Scribd
Upload
180 views

Balanced Scorecard

The document provides an overview of the Balanced Scorecard framework. It discusses what the Balanced Scorecard is, why organizations implement it, and its key components. The Balanced Scorecard balances non-financial and financial metrics, short-term and long-term goals, and leads to strategic focus and organizational alignment. It helps organizations achieve their strategic objectives and continually improve. The document then outlines the four perspectives of the Balanced Scorecard - Financial, Customer, Internal Processes, and Learning and Growth. It provides examples of measures, targets, and initiatives that could be used for each perspective.

Uploaded by

Atul Singh
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
180 views

Balanced Scorecard

The document provides an overview of the Balanced Scorecard framework. It discusses what the Balanced Scorecard is, why organizations implement it, and its key components. The Balanced Scorecard balances non-financial and financial metrics, short-term and long-term goals, and leads to strategic focus and organizational alignment. It helps organizations achieve their strategic objectives and continually improve. The document then outlines the four perspectives of the Balanced Scorecard - Financial, Customer, Internal Processes, and Learning and Growth. It provides examples of measures, targets, and initiatives that could be used for each perspective.

Uploaded by

Atul Singh
Copyright
© Attribution Non-Commercial (BY-NC)
Available Formats
Download as PPT, PDF, TXT or read online on Scribd
You are on page 1/ 35

The Balanced Scorecard

Adapted by Dr. Ajay Kr. Singh

Finance and Administrative Services Division

John Sanders

The California State University


Quality Improvement Programs
Seminar Outline
Introduction to the Balanced Scorecard
What is it?
Why do it?

Balanced Scorecard Fundamentals


The Four Perspectives
Measures, Targets and Initiatives
Roles and Responsibilities

The CSUSM Finance & Administrative Services Strategy Map

Using the BSC as a Management System


The Balanced Scorecard
What is it?
Definition:
The Balanced Scorecard is a
management tool that provides
stakeholders with a comprehensive
measure of how the organization is
progressing towards the
achievement of its strategic goals.
The Balanced Scorecard
What is it?
The Balanced Scorecard:

 Balances financial and non-financial measures

 Balances short and long-term measures

 Balances performance drivers (leading indicators) with


outcome measures (lagging indicators)

 Should contain just enough data to give a complete picture


of organizational performance… and no more!

 Leads to strategic focus and organizational alignment.


The Balanced Scorecard
Why do it?
• To achieve strategic objectives.
• To provide quality with fewer resources.
• To eliminate non-value added efforts.
• To align customer priorities and
expectations with the customer.
• To track progress.
• To evaluate process changes.
• To continually improve.
• To increase accountability.
The Balanced Scorecard
Why do it?
It works!

In just 90 days, Sandia Labs was able to redirect $190,000


in savings by dropping initiatives that didn’t fit their
overall strategy.

“The BSC has forced our management team to focus


beyond financial measures… too often in the past we
would get sucked into short-term thinking.”

“The BSC dramatically improved our data analysis… we


don’t overreact nearly as much as we used to.”
The Balanced Scorecard
and The CSU
Campuses currently working on the
BSC
 San Luis Obispo
 Pomona
 San Jose
 San Marcos
 Sonoma
 Fullerton
 Long Beach
 Chico
 Northridge
 San Bernardino
 Chancellor's Office
The Strategy Focused
Organization
Mission – What we do

Vision – What we aspire to be

Strategies – How we accomplish


our goals

Measures – Indicators of our


progress
Environmental Scan

Strengths Weaknesses

Opportunities Threats

A Model for
Values
Strategic
Planning
Mission &
Vision

Strategic Issues

Strategic Priorities

Objectives, Initiatives, and Evaluation


The Strategy Focused
Organization
The Five Principles

1. Translate the strategy to


operational terms.

2. Align the organization to the


strategy.

Source: The Strategy Focused Organization, Norton & Kaplan


The Strategy Focused
Organization
The Five Principles (cont.)

3. Make strategy everyone’s job.

4. Make strategy a continual


process.

5. Mobilize change through


executive leadership
Source: The Strategy Focused Organization, Norton & Kaplan
The Balanced Scorecard
and The Big Picture
•Activity Based Costing
•Economic Value Added
•Forecasting
S trategic •Benchmarking
P lanning •Market Research
•Best Practices
M ission
•Six Sigma
and
•Statistical Process Control
V ision
•Reengineering
B alanced •ISO 9000
S corecard •Total Quality Management
•Empowerment
•Learning Organization
•Self-Directed Work Teams
•Change Management
Strategic Direction
Create Environment Strategic Performance Management
For Change System

Communicate Strategies
Define Objectives
Implement BSC

Balanced Scorecard
Measure Performance
Improve Processes

Evaluate and Adjust


Linking it all together…. Continuous Improvement
Redefine Initiatives
THE BALANCED SCORECARD

FINANCIAL/REGULATORY
CUSTOMER
To satisfy our constituents,
To achieve our vision,
what financial & regulatory
what customer needs must
objectives must
we serve?
we accomplish?

INTERNAL
To satisfy our customers and
stakeholders, in which business
processes must we excel?

LEARNING & GROWTH


To achieve our goals, how
must we learn, communicate
and grow?
Customer Perspective

To achieve our vision, what customer needs


must we serve?

Possible Performance Measures


o Customer Satisfaction (Average)
o Satisfaction Gap Analysis (Satisfaction vs.
Level of Importance)
o Satisfaction Distribution (% of each area scored)
Financial / Regulatory Perspective

To satisfy our constituents, what financial


and
regulatory objectives must we accomplish?
Possible Performance Measures
o Cost / Unit
o Unfunded Requirements or Projects
o Cost of Service
o Budget Projections and Targets
Internal Perspective

To satisfy our customers, in which business


processes must we excel?
Possible Performance Measures
o Cycle Time
o Completion Rate
o Workload and Employee Utilization
o Transactions per employee
o Errors or Rework
Learning and Growth

To achieve our goals and accomplish core activities,


how must we learn, communicate and work
together?
Possible Performance Measures
o Employee Satisfaction
o Retention and Turnover
o Training Hours and Resources
o Technology Investment
Why Measure?
• To determine how effectively and
efficiently the process or service satisfies
the customer.

• To identify improvement opportunities.

• To make decisions based on FACT and


DATA
Measurements Should:
• Translate customer expectations into goals.

• Evaluate the quality of processes.

• Track our improvement.

• Focus our efforts on our customers.

• Support our strategies.


Targets

“If you don’t know where you’re


going, you’re probably not gonna
get there.”
Forrest Gump
Targets
• Targets need to be set for all measures

• Should have a “solid basis”

• Give personnel something for which to aim

• If achieved will transform the organization

• Careful not to develop measures/targets in


a fragmented approach:

i.e. Asking people to increase customer satisfaction has to be backed


up with the knowledge, tools, and means to achieve that target.
Initiatives
Once measures and targets are
established, it is the responsibility of
management to determine HOW the
organization will achieve its goals.

Measures are used to determine the


effectiveness of strategic initiatives.
The Leadership Team
 Develops the division’s vision,
strategy and goals
 Develops organizational objectives
and targets
 Provides leadership, endorsement
and vision for the project
 Clears barriers to scorecard progress
The Core Team
 Drafts the strategy map and scorecard

 Works with employees to develop


measures supporting strategic
objectives

 Works with the Leadership Team to plan


and implement the Balanced Scorecard
in the FAS Division
Finance and Administrative Services

Strategy Map
Link it together….
DIVISION

CUSTOMER INTERNAL   LEARNING & 


 FINANCIAL
PROCESS GROWTH
DEPT.

Hum. Rscrs. Univ. Police Facilities


FUNCTION

Police Parking

Measure: Satisfaction Index
Current: 3.0       Target: 4.0
The Balanced Scorecard
as a Management System
BSC reviewed regularly to enhance
operational decision-making
 Success of initiatives assessed based on

DATA… not opinions


 Leading indicators evaluated to confirm

accuracy of assumptions
The Balanced Scorecard
as a Management System
The BSC is a “Living Document” that
requires regular revision of objectives,
measures and initiatives:
 How are we doing?

 Are we measuring the right things?

 What initiatives do we need to get us

where we want to go?


 Have our organizational goals changed?
Advantages to this Approach

 Simple to Use and Understand


 Based on Vision and Strategy
 Multidimensional
•Quantitative and Qualitative Measures
•Current and Future
 Provides Measurement of and Method
for Improving our Services
 Ties QI initiatives together
 Serves as a Communication Tool
Suggested Readings

Kaplan, Robert and Norton, Edward. The Balanced Scorecard.


Harvard Business Publishing, 1998

Kaplan, Robert and Norton, Edward. The Strategy-Focused Organization.


Harvard Business Publishing, 2001

Buckingham, Marcus and Coffman, Curt. First, Break All the Rules
The Gallup Organization, 1999

Brown, Mark. Keeping Score. Mark Graham Brown, 1996

http://www.afd.calpoly.edu/afd/Strategic_plan/

http://cqi.csusb.edu/
Source:
John Sanders
The California State University
(562) 951-4556
[email protected]
www.calstate.edu/qi
Thank You
www.drajayksingh.co
m

You might also like