Overview of the Balanced Scorecard Concept ISE 468 ETM 568 Spring 2017 Dr. Joan Burtner Associate Professor and Chair, Department of Industrial Engineering and Industrial Management

Balanced Scorecard (BSC) Developed by Robert Kaplan and David Norton in the early 1990s Definition: A tool that translates an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system Source: Kaplan, R. and Norton, D. The Balanced Scorecard. (1996) Boston: Harvard Business School Press. Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard

Balanced Scorecard Benefits Concept: An organization’s strategies and their execution are important factors in performance improvement Potential benefits Increased financial returns A more market-oriented, customer-focused strategy Greater alignment between employees and company goals Improved collaboration Strong focus on strategy Accountability for performance at all levels of the organization Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard

Links Strategy and Performance in 4 Areas Learning and Growth Perspective Internal Process Perspective Customer Perspective Financial Perspective Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard

Basic Graphic of Original Concept Source: http://www.institute.nhs.uk/quality_and_service_improvement_tools/quality_and_service_improvement_tools/balanced_scorecard.html Accessed Feb. 28, 2013 Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard

Typical Graphic of Concept Source: http://balancedscorecard.org/portals/0/images/balancedscorecard.jpg Accessed Feb. 25, 2014 Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard

Typical BSC Measures in Healthcare Source: http://www.activestrategy.com/strategy_execution/example_balanced_scorecards.aspx Accessed Oct. 18, 2009 Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard

Value Stream Management for Lean Healthcare Original areas Learning and Growth Perspective Internal Process Perspective Customer Perspective Financial Perspective Oakview Hospital (Tapping, et al) Learning and Growth Perspective = Satisfaction Internal Process Perspective = Service Customer Perspective = Quality Financial Perspective = Finance Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard

Implementation of the Balanced Scorecard Value Stream Management for Lean Healthcare (2009) Authors: Don Tapping, Sue Kozlowski (CSSBB), Laura Archbold (RN, BSN,MBA), and Todd Sperl (MBB) Seven step implementation process Identify team Understand organizational strategy Determine levels for measurement Identify goals (targets) for each measure Create Balanced Scorecard Build Goal Card Monitor the Balanced Scorecard Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard

Value Stream Management (VSM) Perspective “The Balanced Scorecard is the starting point for Value Stream Management for the Assess phase. It is an evaluation of the current “state of facility health” and will be the driver for all Lean projects.” page 74 Value Stream Management for Lean Healthcare (2009) Authors: Don Tapping, Sue Kozlowski, Laura Archbold, and Todd Sperl Spring 2017 ISE 468 ETM 568 Dr. Burtner ~ Balanced Scorecard