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Advanced Performance Measurement Workshop Develop Measures That Drive Performance By David Wilsey
 

Advanced Performance Measurement Workshop Develop Measures That Drive Performance By David Wilsey

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Understand how to develop meaningful performance measures that drive breakthrough strategic performance.

Understand how to develop meaningful performance measures that drive breakthrough strategic performance.

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    Advanced Performance Measurement Workshop Develop Measures That Drive Performance By David Wilsey Advanced Performance Measurement Workshop Develop Measures That Drive Performance By David Wilsey Presentation Transcript

    • Advanced Performance Advanced Performance Measures Workshop: Measures Workshop: Develop Develop MeasuresDrive Measures That That Drive Performance Performance David Wilsey, BSMP, SMP Vice President of Education & Technology Balanced Scorecard Institute March 2012 1©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Purpose and Agenda Presentation Purpose: Understand how to develop meaningful performance measures that drive breakthrough strategic performance.Agenda: • Driving Breakthrough Strategic Performance and Strategic Alignment with performance information • A Practical Step-by-Step Approach to developing meaningful performance measures – Exercise: Identifying Intended Results – Exercise: Developing Candidate Measures • Performance Analysis Steps • Problem-Solving Q&A (time permitting) 2 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Why Do We Need Effective Strategic PerformanceManagement & Measurement Now More Than Ever? 3 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • We Live in Uncertain Economic TimesSource: Kauffman Economic Outlook, A Quarterly Survey of Leading EconomicsBloggers, Tim Kane, First Quarter, 2012. 4 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • We Live in a World of Routine Government Cutbacks• U.S. Federal debt plus unfunded liabilities is now over $100 Trillion• Projected 2012 State budget shortfalls is over $153 Billion• 2012 Municipal Budget In this environment, shortfalls will exceed $53 programs and services that cannot be defended Billion will be cut! 5 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • We Live in a World of Information Overload 6©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • We Work in Siloes “This is not in my Job Description. I draw lines; I don’t remove trees”Source: John Phatshwe, BSMP, Botswana National Productivity Centre. 7 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • We Often Measure the Wrong ThingsSabermetrics: the use of statistical analysis toanalyze baseball records and make determinationsabout future player performance based on pastperformance and correlations.Teams which appear to value the concepts ofsabermetrics are often said to be playing"MoneyBall". 8 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • “Sabermetrics” Transformed Baseball Scouting Into a ScienceTraditional Scout Evaluations “Sabermetrics” Measures Based on “Tool Set” Speed On-Base Percentage Arm Strength OPS = On-Base + Slugging Runs Created = (Hits + Hitting for Average Walks) * (Total Bases) WHIP = Walks + Hits per Hitting for Power inning pitched 9 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • “MoneyBall” is a Case Study on How to Transform an Organization With Performance Information• There is value in understanding the “drivers” of overall (financial and customer) success• Make “fixing gaps” in driver performance a priority• Focus energy (and resources) on the things that matter most• Measure what matters To accomplish this, you have to think differently about your organization! 10 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Why Integrate Strategic Planning & Performance Management? A Framework Brings Discipline• Get everyone using the same language• Connect-the-dots between activities and strategy & vision• Systematically align vision, strategy, program, budget & people• Align resources with strategic objectives  11 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Why Integrate Strategic Planning & Performance Management? Priority & Focus Improves Efficiency & Effectiveness• Measure only what matters• Focus on the right initiatives and projects and choose the right products and services• Process improvements guided by strategy• Employees focus on results 12 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Align the Organization to Mission, Vision & Strategy • Strategy Budget • Operational Budget • Capital Budget Vision Mission• Customer Values & Needs Strategy Budget &• Political Priorities Actions• Organizational Values • Programs, Products,• Stakeholder Considerations • Strategic Goals / Services Themes • Projects, Activities &• Policies & Governance Tasks • Strategic Results Strategic • Rewards, Recognition & Incentives Objectives • Schedule, Scope, Resources, Risk • Strategic Objectives/Map • Measures & Targets • Strategic Initiatives  13 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Why Integrate Strategic Planning & Performance Management? Strategic AlignmentMission: Air Botswana iscommitted to being the airline offirst choice through the deliveryof high quality service 14 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Building & Implementing a Balanced Scorecard: Nine Steps To Success™ 15©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Topics From the Nine Step Framework to Be Addressed Today• Understand Strategic Context: – Steps 1-4, culminating in Strategic Objectives• Develop Performance Measures: – Step 5.1: Describe the Intended Results – Step 5.2: Describe the Measures – Step 5.3: Describe the Desired Level of Performance• Analyze Performance Information – Step 7: Performance Analysis 16 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • The Goal is to Develop Meaningful Performance Measures• Meaningful means strategic – Focused on desired results – Derived from the Objectives from a Strategy Map or Strategic Plan• Meaningful means relevant to the user – It tells the user what he or she needs to know to make better decisions – Accepted as valid (measures what it intends)  17 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Example: Airline Balanced Scorecard Mission: Dedication to the highest quality of Customer Service delivered with a sense of warmth, friendliness, individual pride, and Company Spirit. Vision: Continue building on our unique position -- the only short haul, low-fare, high- frequency, point-to-point carrier in America. Simplified Strategy Map Objectives Measures Targets InitiativesFinancial • Increase Profits • Market Value • 25% per year • Optimize routes Increase • Lower Costs • Plane Lease Cost • 20% per year • Standardize Profits • Increase Revenue • Seat Revenue • 5% per year planes Increase Lower Costs RevenueCustomer • More Customers • # of Customers • 5% change • Quality More • Increase On-time • FAA On time • First in the Management Customers Flights Arrival Rating industry • Customer Increase On- • Lower Prices • Customer • 98% Loyalty Time Flights Ranking Satisfaction Program Lower PricesInternal Improve • Improve • On Ground Time • <25 Minutes • Cycle timeProcess Turnaround Turnaround • On-Time • 93% Optimization Time Departure Program TimeLearning & Align • Align Ground • % Ground Crew • 70% (100% by • StockGrowth Ground Crew Stockholders year 6) Ownership Plan • % Ground Crew • 70% • Ground Crew Crew Trained Training Adapted from work by Harvard University / Balanced Scorecard Collaborative  18 ©1997-2011 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Identify Strategic Objectives Before Developing Performance Measures Strategic Result (Outcomes) Strategic Objective:Key strategy component;continuous improvement activity that must be Financialperformed; the “building blocks” that make up a Customer strategy. Internal Processes StrategicStrategic Objectives are Objectives the “DNA” that break Organization Capacityhigh level strategy into smaller pieces 19 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Strategic Objectives are “Mid-Altitude”StrategicAltitude Vision & Mission type language: Problem: Too High (Vague) 30,000 ft. •“World – class” Risk: not actionable; will not •“Provider of choice” give actionable focus and •“High-performance” direction Objective language: 25,000 ft. •“Improve Customer Service” Strategic •“Improve Knowledge & Skills” Objective •“Increase Revenue” •“Improve Service Delivery” 15,000 ft. Project, Program or Service Language: Problem: Too Low (project “Train staff” specific) Ground “Build a new system” Risk: too narrowly defined; Level “Deliver services” strictly operational  20 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Strategic Objectives Describe the Intended Results of Continuous Improvement Good Examples:• Describe the result that we intend to accomplish Increase Economic Reduce Waste• Should be “verb-object” Abundance form, normally using a verb Improve Improve Access that implies continuous Product Quality to Services improvement: – Improve Improve Brand Improve Customer Awareness Satisfaction – Increase – Reduce Not-So-Good Examples: – Decrease Better: Improve – Strengthen Train All Employees Knowledge & Skills – Possible: Optimize (can be Better: Improve confusing) Write a understanding of our Strategic Plan strategic direction  21 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Performance Measurement Development ModelStep 5.1: Step 5.2: Step 5.3:Describe the Describe the Describe the Desired Performance LevelResults Measure(s) and Interpretation Choose & define the appropriate Yes “direct” measure(s) Describe the Can the Should Intended Intended Result measures be Develop targets No Result of the be measured combined & thresholds for Objective directly? into a single each measure “index”? No Yes Choose & Develop a Define measureable define the “composite components that appropriate index” thoroughly describe “indirect” the Intended Result measures To Step 7: Documentation: Intended Result, Measurement Definition & Desired Performance Levels Performance Analysis  22 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Step 5.1: Describe the Intended Result of Each Strategic Objective• For each Objective, describe the objectives intended result explicitly, in a few sentences – Use action verbs – Avoid words that create ambiguity – Identify changes in state that accompany the result Establish agreement across your team on the desired result!  23 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Measurement Development: First “De-Weasel” the Intended Results• Strategy is hard to measure because it is often written using “weasel” words, or vague ideals that are hard to interpret, for example: • We employ “best practices” • Performance is “Optimized” or “Maximized” or “World Class” • Employees are more “Efficient,” “Effective” or “Productive”• “Intended Outcome/Result” in the Objective Commentary should avoid this practice – Use plain language: Not “Improve Thought Leadership,” but “We create engaging content,” or “More people read (or rave about) our stuff” – Use sensory language to visualize the desired end result • If you can see, feel or hear it, you can count it! Adapted from the Performance Measure Blueprint Workshop, by Performance Measure Specialist Stacey Barr (www.staceybarr.com)  24 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Remove Ambiguity From Intended Results - Examples • Intended Result: improve thought leadershipImprove Brand – Too ambiguous: it is not clear exactly what Image thought leadership means • Not ambiguous: People rave about the articles we write • Intended Result: we deliver world classImprove Service service Delivery – Too ambiguous: it is not clear exactly what world class means • Not ambiguous: Our service is delivered on time and without defect  25 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Exercise 1: Which of the Following “Intended Results” Still Contain Weasel Words? And How Might They Be Improved?Organization: Leading Tablet/Technology InnovatorObjective: Improve Product DevelopmentCandidate Intended Results:1. Quality increases2. Enjoyment of our products is optimized3. We understand our customers4. Communications improves, both internally and externally5. We have a sexy user interface6. We are on the bleeding edge of technology7. We humanize technology 26 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Exercise 1: Intended Results Possible SolutionsOrganization: Leading Tablet/Technology InnovatorObjective: Improve Product Development1. Quality increases Products meet specifications x or y at z consistency2. Enjoyment of our products is optimized Customers tell us they love our products3. We understand our customers Voice-of-the-customer research is consistently used in product development4. Communications improves, both internally and externally Employees are aware of key initiatives; our marketing advertisements are a hit on free social media outlets5. We have a sexy user interface Customers tell us they prefer our interface; celebrities want to be seen using our products6. We are on the bleeding edge of technology Our technology scanning team identifies all important advances relevant to our products7. We humanize technology Our customers tell us our products are intuitive; non-technical customers use our products 27 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Step 5.2: Describe the Measures• Analyze each identified Intended Result using this leading question: – Can the Intended Result of the Objective be measured “directly”? (i.e. is there a clear, discrete, unambiguous way to capture the entire Intended Result?)• Yes? – Choose and define the most appropriate “direct” measures• No? – Define measureable components that thoroughly describe the intended results  28 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Direct Measurement of the Intended Result is Ideal - Examples • Intended Result: Services are delivered on time:Improve Service – We know when the service is due; we know Delivery when it is delivered; thus, we can directly measure whether it was delivered on time • Intended Result: Interagency is better integrated Improve into planning:Organizational – We know the regular planning activities that Alignment occur; we know whether Interagency representatives are included in those activities; thus, we can directly measure whether there is better integration • Intended Result: All the products that we Improve produce meet specifications:Product Quality – If we can define the specifications with physical measures, and measure the products based on those measures, we can measure directly  29 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • If the Intended Result is a Complex Concept with Multiple Components, Measure it “Indirectly”• If necessary, define components that could thoroughly describe the intended result• Select and define the appropriate indirect measures Identify those components by looking for related results or for contributing factors 30 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Indirect Measurement of the Intended Result May Be Necessary• If the Intended Result can’t be directly measured, develop indirect measures based on a hypothesis around: – Correlation with intended result : if desired result improves, the indirect measure does also – Contribution to intended A result : if A & B occur, the result will be C; or A might also C be a driving factor in B B 31 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Use a Proven Methodology to Generate Candidate Measures Logic Model Input Process Output Outcome Cause-Effect Analysis or Ishikawa (Fishbone) Diagram Resources Methods Process Flow AnalysisEnvironment Effect Systems Policies  32 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Consider the Purpose for Measuring Performance When Selecting Measures Promote Budget Motivate Control Evaluate Celebrate Learn ImproveSource: Adapted from Robert D. Behn, Why Measure Performance?, Public Administration Review, Sept./Oct. 2003, Vol. 63, No. 5. 33 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Public Sector Managers Have Eight Purposes for Measuring Performance Common MeasurementPurpose Question Answered CharacteristicsEvaluate How well is the agency performing? Outcomes, combined with inputsControl Are subordinates doing what is asked? Inputs that can be regulated; complianceBudget What should we spend money on? Efficiency (outputs/inputs) or effectiveness (outcomes/inputs)Motivate How can I motivate staff to improve? Real-time outputs compared with production targetsPromote How can I convince stakeholders that my Easily understood; interesting and agency is improving? How can I demonstrate meaningful for the intended audience transparency?Celebrate What accomplishments can we celebrate? Periodic and significant milestone targetsLearn What is working and what is not working? Disaggregated data that reveals deviances from the expectedImprove What should we do to improve performance? Those that connect the dots between (the overriding high level purpose for all) operations and desired outcomes Source: Adapted from Robert D. Behn, Why Measure Performance?, Public Administration Review, Sept./Oct. 2003, Vol. 63, No. 5. 34 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Define and Document all Selected Measure(s)• Use a Data Definition Table to capture and document all the essential information about the measure: 35 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Step 5.3: Describe the Desired Performance Level and Interpretation• Determine if “composite” measures are appropriate using this leading question: – Do the individual indicators from Step 5.2 offer useful indicators of different dimensions or components of the Objective’s Intended Result?• If so, a composite index will help capture various important dimensions of the Intended Result and combine them into a single measure• Develop targets & thresholds for each measure 36 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Targets & Thresholds Help With Interpretation • Target: the desired level of Target performance for theGreen / Yellow reporting period in question Threshold • Threshold: the upper and Yellow / Red lower limits of desired Threshold performance around a target value (e.g., the exact point that we want an indicator to display green to indicate good performance, yellow to indicate satisfactory performance, or red to indicate poor performance) 37 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Exercise 2: Performance Measurement Development & Selection Quiz• Answer each of the following questions regarding performance measurement development and selection. 38 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • • Organization: Leading Tablet/Technology Innovator• Objective: Improve Product Development• Intended Result: Voice-of-the-customer (VOC) research is consistently used in product development• Q: What is the most appropriate measurement? a) Revenue related to new products in $ b) % of customers that love our products c) % of products where VOC research procedure was followed d) % of employees with project management skills Why? The other measures, while needed, probably focus on other objectives or intended results. Measure C DIRECTLY measures the intended result.  39 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • • Organization: Professional Sports Team• Objective: Improve Player Skills & Abilities• Intended Result: Our players are skilled in their respective roles• Q: What is the most appropriate measurement? a) Sales of shirts with shirts with star player names printed on back (based on a hypothesis around correlation) b) Our players lead the league in key player statistics relative to their roles (correlation) c) We win a lot of games (correlation) d) We spend more on sabermetrics software (contributing factor) Why? There are too many other factors for A to be a helpful measure. B focuses specifically on the outcome identified in the Intended Result. C is probably covered in another objective. D is an input that doesn’t monitor follow-through.  40 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Contribution Vs. Correlate Lemonade Stand Example Strategy Map / Objectives Measures Targets Profit is a ____ of Profit?Financial • Profit • Enough to buy a a) direct measure of Increase bicycle by the end Profits b) correlate of of summer c) contributor toCustomer • Repeat business • 80% of target Improve market (parents) Customer Sugar content is thought Satisfaction to be a _____ of Quality? a) direct measure?Internal • Quality: Sugar • 100% sugar b) correlate?Business content content exceeds Improve c) contributor?Process Improve • Image: “Awww” that of soda Lemonade Brand Image Index: % of drivers • 80% smile Quality that smile Mom’s anger is thought toOrganizational • Skills: % Mom is • 0% anger rate be a _____ of LemonCapacity angry due to • < 6 years old Squeezing Skills? Increase wasted lemons a) direct measure? Improve Lemon- Youthful Work • Culture: Average Squeezing Skills b) correlate? Culture age of lemonade c) contributor? stand workers  41 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • • Organization: Local Elementary School• Objective: Improve School Technology Capabilities• Desired Result: Children have access to the technology they will need to succeed in the world• Q: Which of these is the most appropriate measure? a) # of computers donated to the school (based on a hypothesis around contribution) b) Network up time (contribution) c) Budget spent on technology and staff training (contribution) d) % of students with access to technology that is less than two years old (direct measure) Why? It directly measures the Desired Result. The others are inputs that don’t monitor follow-through.  42 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • • Organization: State Literacy Program• Objective: Improve Program Outcomes• Desired Result: Literacy improves in the state• Q: I’ve determined that the measurement purpose is promotion, as I need to communicate progress to the program sponsors and to external stakeholders. What is the most appropriate measurement? a) # of teachers trained in literacy coaching b) Change in state literacy rate since program was enacted c) # of students that attend the program per week d) % of budget focused on literacy programs Why? It is outcome focused and easily understood, interesting and meaningful for the intended audience  43 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Step Seven is Now Called “Performance Analysis” Performance 7 Analysis 44©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • There Are Many Steps to Turning Data Into Information and Knowledge Continuously Review Take Action Share / Create Dialog Interpret / Present AnalyzeTurn Data IntoInformation & Store Knowledge Collect Source: Adapted from Performance Measurement Diagnosis PuMP Mind Map, by Stacey Barr and The Performance Measurement Cycle, Transforming Performance Measurement, Dean Spitzer.  45 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Take a Step-by-Step Approach to Performance Analysis/Analytics1. Focus on the highest value opportunities first – Look to Strategic Themes, Results and Strategy Map linkages for a starting point2. Start with questions and decisions to make, NOT DATA3. Drive data-driven insights deep into the organization – Enable dialog – Share, visualize & simulate4. Expand (not replace) your analysis capacities – Focus on both talent & culture5. Use analysis to improve ongoing strategic planningAdapted From: Analytics: The New Path to Value – How the Smartest Organizations Are Embedding Analytics toTransform Insights Into Action, LaValle, Hopkins, Lesser, Shockley & Kruschwitz, MIT Sloan Management Review andthe IBM Institute for Business Value, Fall 2010. 46 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Performance Data Can Analyzed for Actionable Correlations Sears “mined” over 70 performance indicators for an actionable correlations. Twenty-two months after the analysis began, they identified three that were highly significant: Employee Customer Revenue Attitude Impression Growth (Satisfaction) (Satisfaction) 5 unit 1.3 unit 0.5 % increase increase increase 15 monthsSource: Harvard Business Review  47 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Gwinnett County Schools Used Performance Data to Improve Graduation RatesIn 2002, the Gwinnett Count (GA) public school system decided to use performanceanalytics to improve the (falling) graduation rates for at-risk kids. Key Questions: • What aspect of performance most Graduation accurately predicted graduation? ? • What is the strongest predictor of Pass passing Algebra I? Algebra I Success at eighth- ? grade creative writingIn Fall 2010, Gwinnett County won the Broad Prize for studentachievement and improvement while narrowing achievementgaps between income and ethnic groups Source: Big Data, Analytics and the Path from Insights to Value, LaValle, Lesser, Shockley, Hopkins & Kruschwitz, MIT Sloan Management Review, Winter 2011. 48 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Other Examples of Performance Analysis Driving Better Decision Making• Hilton Hotels found that a 5% improvement in customer retention would result in a 1.1% increase in revenue at a typical property*• Best Buy discovered that a tenth-of-a point increase in employee engagement lead to an increase in store operating income by $100,000*• The Baltimore Department of Works used data management to reduce absenteeism to reduce operating costs by $13.2m.**• Victoria’s Secret found that raising its average conversion rate (entering customer who buy something) by 1% led to more than $35m in sales and more than $15m in profit.*• Store 24, a convenience store, confidently abandoned its “entertaining service experience” strategy after finding a negative relationship between strategy implementation and profits.* Sources: *The Rise of Analytical Performance Management, Thomas H. Davenport, Harvard Business Digital / SAS Institute. **The CItiStat Model-How Data-Driven Government Can Increase Efficiency & Effectiveness, Perez & Rushing, the Center for American Progress, April 2007. 49 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Use Performance Analysis to Improve Ongoing Strategic Planning• Use performance information to “manage to results” and inform decision making• Look for new leading performance indicators – incorporate learning into strategy and business operations• Communicate strategy effectively, internally and externally• Periodically check reward and incentive systems for alignment with desired results• Use Performance Information during Evaluation (step 9) to revise Strategic Themes, Strategic Results, Strategic Objectives, Strategy Maps, etc.• Don’t be afraid to “test and learn”  50 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Q&A: What Are the Issues You Are Facing in PerformanceMeasurement Development & Analysis? Thank You! 51 ©1997-2012 Balanced Scorecard Institute, a Strategy Management Group company. All Rights Reserved. Do not copy without permission.
    • Strategic Performance & Change Management Conference November 13-15, 2012 in New Orleans, LA View the Strategic Performance & Change Management program here: http://tinyurl.com/8wxywgc If you would like to receive the free IQPC brochure directly email taryn.soltysiak@iqpc.com