Balanced Scorecards Tools to Increase Organizational Alignment A Presentation for the 2004 OHA Annual Meeting Missy Richard Kendall L. Stewart, M.D. June 14, 2004
What is the point?
We all long to work and serve in organizations that are committed to excellence.
We all understand that excellence is hard to achieve and still harder to sustain.
We are all looking for strategies and tools that will help us make a difference.
The balanced scorecard is one such tool.
Implementing these powerful tools to increase organizational alignment and accountability is neither easy nor simple.
But the results they can produce are worth the effort.
We will share one of ours.
After listening to this presentation, you will be able to
List three strategies that will assist you in your pursuit of organizational excellence,
Identify three elements of a balanced scorecard (BSC),
Give three reasons why using scorecards makes sense,
Discuss three difficulties you can anticipate when launching your BSC,
Suggest three practical strategies for overcoming these difficulties, and
Point to several resources that can be helpful to you in your passionate pursuit of organizational excellence.
What are the foundations of organizational excellence? People Planning Process Performance
What practical strategies will promote the creation of a culture of excellence?
Define the “Rules of Engagement.”
Extrude negative leaders.
Align the organization around your strategic values.
Adopt a framework for organizational excellence.
Adopt a process improvement methodology.
Deploy a simple strategic planning process.
Take the long view.
Design and deploy an organizational change process.
Deploy leadership teams throughout the organization.
Document key organizational processes
Empower a limited number of interdisciplinary process improvement teams.
Engage stakeholders in real work.
Identify key performance indicators.
Demand comparative data.
Set measurable short- and long-term goals.
Insist on detailed action plans.
Deploy balanced scorecards (BSCs) throughout the organization.
What exactly is a balanced scorecard (BSC)?
This is a collection of key indicators that reflect the department’s performance.
They are “measures that matter.”
The indicators are chosen based on the organization’s strategic values.
These report cards include a “balance” of leading (performance drivers) indicators and lagging (outcome) indicators.
The leading indicators should support the lagging indicators on the scorecard.
Monthly indicators are preferred but these may not always be available.
Whenever possible, these indicators should be compared against best national practices; your performance should be percentile-ranked against a regional or national database.
Why does using balanced scorecards make sense?
They force users to focus on performance.
They force leaders to focus on meaningful indicators.
They require leaders to manage by fact.
Since everyone in the organization begins searching for their own indicators that support the organization’s strategic objectives, BSCs increase organizational alignment.
They naturally encourage improved performance and benchmarking.
They enhance communication and networking.
BSCs demand accountability and call for action plans.
BSCs strongly support continuous organizational improvement
What difficulties can you expect?
Identifying the right indicators is hard work.
Finding national benchmarks can be difficult.
Following too many metrics is a constant temptation. More is not necessarily better.
Collecting the data may be a barrier.
Achieving consensus about key indicators is usually a challenge.
Those who have never been forced to “manage by the numbers” may feel overwhelmed.
After key indicators have been selected, directors will experience definite pressure to “make the numbers.”
This opportunity to embrace an important tenet of the for-profit business world is critical to your organization’s continued success. However, higher expectations always bring discomfort. This is a good thing.
What strategies will help launch your balanced scorecard successfully?
Stop waiting until you have the perfect indictors and the perfect data. You never will.
Stop waiting on senior leaders to figure this out. Some never will.
Find colleagues who’ve done it and pick their brains. They are eager to help.
Brush off criticism. Leaders take heat for two things—doing the wrong thing, and doing the right thing!
Find or create comparative data. This is your secret to success.
Abandon flawed indicators. People hate meaningless work.
Where can you learn more?
Kaplan RS and Norton DP, The Balanced Scorecard . Harvard Business School Press, Boston, 1996.
Kaplan RS and Norton DP, “The Balanced Scorecard - Measures That Drive Performance,” Harvard Business Review, January - February 1992.
Kaplan RS and Norton DP, “Putting the Balanced Scorecard to Work,” Harvard Business Review, September - October 1993.
Stewart KL, “Team Leadership: Some Guidelines for Making It Work,” A SOMC White Paper, 2000.
Stewart KL et, al., A Portable Mentor for Organizational Leaders . SOMCPress, 2003
http:// www.mgma.com /
http:// www.somc.org /
How can you contact us? Kendall L. Stewart, M.D. Medical Director Southern Ohio Medical Center President and CEO The SOMC Medical Care Foundation, Inc Phone: 740.356.8153 Email: stewartk@SOMC.org Missy Richard Physician Recruiter Southern Ohio Medical Center Phone: 740.356.8428 Email: richardm@SOMC.org
Southern Ohio Medical Center Safety Quality Service Relationships Performance What questions remain? www.somc.org