All Posts Tagged With: "balanced scorecard"
Aligning with Strategies & Measures
The Veterans Affairs Cooperative Studies Program Clinical Research Pharmacy Coordinating Center (VACSP Center) won the Baldrige Award in 2009. It has four key strategic goals and 13 key performance indicators, which are listed on its balanced scorecard
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Data from a New Perspective
We have all seen more than our shares of charts and tables. Data in columns and rows. If we’re lucky, a trend chart. Numbers filling pages filling handouts filling binders.
That’s why it is always delightful to find a new way of presenting information, as Doug McCune has done with crime in San Francisco. He took real data, aggregated it geographically, and artistically rendered it as elevation. More crime mean higher elevation. You have to see the maps to understand their impact. Click here to see the hills and mountains of San Francisco created by larceny, narcotics, assault, vandalism, warrants, prostitution, vehicle theft, and robbery.
As McCune points out, the features are pretty consistent across all of the maps. It looks like the northeast center of the city easily has the highest crime rate across all types of crimes. The most dramatic map is the prostitution map with its twin peaks casting shadows over the city.
It made me think of how an elevation map could be used to show an organization’s data. For example, if you measure quality at different points in a process, you could map the process and use the quality measures to create elevation along the route. If you work for a utility, you could use outage data to create elevation maps that showed where most outages occur in the area you serve. Sure, you already have the data and everybody knows that bigger numbers…
9Jun2010 | Steve George | 0 comments | ContinuedHow to Develop a Balanced Scorecard
Organizations that want to get a better handle on how they are doing in the areas most important to their success often decide to develop a Balanced Scorecard. Here are four typical stages of development.
Stage 1: Enlightenment. Senior executives need to believe that the path to solid, long-term success requires knowledge of: (a) customer requirements and how to meet them; (b) employee requirements in order to reduce turnover, improve processes, and provide better service; and (c) operational processes and costs to discover how to become faster and more flexible. With this realization, leaders seek measurements that will tell them how the company is doing in each of these areas. Better yet, they want a measurement system that shows the connection between these vital areas. They are enlightened. The need for a Balanced Scorecard grows.
Stage 2: Identification. The organization initiates a system-wide effort to identify existing measures and to create needed measures where none exist. It begins to track performance on these measures, to report progress to employees, and to reward them for meeting performance goals.
Stage 3: Refinement. The reaction to the measurements, progress, reports, and rewards suggests that people respond to what is measured. This leads to greater refinement of the measures. For example, since daily performance measures receive more attention than annual customer surveys, leadership may decide it should have more frequent customer measures and establish interim performance indicators tied to the less frequent…
11May2010 | Steve George | 0 comments | ContinuedCommunicating Performance on Key Measures
Wainwright Industries manages by fact. One visit to Mission Control and you believe it.
Wainwright dedicates one conference room at its headquarters in St. Peters, Missouri, to displaying the information and analysis that drives its award-winning continuous improvement efforts. It calls the room Mission Control.
The walls display a plethora of charts and graphs, including trends for quality and performance indicators and, for each customer, monthly satisfaction index scores, trends for quality measures, stretch targets for exceeding customer expectations, and weekly customer feedback reports.
Wainwright developed five key strategic indicator categories from its strategic business planning process: safety, internal and external customer satisfaction, Six Sigma quality, and business performance. “We focus on safety first and making money last,” says plant manager Mike Simms. And the focus has paid off. “We went from $100,000 in Workers Compensation claims in 1991 to zero in 1994,” Simms said, “and our number of recordable accidents dropped from 66 to 12.” At the same time, putting business performance last did not mean it suffered. Over the same time period, Wainwright’s gross profit as a percent of sales jumped from 8.7% to 14.2%.
Mission Control displays key quality indicators for each of the five categories, all of which link to the company’s mission, vision, values, and objectives. The Mission Control indicators are recordable accidents, associate suggestion rate, internal and external customer satisfaction, internal parts per million, sales, and net income. Trends are updated and reviewed…
23Mar2010 | Steve George | 0 comments | ContinuedThe Best Way to Measure Company Performance
OK, I stole the title. John Hagel III, John Seely Brown, and Lang Davison posted on this very topic on the Harvard Business Review today. And then they spent the entire time dissing return on equity and touting return on assets in its place.
Hello? I understand the whole “business-exists-to-make-a-profit-and-nothing-else-really-matters” position, but are ROA or ROE really the best ways to measure company performance? I thought the balanced scorecard came along because our obsession with financial performance wasn’t working. Apparently, a lot of folks can’t stop obsessing.
Case in point: HuffPost Business. If you visited its home page today you would find articles on Goldman Sachs, predatory lending, Hank Paulson, the Treasury Department, AIG’s bonus cutbacks, robber barons, financial crisis, financial innovation, bank bailouts, Federal Reserve, credit card blacklists, financial reform, economic oracles, Citigroup, China, more on the Federal Reserve, home sales, jobs bill, dollar vs. euro, Greece bailout, still more Federal Reserve, etc. About the only articles on the home page that weren’t about money were about health care and fast cars.
It shouldn’t be HuffPost Business; it should be HuffPost Finance. And they’re far from alone. Pick any random site that purports to tell you what’s happening in the business world and you’ll find that 90% of their articles revolve around finance. The same is true for most business magazines.
This is how the Baldrige Criteria, which define performance excellence, measures company performance:
- What are your product performance…
A Healthcare Role Model
I don’t know if the Providence Regional Medical Center in Everett, Washington, has thought about applying for the Baldrige Award, but it should. It’s already a role model for high-performing healthcare organizations.
A recent article in BusinessWeek lists its world-class attributes (“Hospitals: Radical Cost Surgery,” Catherine Arnst, January 7, 2010):
- Uses scorecards throughout the hospital to measure quality and efficiency
- Acts on innovative ideas from staff (a nursing team’s idea to check on patients every two hours to see if they need help moving around their rooms reduced falls by 25%)
- Places the day-to-day care of most inpatients in the hands of hospitalists (the program reduced length of stay, infections, and surgical complications)
- Created “single stay” wards where, after heart surgery, cardiac patients remain in one room throughout their recovery (patient satisfaction soared and average length of stay dropped by more than a day)
- Breaks even on Medicare patients while almost 60% of U.S. hospitals lose 20 cents on the dollar
- Offers financial training to 800 independent doctors affiliated with Providence to get them thinking about cost efficiencies
- Established an independent panel to investigate medical mistakes, share its finding with patients, and voluntarily offer a financial reward if warranted (Providence has two malpractice suits pending compared to 12 to 14 on average at other hospitals of similar size)
- Provides $16 million in healthcare each year that goes unpaid
- Wins awards: Top 100 Hospital and Distinguished Hospital for Clinical Excellence three years in a row and ranked #1…
Increasing Employee Satisfaction in a Time of Decline
Employee satisfaction appears on a lot of companies’ balanced scorecards. Most of the ones I’ve seen have annual goals to increase this number by one percent or less, which doesn’t seem like much of a challenge until you realize that employee satisfaction in the U.S. has been spiraling downward for twenty years.
The Conference Board released a report today on a survey of 5,000 U.S. households conducted by TNS. Only 45% of those surveyed say they are satisfied with their jobs, down from 61.1% in 1987. You can read a summary of the report here.
According to the summary, “no age or income group is immune. In fact, the youngest cohort of employees (those currently under age 25) expresses the highest level of dissatisfaction ever recorded by the survey for that age group” (64%). Only 51% find their jobs interesting, 43% feel secure in their jobs, and 51% are satisfied with their boss.
Why is this important? Lynn Franco, one of the report’s authors, says, “What’s really disturbing about growing job dissatisfaction is the way it can play into the competitive nature of the U.S. workforce down the road and on the growth of the U.S. economy—all in a negative way.” (“Don’t love your job? You’re not alone,” Jeannine Aversa, Associated Press, January 5, 2010)
Jobs are tight, pay is stagnant, out-of-pocket healthcare costs are skyrocketing, and fewer and fewer workers consider their jobs interesting. It’s no wonder employees…
5Jan2010 | Steve George | 1 comment | Continued
