Professional Documents
Culture Documents
• 2
What is the balanced Scorecard (BSC)?
• An improved strategic planning process for focusing on the
most important things,
• A change initiative for visualizing and communicating an
organization’s long term strategic intent to all employees,
• A framework for breaking strategy into actionable strategic
objectives,
• An effective strategic management system for aligning day
to day work to an organization’s vision and strategy using
strategic performance measures and strategic initiatives,
• An integrated framework for informing strategic budgeting,
and allowing the organization to learn what works and to
become more strategy focused,
• In other words, BSC is an integrated strategic planning
and management system, not just a measurement
system!
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Summary of BSC Benefits, Costs and Risks
Benefits
• Brings employees together to talk about the organization’s
future, strategy, pains, and prospects
• Builds alignment among shared vision, strategy and
operations
• Improves interactive communications, internally and
externally
• Demonstrates a commitment to results and high-
performance
• Links employee day-to –day work with organization ”big
Picture” desired results
• Measures what matters
• Focuses on the most important things: customers,
employees, strategy, results
• Increases employee accountability and ownership
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Challenges
• It requires employee time commitment:-
• It Changes the way planning is done-
changes the way strategy is reported
and executed
• Expense of hiring expert training and
facilitation help
• Maintaining momentum and commitment
after the initial euphoria of a fresh new
approach
• Changing hearts and minds takes time
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BSC Best Practices
• Engage leadership at the highest possible level- a
commitment to a journey, not a project
• Use cross-functional teams to build the system, made up of
employees from all levels of the organization (you need
to incorporate different “voices”)
• Build the scorecard system right from the start; use a
disciplined framework to build and connect scorecard
components into a strategic planning and management
system
• Build in leadership development and two-way
communication at all levels
• Celebrate success frequently, and incentivize desired
behavior changes
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BSC Best Practices (Con’t.)
• Avoid the “rush to judgment” on:
o Performance measures (Ask “What should we
measure?”, not “Which of our current
measures should we use?”
o Focus just on current projects and activities
(Strategy is NOT the sum of all the stuff we are
currently doing!)
o Early software purchase (“just buy some
balanced scorecard software… that will give us
our scorecard”)
o “Let the planning shop build it-it’s their job”
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Balanced Scorecard Leadership
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Building the Balanced Scorecard system
Learning Objectives:
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The balanced scorecard is (Is Not)
Is: Is Not:
A Strategic Planning & management system Just a performance measurement framework
A communication tool for the whole organization An executive Information Stem for a few managers
and executives
A journey- “change hearts and minds” A project- flavor of the month performance
measurement system
Strategic & Operational-requires critical thinking Operational- group current projects in to strategic
goals “buckets”
A transformation and change initiative Business as usual
A balance among financial, non-financial, efficiency, and Putting existing metrics into 4 perspectives
organization capacity views of performance
Increased accountability Tighter individual control
Aligning vision with strategy and operations A TQM, Six Sigma, ISO, Lean, Baldrige, or BPR
initiative
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Step One: Assessment
Three Tasks In Step One
Prepare for balanced Scorecard Program
Launch
• Team charter, roles & responsibilities
• Schedule and resourcing
• Team member time commitments
• Team initial training
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• Conduct Organization Assessment (“Environmental
Scan”)
• Existing plans, surveys, and data
• Mission
• Vision
• Core Values
• Customers and Stakeholders
• SWOT Analysis (Organization Internal & pains
and Enablers)
• Plan for change
• Readiness assessment
• Organization change management strategy and
plan
• Organization communications strategy and plan
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Teams
Roles And Responsibilities
Strategic Management Team
Consulting Team
oWork closely with all teams
oFacilitate all aspects of the Balanced
Scorecard program
oProvide Balanced Scorecard expertise
oPerform performance measures gap analysis
oDesign BSC-based performance reporting
oIncorporate “ best Practices” insights 21
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Team Member Attributes:
• Desired attributes of team members:
o Analytical thinker, visionary, change agent,
business process expert, proactive(*outside
the box”) thinker, understand “ voice of the
customer”, quick mind, respected, “ can do”
attitude
Strengths Weaknesses
Internal What do you do well? What could you improve?
strengths? weaknesses?
Opportunities Threats
External What good opportunities are open What trends could harm you?
to you? What is your competition doing?
Looking at your strengths, how can threats do these expose you to?
you turn these into opportunities?
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Turn Your SWOT Analysis into Pains & Enablers
Strengths Weaknesses
Internal What do you do well? What could you improve?
What unique resources Where do you have fewer
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Identifying Customers and Stakeholders
• Stakeholders
• A stakeholder is anyone who has an interest
in the outcome of the organization
• Customers
• A customer is a direct beneficiary of your
organization’s products or services
• Customers are stakeholders who benefit
directly
• Examples of stakeholders:
• Customers
• Clients
• Employees
• Management team
• Suppliers
• Regulators
• Policy Makers
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Defining Mission Statement
• A Mission Statement describes,
o Defines why our organization exists
o Reflects our purpose
o Who we are and what we are about- “Our Mission is
to provide (Serve)…….”
o A few sentences in length-no more than one
paragraph
– Incorporates features of our organization (e.g.
products or services, markets or community
served, functions performed, uniqueness)
– What functions) does the Organization perform?
– For whom does the Organization perform this
function
– Where does the Organization operate? (Geographic
domain)
– How does the Organization go about filling this
function? (Methods)
– Why does this Organization exist
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– What? (Service user's needs; services)
Defining Vision
• A Vision,
o Describes where we want our organization to be in the future,
typically 3-5-10 years from now – “Our Vision is to become
(achieve)….”
o Describes the organization’s future intent…. The “picture of the
future”
o Brief, easy to understand and communicate message, usually
one sentence: can include a high-level strategic result (goal)
or not
o Vision statement should be an emotionally inspiring picture of
future success
– Purpose of a vision
– Shared Vision is an initial force that brings people
together.
– Inspires stakeholders
– It is a life-blood of an organization
– Helps to see what you are working towards
– Clearly articulated vision can provide energy,
momentum and strengths to individuals
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– Provide bases for partnership
Overarching Strategic Result (Vision Result)
• “What will be the high-level result of being successful
with our Vision?
• The vision statement can be written as goal and target in
a single statement (e.g.. Starbucks 1998 vision: 2000
Stores in the year 2000”)
In such a case, success can be easily measured and
progress tracked
• If the vision does not include a goal, Overarching
Strategic result can be developed for the vision
separately
(eg. Sears Vision: “A Compelling Place to Shop, A
Compelling Place to Work,
A Compelling Place to Invest” does not have a
goal included in the vision statement)
• The Overarching Strategic result should be achievable,
but with hard work (stretch target)
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Vision And Mission Statement Examples
Mission: we create the safest, most exciting car experience for modern families
Nature Conservancy
Vision: Saving the Last Great Places on Earth
Mission: Preserve the plants, animals and natural communities that represent the
diversity of life on Earth, by protecting the lands and waters they need to
survive,
Congressional Administrative office
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Core Values Guiding principles
• Commitment to Service
• Effective & Efficient resource Stewards
• Safe Working Environment
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What is Change Management?
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Fundamentals of Change Management Planning
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Examples of Strategic Change Drivers (from Organization
Assessment)
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ADKAR- A Change Management Model
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Change Management Actions
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Develop the Core Messages
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Communications Actions Workshop Steps
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Summary: Step 1 – Organization Assessment
Key Elements:
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• Products developed in Step One:
o Management commitment to BSC Process secured
o BSC teams selected and empowered
o Resource commitments secured
o Key player roles and responsibilities understood and
accountability established
o BSC Plan and timetable developed and approved
o SWOT results summarized:
• Strengths + Opportunities = Enablers
• Threats + weaknesses = Pains
o Picture of the future" described
o Organization values identified
o Mission and vision elements identified: statement development
process initiate
o Customers and stakeholders identified
o Communication strategy developed
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Step Two: Strategy
Learning Objectives:
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Some “Strategic” Quotes
“If you don’t know where you are going, you will wind up somewhere else”
Yogi Berra
“HAVING Lost Sight of our objectives, we have redoubled our efforts”
Anonymous
“There is always a better strategy than the one you have … you just haven’t
thought of it yet” Lloyds CEO in HBR
“Strategy is Choice “ Herodotus 500 BC
“What’s the use of running if you are not on the right road?
Old German Proverb
“ We don’t have a (traditional) strategy process- it allows us to innovate”
Eric Schmidt, Google
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What is Strategy ?
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Causes of Strategy Failure in Organizations
Root cause for Failure Description
Unclear strategy/ conflicting The strategy is not clear to staff, especially those at
priorities lower levels in the organization. Priorities often
conflict and are unclear to execute against
Ineffective senior team The strategy formulation team lacks the skills and
capacity to develop land follow through on a cohesive
strategy plan
Poor vertical communication The communication about the strategy is not very
effective down the line
Poor coordination across Bus Business units and functions are not aligned in their
or functions understanding or execution of the strategy
Inadequate down the line Level or resources involved in leading and deploying
leadership skills the strategy is inadequate 52
Traditional Strategic Planning
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Elements of “ New” strategic planning
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Identify Customer and Stakeholder Needs
§ Identifying customers and stakeholders
o A stakeholder is anyone who has an interest
in the outcome of the organization
o A customer is a direct beneficiary of your
organization’s products or services…
customers are stakeholders who benefit
directly
§ Identifying your primary customers
o By revenue impact or value to your
organization
o By influence
o By services offered
o Identifying needs
o Differentiate needs from wants
o Needs are based on what products or services
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the organization can or intends to deliver to
Identify and Understand Your Customers and Stakeholders
Customers and Stakeholders Planning Matrix
Other Customers
Stakeholders
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Customer Value Proposition
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e.g: Customer Value Proposition
A Business
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The” Altitude” of strategic Themes
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Apply Filters To Candidate Strategic Themes
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Strategic Themes Example:
An Administrative support organization
§ Customer-Focused operational
Excellence
§ Compelling place to work
§ Support Anywhere, Anytime
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Some other Strategic Theme Examples
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Defining Strategic Results
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Strategic Themes And Results Example:
An Administrative Support Organization
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Characteristics of Good Strategic Results
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Choose Balanced Scorecard Perspectives
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Some “Perspective” on perspectives
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Balanced Scorecard Perspective Examples
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Summary of Step 2- Strategy
Key Elements:
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Products Developed in step Two:
Perspectives selected
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Aligned Government Agency strategic Themes
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Module 3
Step Three: Strategic Objectives
Learning Objectives:
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What Are Strategic Objectives?
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Three Tasks in step Three
Team Preparation:
o Improve health
o Increase work efficiency
o Lower cycle time
o Increase employee satisfaction
Should indicate what a “ good” result is:
o Improve
o Increase
o Decrease
o Enhance
o Optimize
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Sample Strategic Objectives
Good Objectives,
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How to Develop Strategic Objectives
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• List (brainstorm) ways in which the Strategic Result
could be accomplished on a continuous
improvement basis
• Capture commentary for all objectives that are
selected e.g.
o What is included/
o What is not included,
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•
•
O D
B O
J C
E M
C E Prepare Objective Commentary
T N
I T
V A
E T
I
O
N
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Documenting Strategic Objectives:
Objective Commentary
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Sample Strategic Objective Commentary
Description
Improve recruiting strategies to ensure we recruit people that are highly
motivated and share our core values. We will attract and Retain skilled
experienced leaders, technical and Construction professionals reduce
Improve the recruiting cycle and increase our ability to meet the rising Needs of our
Hiring organization as we grow. Improve candidate Assessment, screening and
and selection process
Out come:
Retention Lean, Versatile, committed and loyal workforce
Low short term turnover rate
Labor pools that fluctuate with workload
Right size recruitment time and cost
A diverse work force, representatives of community
demographics
Description
Improve client Alignment from opportunity identification
Through close out, ensuring we exceed the client’s written
And unwritten expectation. It includes proper planning for
Improve Communication process necessary to foster collaboration
And ensure common goals with stakeholders are identified
Client Early, tracked and reported.
Alignment Out come:-
This alignment will create a common bond between all internal and
external
Client participants, a pro-active model that results in no surprises to any
Stakeholder on the team and ensure that we have correct answers and 108
Solutions every time
Summary Step 3- Strategic Objectives
Key Elements:-
•Facilitate workshops to develop strategic objectives for each
Theme
•Capture objective commentary (short paragraph on what is
included
and not included in objectives)
Products Developed in Step Three:
•Strategic objectives defined
•Objective commentary documented
•Objectives categorized by strategic Theme
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Group Exercise
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Module 4
Step Four: Strategy Mapping
Learning Objectives:
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What Is A Strategy Map
A Strategic Map is an important business tool for
communicating value internally and externally:
o Defines the causal relationships among
Strategic Objectives leading to results
o Helps create a balance among Objectives,
Performance Measures, and Initiatives across
the Perspectives
o Helps to visualize the logical consistency of the
scorecard
o Helps align an organization around strategy
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Why Strategy Maps Are Important
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Characteristics of Good Strategy Maps
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How To Construct A Strategic Link
Reduce
Cycle Time
Of Billing
Improve
Computer
Skills
A Strategic Link
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Strategy Mapping Procedure
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Develop A Corporate Strategy Map
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Constructing Organization-Wide Strategy Maps From
Strategic Theme Objectives
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3. Eliminate duplicate objectives, and combine closely
related objectives into a single “ overall”
objective
4. Proceed as with previous instructions, identifying
objectives that “cause” others continuing to
eliminate duplications and combine closely
related objectives as you go
5. Some Theme Objectives may not be included on the
overall map, but should be set aside for future
reference; they may appear as Objectives in the
“cascading” process
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Summary Step4- Strategy Maps
Key Elements:
•Link Strategic Objectives in cause-effect relationships, to show the value
chain to customers and the logic of our strategy
•Create an enterprise-wide strategy Map from Theme Team maps
Steps:
4
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Module 5
Step Five: Performance Measure
Learning Objectives:
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Why Do We Need Performance Measures?
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Develop Meaningful Performance Measures
the
attributes of strategic objectives and
personal goals
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Decision Model For Determining What To Measure
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Performance Measurement Definitions
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• Input Measure: A Performance Driver that measure
attributes (amount, type, quality) of resources
consumed in processes that produce out puts
• Project Measure: A measure of schedule, budget,
scope, or risk associated with a project or initiative
• Lagging Measure: An indicator of past performance that
shows how successful we were in achieving results
• Leading Measure: An indicator of performance that is a
precursor of future success
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• Target: Desired level of performance
• Threshold: Upper and lower ranges of performance
around a target value (e.g. Green threshold range
indicates Good performance, Yellow threshold
range indicates Satisfactory performance, Red
threshold range indicates poor performance)
• Benchmark: Comparison of one organization's
performance to an industry standard or “best in
class” performance
•
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Performance Measures have Several Dimensions
Measure
What? Quality, Timeliness, Economics, Competence,
Effectiveness, completeness, Efficiency, Satisfaction,
Governance, Compliance
Measure
How? Directly, Indirectly
Measure
Type End Outcome, Intermediate Out come,
Output, Process, Project, Input
Measure
Timing Leading, Lagging
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Performance Measures Should Answer Key
Strategic Questions
This
may be based on a
Objective
Strategic objective at the
“enterprise”
level, or on a
Strategic objective at a low
Cascaded level
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Measuring Strategic Objectives
Strategic Out comes and Outputs are derived directly
from the strategy map!
Strategic
outcome Measures
$&%change in ?Tax
Strategic Tax Revenue Revenues from
Objective Growth Previous Year
$&% change in
Increase Taxable Base
Tax Bases from
Economic Growth
Previous Year
Growth Strategic
Out puts
P
E
R M F
F E R
O A A
R S M
M
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U E •Understand the framework for assessing
A R W performance
N E O
C S R
E K
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Framework for Assessing Performance
When developing performance measures, it is helpful to think
Of the development process as having four components:
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Describe The Intended Result
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Measuring Performance Directly
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Measuring Performance With “Indirect Indicators”
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Measuring Performance with Indirect Indicators
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Select the Measure or Indicator
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• Use measures with strongest contribution to
(correlation with) results
• Use those over which you have influence or control
• Use those that capture desired behavior changes
• All other things being equal, consider accessibility
of data, ease of collection and use
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Business Intelligence Value of Different Types of
Performance Measure
Increase in
Business 1. Outcome (e.g. customer retention, profitability,
Intelligence organization Value, impact)
Value
2. Intermediate Outcome (e.g. customer/stakeholder
satisfaction, Sales employee development/
knowledge gain)
3. Out put (e.g. number of customers booked, items
sold, parking tickets issued)
When Results
4. Process (e.g. efficiency-output/input cycle time
cost per unit)
Are clearly
5. Project (e.g. accomplishment of schedule tasks,
Linked resources used Scope)
To Drivers 6. Input (e.g.; FTE, budget amount number of
computer)
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Establish Target
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Target Based On Customer Requirements
Targets based on customers requirements can be of
two types:
o Those intended to meet self imposed, or agreed
service levels or performance standards
§ Internal performance standards”
§ Service level Agreements (SLA’S)
o Those that reflect a minimal essential level of
performance
§ Failure to meet these causes
customer to fail
§ Failure may involve high human or
financial costs
• The latter type of requirement takes precedence over
both baseline and benchmark considerations!! 158
Develop Baseline Data
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Determine Thresholds
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Performance Measures Example
Strategic Result: Improve Our IT Security
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Performance Measure Example (Con’td)
Strategic Result: Improve our IT security
P
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R M D
F E E
O A F
R S I
M U N •Compete Data Definition Tables for each
A R I measure
N E T
C S I
E O
N
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Performance Measurement “Data Definition Table”
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Performance Measures Template:
Data Definitions Table
• A strategic objective Development Team completes
this table for each measure for which it is
responsible
• Strategic objective (number and name)
• Objective owner
measure Data Units of formula Collection baseline Target Measure Validated byVerified
source measure frequency Thresholds location's & by
owner
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Performance Measure: Data Definition
• Data source
o How will the data be collected
• If automated, where does the data currently reside?
• If manual, who will collect the data? How and where
will they record it ?
• Collection frequently
• How often will the data be collected?
§ Annually, monthly, weekly, daily, continuously?
• How often with data be reported
• Units of measure
• What will you be counting or recording?
§ Dollars; days; proportions; events
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Performance Measures: Data Definition (Con’td)
• Formula
§ How will performance measures be calculated
• Baseline
o How well are we performing now in this performance
area?
§ Historical data; comparable Organization
benchmark data
• Target
o What is our expected/desired level of performance?
§ Targets based on: expectations (e.g. stretch
goal) analytically derived, baselines,
benchmarks
• Thresholds
o What are the performance ranges above and below the
target that indicate Good, Satisfactory, and Poor
performance?
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Performance Measures: Data Definition (Con’td)
Responsibility
Understand relationships among Verify and validate data Report progress against
Reporting all objectives accuracy; ensure timeliness; assist project milestones, resource
Report summary results with visualization reporting performance risk, cost and
scope
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Performance Measure Technical Requirements
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Timeliness
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Long-term Consistency
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Ease Of Use and Useful
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P O
O R
Turn data into management information
R M Visualize performance information
T A
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N I
G O
N
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Wrap-Up: How To Develop Meaningful
Balanced Scorecard Performance measures
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Creating Accountability For
Maintaining And Reporting Measures
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Summary Step 5- Performance Measures
Key Elements:
Develop one or more performance Measures for each objective Set
Complete the Data Definition Table TM
Plan for how performance Measures will be used
Benchmarking plans
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Module 6
Step Six: Strategic Initiatives
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What Are Strategic Initiatives?
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Four Tasks in Step Six
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Strategic Initiatives Make Strategy Actionable
Objective
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Prioritized Strategic Initiatives, tied to strategic
objectives, drive performance improvement
Potential Initiatives
Objectiv Prioritization
e Selection
Criteria
1 2 3 4 5 6 7
Prioritized, Actionable
Projects
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Initiatives are Means, Not Ends
Strategic Measure
Do initiative
Objective Initiative
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The Right Sequence
Strategic
Measures &
Targets
Strategic
Objective Project
Strategic Measures &
Initiatives Targets
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Identifying Strategic Initiatives
•Definition of Strategic Initiatives
qEach initiative must be clearly defined before it can be assessed
qEveryone in the organization should have an understanding of
what
the initiative will create, why you are creating it, and what will be
required of the organization to create it
•Four components of describing an initiative
qScope
§What is included in each initiative?
qOpportunity Description
§How will the initiative benefit the organization?
§What is the opportunity that the initiative capitalizes on?
§what strategic objectives on the strategy Map are
supported?
qDeliverables
§What will the initiative produce?
§What is the output of the initiative?
qRequirements
§What resources are necessary for the initiative to succeed?
§What does the organization need to do to “Make it
happen”? 193
Initiatives Need To “Fit” The Strategy
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§
Characteristics of Good Strategic Initiatives
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Example: Strategic Initiatives
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Candidate Selection Criteria
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Choosing Final Selection Criteria
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Applying Selection Filter To Candidate Initiatives
Candidate Initiatives
•Marketing campaigns
•Pre-promotion studies
•BPR
•Process improvement Selection Criteria To Ranking
•TQM proposals •Effort required Framework
•Training courses •Budget 1
•Urgency
•Policy analysis •Results 2
•R & D efforts anticipated
•Branding studies •Multiple
3
•Workflow improvements objectives
supported
•Time needed 4
•Risk
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I
N •
I qsimple weighted Scoring
T qWeighted Criteria Scoring
R I q2x2 Matrix
A A qPaired Comparison
N T qOther (?)
K I •Analyze candidate initiatives against selection criteria
V •Rank initiatives
E
S
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Choose Ranking Framework
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Example: 2x2 Matrix Framework
Maintain Maintain or improve
P Low impact High impact
E
C R High performance High performance
U F
R O
R R
E M
N A Monitor Highest Priority
T N Low impact High impact
C
Low Performance Low performance
E
IMPACT
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Paired Comparison Framework
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• Write down the letter of the more important option in
the cell, and score the difference in importance
from 0 (no difference) to 3 (major difference
• Consolidate the results by adding up the total of all
the values for each of the options (e.g., A-6, B-11,
C-8, etc.)
• The option with the highest score is the
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e.g.: New Initiatives (the “A List”) Allow Us to Test
Strategy Hypothesis
Implement a project management model
Identify key management systems; (prioritize) Complete business needs assessment and
determine business rules and protocol (example: CRM; fin; HR) Determine financial
resources needs and acquisition strategy.
Identify internal collaborative opportunities for Center Boards
Create ”cradle to give” training system that supports cross-functional departments
Establish stronger advocacy in Washington, to improve coordination among agencies and
departments
Institutionalize the new strategic planning/management system, including the development
of standardized organizational strategic planning procedures, and the assignment of
system oversight and management responsibilities to a program manager/management
team
Establish priority process for allocation of Brach assistance, Association Partners, United
Way and other funds
Develop information products that support the core message and better inform internal and
external stakeholders about our programs and services
Develop an organizational orientation program using a cross- functional team
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M
A
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A
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m
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•Project Definitions Table
T
•Project Management Process
P •Project Reporting
R
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C
T
S
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Choose and Prioritize Strategic Initiatives:
Project Definitions Table
• Complete this worksheet to document the tracking of strategic projects
that will help us achieve our strategies and objective. Sort initiatives
into “A” list, and Other
Other
projects
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Management is Needed to Ensure Project Success
•
• Project Management is about ensuring the successful
management of resources to deliver your product or
service on time, to specification and within budget
• Project Management is about managing risk
• An Initiative Manager should be assigned early
• Project management involves five overlapping
phases: planning, initiating, executing, controlling,
and closing
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Initiative Manager Responsibilities
• Schedule
• Resorting
• Anticipated deliverables
• Risk management
• Communications management
The Initiative Manager Should also:
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Summary Step 6 -Strategic Initiatives
Key Elements:
•Identify potential new strategic initiatives
•Develop selection criteria for strategic initiatives
•Choose ranking framework
•Prioritize and identify the “A List”
•Turn initiatives into risk-managed projects by completing the strategic initiative
•Definition Table
P
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R B
F U
O D
R G
M E Align performance expectations to budgets
A T
N I
C N
E G
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Align the Scorecard to Budget:
Building A Performance-Based Budget
All budgeting starts with object classes Establish accountability between points
Object classes start at the smallest unit “A” and “B”
level Connect resource with goals
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Module7
Step Seven Automation
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Three Tasks In Step Seven
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Software Requirements
226
• Displays not just numbers but stories (description;
interpretation; actions planned, etc..) about
measures, the business, and performance
• Provides analysis and “what if” capabilities, to allow
analysis of trends forecasts multiple level drill-
downs into underlying data
• Supports exception reporting
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Analyze Organization Automation Requirements
228
Data Considerations
•Data currently collected,
•Number of data elements location,
•Owners Data quality (validity verification)
•Current software being used
(e.g. spreadsheet, database, word processing,
data Warehouse)
•Update frequency storage
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Information Considerations
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Technology considerations
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Performance Information software Options
Software Solution
Enterprise Space
Requirements •Enterprise-wide data
•Composite measures
Business •Many data/reporting
Performance Information Intelligence locations
Collection & Reporting System •Advanced executive
reporting
•Web publishing
•Numerous measures •Ad-hoc queries •Advanced analysis
•Advanced charting (OLAP) •Dynamic links to legacy
Nine •Advanced
•Multiple locations systems
Steps TM analysis
•Web publishing
Databas •Predictive Data Warehouse
•Analysis &
e analytics
commentary
Toolkit •Advanced
graphics
•Supports scorecard
development
•Information portal for Toolkit
business
•Few•Tied to existing software
measures COTS
•Simple Database
reports
•Small office
• 232
Time and Cost to Implement
Software Solution Comparisons
Scorecard Development & Access database documents Documentation tool only Limited
Documentation (BSCI workshop deliverables performance information reporting
Database Toolkit) functionality
Data Warehouse Strongest data engine “Slice Most expensive option Requires
and dice” Data marts dedicated IT staff Limited “Out of the
box” reporting capability, requiring
custom development 233
Major BSC Software Suppliers
234
Summary Step-7 Automation
Key Elements:
•Define enterprise data collection and reporting requirements
•Evaluate information Software system options and choose one
•Automate the collection and reporting of quantitative data
•Transform data into relevant information
•Communicate performance information to decision makers visually
• Use information to build knowledge and better inform decision
making
235
Module 8
Step Eight: Cascading
Learning Objectives:
•Align the organization
•Develop scorecards for business and support
units,
and for teams and individuals
•Develop performance measures and
initiatives
for cascaded scorecards
•Recognize and incentivize desired behavior
changes
•
236
237
What is Cascading?
238
Organization Alignment Comes From Scorecard
Cascading
Tier 2: Strategic Unit Scorecards
•Purpose Statement
Tier 1: Organization-wide scorecard
•Department Strategic Objectives
•Strategy Maps (Optional)
•Mission •Unit Performance Measures &
•Vision Target
•Core Values Initiatives
•Customer Focus
•Strategic Theme (Focus Areas)
•Strategic Objectives
•Performance Measures &Targets
•Initiatives Tier 3: Individual Scorecards
239
Three Tasks In Step Eight
243
Cascading Options:
Cascade By Function, Organizations Structure, Or
Location
Vision: Become A Customer- Focused Organization
Tier one
Tier Two
Tier Three
244
245
Cascading Best Practices
246
C
A
S
C
T A
I D
E I
R N
G • Organizing teams
•Develop objectives, measures, and initiatives
2 S
T
E
P
S
247
Cascading Team Responsibilities
248
Cascading Action Steps- Tier 2
249
Example: Cascading Strategic Intent
To A Tire 2 Business Unit
Aligned Balanced
Scorecard objectives:
Tier 1
Increase PM1: Corporate
Sales Sales
Tier 2
Increase PM1: Divisional
Sales Sales
Improve Tier 1
Ease of
PM1:% of processes
Customer
Access Automated
255
Leading Sustainable Change- Key Lessons
256
Recognition and Rewards
•Recognition and rewards should fit the person and what’s important
to him/her …i.e. “they should fit like a glove.. and not like a mitten”
oA first step- determine “what is of value to whom?”
oRecognition is first- as it should be more frequent, is “no-cost”,
o and generally means more (when done sincerely by a
respected
person)
•Most people simply want to know that their ideas are valued, their
work is valued, and they are valued
•Money is appreciated as a reward, but usually has a very short-term
(reinforcement) impact
•Informally interview people to find out what recognition and reward
approaches really matter; make sure you probe beyond the obvious
•Whatever methods you use, make sure that recognition and rewards
are rewards are timely, sincere, meaningful, and tied to the
behaviors/results you want
257
The Internal Change Journey
258
Summary Step 8 – Cascading
Kay Elements:
•Communicate scorecard plans throughout the organization
•Align organizational components
•Build aligned scorecards for strategic business and support units
(Tier 2)
•Build aligned scorecards for teams and/or individuals (Tier 3)
•Develop performance incentives, rewards, and recognition plans
259
Module 9
Step Nine: Evaluation
Learning objectives:
•Assess why the organization achieved the results it did
•Make needed corrections to strategy, objectives,
measures
and initiatives
•Understand supporting communications, change
management, and leadership actions
260
261
What is Evaluation?
262
Three Tasks in Step Nine
• Develop an evaluation Plan
• What is to be evaluated?
• By whom?
• Evaluation results reported to who?
• Determine schedule and scope
• Analyze strategic results against planned results
• Review background assumptions
• Evaluate performance results against targets
• Evaluate initiative results against expectations
• Make any necessary changes to strategic elements and
rebalance the scorecard system
• Revise vision, mission, values, customer value proposition
• Revise strategic themes
• Revise strategic objectives and the strategy map
• Revise performance measures and targets
• Identify new strategic initiatives
• 263
Evaluation Planning
• Identify the purpose of the evaluation effort
• Review program, service, product, and project results
• Refine strategies based on review of strategic
assumptions
• Rebalance scorecard system
• Identify who the evaluation results are designed to serve
• Leaders and managers, who need to re-evaluate
strategic direction and focus
• Key stakeholders who need to be informed on the
organization’s progress
• Identify the key questions
• Why did we get the results we did?
• How do people in the organization feel about the
relevance and timeliness of performance information?
• How do people in the organization feel about the
relevance and timeliness of performance information?
• Where can the use and usefulness of information be
improved?
• What objectives, strategy map linkages, performance
measures and targets, and strategic initiatives be
modified, added, or deleted?
• Lay out the schedule and evaluation team assignments 264
What should Be Evaluated?
265
• Performance measures and Targets- are the
measures effective: are they being used to deliver
actionable business intelligence, and are targets
realistic?
• Strategic initiatives- did we get the results we wanted
from our initiatives?
• Workflow and processes-did we get the results we
wanted from our initiatives?
• Workflow and Processes- are they efficient, and are
customer-facing processes working as planned?
Are communications interactive (Two-way)/
• Employee Engagement-are we getting the behavior
changes needed?
• Budget influencing-are strategies “budget
influencing”?
•
266
Evaluation Starts With Desired Results
• Business Results-Typical
• Improve shareholder value
• Improve profitability
• Improve earnings
• Improve governance
• Improve community responsibility
• Federal government Reform Goals-Office of
Management and Budget
• Improve effectiveness and public
accountability
• Improve oversight decision making and
visioning
• Improve internal management
• Hold agencies accountable for achieving
goals
• Initiate agency-specific reforms to make a267
dramatic and material difference in program
Example: Government Program Assessment Rating
Tool (PART)
268
Evaluate performance Management progress (Effectiveness)
Effectiveness
(1=Low.5=High)
• Evaluation components
• Communications effectiveness
• Critical performance issues identified and being worked
• Performance measure and target setting effectiveness
• Strategy is actionable and effective
• Leadership and other employee engagement and buy-in
• Objectives understood and working
• Progress on Strategic initiatives
• Budget influencing is evident
• Proactive performance management corporate culture working
• Identifying and solving “red” problems
• Performance information linked to organization capacity
learning
• Useful business intelligence going to the right people on time
• Process improvements realized
• Incentive/rewards program effectiveness
• Customer satisfaction scores high/improving
269
Summary Step 9- Evaluation
Key elements:
• Evaluate strategic results achieved
• Analyze why organization results were what they were
• Review organization strategic elements
• Update any strategic elements to reflect learning
• Modify strategy, strategic Objectives, Strategy Map. Performance Measures,
and Strategic initiatives as necessary
• Make other organization changes (restructuring) as needed
270