Some introductory slides from my workshops

1. Balanced Scorecard for
Performance Management
Some introductory slides
Ian J Seath

2. Balanced Scorecard
 “The Balanced Scorecard (BS) provides
managers with the instrumentation they need to
navigate to future competitive success.”
Kaplan and Norton
 “Wise executives know that their company must
develop the capabilities which it will need to
prosper in the future. But, doing so will produce
no profits in the current year, only costs.”
Olve, Roy & Wetter
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3. Performance Management
 Involving people in the use of quantified
information to direct/handle the activities
within the organisation to achieve higher
levels of performance
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4. Business Planning
 Business Planning is the process of ensuring
that the organisation knows what it is trying to
achieve; understands what activities are
necessary to achieve it; and can set it down
in a manageable programme of actions that
deliver its desired outcomes within its
available resources.
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5. Typical Problems
 Mission Statements are unclear and don’t “come off the
wall”
 Vision and strategy are weak, or unclear
 Planning is done with inadequate data and analysis
 Daily activity gets in the way of working on “breakthrough
plans”
 Progress is not reviewed & plans stay “in the bottom
drawer”, so improvements don’t happen
 And…
 There is a whole load of confusing jargon!
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6. Let’s be clear…
 A Balanced Scorecard (BS) is a performance
management approach, not a performance
measurement approach
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7. Objectives
Mission
Measures
Targets
Vision
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8. Objectives
Mission
Measures
Targets
Vision
Projects Processes
Step 1 Step 2
Step 3 Step 4
Step 5
Plans
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Deliver
tomorrow
Deliver
today

9. Objectives
Mission
Measures
Targets
Vision
Technology, Systems, Facilities, Infrastructure
People:
Leadership, Capability
Projects Processes
Step 1 Step 2
Step 3 Step 4
Step 5
Plans
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10. Financial
perspective
Customer
perspective
Process
perspective
Learning &
Growth
perspective
Objectives
Mission
Measures
Targets
Vision
Technology, Systems, Facilities, Infrastructure
People:
Leadership, Capability
Projects Processes
Step 1 Step 2
Step 3 Step 4
Step 5
Plans
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11. 11
Generic Balanced Scorecard
Financial
perspective
Customer
perspective
Process
perspective
Learning &
Growth
perspective
Vision &
Strategy
How should
we look to our
Shareholders?
How should
we look to our
Customers?
How should
we develop
our capability
to improve?
What processes
must we excel
at?
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12. “Balanced” means…
 Long-term and short-term view
 Financial and non-financial
 Leading and lagging indicators
 Internal and external perspectives
 Objective and subjective measures
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Objectives Measures Targets Plans
Strategy Action

13. Enablers and Results
13
Financial Customers
Innovation
and
Learning
Internal
Business
Processes
Vision
Results
Enablers
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14. Strategy Map - example
14
Improve revenues & profitability by understanding
customer needs and differentiating ourselves accordingly
Financial
Customer
Process
Learning
ROI
Growth
Revenue
Growth
Margin
Improvement
Delight the
Consumer
Win-Win
Partner Relations
New
Products &
Services
Best in Class
Delivery
On Spec
On Time
Leadership
Skills
New
Technology
Employee
Alignment
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15. Public Sector Example
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Health & Social Care
Outcomes
What outcomes do we
have to deliver to
patients, carers and the
public?
Organisational
Capability
What do we have to do to
develop the
capabilities of the
organisation?
Satisfied Government
What do we have to do to
satisfy our Government
Stakeholders and those
who fund us?
Satisfied Delivery
Partners
What do we have to do to
satisfy our delivery partners
& customers?
Business Processes
At what processes
must we excel?

16. Private Sector Example – Financial perspective
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17. Private Sector Example – Financial perspective
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18. Public Sector Example – Stakeholder
perspective
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19. Identifying Key Processes
 The BS challenges you to identify the
processes at which you must excel
 These will (usually) be external-facing,
customer-delivery processes; e.g.
 Design services
 Promote services
 Deliver services
 Provide post-delivery support
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20. Objectives
Mission
Measures
Targets
Vision
Technology, Systems, Facilities, Infrastructure
People:
Leadership, Capability
Projects Processes
Step 1 Step 2
Step 3 Step 4
Step 5
Plans
Financial
perspective
Customer
perspective
Process
perspective
Learning &
Growth
perspective
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21. Two types of measurement (metrics)
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 Strategic Measures;
e.g.:
 Profitability/ROI
 Customer Satisfaction
 Customer/Staff Retention
 Employee Skill Levels
 Are lagging indicators and
tend to be “generic” for many
organisations
 Performance Drivers;
e.g.:
 Productivity
 Complaints
 Defect/Error rates
 Process cycle-times
 Are leading indicators of
successful strategy
implementation & often relate to
critical processes

22. How will you measure success?
 “If you can’t measure it, you can’t manage it”
 “What gets measured, gets done”
 Or, “What gets measured badly, gets done badly”
 "Weighing the pig every day will not make it
fatter“
 “People do what you inspect (measure), not
what you expect”
 “If you wait to develop the perfect set of
measures, you will wait a very long time”
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23. Leading and Lagging Indicators
 Lagging Indicators without Leading Indicators tell you
nothing about how outcomes will be achieved, nor can
you have any early warnings about being on track to
achieve your strategic goals
 Leading Indicators without Lagging Indicators may
enable you to focus on short-term performance, but you
will not be able to confirm that broader organisational
outcomes have been achieved
 Leading Indicators should enable you to take pre-
emptive actions to improve your chances of achieving
strategic goals
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24. Leading and Lagging Indicators
 If you are measuring “activity” (i.e. at a process level), it
is more likely that you are using Leading Indicators
 The closer you move to process inputs and activities, the
closer you get to Leading Indicators of downstream,
(Lagging) performance
 If you are measuring aggregated effects, or outcomes, at
an organisational level, you are more likely to be using
Lagging Indicators
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25. Improvement Skills
Consulting Ltd.
ian.seath@improvement-skills.co.uk
M: 07850 728506
W: www.improvement-skills.co.uk
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