The health care consulting group of Kurt Salmon Associates, Inc. (KSA) provides management advisory services in
facility p...

Kurt Salmon Associates | Catalyst, Summer 2004
Charting the Course
               Organization Performance Measurement

                                     The theory ...

      A “balanced” set of corporate performance indicators goes beyond the fin...

                    Learning                Process               ...

      STRATEGIC OBJECTIVES BY                              ...
The Shipyard
         Building the Performance Management System

                                      Performance      ...
IMPROVEMENT. Once the underlying cause of a perform-            BSC goal of ensuring every workforce member, depart-
Sailing the High Seas
                                             PMIT Strategy

STEP 3: Upon senior leadership’s confirmation of a pre-            How far can our existing financial decision support
integration challenges. Companies should strive to stan-
Compass Points

As the owner of a PMIT solution set, you will embark on the challenging voyage of deploying the policy ch...
We hope you found this Catalyst insightful and actionable.
For more information about how KSA can help your organization a...
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Catalyst Balanced Scorecard
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Catalyst Balanced Scorecard


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This KSA Catalyst whitepaper discussed the practical application of the Balanced Scorecard methodology and framework within healthcare and the information technology implications.

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Catalyst Balanced Scorecard

  1. 1. The health care consulting group of Kurt Salmon Associates, Inc. (KSA) provides management advisory services in facility planning, strategy, and information technology to multi-hospital systems, community hospitals, academic medical centers, children’s hospitals, and physician group practices. Today, the group is among North America’s most dedicated and experienced resources to health care providers. We work closely with our clients to raise the critical questions, explore the full range of vision and possible innovation, and develop recommendations that can be implemented. © Copyright Kurt Salmon Associates, 2004
  2. 2. Foreword HEALTH CARE ORGANIZATIONS CONTINUE TO BE BUFFETED BY A PERFECT STORM THAT IS BOTH POWERFUL IN FORCE AND 1 NATIONAL IN SCALE. This storm is a confluence of forces, including the economy, labor shortages, revenue pressures, and industry interventions regarding demonstrable patient safety, quality, and performance. In striving to navigate their local markets and reach their goals, health care organizations are devising and attempting to implement various strategies, including revenue cycle management, clinical process redesign, and Six Sigma. Drs. Robert Kaplan and David Norton of the Harvard Business School have observed that it is not necessarily bad strategies that lead to inferior performance, but the inability to effectively deploy, communicate, monitor, and refine those strategies.1 As organizations steer their way through dynamic and turbulent competitive environments, the corporate business plan — a compendium of strategies, objectives, and goals — serves as the navigational chart leading them to superior performance. The performance management system, as a business planning framework, strategy deployment tool, performance improve- ment methodology, and measurement approach, is of growing interest throughout the industry as a means of bringing the corporate business plan into the 21st century. Promising to transition corporate strategic planning from navigation by the stars and whims of the wind, to a system of information technologies, automation, and the seamless flow of information, intelligence, and best practices, performance management ensures the entire organization is working toward a common purpose. Many of Kurt Salmon Associates’ (KSA) clients, both in the health care and retail/consumer products industries, are pursuing performance management initiatives to address the tactical gap between strategy definition and deployment. The performance challenge is how best to link strategic objectives to high-performing operations. Drs. Kaplan and Norton address this performance management limitation through the introduction of the Balanced ScoreCard (BSC) in their seminal article and subsequent book, “The Balanced ScoreCard: Translating Strategy into Action” (1996). The BSC is a performance management system for devising strategic objectives and translating them into a focused set of performance measures which, in turn, focus and drive decision makers’ tactical and operational activities. KSA considers the BSC and similar approaches, such as Management-by-Objectives (MBO), Malcolm Baldridge National Quality Award criteria, and ISO 9000, to be performance management systems. These systems call for the development of a corporate business plan, its communication to the workforce, and monitoring and feedback to ensure the workforce, from CEO to staff nurse, is focused on working together in the pursuit of the business plan. This KSA Catalyst explores the definition and application of BSC performance management systems within health care provider organizations and considers enabling performance management information technology strategies and solutions to help health care organizations navigate the perfect storm. 1 Kaplan, Robert S., Norton, David P “The Balanced Scorecard: Translating Strategy Into Action,” Harvard Business School Press 1996. ., Performance Management Systems | Navigating the Perfect Storm
  3. 3. Kurt Salmon Associates | Catalyst, Summer 2004
  4. 4. Charting the Course Organization Performance Measurement The theory of the BSC performance meas- urement framework emphasizes the use of 3 average length-of-stay, in- A CRITICAL ELEMENT OF financial and non-financial measures in a patient/outpatient vol- ANY ORGANIZATION’S OVER- ume). These traditional ALL PERFORMANCE MAN- balanced manner. measurements focus man- AGEMENT SYSTEM IS KNOW- agement attention on past ING WHERE THE ORGANIZA- performance, and provide TION IS RELATIVE TO WHERE IT WANTS TO BE. This per- only a short-term view of formance monitoring is achieved through the provision achieving corporate objectives. Managers hone in on the of accurate, timely, and pertinent measurements to the previous month’s expense budget numbers, rather than decision makers of the organization. Managers have long balancing the evaluation and performance improvement recognized the need to measure organizational activities. of the intangible assets: effective processes, skilled and As the management adage goes: “If you can’t measure it, satisfied human resources, and the patient care value you can’t manage it.” However, despite this recognition, proposition necessary to maximize performance across most health care organizations do not manage them- the four perspectives. This is analogous to steering the selves with performance measurement systems that pro- Queen Mary II to its port of call across two oceans by vide visibility into the full continuum of corporate activ- virtue of only a speedometer and a rear-view mirror. ities that result in superior performance. Superior per- The theory of the BSC performance measurement frame- formance is achieved with the effective synthesis of four work emphasizes the use of financial and non-financial perspectives of corporate activities: 1) finances, 2) human measures in a balanced manner. These measures are con- resources, and 3) internal processes, all integrated to nected to a cause-and-effect view of the organization’s increase 4) the value proposition of health care delivery activities along the four performance perspectives. The to patients and other key stakeholders (see Figure 1). premise is that measuring and managing the learning and A performance management system based solely on growth of human resources and improving the effective- measuring a single perspective, typically finances, has ness and efficiency of internal processes will lead to limitations. Current health care performance measure- improved customer satisfaction and loyalty, which results ments are dominated by financial reporting indicators in superior long-term financial performance. (e.g., operating expenses, gross charges, case mix index, Performance Management Systems | Navigating the Perfect Storm
  5. 5. FIGURE 1: BALANCED SCORECARD PERSPECTIVES A “balanced” set of corporate performance indicators goes beyond the financial Financial Customer 4 Economic consequences of Value proposition delivered past actions to customer segments Income Patient, physicians, payers, community Expenses Customer satisfaction Profit margin Retention Cash flow Acquisition Loss of sale Valued services Strategy Business Process Learning and Growth Current and new internal business Infrastructure to build long-term growth processes in which the HCO must excel and improvement Supply chain efficiency Employee satisfaction Achieving valued services Human resource reskilling Effectiveness of care Information technology Surgical infection rate Wound care training Pathway compliance Source: Illustrative example This is Management Theory 101. The innovative heart of essential resource capabilities are critical to improved the BSC approach is to explicitly select, gauge, and organ- performance of the cardiology product line? Are our ize focused measures of the four performance perspec- patients dissatisfied with key aspects of service delivery tives, and to deliver them to decision makers in a timely and/or medical care? Why? Each question requires an and actionable manner via a BSC report. element of outcome measurement in the BSC. Each out- come measurement must also be linked in an explicit The BSC, however, is more than a scorecard of key per- cause-and-effect relationship to the measurement of a formance measures. To truly measure performance for supporting process or driver that enables the achieve- purposes of evaluation and improvement, and not just ment of the goal (see Figure 2). documentation, there must be a cause-and-effect connec- tion between the business plan objectives and their oper- This outcome measurement is called a lagging indicator in ational realization. That is, employees and managers BSC parlance, as it measures what has already happened: must use performance measures directly related to their costs decreased, revenue increased, quality decreased. daily tactical and operational activities — measures that The driver measurement is called a leading indicator, as it let Operations know when to turn left, when to slow measures the capability to achieve performance in the down, and when to stop. future: 90% of cases are being managed by a critical path- way; 75% of case managers have received Six Sigma Performance indicators that amount to documented training. A scorecard that explicitly connects leading and spilled milk (i.e., you lost $2 million in cardiology last lagging measurements allows decision makers to take year) do not help managers achieve corporate strategies. action on processes that will improve desired outcomes. Did we lose $2 million because of missed cost objectives or revenue objectives, or both? What processes and An example: If for no other reason than habit, a cause- Kurt Salmon Associates | Catalyst, Summer 2004
  6. 6. FIGURE 2: BALANCED SCORECARD CAUSE-AND-EFFECT CHAINS Learning Process Customer Finance ome 5 Post-surgery Satisfied patients Profit margin Outc infection rate decreases decreases increases r Drive Wound care training Loss of sales % of staff decreases increases Source: Illustrative example and-effect chain begins with financial outcome measures, Designing a Performance Scorecard such as product line profitability. One way to reduce The BSC management system is as effective when costs and increase profitability, at least for case-based applied to an individual line of business as when applied reimbursement, is to reduce length-of-stay (LOS) in a to the corporate-level business plan. To illustrate, we will medically responsible way. The LOS lagging outcome apply the BSC performance management system to a cor- measure requires a leading driver measure to indicate porate strategy to develop a cardiology center-of-excel- how the desired LOS outcome is to be achieved. The per- lence service line. There are two broad tasks: devising the centage of discharges in compliance with developed crit- service line business plan and designing the scorecard to ical pathways could be a meaningful driver measure. monitor and manage the performance of that business An increased patient satisfaction score on the latest Press plan. During a planning session, management and the Ganey survey indicates proper balance between aggres- clinical team have identified three strategic goals for the sive case management and patient satisfaction. Have cardiology center-of-excellence: these improvements led to greater center of excellence 1. Be recognized as the choice for cardiology cost/quality market share, and therefore revenue stream? There should performance in the region. be a metric in place to answer this question. Dozens of 2. Identify, target, and lead in the three “customer” seg- permutations exist for how performance measures can ments (patient, physician, and insurance product). relate to each other; and in turn, how the strategic objec- 3. Improve the quality and efficiency of cardiology patient tives they represent also relate to and affect each other. clinical management. Performance Management Systems | Navigating the Perfect Storm
  7. 7. FIGURE 3: CARDIOLOGY CENTER-OF-EXCELLENCE BALANCED SCORECARD STRATEGIC OBJECTIVES BY PERFORMANCE MEASUREMENTS DIMENSION LEADING DRIVER LAGGING OUTCOME FINANCIAL PERFORMANCE Achieve profitable growth Length-of-stay vs. best-practice benchmark Average total cost per case 6 Improve operating performance Payor contract development vs. plan Case mix adjusted occupancy rate PROVIDER OF CHOICE Improve hospitality of services Days to next appointment availability Customer satisfaction survey Improve/reinforce image to customer Advertising budget per cardiac bed Marketing focus group scores segments INTERNAL PROCESSES Improve clinical innovation $ in cardiology research programs Resource consumption (index vs. Improve business productivity % of first-time clean claims benchmark) Days in Accounts Receivable EMPLOYER OF CHOICE Upgrade staff competencies % of cardiology board certified physicians Strategic skill rating Create climate for action % of staff received Six Sigma training Employee satisfaction survey Source: Illustrative example A planning team translates these goals into specific While there is no magic number of measures, research objectives within each of the four performance perspec- supports a total of 25 to 30 performance indicators per tives (see Figure 3). Outcome measures are then selected scorecard as ideal from a practical deployment and human to make each objective operational by answering the sim- cognitive perspective. Measures should be accessible, rel- ple question, “How do we know if we have achieved this evant, and easily understood. They should be balanced objective?” Each objective is then assigned a perform- between leading and lagging performance indicators and ance driver measurement to monitor its achievability. In short- and long-term goals. Another criterion for the this example, each measure is also given a trend indicator measure set is balance, such that no single measure out- to denote the desired direction, increasing or decreasing. weighs or is improved at the expense of another. The next step in charting the achievement of the business plan is to design and build the performance management system that will manifest the designed scorecard. Kurt Salmon Associates | Catalyst, Summer 2004
  8. 8. The Shipyard Building the Performance Management System Performance management information technology (PMIT) actually encompasses Performance monitoring AT THIS STAGE, THE CARDIAC 7 much more than the delivery of a perform- can be strategic (long- CENTER OF EXCELLENCE term) and operational PERFORMANCE SCORECARD ance scorecard. (real-time) in the type and IS A TABLE-TOP PLANNING EXERCISE. It is not radically timeliness of its delivered different than dozens of measures. While manage- planning frameworks put ment may need to under- forth throughout the histo- stand occupancy trends to ry of organization management science. The organization plan bed capacity and allocation for the next two years must now determine how the performance scorecard will (strategic), it must also know this week’s census and acu- be built and delivered to decision makers in a timely and ity to plan adequate RN coverage for next week (opera- actionable fashion. tional). Each type of performance monitoring objective indicates the need for different types of data sources, data Information technology is one component of the solution. management processes, timeliness, and analytical meth- Performance management information technology (PMIT) ods for delivering information and actionable knowledge actually encompasses much more than the delivery of a into the hands of decision makers. Certainly strategic performance scorecard. It can enable a broader perform- monthly, quarterly, and yearly reporting is the primary ance management system, including the acquisition and focus of the BSC. However, steering the organization management of performance data, assisting with the according to plan is only possible when measures are business planning cycle, operational and capital budgeting, operational and actionable as well. Six Sigma support, and information analysis functionality. This Catalyst will focus on a performance management EVALUATION. Performance monitoring allows manage- system comprised of three capabilities: performance ment to identify negative and positive performance monitoring, evaluation, and improvement. events and trends in a timely manner. Management must then conduct root-cause analysis to drill down into layers PERFORMANCE MONITORING. Like a radar or Doppler of performance information detail and isolate contribut- screen tracks a storm, effective performance monitoring ing factors. The ability to evaluate performance indicates explicitly maps performance measures to the business a broader requirement for integrating and normalizing plan’s strategic objectives, goals, and initiatives and com- detailed performance data into a single managed per- municates their performance to stakeholders, including formance data resource. The data resource is made read- Joint Commission on Accreditation of Health Care ily available for analysis using a variety of decision sup- Organizations (JCAHO), patients, payors, Centers for port tools within an integrated performance management Medicare and Medicaid Services (CMS), and the commu- system environment. Decision makers should be able to nity. The BSC report is the primary method of communi- navigate seamlessly from performance monitoring to cating to management actual vs. expected performance. evaluation, prepared to take immediate action and make knowledge-based decisions. Performance Management Systems | Navigating the Perfect Storm
  9. 9. IMPROVEMENT. Once the underlying cause of a perform- BSC goal of ensuring every workforce member, depart- ance problem is evaluated, management and analysts ment, division, and vice president knows how and must redirect operational efforts and improve the under- how well it contributes to corporate strategy achieve- lying process(es) to stay on the course of the business ment. plan. The health care industry is increasingly adopting COLLABORATION FUNCTIONALITY allows accountable Six Sigma and other performance improvement tech- management to communicate, document, and collabo- niques and applying them to performance management rate as a team when monitoring and evaluating per- 8 systems by exploiting the performance data resource, the formance trends. There is no longer a need to play BSC, and the collection of evaluation and analysis tools. phone tag with three department directors to explain a More advanced capabilities include business process variance to the CEO; an organization can interact modeling and data mining techniques that can model directly with the CEO within the environs of the per- and explain variations and create “if-then” models for formance management system, with performance data, improvement interventions. trends, and management explanations all in one place. DATA MANAGEMENT. Because the goal of the BSC is to A BROAD SET OF INFORMATION TECHNOLOGY REQUIRE- create views of the organization that extend beyond MENTS MUST BE MET TO ENABLE THESE THREE CAPABIL- financial elements, data regarding clinical care, quality, ITIES OF THE PERFORMANCE MANAGEMENT SYSTEM. Information technology is needed to acquire performance patient safety, operations, administration, external data, organize it for reporting and analysis, and apply benchmarks, and competitor market share are also various visualization and analysis tools to the organized required. Data must be sourced from a wide variety of performance data. The performance management IT internal and external information systems and data col- components can be organized into three broad categories of lection processes. The many disparate information functionality: the BSC, data management, and business sources — internal and external, electronic and manual intelligence. — must be managed for the expressed purpose of per- formance monitoring, evaluation, and improvement. THE BSC. BSC information technology enables manage- Data must be extracted, integrated, standardized, and ment to visually monitor and navigate an organization’s cleansed. The manifestation of this data management business plan and performance measures against targets. technology and integrated data resource effort is a corpo- The BSC Collaborative is an organization that identifies rate performance data warehouse. specific BSC technology functionality and certifies vendors against that list. Key BSC functionality includes: BUSINESS INTELLIGENCE. The management of an organi- STRATEGY MAPPING OR VISUAL NAVIGATION of busi- zation’s performance data is one side of the coin; the ness plan strategies, objectives, goals, and measures. tools, technologies, and methodologies to exploit that DATA VISUALIZATION, such as performance status icons data to generate actionable knowledge is the other. A set using stop-lighting (red, yellow, green). of what is commonly termed Business Intelligence (BI) tools provides drill-down, Web-based reporting, statistical DIRECTIONAL ICONS, GAUGES, DIALS, AND OTHER VISUAL CLUES to alert management to growing prob- analysis, business activity monitoring, business process lem areas. modeling, data mining, data visualization, portal, and LINE-OF-SIGHT FUNCTIONALITY linking individual staff, dashboard functionality to complement and complete the and departmental and service line performance score- PMIT environment. cards to the corporate business plan. This serves the Kurt Salmon Associates | Catalyst, Summer 2004
  10. 10. Sailing the High Seas PMIT Strategy The strategy and solution set will depend on the realities of the future-state vision identify current capabili- MUCH LIKE CLASSIC CORPO- 9 relative to the organization’s current PMIT ties’ strengths and weak- RATE BUSINESS PLANNING, nesses; and evaluate exist- HEALTH CARE ORGANIZA- environment. ing applications, skill sets, TIONS NEED TO TAKE A CON- tools, and processes. The SIDERED AND STRATEGIC assessment should identify APPROACH TO DEFINING the inhibitors and accelera- AND DEPLOYING A PER- tors to adopting a new per- FORMANCE MANAGEMENT formance management system and determine whether SYSTEM AND APPLYING INFORMATION TECHNOLOGY AS A SOLUTION. A three-step PMIT strategy process is recom- the current analytical culture and management skill set are mended to assess where the organization is now, where able to exploit access to performance data and analytical it wants to be, and how it will get there (see Figure 4). tools. STEP 1: The organization assesses the existing perform- STEP 2: The next step is to define a future-state vision and ance management system environment relative to best perform a gap analysis of the current environment. practices and identifies corporate requirements. The goal Alternative performance management strategies for achiev- of the assessment is to identify management require- ing the future state, assessing relative value propositions, and ments with regard to access to performance information; recommending a preferred strategy to pursue are devised. FIGURE 4: THREE-STEP PMIT STRATEGY PROCESS STEP 1 STEP 2 STEP 3 (Where are we now?) (Where do we want to go?) (How do we get there?) Examine Define Analytical Processes/ Perform Marketplace Project Organization Culture Requirements Overview Set Project Goals Define Analytical Evaluate and Objectives Requirements Technology Solution(s) Assess Current Define Data Management Select Technology PMIT Environment Requirements Solution(s) Identify Strengths Determine Unmet Formulate Budget and and Weakness PMIT Needs (Gaps) Timeline Projections Assess Define, Evaluate, and Begin PMIT PMIT Environment Select PMIT Strategy Implementation Source: KSA methodology Performance Management Systems | Navigating the Perfect Storm
  11. 11. STEP 3: Upon senior leadership’s confirmation of a pre- How far can our existing financial decision support ferred performance management strategy, it is translated applications take us in pursuing the goals of the BSC? into a tactical plan to pursue policy changes; skill set How well does the existing information technology development; business planning calendars; and technol- environment support the automated capture of clinical ogy selection, acquisition, and implementation. data required for quality and patient safety perform- ance indicators? Performance management and assessment of the current 10 environment will undoubtedly give rise to several chal- As these probing questions indicate, the scope of a PMIT lenges for the organization to overcome as it embarks on strategy and its associated tactical solution(s) can vary improving its strategic planning and deployment widely. The solution may be as simple as a targeted niche approach. These challenges include: BSC product; it may include data warehousing, budget- Holding management accountable for performance. ing, and business planning within an ERP environment; Enabling accountability through performance-based or it may include any solution map in between. The strat- reward and compensation models. egy and solution set will depend on the realities of the Affecting policy and culture changes with respect to future-state vision relative to the organization’s current corporate information access. PMIT environment. Building consensus and standardizing corporate per- Upon specification of a PMIT solution scope, assessment formance metrics across multiple perspectives, entities, of the current PMIT environment, and identification of and departments. the gaps between the current environment and the In addition to organizational behavior and cultural chal- future-state vision, the organization must determine how lenges, a key PMIT strategy challenge is determining how best to address the gaps and move toward the future-state best to integrate and exploit existing data and analytical vision. Based on numerous technology planning and solutions with potentially new PMIT components and selection projects, KSA has identified three broad PMIT solutions. strategies (see Figure 5). Frequently asked PMIT strategy questions include: BEST-OF-BREED. Allows each entity, service line, and Are broader requirements for data management and department to determine how best to satisfy each of the analysis, automating the budget cycle, and integrated three PMIT components with a best-in-class solution for business planning required, or is a visual dashboard of BSC, data management, and business intelligence. performance indicators sufficient? BEST-OF-FAMILY. Groups the PMIT components into Does our Enterprise Resource Planning (ERP) vendor “functionality families” to be addressed by a smaller set offer a PMIT solution that can meet our health care- of vendors, reducing cost, support, implementation, and specific requirements? FIGURE 5: THREE BROAD PMIT STRATEGIES BEST-OF-BREED BEST-OF-FAMILY END-TO-END Each PMIT component is satisfied by Group PMIT solution components into Further group PMIT solution into a single the “best” niche vendor solution two “families” of functionality: suite of functionality: DM, BI, and BSC Entity-/department-specific solutions – Data Management (DM) and Business Intelligence (BI) – The Balanced ScoreCard (BSC) Source: KSA methodology Kurt Salmon Associates | Catalyst, Summer 2004
  12. 12. integration challenges. Companies should strive to stan- PMIT VENDOR MARKETPLACE dardize best-of-family solutions as a single PMIT solution set across the entire organization. The definition of the functionality families can differ based on the realities of Given the scope of an organization’s PMIT approach, an organization’s assessment and the identified gaps in and the various possible strategies, many vendors the PMIT environment. One definition could include data and solutions can be included in an organization’s management and business intelligence as one family PMIT solution set. Several vendors’ business intelli- 11 (one vendor) and the BSC as another. The BSC and busi- gence and BSC products can be considered function- ness intelligence could be yet another family coming ality families. Numerous niche vendors specialize in from one vendor and data management technology from BSC functionality as well. While accredited by the BSC another. Collaborative, many of these niche solutions require the acquisition and integration of business intelligence END-TO-END. The perceived benefits of the best-of-family and data management tools if such don’t already strategy can be further expanded to a strategy in which exist. An organization lacking all three PMIT components all the PMIT components are supplied by a single inte- can consider a smaller set of end-to-end vendors grated solution set from a single vendor. This strategy claiming to offer the components in an ostensibly inte- works best when it is deemed by the organization during grated environment. Figure 6 provides a PMIT market- the PMIT assessment that none of the three components place overview based on KSA analysis. It is not an all- — the BSC, data management, or business intelligence — inclusive depiction of potential vendors, but repre- are prevalent and/or enjoy a single, consistent strategy sents perceived leadership in the PMIT space. and solution set across the organization. FIGURE 6: PERCEIVED PMIT LEADERSHIP VENDOR PMIT COMPONENT BEST-OF-BREED BEST-OF-FAMILY END-TO-END ACTIVESTRATEGY BSC BUSINESS OBJECTS BI, DM COGNOS BSC, DM, BI CORVU BSC CRYSTAL DECISION BI, BSC HYPERION BI, BSC INFORMATICA DM ORACLE DM, BSC, BI PBVIEWS BSC SAS BI, DM, BSC Source: KSA marketplace analysis Performance Management Systems | Navigating the Perfect Storm
  13. 13. Compass Points As the owner of a PMIT solution set, you will embark on the challenging voyage of deploying the policy changes, process redesign, skill set development, and technology implementation to realize the future-state vision. Great attention must be paid to ensuring key success factors are in place and managed within a continuous risk man- agement program. SECURE EXECUTIVE SPONSORSHIP. Senior management must sponsor a project of this magnitude and strategic importance. The performance management system and PMIT must be treated as a strategic and mission-critical initiative owned and sponsored by the CEO or his/her designee, in partnership with the CIO. This project will expose and create numerous political challenges, require significant funding, and likely cause considerable cultural change. Committed and astute executive sponsorship is critical to keeping the project alive, focused, and on course for success. INVOLVE OPERATIONS. The involvement of stakeholders from operations, specifically patient care-related departments, is also critical. The next level of performance improvement will be in patient care, quality, and clinical operations; not finance, human resources, and materials. From strategy through implementation, stakeholders from ambulatory, operating room, clinical, pharmacy, nursing, and senior management should be intimately involved, owning the project and its success. COMMUNICATE. Given the dramatic cultural change and broad scope of the project, constant and consistent com- munication will stoke excitement and adoption of the PMIT environment. Starting with senior management, the “why and how it will affect you” message should spread through the organization through existing communication channels, as well as new ones, such as a performance management newsletter. The BSC is used by more than 60% of Fortune 500 companies to measure performance and align operations with strate- gies. Strategy is critical to guiding health care organizations through dynamic markets and ever changing competitive environments. Outside competition, regulatory changes, and more sophisticated patient expectations are just some of the factors driving organizational change. Only those organizations prepared to execute strategy and maximize business performance will succeed. Performance evaluation predicated on the BSC helps integrate business and clinical perform- ance at strategic and tactical levels by measuring, disseminating, and analyzing interrelated key performance indicators. This Catalyst reviewed the challenges of devising and deploying an information technology strategy to enable the goals of performance management and measurement in the stormy health care environment. Implementing PMIT within the BSC performance management system can help align an organization’s mission, vision, and strategic plan with its success-defining measures. Using PMIT can also create management tools to evaluate opportunities for improvement and support knowledge-based decision making that will enable organizations to navigate successfully into the 21st century.
  14. 14. We hope you found this Catalyst insightful and actionable. For more information about how KSA can help your organization apply BSC performance management systems and PMIT strategies and solutions to navigate the perfect storm, e-mail
  15. 15. www.kur Offices Worldwide