·What is a Balanced Scorecard?
Translates mission and Vision into a set quantified measures
·Provides way for organizations to “balance” financial focus
·A Management measurement system
Takes 4 perspectives
·Builds on TQM
·By 2001 about 36% of global companies using it
·A measurement-based strategic management system, originated by Robert Kaplan and David Norton, which provides a method of aligning business activities to the strategy, and monitoring performance of strategic goals over time
·Learning and Growth
·You improve what you measure
·Balanced Scorecard focus
·Value of good measures
Strategic feedback to show the present status of the organization from many perspectives for decision makers
·Diagnostic feedback into various processes to guide improvements on a continuous basis
·Trends in performance over time as the metrics are tracked
·Feedback around the measurement methods themselves, and which metrics should be tracked
·Quantitative inputs to forecasting methods and models for decision support systems
Balanced Scorecard Effects
·Clarify or update a business’s strategy;
·Link strategic objectives to long-term targets and annual budgets;
·Track the key elements of the business strategy;
·Incorporate strategic objectives into resource allocation processes;
·Facilitate organizational change;
·Compare performance of geographically diverse business units;
·Increase company-wide understanding of the corporate vision and strategy.
·Baldridge Criteria book (1997)
·"A major consideration in performance improvement involves the creation and use of performance measures or indicators. Performance measures or indicators are measurable characteristics of products, services, processes, and operations the company uses to track and improve performance. The measures or indicators should be selected to best represent the factors that lead to improved customer, operational, and financial performance. A comprehensive set of measures or indicators tied to customer and/or company performance requirements represents a clear basis for aligning all activities with the company's goals. Through the analysis of data from the tracking processes, the measures or indicators themselves may be evaluated and changed to better support such goals."
·Traditional Project Management
·Problems with too much focus on measurements
·“…consider the myth of measurement, an ideology embraced with almost religious fervor …. Things have to be measured, to be sure, especially costs. But how many of the real benefits … lends themselves to such measurement? Some rather simple and directly delivered ones do … But what about the rest? … Measurement often missed the point, sometimes causing awful distortions. ….“ Mintzberg, Harvard Business Review 1996
·What measures are important?
·Desired Organizational Outcome Differences
·Ministry of Interior?
·Objections to Balanced Scorecards
·Costs outweigh benefits. What will we find we don’t know?
·We have only limited control over results. Why should we be held accountable for things we cannot control?
·The results will be used against us.
·The process will be “gamed.”
·They will evaluate us by unfair standards.
·Method to construct
·Articulate the business’s vision and strategy;
·Identify the performance categories that best link the business’s vision and strategy to its results (e.g., financial performance, operations, innovation, employee performance);
·Establish objectives that support the business’s vision and strategy;
·Develop effective measures and meaningful standards, establishing both short-term milestones and long-term targets;
·Ensure company-wide acceptance of the measures;
·Create appropriate budgeting, tracking, communication, and reward systems;
·Collect and analyze performance data and compare actual results with desired performance;
·Take action to close unfavorable gaps.
·Building a Scorecard
1.Assessment of core beliefs, market opportunities, competition, financial position, goals, and customer satisfaction
•Mission, Vision, Strategies
•Choose a champion & core team
•Set schedule for development
•Establish communication plan
Development of overall business strategy
- Build the Business
- Improve Operational Efficiency
- Develop New Products
- Improve community health
·Break business strategy into objectives
-Days until next clinic appointment
·Create a map of overall business strategy
-Cause and effect links
-Connect components of strategy
-Place components in scorecard categories
·Determine desired outcomes
·Use strategic map & specify objectives
-Few key critical for success
·Develop Results & Process Measures
·Rules for good measures
·Take enough time
·Don’t have too many
·Don’t just use what is available
·Use a process
·Relationship among 4 types of performance measures
·Questions to get to real why
·New Initiatives are identified
-Process to implement set
-Make initiatives strategic – how do they promote the organizational strategies
·Duke Hospital’s Method
·FOCUS – Define & verify process to be improved
·ANALYZE – Collect & analyze data to establish baselines, identify root causes & point toward possible solutions
·DEVELOP – Based on the data, develop action plans for improvement implementation, communication, & measuring monitoring
·EXECUTE – Implement the action plans & install measuring/monitoring system
·Duke’s many report systems
·Aggregate Reports/ ORYX
·Clinical & Operational Excellence Reports
·Patient Satisfaction Reports
·Dukes Tie to Mission & Vision
·Mission: To serve our patients and the global community by providing the finest patient care, education, and research while respecting the needs of the human spirit.
·Vision: To be the leading academic health service Provider by delivering high quality innovative responses to society’s changing healthcare needs.
·Duke’s Aggregate Report
·Procedures that place patients at risk
·Processes related to medication use
·Appropriateness of Pain Management
·Restraint Use per 1,000 patient days
·Outcomes related to resuscitation
·Other Accreditation performance measures
·Quality Control Activities
·Duke’s Clinical & Operational Excellence Report
·All reported ADEs
·Patient Falls per 1,000 patient days
·% of patients with Armband on
·Total # complaints & compliments
·MRSA acquisition rate per 1,000 patient days
·Transfusion related errors
·Prevalence of decubitus ulcers
·Patient flow (% discharged 7 am to 11 am)
·Reported to JCAHO quarterly
-Anesthesia mortality rate
-CABG mortality rate
-PTCA mortality rate
-COPD mortality rate
·VA Weighted Scorecard
·Quality 30 pts
·Access 20 pts
·Customer Satisfaction 14 pts
·Performance 8 pts
·Efficiency 14 pts
·Revenue Enhancement 14 pts
-Prevention index >83% = 15 pts
78-82% = 11 pts
<78% = 0 pts
-Overall clinical practice guidelines
top quadrant 15
mid – quadrants 11
lowest quadrant 0
-Audiology <30 days wait = 2 pts
-Number of patients
Maintain or Increase = 8 pts
-Patients with a complaint <14 per 100 = 2
-Education/information 15 to 24 = 1
-Employee engagement >3 = 7
·Survey score > 3 2 – 3 = 4
<2 = 0
-Meet budget <100% = 14
100.1 – 101% = 10
>101% = 0
·Performance System Index
·Factors Affecting Employee Present Value
·LMTAS Employee Present Value Metrics
·Epstein, Marc, and Jean-François Manzoni. "Implementing Corporate Strategy: From Tableaux de Bord to Balanced Scorecards." European Management Journal , April 1998, pp. 190-203.
·"Harvard Business Review Balanced Scorecard Report." Harvard Business Review , 2002 to present (bimonthly).
·Kaplan, Robert S., and David P. Norton. The Balanced Scorecard: Translating Strategy into Action. Harvard Business School Press , 1996.
·Kaplan, Robert S., and David P. Norton. “Having Trouble with Your Strategy? Then Map It.” Harvard Business Review , September/October 2000, pp. 167-176.
·Kaplan, Robert S., and David P. Norton. “Measuring the Strategic Readiness of Intangible Assets.” Harvard Business Review , February 2004, pp. 52-63.
·Kaplan, Robert S., and David P. Norton. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Harvard Business School Press, 2000.
·Kaplan, Robert S., and David P. Norton. Strategy Maps: Converting Intangible Assets into Tangible Outcomes. Harvard Business School Press , 2004.
·Kaplan, Robert S., and David P. Norton. "Using the Balanced Scorecard as a Strategic Management System." Harvard Business Review , January/February 1996, pp. 75-85.
·Niven, Paul. Balanced Scorecard Step-by-Step: Maximizing Performance and Maintaining Results. John Wiley & Sons, 2002.
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