time
IncreaseNetworkCapacity
ImproveSkills
ReduceProcurement
Steps
Increase
Safety
Lower
Wait Time
Grow Tax
Base
Step Three
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Reduce
Costs
Citizens
Budget
Internal Business Process
Learning and Growth
Public Sector Strategic Map
IncreaseSatisfaction
IncreaseInvolvement
IncreaseNetworkCapacity
ImproveSkills
ReduceProcurement
Steps
IncreaseSafety
LowerWait Time
Grow Tax
Base
Step Four
ImproveCycle Time
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Performance Measures Should Help Us Decide:
Input: Resources, including cost and workforceProcess: Activities, efforts, workflowOutput: Products and services produced
Outcome: Results, accomplishments, impacts
Are We Doing The Right Things?
Strategic Planning (What?)
Are We Doing Things Right?
Business Planning (How?)
Step Five
Performance Measures
OutputOutputInputInput ProcessProcess OutcomeOutcome
PerformanceMeasures
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Candidate Initiatives
Outreach programsCitizen surveys
Partnerships
Process improvement
Training coursesKnowledge building
Policy analysis
R & D efforts
Communication planPerformance-based budget
Prioritized
FundedInitiatives
1.
2.
3.
4.
5.
6.
F
I
L
T
E
R
Selection Criteria
Resources required
Impact potential
ranking on strategy
Multiple objectivescovered
Time
required/needed
InitiativesStep Six
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Putting It All Together Federal
Government Logistics Center
World-class, Customer Driven; ProvidingQuality Services Worldwide
Provide Logistics Support and Productsto Assure Safety for the Flying Public
S1: Become more customer-driven
S2: 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 delivery
S1-O2-M1: % defective product
S1-02-M2: % defective shipments
S1 S2
O1 O2 O3
M1
M1
M2
Objectives
S1-O1-M1-T1: 100% in 2002
S1-02-M1-T1: Zero in 2002
S1-02-M2-T1: Zero in 2002
T
1
T
1
InitiativesS1-I1: Re-engineer delivery
process
S1-I2: Six Sigma training
T
1
I1
I2
Mission
Vision
Strategy
Measures
Targets
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
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 partnerships
S1-01: Optimize organization (Internal)
S1-02: Identify service & resource gaps (Employee)
S1-03: Survey citizens (Customer)S1-O1-M1: Skills match index
S1-O2-M1: Cost per unit service
S1-03-M1: Citizen satisfaction rating
S1 S2
O1 O2 O3
M1
M1
M1
Objectives
S1-O1-M1-T1: Skills index = 80% in 2002
S1-02-M1-T1: 7% improvement above baselinS1-03-M1-T1: 95% in 2002
T
1
T
1
InitiativesS1-I1: New outreach programS1-I2: Communications plan
T
1
I1
I2
Mission
Vision
Measures
Targets
Citizen Needs &Desired Outcomes
Strategy
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Automation
EnterpriseRequirements
Time and Cost to Implement
Few measures Simple reports Small office
Numerous measures
Advanced charting Multiple locations Web publishing Analysis & commentary
Enterprise-wide data Composite measures Many data/reporting locations
Advanced executive reporting Web publishing Advanced analysis Dynamic links to legacy
systems
Step Seven
COTS Data Base
PMIS
Data Warehouse
Software Solution Space
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Cascaded Scorecards Support Strategy
Goal Measure Target Initiative
Learning and GrowthGoal Measure Target InitiativeLearning and Growth
Goal Measure Target Initiative
FinancialGoal Measure Target InitiativeFinancialGoal Measure Target Initiative
Financial
Goal Measure Target Initiative
CustomerGoal Measure Target InitiativeCustomerGoal Measure Target Initiative
Customer
MissionStrategy
MissionMission
StrategyStrategy Goal Measure Target InitiativeInternal Business ProcessGoal Measure Target Initiative
Internal Business ProcessGoal Measure Target InitiativeInternal Business Process
Goal Measure Target Initiative
Learning and Growth
Corporate
Business UnitsSupport Units
Team/Individual
Step Eight
Adapted from: Kaplan & Norton
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Communicating Corporate Strategy To
Business Units
Strategy
AgencyAgency
DepartmentDepartment
Team/IndividualTeam/Individual
MeasuresObjectives
Vision: Be The Best Local Government Service Provider
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
OutputOutputInputInput ProcessProcess
Programs & Operations
Evaluate & Change
Strategic Direction
Planning
Management
Adapted from: Balanced Scorecard Collaborative
Balanced Scorecard
Budget Formulation & Costing
O
U
TC
O
M
E
S
Strategy Objectives
PerspectiveMeasures
Strategy Objectives
PerspectiveMeasures
Strategy Objectives
PerspectiveMeasures
Strategy Objectives
Perspective #1Measures
Step Nine
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement The BSC Is The Strategic Front-End
Of Managing-For-Results
Budget
Evaluation
Results AccountabilityAccountability
StrategicPlanning
Program/ServiceArea Planning
CorporateBSC
DepartmentBSC
Performance
Measures
MeasurePerformance
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Goal: Performance-Based Budget
RecipientsRecipients
Suppliers
Contractors
CitizensME
ASURE
S
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
StrategicGoals
StrategicStrategicGoalsGoals
Goal 1Goal 1
Goal 2Goal 2
Goal 3Goal 3Goal 4Goal 4
Goal 5Goal 5
Goal 6Goal 6
Goal 7Goal 7Goal 8Goal 8
Goal 9Goal 9
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Summary
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
The Balanced Scorecard Is (Is Not)
A strategic performance management
system for the whole organizationA communications tool to make
strategy clear to everyone
A way to balance financial and non-
financial views of organization
performance
A journey
A system for increasing accountability
A commitment to change
A way of aligning organization visionwith human and capital resources, and
with day-to-day operations
A performance measurement tool to
control individual productivityA flavor of the month performance
measurement system
About placing your existing
performance measures into four
categories
A project
Easy
The status quo
A TQM initiative
IS: IS NOT:
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement Performance Management System
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 budgeting as separate from strategy development
Measures that are set independently of the performance framework,
or measures with no ownership
No performance targets, or targets that are set too high or too low
Little or no strategic feedback
Lack of meaningful employee involvement
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Limit the number of measures
Include measures for all perspectives and all strategies Seek balance among measures
Develop solid baseline date
Develop measures for past, present, and future
Dont over-rely on output, process and input measures
Set stretch targets
Watch for unintended incentives
Hold people accountable for results
And always, beware the watchman!
@ U.S. Foundation for Performance Measurement
Best Practices
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Sir Josiah Stamp, 1880-1944,
Head, Bank of England
"The government are very keen on"The government are very keen on
amassing statistics. They collect them,amassing statistics. They collect them,
add them, raise them to the Nadd them, raise them to the Nthth power, takepower, takethe cube root and prepare wonderfulthe cube root and prepare wonderful
diagrams.diagrams.
But you must never forget that every oneBut you must never forget that every one
of these figures comes in the first instanceof these figures comes in the first instance
from the village watchman, who just putsfrom the village watchman, who just putsdown what he pleases."down what he pleases."
But, Beware The Watchman !!But, Beware The Watchman !!
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Strategy = Doing the right things
Operations = Doing things right
Change = Doing things differently
StrategyStrategy = Doing the right things
OperationsOperations = Doing things right
ChangeChange = Doing things differently
BSC = Strategy + Operations + ChangeBSC =BSC = StrategyStrategy++ OperationsOperations ++ ChangeChange
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
SUCCESS = Effective, Well Executed Strategy
+ Efficient Operations
+ Meaningful Change
SUCCESS =SUCCESS = Effective, Well Executed StrategyEffective, Well Executed Strategy
++ Efficient OperationsEfficient Operations
++ Meaningful ChangeMeaningful Change
BSC = Strategy + Operations + ChangeBSC =BSC = StrategyStrategy++ OperationsOperations ++ ChangeChange
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement References
Building & Implementing A Balanced Scorecard: Nine Steps to Success
Howard Rohm, U.S. Foundation for Performance Measurement
Performance Scorecard Toolkit, 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
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Performance ounts 2002 by Howard Rohm. All rights reserved.
U.S. Foundationfor PerformanceMeasurement
Its about management and
change first; measurement
and technology are second
Its about management and
change first; measurement
and technology are second Howard Rohm
Internet: www.balancedscorecard.org
e-mail: [email protected]
Phone: (202) 251-7676