1. August 15, 2005 © Campus Strategies 1 Measurement: Linking Budgeting to Planning MSU Planning/Budgeting/ Measurement Retreat August 15, 2005 Larry Goldstein President, Campus Strategies

2. August 15, 2005 © Campus Strategies 2 Agenda Performance management overview Importance of metrics Types of metrics How to use metrics Questions, comments, and reactions

3. August 15, 2005 © Campus Strategies 3 Performance Management Applying strategy, methodologies, and processes Managing performance of organization and business network Leveraging resources to achieve –Common set of goals and objectives… Adapted from Paul Niven’s “Balanced Scorecard for Government and Nonprofit Agencies”

4. August 15, 2005 © Campus Strategies 4 Performance Management (contd.) Unique to an institution Focuses on results Action orientation Based on measurable facts (i.e., data)

5. August 15, 2005 © Campus Strategies 5 Metrics Matter Demonstrate efficient / effective operations Operating within available resources Increased calls for accountability to various stakeholders –State government –Federal government –Students / Parents Align resources with priorities

6. August 15, 2005 © Campus Strategies 6 What Metrics Can Do Bring clarity to vision Focus attention on strategy as opposed to short-term operational considerations Avoid resource allocation decisions focused solely on short-term budget needs / issues Highlight strategies to ensure incentives are appropriate

7. August 15, 2005 © Campus Strategies 7 Why Metrics Are Not Used Tendency to focus on projects rather than big picture Concern about scrutiny of “pet” initiatives Historical lack of accountability or penalty for poor performance Vulnerability to attack and misinterpretation if not done effectively or misused…

8. August 15, 2005 © Campus Strategies 8 Why Metrics Are Not Used (contd.) No executive champion Measurement is difficult Most common measures from for-profit sector don’t fit higher education Some activities not susceptible to routine quantification

9. August 15, 2005 © Campus Strategies 9 When Measurement is Done Well Enhances communication about strategy Better focus / alignment of activities with strategies Improves ability to assess organizational performance / progress toward mission Puts focus on priorities; improves resource allocation decisions Enables employees to self-assess performance

10. August 15, 2005 © Campus Strategies 10 Operational Measures External Internal Learning and Growth Financial… Adapted from Paul Niven’s “Balanced Scorecard for Government and Nonprofit Agencies”

11. August 15, 2005 © Campus Strategies 11 Illustration Financial measures –Assessing overall financial health? Adequacy of resources to support mission? Living within available resources? Are assets / debt managed effectively? Are resource decisions driven by mission?

12. August 15, 2005 © Campus Strategies 12 Mission / Strategic Measures Longer term and outcome focused Support organizational vision Define organizational direction Can be used to evaluate programs Support resource allocation Adapted from Paul Niven’s “Balanced Scorecard for Government and Nonprofit Agencies”

13. August 15, 2005 © Campus Strategies 13 Mission Measures Assess effectiveness of mission-based outcomes Unique to each institution based on its specific mission / vision When mission is not measurable –Establish goals representative of mission accomplishment and measure those

14. August 15, 2005 © Campus Strategies 14 How to Use Metrics Link budgets to plans Use for comparison to peers / aspirants Use for longitudinal analysis Effect mid-course corrections – take action Report / discuss with management, internal stakeholders, and interested external constituents

15. August 15, 2005 © Campus Strategies 15 Measurement: Linking Budgeting to Planning Questions, Comments, and Reactions Larry.Goldstein@Campus-Strategies.com 540.942.9146