balanced scorecards for colleges and universities: development and deployment

11

Balanced Scorecards for Balanced Scorecards for Colleges and Colleges and Universities: Universities:

Development and Development and DeploymentDeployment

22

Balanced ScorecardsBalanced Scorecards

Jan W. Lyddon, Ph.D.Jan W. Lyddon, Ph.D.Executive Vice PresidentExecutive Vice President

San Jacinto CollegeSan Jacinto College

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What is a Balanced What is a Balanced

Scorecard ?Scorecard ? ► A measurement systemA measurement system

► Strategic management system, Strategic management system, and and

►Communication toolCommunication tool

4

Why A Balanced Scorecard?Why A Balanced Scorecard?►Increased requirements for Increased requirements for

accountabilityaccountability ►Keep our eye on what’s most Keep our eye on what’s most

important important ►Focus especially on major Focus especially on major

outcomesoutcomes

5

Primary UsesPrimary Uses

►Monitoring key itemsMonitoring key items►Communication of priority Communication of priority

areas for actionareas for action►Myth busting – real resultsMyth busting – real results

6

What Is It? What Is It? Visual display Visual display

ofof

the most important information needed to the most important information needed to achieve one or more objectivesachieve one or more objectives

whichwhich

fits entirely on a single screen or sheetfits entirely on a single screen or sheetso it can beso it can be

monitored at a glance.monitored at a glance.Stephen Few, 2006Stephen Few, 2006

7

8

9

What is on it?What is on it?►Performance Indicators: Performance Indicators:

From strategic or other planFrom strategic or other plan Of key decisions or objectivesOf key decisions or objectives Usually highly aggregated dataUsually highly aggregated data Maximum 15 – 20Maximum 15 – 20 Called Key Performance Indicators (KPIs)Called Key Performance Indicators (KPIs)

10

Kinds of IndicatorsKinds of Indicators►Indicators should be: Indicators should be:

A balance of A balance of perspectivesperspectives ►Student perspectives, process Student perspectives, process

perspectives, learning perspectives are perspectives, learning perspectives are examples examples

►Also called categoriesAlso called categories

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Kinds of Indicators, cont’dKinds of Indicators, cont’d► Indicators should be: Indicators should be:

A balance of leading and lagging A balance of leading and lagging indicators indicators

►Inputs as well as outputs or outcomes Inputs as well as outputs or outcomes measuresmeasures

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Who uses it?Who uses it?► Key decision makersKey decision makers

Monitor Monitor regularlyregularly

► Key policy makers Key policy makers To make informed decisionsTo make informed decisions To communicate with external stakeholdersTo communicate with external stakeholders

► Internal stakeholders Internal stakeholders To help align their actions with overall purposesTo help align their actions with overall purposes

13

Components of the IndicatorsComponents of the Indicators

►The actual performance, expressed in The actual performance, expressed in numerical termsnumerical terms

►The target, benchmark, or objectiveThe target, benchmark, or objective►The difference between actual The difference between actual

performance and the objectiveperformance and the objective Signal values indicate how far from the Signal values indicate how far from the

objective or target (“best, middle, worst”)objective or target (“best, middle, worst”)

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Categories for IndicatorsCategories for Indicators►Four or five categories: Four or five categories:

Strategic plan goals, orStrategic plan goals, or Perspectives, such as: Perspectives, such as:

►StakeholderStakeholder►ProcessesProcesses►Learning and innovationLearning and innovation►FinancialFinancial

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Examples of IndicatorsExamples of Indicators► Stakeholder: Stakeholder:

Student satisfactionStudent satisfaction Student retention and graduation ratesStudent retention and graduation rates Community supportCommunity support

► Processes: Processes: Continuous improvement initiativesContinuous improvement initiatives Time required to complete DETime required to complete DE Efficiency measures (e.g., percentage of seats Efficiency measures (e.g., percentage of seats

filled)filled)

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Examples of Indicators, Examples of Indicators, Cont’dCont’d

►Learning and innovation: Learning and innovation: Professional development impactsProfessional development impacts New programsNew programs

►Resources:Resources: EnrollmentEnrollment DonationsDonations Budget balanceBudget balance

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Date: 5/1/2006Sample Community College - Balanced Scorecard

Goal Measure/Index Title Above Targ

et

At Targ

et

Below T

arget

Far B

elow T

arget

Score

or L

evel

Target

Last u

pdate

I Retention rate (fall to winter return rate) X 71.7% 68.0% Fall 2005I Persistence rate (fall to fall return rate) X 45.1% 40.0% Fall 2005I Graduation rate (% of 1st time full time graduating 3 years later) X 13.0% 18.0% Fall 2005I Transfer rate (% of new students who have transferred 3 years later) X 32.0% 30.0% Fall 2005I New students X 1,626 1,550 Fall 2005I % share from Level I & II high schools X 21.1% 32% Fall 2005I Dual enrolled high school students X 340 325 3/15/2006I Headcount X 5,915 5,817 4/27/2006I Student Credit Hours X 45,670 45,977 4/27/2006II Student satisfaction - academics (satisfaction on a 4.0 scale) X 3.05 3.25 2005-06II Student satisfaction - services (satisfaction on a 4.0 scale) X 2.98 3.25 2005-06II Employer satisfaction X 90.3% 93% 2004-05II Financial aid participation rate (% of first time full timers receiving any form of financial aid) X 71% 72% 2005-06II Tuition discounted with financial aid X 79.1% 80% 2004-05II Alumni satisfaction X 88% 80% 2005-06II Employee turnover X 0.25% 0.08% 3rd qtr 05-06III Enrollment of Students of Color X 8.9% 8% 1/2/2006III Employees of Color X 9.4% 8% Fall 2005III CIP enrollment rate X 19.1% 20% 2004-05III Student learning - multiculturalism X 89.8% 83.57% 2004-05III Student learning - international X 82.3% 87.03% 2004-05IV Community supportIV Action projects to improve community supportV Budget balance (% of tuition & fees revenue compared to target) X -0.5% 5.0% 3rd qtr 05-06V Private gifts (dollar value of donations during the quarter) X 138,086$ 80,000$ 3rd qtr 05-06V Grant funds received (dollar value of the funds received in the quarter) X 80,000$ 75,000$ 3rd qtr 05-06V Revenue from employer training (revenue received during the quarter) X 24% 25% 3rd qtr 05-06V Facilities Condition Index (ratio of deferred maintenance to building value) X 4.3 5.0 2005-06V IT systems response (Ratio of tickets open to completed) X 0.93 1.0 May-06

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Development Development ProcessProcess

Steps in Building Your Steps in Building Your Balanced ScorecardBalanced Scorecard

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Development ProcessDevelopment Process

►Identify project partners: Identify project partners: Project championProject championContent providerContent providerTechnology supportTechnology support

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Development ProcessDevelopment Process►Identify Key Performance Identify Key Performance

Indicators (KPIs)Indicators (KPIs) 15 – 20 maximum15 – 20 maximum

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Development ProcessDevelopment Process►Work with process stakeholdersWork with process stakeholders

Refine definitions of dataRefine definitions of data Develop methods of display and Develop methods of display and

updateupdate Ensure their understandingEnsure their understanding

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Development ProcessDevelopment Process►Set benchmarks, targets or signal Set benchmarks, targets or signal

valuesvalues Comparisons with other institutionsComparisons with other institutions Comparisons with past performanceComparisons with past performance Comparisons with goalsComparisons with goals

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Development ProcessDevelopment Process►Signal ValuesSignal Values

Three levels – Three levels – ►Best Best ►MiddleMiddle►Worst Worst

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Signal Values – Example 1Signal Values – Example 1

Fall Headcount

5,700

5,800

5,900

6,000

6,100

6,200

6,300

6,400

6,500

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Actual

Best

Middle

Worst

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Signal Values – Example 2Signal Values – Example 2

Average Semesters to Complete DE

0

1

2

3

4

5

6

7

8

1997 1998 1999 2000 2001 2002 2003 2004 2005 2006

Actual

Best

Middle

Worst

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Establishing Signal ValuesEstablishing Signal Values►Base them on: Base them on:

Institutional past performanceInstitutional past performance Institutional goalsInstitutional goals Comparisons with other Comparisons with other

organizationsorganizations

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Development ProcessDevelopment Process►Design the display and delivery Design the display and delivery

mechanismmechanism One screen or one pageOne screen or one page Avoid clutterAvoid clutter Provide detail by using hyperlinksProvide detail by using hyperlinks Decide who will have accessDecide who will have access

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Development ProcessDevelopment Process►Hyperlinks example: Hyperlinks example:

KPI = overall student KPI = overall student satisfactionsatisfaction►Detail = student satisfaction Detail = student satisfaction with with academics academics servicesservices

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Hyperlinks in ExcelHyperlinks in ExcelDate: 5/1/2006Sample Community College - Balanced Scorecard

Goal Measure/Index Title Above Targ

et

At Targ

et

Below T

arget

Far B

elow T

arget

Score

or L

evel

Target

Last u

pdate

I Overall Student Satisfaction X 3.01 3.25 Fall 2006

Student Satisfaction Trends

98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06Instruction 3.07 3.14 3.15 3.11 3.16 3.17 3.03 3.05Services 2.95 3.01 2.95 3.03 2.90 2.96 3.03 2.98Best 3.25 3.25 3.25 3.25 3.25 3.25 3.25 3.25Middle 3.15 3.15 3.15 3.15 3.15 3.15 3.15 3.15Worst 3.10 3.10 3.10 3.10 3.10 3.10 3.10 3.10

Student Satisfaction

2.70

2.80

2.90

3.00

3.10

3.20

3.30

98-99 99-00 00-01 01-02 02-03 03-04 04-05 05-06

Instruction

Services

Best

Middle

Worst

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Development ProcessDevelopment Process►Usage and updatesUsage and updates

Project champion should monitor Project champion should monitor frequentlyfrequently

►Other key decision makers should monitor alsoOther key decision makers should monitor also►Inform others of how often the data changeInform others of how often the data change

Who should accessWho should access►Wide-spread Wide-spread few users few users►Help with “fear factor”Help with “fear factor”

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Benefits of a ScorecardBenefits of a Scorecard►Useful in guiding strategic plan Useful in guiding strategic plan

development: development: One college used its scorecard data One college used its scorecard data

to identify areas where it was to identify areas where it was consistently below targets. consistently below targets.

The Board identified five strategic The Board identified five strategic goals for the new strategic plan. goals for the new strategic plan.

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Benefits of a Scorecard, Benefits of a Scorecard, cont’dcont’d

►Increased internal alignment: Increased internal alignment: Visible targets and performance Visible targets and performance

informs operational unit and informs operational unit and individual plansindividual plans

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Increased AlignmentIncreased Alignment

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Benefits of a Scorecard, Benefits of a Scorecard, cont’dcont’d

►Establishes a culture of Establishes a culture of evidence at the collegeevidence at the college

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Next StepsNext Steps►Evaluate and improve some of the Evaluate and improve some of the

measures, such as those that:measures, such as those that:►Are not a valid measure of what is Are not a valid measure of what is

being donebeing done►Not possible to measure often enough Not possible to measure often enough

or difficult to measureor difficult to measure►Benchmarks with better measures are Benchmarks with better measures are

availableavailable

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Next StepsNext Steps► Evaluate and improve some of the measuresEvaluate and improve some of the measures

Develop leading indicators: Develop leading indicators: ►““Measures that indicate progress Measures that indicate progress

against a process or behavior. These against a process or behavior. These measures are helpful in predicting the measures are helpful in predicting the future outcome of an objective.”future outcome of an objective.”

Balanced Scorecard CollaborativeBalanced Scorecard Collaborative

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Next StepsNext Steps►Review the signal values: Review the signal values:

Develop more robust targetsDevelop more robust targets►Achieving the Dream databaseAchieving the Dream database►National CC Benchmark ProjectNational CC Benchmark Project►IPEDS Peer Analysis SystemIPEDS Peer Analysis System►State dataState data►Other professional sourcesOther professional sources

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Next StepsNext Steps► Increase alignment of departmental or Increase alignment of departmental or

unit data with overall performance unit data with overall performance indicatorsindicators

►Develop cascading scorecardsDevelop cascading scorecards

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Lessons LearnedLessons Learned►Monitor regularlyMonitor regularly

Presidential commitment is crucialPresidential commitment is crucial

►Be sure measures are balancedBe sure measures are balanced►Align the measures with the planAlign the measures with the plan►Keep the scorecard display Keep the scorecard display

straightforward (“Keep It Simple & straightforward (“Keep It Simple & Straightforward – KISS)Straightforward – KISS)

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Lessons LearnedLessons Learned►What is measured gets noticedWhat is measured gets noticed►What is noticed gets acted onWhat is noticed gets acted on►What is acted on gets improvedWhat is acted on gets improved

Dee W. Hook presentationDee W. Hook presentation

Phenomenon of MeasurementPhenomenon of Measurement

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Want to know more? Want to know more? ► Contact me: Contact me:

Jan W. Lyddon, Ph.D.Jan W. Lyddon, Ph.D.► Jan.lyddon@sjcd.eduJan.lyddon@sjcd.edu

► Read:Read: Few, Stephen. 2006. Few, Stephen. 2006. Information Dashboard Design: The Effective Visual Information Dashboard Design: The Effective Visual

Communication of Data.Communication of Data. Sabastopol, CA: O’Reilly Media, Inc. Sabastopol, CA: O’Reilly Media, Inc.

Kaplan, Robert S. & David P. Norton. 1996. Kaplan, Robert S. & David P. Norton. 1996. The Balanced Scorecard: The Balanced Scorecard: Translating Strategy Into Action.Translating Strategy Into Action. Boston: Harvard Business School Press. Boston: Harvard Business School Press.

Niven, Paul R. 2003. Niven, Paul R. 2003. Balanced Scorecard Step-by-Step for Government Balanced Scorecard Step-by-Step for Government and Nonprofit Agencies. and Nonprofit Agencies. Hoboken, NJ: John Wiley & Sons, IncHoboken, NJ: John Wiley & Sons, Inc..