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Improve Public Sector Results With A Balanced
Scorecard Nine Steps To Success
Howard Rohm Vice-President, the Balanced
Scorecard Institute Director, U.S. Foundation for
Performance Measurement Internet
www.balancedscorecard.org e-mail
hhr_at_balancedscorecard.org Phone [phone]
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Seminar Objectives

• Describe a framework for building and
  implementing public-sector balanced scorecard
  performance systems
• Understand how a scorecard system can help align
  organization effort with agency mission and
  strategy
• Share best practices and lessons learned

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Basic Design Of A Balanced ScorecardPerformance
System
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Public-Sector Balanced Scorecard
Strategy
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Balanced Scorecard (BSC) System Components
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Balanced Scorecard Logic
Customer Requirements
Phase II Strategy
Phase I Strategic Foundations
Phase III Performance Measures

• Budget
• Activities

Phase IV New Initiatives
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Building Implementing A Balanced Scorecard
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Building Implementing A Balanced Scorecard

• Customer Values
• Organization Pain
• Organization Values
• Vision Mission

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Building Implementing A Balanced Scorecard

• Themes
• Strategic Results
• Strategies

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Building Implementing A Balanced Scorecard

• Strategy Elements

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Building Implementing A Balanced Scorecard

• Performance Drivers
• Enablers
• Causal Links

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Building Implementing A Balanced Scorecard

• Performance Measures
• Targets
• Baselines

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Building Implementing A Balanced Scorecard

• New Projects

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Building Implementing A Balanced Scorecard

• Software
• Performance Reporting
• Knowledge Sharing

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Building Implementing A Balanced Scorecard

• Alignment
• Business Support Unit Scorecards

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Building Implementing A Balanced Scorecard

• Performance Results
• Revised Strategies

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Building Implementing A Balanced Scorecard

• Customer Values
• Organization Pain
• Organization Values
• Vision Mission

• Performance Results
• Revised Strategies

• Alignment
• Business Support Unit Scorecards

• Themes
• Strategic Results
• Strategies

• Software
• Performance Reporting
• Knowledge Sharing

• Strategy Elements

• Performance Drivers
• Enablers
• Causal Links

• New Projects

• Performance Measures
• Targets
• Baselines

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StrategyStrategy MappingPerformance
MeasuresImplementation
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People and their managers are working so hard to
be sure things are done right, that they hardly
have time to decide if they are doing the right
things. Stephen R. Covey
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Focus On Organization Strategy
Budget For Performance
Develop Strategy To Support Mission
Strategy Our Approach To Accomplishing Our
Mission
Make Strategy Actionable
Manage For Performance
Align Work With Mission
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Step Two
Define Strategies
Mission Provide information services to citizens
Vision Enable Internet access to all available
information
Strategic Themes Build the information
infrastructure Improve operational efficiency
and effectiveness
Strategies Develop an on-line, 24/7capability
to access information services Build knowledge
and skills, to cross-sell new banking products
Call Center Strategies Provide caller support
on an exceptions basis Provide critical customer
intelligence to Web site designers
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Strategy Translates What Customers Want Into What
We Must Deliver
Values
Customer Requirements
Organization Results
Operations
Business Strategy
Mission
Business Units
Support Units
Vision
Teams Individuals
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Strategy Translates What Customers Want Into What
We Must Deliver
Best Practices
Values
Customer Requirements
Organization Results
Operations
Business Strategy
Mission
Business Units
Support Units
Vision
Teams Individuals
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StrategyStrategy MappingPerformance
MeasuresImplementation
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Strategy Is A Hypothesis About What Drives
Organization Success
Training
Program Effectiveness
Service Quality
Customer Confidence
Customer Satisfaction
InformationTechnology
Leadership
Identify the key performance drivers that lead to
successful strategy execution
Adapted From John Krieger, Paramount Consulting
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Step Four
Public Sector Strategy Map
Increase Satisfaction
Lower Wait Time
Citizens Budget Internal Business
Process Organization Capacity
Reduce Costs
Reduce Procurement Steps
Lower Cycle Time
Increase Network Capacity
Improve Skills
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Step Four
Public Sector Strategy Map
Best Practices
Increase Satisfaction
Lower Wait Time
Citizens Budget Internal Business
Process Organization Capacity
Reduce Costs
Reduce Procurement Steps
Lower Cycle Time
Increase Network Capacity
Improve Skills
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StrategyStrategy MappingPerformance
MeasuresImplementation
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Performance Measures Should Help Us Decide
Step Five
Performance Measures
Input Resources, including cost and
workforce Process Activities, efforts,
workflow Output Products and services
produced Outcome Results, accomplishments,
impacts
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Performance Measures Should Help Us Decide
Step Five
Performance Measures
Input Resources, including cost and
workforce Process Activities, efforts,
workflow Output Products and services
produced Outcome Results, accomplishments,
impacts
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Develop Performance Measures
Program Logic Model
Process/ System
Intermediate Outcomes
End Outcome
Inputs
Output
Source Gardner Shaw Howard Rohm
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Develop Performance Measures
Program Logic Model
Process/ System
Intermediate Outcomes
End Outcome
Inputs
Output
Causal Analysis
Desired Outcome
Source Gardner Shaw Howard Rohm
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Develop Performance Measures
Program Logic Model
Process/ System
Intermediate Outcomes
End Outcome
Inputs
Output
Process Flow
Causal Analysis
Desired Outcome
Source Gardner Shaw Howard Rohm
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Balanced Scorecard Performance Measures
What We Want To Measure
Customer/ Stakeholder Internal
Business Processes Financial /
Budget Organization Capacity
Results
Process Activities (Quality, Quantity,
Timeliness, Efficiency)
Results Or Inputs
Behavior Changes Knowledge, Skills,
Abilities Efficiency
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Balanced Scorecard Performance Measures
Measurement Categories
Achievement of Strategic Results Business Impacts
Customer/ Stakeholder Internal
Business Processes Financial /
Budget Organization Capacity
Changes in Process Efficiency
Return on Investment (Program/Service
Effectiveness)
Or Input Measures (Resource Adequacy)
Changes in Employee Knowledge, Skills, Attitudes,
Behavior, and Abilities Service
Efficiency/Effectiveness Measures Infrastructure
Capacity Gain Measures
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Balanced Scorecard Performance Measures
Best Practices
Measurement Categories
Achievement of Strategic Results Business Impacts
Customer/ Stakeholder Internal
Business Processes Financial /
Budget Organization Capacity
Changes in Process Efficiency
Return on Investment (Program/Service
Effectiveness)
Or Input Measures (Resource Adequacy)
Changes in Employee Knowledge, Skills, Attitudes,
Behavior, and Abilities Service
Efficiency/Effectiveness Measures Infrastructure
Capacity Gain Measures
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The Finished BSC Tells Our Story

Infrastructure Perspective

Process Perspective
Strategy Our Approach To Accomplishing Our
Mission
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Putting It All Together Federal Government
Logistics Center
Provide Logistics Support and Products to Assure
Safety for the Flying Public
Mission
World-class, Customer Driven Providing Quality
Services Worldwide
Vision
S1 Become more customer-driven S2 Increase
business opportunities
S1
S2
Strategy
S1-01 Assure timely delivery (Customer) S1-02
Raise quality level (Customer) S1-03 Reduce
cycle time (Internal)
O1
O2
O3
Objectives
S1-O1-M1 on-time delivery S1-O2-M1
defective product S1-02-M2 defective shipments
M 1
M 2
M 1
Measures
S1-O1-M1-T1 100 in 2002 S1-02-M1-T1 Zero in
2002 S1-02-M2-T1 Zero in 2002
T 1
T 1
T 1
Targets
S1-I1 Re-engineer delivery process S1-I2 Six
Sigma training
I 1
I 2
Initiatives
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Putting It All Together Local Government
Serve County Residents by Helping Improve Their
Lives and Community
Mission
Be the Best Local Government Service Provider
Vision
Citizen Needs Desired Outcomes
S1 Increase value by providing more
cost-effective services S2 Reduce violence, harm
injury through community partnerships
S1
S2
Strategy
S1-01 Optimize organization (Internal) S1-02
Identify service resource gaps
(Employee) S1-03 Survey citizens (Customer)
O1
O2
O3
Objectives
S1-O1-M1 Skills match index S1-O2-M1 Cost per
unit service S1-03-M1 Citizen satisfaction rating
M 1
M 1
M 1
Measures
S1-O1-M1-T1 Skills index 80 in
2002 S1-02-M1-T1 7 improvement above
baseline S1-03-M1-T1 95 in 2002
T 1
T 1
T 1
Targets
S1-I1 New outreach program S1-I2 Communications
plan
I 1
I 2
Initiatives
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MARINE CORPS SYSTEMS COMMMAND COMMAND BALANCED
SCORECARD DESIRED OUTCOMES VIEW
OPS EFFICIENCY GOAL Improve operating
efficiency through streamlined and innovative
business systems
LIFE CYCLE MANAGEMENT GOAL Deliver highly
effective systems and equipment using Life Cycle
Management
HI-PERFORMANCE ORG GOAL Become a proud,
high-performance, team-based learning
organization in a professional environment
QUALITY SYSTEMS GOAL Improve quality of systems
and equipment provided to operating forces
Equip the Warfighter to Win
WARFIGHTER/ STAKEHOLDER (BETTER)
Acquire Best-Value Products
Improve Delivery Time
Improve External Communications
Understand and Meet Explicit Implicit Customer
Requirements
Improve LCM Focus
Improve Command Planning Resource Allocation
WORK SYSTEM (FASTER)
Increase Collaborative Partnerships
Increase Internal Process Efficiency
Improve Systems Integration
FINANCIAL (VALUE)
Optimize Operating Budget
Increase Financial Efficiency
Improve Team-based Workforce Competency
HUMAN SYSTEM (SMARTER)
Identify Meet Future Skills Requirements
Improve Infrastructure Support
Improve Internal Communications
Improve Workforce Satisfaction Commitment
Improve Workforce Knowledge, Skills Abilities
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StrategyStrategy MappingPerformance
MeasuresImplementation
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SAS Institute
pbVIEWS
iDashes
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Automation
Step Seven
Software Solution Space
Enterprise Requirements

• Few measures
• Basic tracking
• Small office

Time and Cost to Implement
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Automation
Step Seven
Software Solution Space
Enterprise Requirements

• Numerous measures
• Visualization charting
• Multiple locations
• Web input publishing
• Commentary

• Few measures
• Basic tracking
• Small office

Time and Cost to Implement
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Automation
Step Seven
Software Solution Space

• Links to legacy systems
• Composite measures
• Many data/reporting locations
• Integrate with enterprise systems
• Advanced executive reporting
• Web input publishing
• Advanced analysis

Enterprise Requirements

• Numerous measures
• Composite measures
• Visualization charting
• Multiple locations
• Web input publishing
• Commentary

• Few measures
• Basic tracking
• Small office

Time and Cost to Implement
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Data Warehouse Features Strategic Performance
Management

• Collect and transform data from virtually any
  data source and manage the process
• Fully automated solution
• Communicate on strategy, provide early indicators
  
• Collaborate on knowledge and share best practices
  enterprise-wide
• Integrate with any performance framework
• Robust analytics, including predictive analysis,
  cost analysis, correlation/impact analysis, trend
  analysis, and data mining
• Dynamic, customizable strategy maps
• Ability to integrate with other enterprise
  solutions
• One consistent Intelligence Architecture across
  the enterprise

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Step Eight
Align The Enterprise View With Business And
Support Units
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Step Eight
Align The Enterprise View With Business And
Support Units
Best Practices
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Goal Performance-Based Budget
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Summary
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Typical Timeline Building The Corporate
Scorecard
Week
1
2
3
4
5
6
7
8
9
10-16
GettingStarted Set Strategic Context Develop
Strategy Objectives Define Performance
Measures Develop New Initiatives Design
Performance Reporting Adapt Management Review
Process Executive Sessions
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Balanced Scorecard Implementation Challenges

• Fear of measurement and new systems
• Lack of common definitions and terms
• Inconsistent or weak buy-in, and lack of
  understanding
• Visions and strategies that are poorly defined
  and understood, not actionable, and not linked to
  individual actions
• Treating budget development separately from
  strategy development
• Measures set independently of a performance
  framework, or measures with no ownership
• Loosing momentum
• No performance targets, or targets set too high
  or too low
• Little or no strategic feedback
• Lack of meaningful employee involvement

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The Balanced Scorecard Is (Is Not)
IS
IS NOT
A strategy-based management system A
communications tool for the whole organization A
journey Hard work A change initiative Balancing
non-financial, efficiency, infrastructure,
financial views of performance Increased
accountability Aligning vision with operations
A performance measurement tool An EIS for
executives only A project Easy Business as
Usual Putting your existing metrics into 4
bins Tighter individual control A TQM, Six
Sigma, or reengineering project
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Getting Quick Results

• Mr. Rohm
• I am new to BSC. Could you email me a list of
  measures for each of the four perspectives?
• (Name withheld to protect the poor man!)

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Its about management and change first
measurement and technology are second
Howard Rohm
Internet www.balancedscorecard.org e-mail
hhr_at_balancedscorecard.org Phone [phone]
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References

• A Balancing Act Developing and Using Balanced
  Scorecard Performance Systems, Howard Rohm,
  Perform, June 2002
• Building Implementing A Balanced Scorecard
  Nine Steps to SuccessTM, Howard Rohm, U.S.
  Foundation for Performance Measurement
• Performance Scorecard ToolkitTM, Howard Rohm,
  U.S. Foundation for Performance Measurement
• How To Measure Performance A Handbook of
  Techniques and Tools, Performance-Based
  Management Special Interest Group, U.S.
  Department of Energy
• Keeping Score, Mark Graham Brown, Quality
  Resources
• Performance Drivers, Niles-Goram Olve, Jan Roy
  and Magnus Wetter, Wiley
• Operational Performance Measurement Increasing
  Total Productivity, Will Kaydos, Saint Lucie
  Press
• The Balanced Scorecard, Robert Kaplan David
  Norton, Harvard Business School Press
• The Strategy-Focused Organization, Robert Kaplan
  David Norton, Harvard Business School Press

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The Balanced Scorecard Institute

• Information Clearing House
• Balanced Scorecard Training, Coaching
  Consulting (GSA Schedule)
• Performance Measurement Development and Training
  (GSA Schedule)

Upcoming Events
Web www.balancedscorecard.org E-Mail
hhr_at_balancedscorecard.org Phone [phone]