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  1. 1. 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
  2. 2. What is the point? <ul><li>We all long to work and serve in organizations that are committed to excellence. </li></ul><ul><li>We all understand that excellence is hard to achieve and still harder to sustain. </li></ul><ul><li>We are all looking for strategies and tools that will help us make a difference. </li></ul><ul><li>The balanced scorecard is one such tool. </li></ul><ul><li>Implementing these powerful tools to increase organizational alignment and accountability is neither easy nor simple. </li></ul><ul><li>But the results they can produce are worth the effort. </li></ul><ul><li>We will share one of ours. </li></ul><ul><li>After listening to this presentation, you will be able to </li></ul><ul><ul><li>List three strategies that will assist you in your pursuit of organizational excellence, </li></ul></ul><ul><ul><li>Identify three elements of a balanced scorecard (BSC), </li></ul></ul><ul><ul><li>Give three reasons why using scorecards makes sense, </li></ul></ul><ul><ul><li>Discuss three difficulties you can anticipate when launching your BSC, </li></ul></ul><ul><ul><li>Suggest three practical strategies for overcoming these difficulties, and </li></ul></ul><ul><ul><li>Point to several resources that can be helpful to you in your passionate pursuit of organizational excellence. </li></ul></ul>
  3. 3. What are the foundations of organizational excellence? People Planning Process Performance
  4. 4. What practical strategies will promote the creation of a culture of excellence? <ul><li>People </li></ul><ul><ul><li>Embrace discomfort. </li></ul></ul><ul><ul><li>Identify champions. </li></ul></ul><ul><ul><li>Develop leaders. </li></ul></ul><ul><ul><li>Define the “Rules of Engagement.” </li></ul></ul><ul><ul><li>Extrude negative leaders. </li></ul></ul><ul><li>Planning </li></ul><ul><ul><li>Align the organization around your strategic values. </li></ul></ul><ul><ul><li>Adopt a framework for organizational excellence. </li></ul></ul><ul><ul><li>Adopt a process improvement methodology. </li></ul></ul><ul><ul><li>Deploy a simple strategic planning process. </li></ul></ul><ul><ul><li>Take the long view. </li></ul></ul><ul><li>Process </li></ul><ul><ul><li>Design and deploy an organizational change process. </li></ul></ul><ul><ul><li>Deploy leadership teams throughout the organization. </li></ul></ul><ul><ul><li>Document key organizational processes </li></ul></ul><ul><ul><li>Empower a limited number of interdisciplinary process improvement teams. </li></ul></ul><ul><ul><li>Engage stakeholders in real work. </li></ul></ul><ul><li>Performance </li></ul><ul><ul><li>Identify key performance indicators. </li></ul></ul><ul><ul><li>Demand comparative data. </li></ul></ul><ul><ul><li>Set measurable short- and long-term goals. </li></ul></ul><ul><ul><li>Insist on detailed action plans. </li></ul></ul><ul><ul><li>Deploy balanced scorecards (BSCs) throughout the organization. </li></ul></ul>
  5. 5. What exactly is a balanced scorecard (BSC)? <ul><li>This is a collection of key indicators that reflect the department’s performance. </li></ul><ul><li>They are “measures that matter.” </li></ul><ul><li>The indicators are chosen based on the organization’s strategic values. </li></ul><ul><li>These report cards include a “balance” of leading (performance drivers) indicators and lagging (outcome) indicators. </li></ul><ul><li>The leading indicators should support the lagging indicators on the scorecard. </li></ul><ul><li>Monthly indicators are preferred but these may not always be available. </li></ul><ul><li>Whenever possible, these indicators should be compared against best national practices; your performance should be percentile-ranked against a regional or national database. </li></ul>
  6. 6. Why does using balanced scorecards make sense? <ul><li>They force users to focus on performance. </li></ul><ul><li>They force leaders to focus on meaningful indicators. </li></ul><ul><li>They require leaders to manage by fact. </li></ul><ul><li>Since everyone in the organization begins searching for their own indicators that support the organization’s strategic objectives, BSCs increase organizational alignment. </li></ul><ul><li>They naturally encourage improved performance and benchmarking. </li></ul><ul><li>They enhance communication and networking. </li></ul><ul><li>BSCs demand accountability and call for action plans. </li></ul><ul><li>BSCs strongly support continuous organizational improvement </li></ul>
  7. 7. What difficulties can you expect? <ul><li>Identifying the right indicators is hard work. </li></ul><ul><li>Finding national benchmarks can be difficult. </li></ul><ul><li>Following too many metrics is a constant temptation. More is not necessarily better. </li></ul><ul><li>Collecting the data may be a barrier. </li></ul><ul><li>Achieving consensus about key indicators is usually a challenge. </li></ul><ul><li>Those who have never been forced to “manage by the numbers” may feel overwhelmed. </li></ul><ul><li>After key indicators have been selected, directors will experience definite pressure to “make the numbers.” </li></ul><ul><li>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. </li></ul>
  8. 8. What strategies will help launch your balanced scorecard successfully? <ul><li>Stop waiting until you have the perfect indictors and the perfect data. You never will. </li></ul><ul><li>Stop waiting on senior leaders to figure this out. Some never will. </li></ul><ul><li>Find colleagues who’ve done it and pick their brains. They are eager to help. </li></ul><ul><li>Brush off criticism. Leaders take heat for two things—doing the wrong thing, and doing the right thing! </li></ul><ul><li>Find or create comparative data. This is your secret to success. </li></ul><ul><li>Abandon flawed indicators. People hate meaningless work. </li></ul>
  9. 9. Where can you learn more? <ul><li>Kaplan RS and Norton DP, The Balanced Scorecard . Harvard Business School Press, Boston, 1996. </li></ul><ul><li>Kaplan RS and Norton DP, “The Balanced Scorecard - Measures That Drive Performance,” Harvard Business Review, January - February 1992. </li></ul><ul><li>Kaplan RS and Norton DP, “Putting the Balanced Scorecard to Work,” Harvard Business Review, September - October 1993. </li></ul><ul><li>Stewart KL, “Team Leadership: Some Guidelines for Making It Work,” A SOMC White Paper, 2000. </li></ul><ul><li>Stewart KL et, al., A Portable Mentor for Organizational Leaders . SOMCPress, 2003 </li></ul><ul><li> </li></ul><ul><li> </li></ul><ul><li>http:// / </li></ul><ul><li>http:// / </li></ul>
  10. 10. 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: Missy Richard Physician Recruiter Southern Ohio Medical Center Phone: 740.356.8428 Email:
  11. 11. Southern Ohio Medical Center  Safety  Quality  Service  Relationships  Performance  What questions remain?