Balanced Scorecard Introduction


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  • Balanced Scorecard Introduction

    1. 1. Balanced Scorecard and Strategy Map Lunch Bunch (Cabinet) August 23, 2007
    2. 2. Short-Term Goal (Today) <ul><li>Understand the Balanced Scorecard </li></ul>
    3. 3. <ul><li>Create a Balanced Scorecard that links objectives, initiatives (new and old), and measures to the strategy of our organization. </li></ul>
    4. 4. Why think strategically?
    5. 5. <ul><li>Funding cuts (Financial) </li></ul>
    6. 6. <ul><li>Demonstrate accountability (all areas) </li></ul>
    7. 7. <ul><li>Improve our performance (Customer/Student Achievement) </li></ul>
    8. 8. <ul><li>Focus on improving our inputs (Internal processes) </li></ul>
    9. 9. <ul><li>Alignment of our PD with where we expect our employees to be headed (Learning and Growth) </li></ul>
    10. 10. Why think strategically? <ul><li>Funding cuts (Financial) </li></ul><ul><li>Demonstrate accountability (all areas) </li></ul><ul><li>Improve our performance (Customer/Student Achievement) </li></ul><ul><li>Focus on improving our inputs (Internal processes) </li></ul><ul><li>Alignment of our PD with where we expect our employees to be headed (Learning and Growth) </li></ul>
    11. 11. ?
    12. 12. Strategy <ul><li>Strategy is h ow we inten d to create value f or ou r customers </li></ul>
    13. 13. <ul><li>It is estimated that fewer than 10% strategies that are effectively formulated are effectively implemented. </li></ul>10%
    14. 14. <ul><li>In the majority of those cases (it is estimated to be 70%) the problem is not the strategy, but the execution of the strategy. </li></ul><ul><ul><li>Forbes Magazine </li></ul></ul>
    15. 15. Barriers to strategic thinking
    16. 16. Vision: Only 5% of workforce understands the strategy
    17. 17. People: Only 25% of managers have incentives linked to strategy
    18. 18. Management: 85% of Executive Teams spend less than 1 hour on strategy
    19. 19. Resources: 60% of organizations do not link budgets to strategy
    20. 20. <ul><li>It is estimated that managers and executives spend less than 1 hour per month on strategy. </li></ul>1 hour
    21. 21. Steps in this Process <ul><li>Step #1: What is a Balanced Scorecard? </li></ul><ul><li>Step #2: What is a Strategy Map? </li></ul><ul><li>Step #3: What method are we going to use to create our Strategy Map? </li></ul>
    22. 22. Step #1: What is BSC?
    23. 23. What is a Balanced Scorecard? <ul><li>… The BSC is a management tool that provides senior executives a comprehensive measure of how the organization is progressing towards achieving its strategic goals. </li></ul>
    24. 24. Balanced Scorecard <ul><li>The idea of the scorecard is to describe the essential ingredients of organizational success. </li></ul><ul><li>Its underlying philosophy – Provides a tool for clearly communicating the goals and priorities of the organization. </li></ul>
    25. 25. <ul><li>Introduced in 1992, by Robert Kaplan and David Norton, the Balanced Scorecard is the most commonly used framework for ensuring that agencies execute their strategies. Today, about 70% of the Fortune 1,000 companies utilize the Balanced Scorecard to help manage performance. </li></ul>Where it started . . .
    26. 26. Some Basic Principles <ul><li>Quantifies the Organizational Strategy in measurable terms </li></ul><ul><li>Strategy is summarized on a Strategy Map over four views of performance (perspectives). </li></ul><ul><li>Must capture a cause-effect relationship between strategic objectives over the four perspectives on the Strategy Map. </li></ul><ul><li>Critical Components include: </li></ul><ul><li>- Measurements </li></ul><ul><li>- Targets </li></ul><ul><li>- Initiatives </li></ul><ul><li>Everything must be linked: Goals to Objectives, Objectives to Measurements, Measurements to Targets. </li></ul>
    27. 27. Vision and Mission Strategic Assessment Strategy Map Balanced Scorecard Execution Monitor
    28. 28. When the community, students and staff are involved, all students do learn and succeed.
    29. 29. … to ensure all students will be at or above grade level
    30. 30. Four Sectors for Business. &quot;If we succeed, how will we look to our shareholders?” The Strategy Private Sector Organizations Financial Perspective &quot;To achieve our vision, how must we look to our customers?” Customer Perspective &quot;To satisfy our customers, at which processes must we excel?” Internal Perspective &quot;To achieve our vision, how must our organization learn and improve Learning & Growth Introducing Strategy Maps A simple model of the value creation process
    31. 31. Customer <ul><li>Who are our targeted customers? </li></ul><ul><li>What is our value proposition in serving them? </li></ul>
    32. 32. Processes <ul><li>To satisfy our customers at what processes must we succeed? </li></ul>
    33. 33. Employee Learning and Growth <ul><li>What capabilities and tools do employees require to help then execute our strategy? </li></ul>
    34. 34. Financial Perspective <ul><li>What financial steps are necessary to ensure the execution of our strategy? </li></ul>
    35. 35. “ Simple, not simplistic.” -Kaplan and Norton
    36. 36. <ul><li>Make sure relationship between point A (where we are today) and point B (scorecard) is clear </li></ul><ul><li>A scorecard is a final measurement tool. To get there we need to clarify our strategy. To clarify strategy will need to spend some time analyzing strategic data and then develop a map of strategy. </li></ul>