The Balanced Scorecard in Public Libraries

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The Balanced Scorecardin Public Libraries

• Joe Matthews
• September 2006

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What Is a Balanced Scorecard?
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The Balanced Scorecard

• The idea of the scorecard is to describe the
  essential ingredients of organizational success.
• Its underlying philosophy Provides a tool for
  clearly communicating the goals and priorities of
  the library.

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The Balanced Scorecard

• Translates an organizations mission and
  strategy into a comprehensive set of performance
  measures and provides the framework for strategic
  measurement and management.

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The Four Perspectives
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Customer PerspectiveCreating a sustainable
differentiated valueproposition is the heart of
strategy

• Product/Service Attributes
• Quality, Availability, Selection, Functionality,
  Price
• Relationship
• Service, Partnering
• Image
• Brand

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Internal Perspective

• Operational Efficiency
• Supplier relationships, produce products
  services, distribute to customers, manage risk
• Customer Relationships
• Provide desired services/products, provide
  convenient processes, provide customized services
• Innovation
• Process innovation, manage capital projects

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Learning Growth Perspectiveis all about
Readiness

• Competencies
• Total Quality Management process improvement
  capabilities, developing a culture of assessment
• Technology
• Software, local area network, wide-area network,
  library information system, Web site, portal
• Climate for Action
• Process improvement Do it better, faster, cheaper

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Financial Perspective

• Productivity Strategy
• Become a cost leader
• maximize use of existing assets
• Revenue Growth Strategy
• Revenues from new customers
• Increase existing customer revenues
• Grants, fund raising

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Who is Using the Scorecard?

• Companies
• Federal government
• State and local government
• Non-profit agencies
• A few libraries

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The Balanced Scorecard Framework Is Readily
Adapted to Non-Profit and Government
Organizations
Public Value and Benefit Individual
community-based outcomes
Customer Perspective Service attributes
satisfaction
Financial Perspective Accountability value
Internal Processes Efficiency productivity
Learning Growth Staff skills, technology
climate for action
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Library Balanced Scorecard
Customer
Internal Processes
Information Resources
Organizational Readiness
Financial
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Why Adopt a Balanced Scorecard?

• Change Formulate and communicate a new strategy
  for a more competitive environment
• Alignment Each staff members actions are guide
  by the strategies and goals of the library
• Focus Provides management with a tool for
  monitoring progress towards achieving the
  library's vision

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Value Chain
Drivers
Inputs
Process
Outputs
Immediate Outcomes
Intermediate Outcomes
Ultimate Outcomes
External causes
Staff IT Facilities Equipment
Activities
Products and services delivered
Time Cost Quality
Change in attitudes, beliefs or behaviors
Societal impact
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Relationship to Plan
Drivers
Inputs
Process
Outputs
Immediate Outcomes
Intermediate Outcomes
Ultimate Outcomes
Budget
Strategies
Goals/Objectives
Vision
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Starting Point

• Mission Statement (the present)
• Values Statement
• The Vision (the future)
• The gap between now and the future leads to a
  plan of action to achieve the vision. How we get
  to the future involves strategies.

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Principles of a Strategy-Focused Organization

• Mobilize change through executive leadership
• Translate strategy to operational terms
• Align the organization to the strategy
• Motivate to make strategy everyones job
• Govern to make strategy a continual process

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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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Barriers to Strategic Implementation
The Vision Barrier Only 5 of staff
members understands the strategy
The Management Barrier 85 of top management
teams spend less than 1 hour per month discussing
strategy
The People Barrier Only 25 of managers
have incentives linked to strategy
9 of 10 companies fail to execute strategy
The Resource Barrier 60 of organizations dont
link budgets to strategy
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You Cant Manage Strategy With aSystem Designed
for Tactics

• Todays management systems were designed
• to meet the needs of stable organizations
• that are changing incrementally.
• The Balanced Scorecard assists an
• organization to align and focus all
• its resources on its strategy!

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The Failure of Strategy

• "You can either take action or
• wait for a miracle to happen.
• Miracles are great but they
• are unpredictable."
• Peter Drucker

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Types of Strategies
Customer Intimacy
Innovative Services
Operational Excellence
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• Strategies translate what customers want
• into what libraries must deliver!

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Strategy Is A Hypothesis About What Drives
Organizational Success
Mission
Results or Outcomes
Vision
Strategy
Operations
Customer Requirements
Identify the key performance drivers that lead to
successful strategy execution
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Strategy Maps

• A visual tool for describing and communicating
  your strategies.
• The best strategies are a set of themes focused
  on the value-creation process.
• The map shows the cause-and-effect relationships
  of the strategy among the various perspectives

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Interrelationships

• Strategy maps tell where we are going and why
• Scorecards explain how well we are doing and
  provide guidance for what can be next
• Budgets tell how

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Value of the Strategy Map

• Assists the library in identifying
• cause-and-effect relationships
• Helps develop a predictive model

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Cause-and-Effect Relationships

• Vision achieved
• Satisfied customers
• Efficient internal processes
• Skilled employees
• Aligned resources

Mission/Vision
Customer Focus
Internal Processes
Org. Readiness
Financial
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Sample Strategy Map
Customers Internal Business
Process Organizational Readiness Budget
Increase Satisfaction
Lower Wait Time
Lower Cycle Time
Reduce Process Steps
Increase Network Capacity
Improve Skills
Demonstrate Accountability
Reduce Costs
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How To Select Performance Measures
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Performance Measures Problems

• Too many measures and no focus
• Entrenched or no measurement systems
• Unjustified trust in informal feedback systems
• Fuzzy objectives

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What Needs to be Measured

• Is derived from what needs to be accomplished
  strategy!
• There needs to be a balance (not too many
  measures) and focus (measures that reflect
  strategy.
• Trends are more important than the value of a
  particular measure.

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Performance Measures

• Combination of
• Leading and lagging measures
• Financial non-financial measures
• Input, process, output and outcome measures
• Internal external measures

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Performance Measures Should Help Us Decide
Are We Doing Things Right? (How?)
Input Resources, including budget and
workforce Process Activities, efforts,
workflow Output Products and services
produced Outcome Results, accomplishments,
impacts
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Identify Targets

• When targets are used, performance improves an
  average of 16
• Use stretch targets
• SWAG targets

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Select Initiatives

• Have an impact on achieving your strategies
• Identify responsible individual, implementation
  schedule, resources required, budgetary
  implications
• Look for ways to eliminate it, simplify it, or
  automate it

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Sustaining the Scorecard

• Managements Focus use the scorecard to drive
  meeting agendas
• Develop a culture of assessment
• Cascade the scorecard
• Communicate your scorecard

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Remember!

• The Library Balanced Scorecard is
• about management and change first
• the use of performance measures is second.

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Resources

• For more information about scorecards, visit
  www.ci.carlsbad.ca.us/imls
• Joseph R. Matthews. Measuring for Results The
  Dimensions of Public Library Effectiveness.
  Westport, CN Libraries Unlimited, 2004.

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Questions?
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Definitions

• Mission What we are about (Our mission is to
  provide . . . )
• Vision What we want to be in the future (Our
  vision is to be the leading providers of . . . )
• Perspectives Different views of our library
  (Customers, internal processes, employees
  capacity, financial and . . . Information
  resources, Public value and benefit)
• Customers Direct beneficiaries of our services
  or products (citizens)
• Stakeholders The universe of people with an
  interest in what services we provide and how well
  we do it)
• Outcomes What results are desired our planned
  accomplishments (Note Improved customer
  satisfaction is a by-product when customers
  received their desired outcomes.)
• Goals What we want to achieve by a certain time
  (increase number of city residents who use the
  library on a quarterly basis by 10)

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Definitions

• Strategies How we intend to accomplish our
  vision and goals our approach or game plan
• Objectives Strategy components action items
  that must be accomplished (improve staff skills,
  decrease costs)
• Strategy Map A visual tool that shows
  cause-effect relationships among strategy
  components
• Outputs What is produced (number of reference
  transactions)
• Performance Measures
• Lagging Indicators of success (number of
  customers served last month)
• Leading Predictors (performance drivers) of
  future success (increase in staff skills and
  knowledge)
• Target Desired level of performance for a
  performance measure (customer satisfaction target
  95)
• Initiatives Action programs that will achieve
  our performance goals (provide 24/7 online
  reference service)