The Library Balanced Scorecard: The Results Please! Joe Matthews American Library Association June 2007

The Challenge There is no framework or predictive model for a library and the services it provides. No understanding of cause-and-effect

The Balanced Scorecard Is a strategic management tool that assists a library in aligning all of its activities towards meeting the needs of its customers.

The Balanced Scorecard The idea of the scorecard is to describe the essential ingredients of organizational success.

Who is Using the Scorecard? Companies Federal government State and local government Non-profit agencies A few libraries

Translating Vision and Strategy: Four Perspectives

The Library Balanced Scorecard Customer Perspective Financial Perspective Internal Processes Learning & Growth Service attributes & satisfaction Accountability & value Efficiency & productivity Staff skills, technology & climate for action Information Resources Perspective Collection (physical & electronic)

Why Adopt a Balanced Scorecard? Change – Formulate and communicate a new strategy for a more competitive environment Alignment – Each staff member’s actions are guide by the strategies and goals of the library Focus – Provides management with a tool for monitoring progress towards achieving the library's vision

Starting Point Mission Statement (the present) Values Statement The Vision (the future) Service responses (PLA Planning for Results) The gap between now and the future leads to a plan of action to achieve the vision. How we get to the future involves strategies.

The Failure of Strategy "You can either take action or wait for a miracle to happen. Miracles are great but they are unpredictable." Peter Drucker

Barriers to Strategic Implementation 9 of 10 companies fail to execute strategy The Vision Barrier Only 5% of staff members understands the strategy The Management Barrier 85% of top management teams spend less than 1 hour per month discussing strategy The People Barrier Only 25% of managers have incentives linked to strategy The Resource Barrier 60% of organizations don’t link budgets to strategy

is largely about accomplishing more with less, and that requires focus! Strategy

Types of Strategies Customer Intimacy Operational Excellence Innovative Services Creating a sustainable differentiated value proposition is the heart of strategy

Customer Focused Strategies Product/Service Attributes Quality, Availability, Selection, Functionality, Price Relationship Service, Partnering Image Brand

Brands Are … A name A logo Your beliefs Most importantly, the experiences you provide to your customers

Do You Know Your Customers? Customers Segment by Demographics Segment by Use Market penetration “Lost” Customers Non-Customers Do You Listen to the Voice of the Customer?

Internal Focused Strategies Operational Efficiency Supplier relationships, produce products & services, distribute to customers, manage risk “Are we doings things right?” Customer Relationships Provide desired services/products, provide convenient processes, provide customized services

Innovation Focused Strategies Process innovation, manage capital projects

For Most Public Libraries Strategy = Tradition! Full Service Library (& vary size) vs. Specific Function Libraries

Strategies translate what customers want into what libraries must deliver!

Strategies answer the question: “ How is the library going to deliver services?”

Strategy Is A Hypothesis About What Drives Organizational Success Mission Vision Customer Requirements Strategy Operations Results or Outcomes Identify the key performance drivers that lead to successful strategy execution

Sample Strategy Map Financial Perspective Readiness Perspective Internal Processes Perspective Information Resources Perspective Customer Perspective Funding Skilled Staff Productivity Improvements Right Collection Satisfaction

Interrelationships Strategy maps tell where we are going and why Scorecards explain how well we are doing and provide guidance for what can be next Budgets tell how we allocate resources

Performance Measures Problems Too many measures and no focus Entrenched or no measurement systems Unjustified trust in informal feedback systems Fuzzy objectives

Performance Measures Should be a combination of: Leading and lagging measures Financial & non-financial measures Input, process, output and outcome measures Internal & external measures

Select Measures that reflect on the strategies chosen by the library

Scorecard Measures 3-4 measures per perspective Simple rather than complex measures Automated or existing measures New measures Rely on staff counts as a last resort

Thus, the scorecard assists the library in selecting the “right data” – data that reflects the library’s strategies.

Targets The 80% rule SWAG targets Stretch targets (BHAG) Organizations that use targets improve performance by an average of 16%

Select Initiatives Have an impact on achieving your strategies Identify responsible individual, implementation schedule, resources required, budgetary implications Look for ways to eliminate it, simplify it, or automate it

Knowing the score is not the objective – changing it is. C.J. McNair

Sustaining the Scorecard Management’s Focus – use the scorecard to drive meeting agendas Develop a “culture of assessment” Cascade the scorecard Communicate your scorecard

Use of Library Scorecards Early Adopters Early Majority Late Majority Laggards

Scorecard = Change

Remember! The Library Balanced Scorecard is about management and change first ; the use of performance measures is second.

Resources For more information about scorecards, visit Joseph R. Matthews. Scorecard for Results: A Guide for Developing A Library Balanced Scorecard. Carlsbad, CA: Carlsbad City Library, May Joseph R. Matthews. Measuring for Results: The Dimensions of Public Library Effectiveness. Westport, CN: Libraries Unlimited, 2004.

Questions?