Data Utilization: Using Baldrige and the Balanced Scorecard to Improve Performance Presented by: Dave Distel, Superintendent Deb Myers, Director of HR and Organizational Development Hamilton County ESC

Three Basic Types of Data ► Input  Customer information  Available resources ► Throughput  In-process measures ► Output  Outcome measures

Baldrige provides the Criteria by which the current performance levels of an organization can be determined and from which improvement strategies can be established. The Balanced Scorecard provides a framework within which an organization can design and deploy strategy and determine key in-process and outcome measures from which performance can be monitored.

What is Baldrige? ► Signed into law on August 20, 1987, Public Law established the Malcolm Baldrige National Quality Program primarily to revitalizing the U.S. economy during the 1990s. ► The Criteria for Performance Excellence are used as an assessment and improvement tool by countless organizations worldwide.

Seven Categories of Baldrige ► Leadership ► Strategic Planning ► Customer and Market Focus ► Measurement, Analysis, and Knowledge Management ► Process Management ► Business Results

What is the Balanced Scorecard? ► It is a strategic leadership and management tool, developed at the Harvard Business School, that has evolved from more than 20 years of research and use to be equally applicable and appropriate for any organization regardless of size or sector.

What is the Balanced Scorecard? ► It is a multidimensional tool organized around four distinct perspectives that balances  short and long-term objectives,  financial and non-financial measures,  lagging and leading measures, and  external and internal performance perspectives.

Four Perspectives of a Balanced Scorecard ► Learning and Growth ► Internal Process ► Customer ► Financial NOTE: As the diversity of organizations using the Balanced Scorecard has increased, the traditional Four Perspectives continue to be modified in name, order, number and definition.

Why Should We Use a BSC? Do you want to: ► Bring greater clarity and focus to strategic organizational priorities? ► More effectively allocate resources? ► Align the organization to strategy? ► Make strategy everyone’s job? ► Make strategy a continuous process? ► Mobilize improvement through strong, effective leadership throughout the organization?

Alignment ► Input ► Throughput ► Output Data Type ► Leadership ► Strategic Planning ► Customer and Market Focus ► Measurement, Analysis, and Knowledge Management ► Process Management ► Business Results BaldrigeBSC ► Strategy Map ► BSC Perspectives  Learning and Growth  Internal Process  Customer  Financial

Where Do We Start? Seven Key Steps 1. Understand the key influences and challenges for your organization 2. Assess your organizational strengths and opportunities for improvement 3. Construct a BSC format appropriate to your organization 4. Develop your organizational strategy 5. Determine both outcome measures and process indicators aligned to strategy 6. Develop a plan to deploy the strategy and monitor progress 7. Implement – Monitor – Review – Learn – Adjust

Step One ► Understand your organization’s  business environment,  relationships,  competitive/comparative environment,  strategic challenges, and  performance improvement system

Baldrige Organizational Profile

Step Two ► Identify your organization’s Strengths and Opportunities for Improvement in the areas of  Leadership  Strategic Planning  Customer Focus  Measurement, Analysis and Knowledge Management  Process Management  Results

Baldrige Criteria Categories

Step Three ► Balanced Scorecards are adaptable to any organization’s particular needs  Names, number, and order of perspectives  Specific objectives or strategic themes  Display of measures  Cause and effect relationship  Organizational level only or business unit scorecards

Step Four ► Develop organizational strategy aligned to mission, core values and vision  Long-Term  Short-Term  Initiatives  Action Plans

HCESC’s Balanced Scorecard Long-Term Strategy Map

HCESC’s Balanced Scorecard Strategic Plan

Step Five ► Select measures aligned to the four perspectives to:  Make the relationships among the objectives explicit so that they can be managed and validated  Identify core outcomes AND unique performance drivers customized to the organization  Illustrate a causal path from all the measures on the scorecard to the ultimate “effect” for your organization

HCESC Strategic Measures * Performance Indicators developed, as appropriate, at functional levels.

Step Six ► Determine whether to use only an organizational level BSC or to cascade it to functional levels within the organization ► Regardless, identify who is responsible for monitoring the measures and monitoring progress; how that will be accomplished; and when.

Step Seven ► Do It! ► Based on a 2002 review of BSC organizations, regardless of what kind of organization, each experienced similar phases of initial execution of a new strategy and/or management tool...

Phase I - Mobilization ► A three to six month period devoted to executive level momentum building by having conversations aimed at clarifying the vision and strategy

Phase II – Design and Rollout ► A six-month period in which the new strategy was rolled out at the top levels of the organization allowing for learning and adjustments to both strategy and measurement tools

Phase III – Sustainable Execution ► A 12 to 24-month period where the strategy was integrated into the day- to-day work and culture of the organization; and performance measurement became a natural part of “work”

Resources ► Books  The Balanced Scorecard: Translating Strategy into Action; Robert S. Kaplan and David P. Norton; Harvard Business School Press, 1996  The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment; Robert S. Kaplan and David P. Norton; Harvard Business School Press, 2001  Balanced Scorecard: Step-by-Step for Government and Nonprofit Agencies; Paul R. Niven; John Wiley & Sons, Inc., 2003 ► Online  Balanced Scorecard Collaborative – ► Subscription  Balanced Scorecard Report; Harvard Business School Publishing and Balanced Scorecard Collaborative ► Subscription Service Center P.O. Box 257 P.O. Box 257 Shrub Oak, NY Shrub Oak, NY ► Baldrige Materials  Criteria for Performance Excellence  Getting Started with the Baldrige Criteria for Performance Excellence  Are We Making Progress? all available through all available through