executing strategy with the balanced scorecard - · pdf file22/01/2009 · executing...

Executing Strategy with the Balanced Scorecard

Paul Niven, President, Senalosa Group

National Council LIVE WebinarJanuary 22, 2009

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Agenda

• Introduction to Paul

• Factors Leading to the Prominence of the Balanced Scorecard

• Balanced Scorecard Fundamentals

• Adapting the Balanced Scorecard for the Nonprofit Sector

• Strategy Maps

• Case Study

• Questions and Answers

Presentation

Download this presentation at www.thenationalcouncil.org/cs/recordings/handouts

http://www.thenationalcouncil.org/cs/recordings/handouts


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Paul Niven and the Balanced Scorecard• BSC Practitioner first, then consultant, and writer

• Led a BSC implementation with large firm in mid-90s (an early inductee into the BSC Hall of Fame)

• Have consulted with Bearing Point (Chicago) and CSC (San Diego)

• Formed The Senalosa Group in 2001

• Have written 3 books and many articles on the subject of Balanced Scorecard

• Speak at conferences and seminars around the world

• Work with clients in many different sectors

Translated into 15 languages,

Second edition released April 2008

Released April, 2005

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Balanced Scorecard Overview

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The Changing Landscape of Performance Management

• 80% of respondents reported making changes in their PM system during the last 3 years. For 33% the change was described as a “major overhaul” More than 50% of respondents indicated their company is currently changing its PM system. (From Strategic Finance Magazine)

• More than 50% of the Fortune 1000 have turned to the Balanced Scorecard. (Bain & Company study)

• Hackett reported in their 2002 Benchmarking study that 96% of the 2000 global companies surveyed either were using a BSC or planned to implement it

• In the public sector, close to 60% of respondents agree or strongly agree that using performance measures has increased efficiency. (GASB study)

The question is why???

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Three Challenges

Prominence of the Balanced

Scorecard

Difficulty Executing Strategy

Rise of Intangible

Assets

Over-reliance on Financial Measures

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Only 10% of organizations execute their

strategy

Barriers to Strategy Execution

Only 5% of the workforce

understands the strategy

Vision Barrier

Only 25% of managers have

incentives linked to strategy

People Barrier85% of executive teams spend less than one hour per month discussing

strategy

Management Barrier

60% of organizations don’t

link budgets to strategy

Resource Barrier

Chart adapted from material developed by Robert S. Kaplan and David P. Norton

The Strategy Story

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A Fifth Barrier

• There is no universally accepted way to describe and communicate strategy

• For strategy to be executed, it must be clearly described

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Balanced Scorecard

What do our financial stakeholders expect or

demand?

How do we align our intangible assets to improve our ability to

support our strategy?

Vision & Strategy

Financial

Employee Learning & Growth

At what business processes must we excel to drive value for customers?

Internal Process

Who are our target customers, what are their expectations, and what is our value proposition in

serving them?

Customer

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Who do we define as our customer? How do we create

value for our customer?

How do we align our intangible assets - people, systems, and

culture to execute our strategy?

Vision and Strategy

Customer

Employee Learning & Growth

Mission

To satisfy customers while meeting budgetary constraints, at what

business processes must we excel?

Internal Process

How do we add value for customers while controlling

costs?

Financial

Public & Nonprofit Balanced Scorecard Model

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Customer Perspective

CustomerObjectives"To achieve our

vision, how should we appear to our customers?"

Measures Targets Initiatives

Internal Business ProcessObjectives"To satisfy our

shareholders and customers, what business processes must we excel at?"


FinancialObjectives"To succeed

financially, how should we appear to our shareholders?"


Learning and GrowthObjectives"To achieve our

vision, how will we sustain our ability to change and improve?"


Visionand

Strategy

• Should answer three questions:

• Who are our customers?

• What do customers demand?

• What is our value proposition in serving them?

• Operational Excellence

• Product Leadership

• Customer Intimacy

• System Lock In

Customer

Financial

Internal Process Perspective













Visionand

Strategy

• Key processes we must excel at to drive value for customers

• Also focus on customer value proposition

• Normally contains the largest number of measures

Customer

Financial

Financial Perspective













Visionand

Strategy

• No BSC is complete without financial measures

• Represent enablers or constraints

• Must balance effectiveness with efficiency

Customer

Financial

Employee Learning & Growth Perspective













Visionand

Strategy

• Often overlooked

• Represent the “enablers” of the other three perspectives

• “Soft” measures can drive “hard” results

• Three areas of ‘capital’

Customer

Financial

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Strategy Maps

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Halifax

Truro

Sydney

Antigonish

Maps Get Us From “A” to “B”

Halifax

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Formation of a Strategy

Landmark 1

Successfully Executed Strategy

Landmark 2

Strategy is Also a New Destination

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Strategy Maps

A one-page, graphical representation of what you must do well to execute your strategy

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Food for the Hungry (U.S.)

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Strategy Maps

• Original Balanced Scorecard model didn’t include Strategy Maps

• Early adopters began prefacing measure discussions with objectives, and began linking them together

• A Strategy Map should “tell the story of your strategy”

• POWERFUL way to communicate what you need to do well to succeed

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To Learn More…• Please visit my website at www.senalosa.com

• Or, read more in any of my three books…

http://www.senalosa.com/

Case Study

Sharon Raggio, CEOColorado West Regional Mental Health Center

UM

Train staffDefine

recovery

Train clients and

community

Clientparticipation

Improved access Clinical

outcomes

Reduced unit cost

New markets/contracts

Customersatisfaction

Increaseproductivity

Monthly Run Charts (Corporate wide totals)

More Run Charts

Single Site Spreadsheet

Single Site Charts

Case Study

Jeff WalterCEO, Rushford Center

Rushford Balanced Scorecard Strategy Map

Build a Strong

Leadership Team

Build a strong

infrastructure for growth

Learning and GrowthDrive

continuous improvement

throughout our organization

Ensure effective, diverse

management

Push technology capabilities

Grow and diversify revenue

base

Ensure fiscal strength through sound financial management & control of cost

growth

Build our teams of high

caliber, committed clinicians

Provide clinicians with

evidence-based & best practice tools

Provide a seamless customer-

focused client experience

Build partnerships to promote integrated health & support

serviceswithin HHCC & outside

Rushford consumers prepared for healthy

living in recovery

Rushford &partners produce impact by

promoting awareness, prevention, treatment and

recovery

Rushford &partners produce impact by

promoting awareness, prevention, treatment

and recovery

Promote healthier communities

Financial Internal Operations Constituent Social Impact

Financial Perspective

Grow and diversify revenue base

Ensure fiscal strength through sound financial management

& control of cost growth

FY 09 Initiatives Measures Target Status Trend

Grow market share in profitable service lines

1. Expand commercial market penetration in addiction programs (AH)

Implement Referral Management Program 2/1/09

10 new referrals

Market Identity and PenetrationHow will we stay current in addressing community needs?

Constituent Rushford Consumers prepared for healthy living in

recovery

Rushford partners produce impact by promoting

awareness, prevention, treatment and recovery


Provide family-focused recovery services

2. Assessment of and plan for C & A service line (MB) Plan completed 4/1/09

Improve health status of clients with SPMI

3. On-site pharmacy at Paddock (CA/KU) Pharmacy opened 4/1/09

Compete successfully in State procurement of existing services

4. Redesign Adult Crisis Services (LD)5. MH Voc RFP w/Kuhn (LD) Successful RFP Bids 6/30/09

Service DeliveryHow will we ensure we provide the right service in the right setting to meet consumer needs?


Internal Operations

Deliver excellent customer service

6. Customer Service Training program at Silver St. (AH/OD)

External and Internal customer surveys

4.0 ratingsQ4

Internal Operations

Ensure excellent clinical quality

7. DMHAS co-occurring enhanced services designation (BS) Silver St. DMHAS designation 2/1/09

8. Trauma-informed services (BS) Assessment and Training Completed 6/30/09

Learning & Growth

Internal Operations

9. Six Sigma Coord. Of Care Project (LD) Service mapping 4/1/09

Quality and Service ExcellenceHow will we ensure an effective infrastructure is in place to drive clinical and service excellence?

Provide a seamless customer-focused client experience

Build our teams of high caliber, committed clinicians Provide clinicians with evidence-based & best practice tools

Drive continuous improvement throughout our organization

Provide a seamless customer-focused client experience

Internal Operations

Be recognized as a great place to work

10. Improved hiring/on-boarding process (WH) New hire survey 4.0 ratingQ4

11. Licensed nurse/clinician recruitment/retention strategy (WH/KU) Reduced agency staff usage <15%

Q4

12. Comprehensive communication/ recognition program Employee focus survey 4.0 rating

Q4

Learning & Growth

13. Establish & assess clinical caseload standards (KU) Assessment and action plan 6/30/09

Learning & Growth

Drive high performance/high quality culture

14. Leadership Development Program – Phase 1 (WH)

Phase 1 plan 10/1/08

Individual personal dev. plans 11/30/08

Individual assessment 6/30/09


PeopleHow will we ensure that we have the right people with the right knowledge and skills to drive

our continuous quality improvement?

Build our teams of high caliber, committed clinicians

Build a strong infrastructure for growth

Build a strong leadership team Ensure effective, diverse management

Financial Perspective Grow and diversify revenue

base

Ensure fiscal strength through sound financial management

& control of cost growth


Improving Operating Margin

15.Improved revenue cycle and efficiency (AC)

-Reduced bad debt expense6/30/09:

6.0%

-Reduced A/R days75 days

Ensure Long Term Financial Viability

16.Increase Cash on Hand (AC)Days of Cash on Hand

20 days

17.Improve commercial reimbursement (AC/) Higher rates; +$175,000

18.Reduce cost through e-automation (AC)Scanning project &

Time/Attendance program 6/30/09

Financial StrengthWhat are the financial objectives that will drive all other aspects of our strategy?

Thank You

Thank You for attending “Executing Strategy with the Balanced Scorecard”

Download the presentation at www.thenationalcouncil.org/cs/recordings/handouts

A recording of today’s webinar will be available at the same url in 48 hours.



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executing strategy with the balanced scorecard - · pdf file22/01/2009 · executing...

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