!DOCTYPE html PUBLIC "-//W3C//DTD XHTML 1.0 Strict//EN" "http://www.w3.org/TR/xhtml1/DTD/xhtml1-strict.dtd"> Streamline Training & Documentation: Creating, Implementing, and Maintaining a Scorecard

Monday, January 29, 2007

Creating, Implementing, and Maintaining a Scorecard

As a complement to yesterday's post, which outlined a process for incorporating risk management into an organization's balanced scorecard, it seems appropriate to document a process for creating, implementing, and maintaining the scorecard system itself.

The Balanced Scorecard Institute offers a straightforward nine-step process:
  1. Do an organizational assessment — Clarify the organization's mission and vision for the future. Identify key success factors for achieving the mission and vision.


  2. Identify strategic themes — The themes are derived from the vision and the organizational assessment, and provide the focus for planning. For example, a county government might have as one of its strategic themes "social, educational, and economic opportunity."


  3. Define perspectives and strategic objectives — Spell out organization-specific details of the four scorecard perspectives: financial, customer, internal, and learning and growth. For each of the perspectives, derive strategic objectives from the strategic themes.


  4. Create a strategy map — The map represents the organization's best thinking concerning the cause-and-effect links that will lead to achievement of the strategic objectives. There is an example here.


  5. Define performance measures and targets — The measures, along with their target values, spell out how the organization will know when each strategic objective has been met. For example, a oounty government might decide that its strategic objective of encouraging young adults to stay in the county is met, in part, if at least 70 affordable housing units are added to the housing stock each year.


  6. Develop strategic initiatives — Identify specific programs and actions that will help in achieving the organization's strategic objectives. Link each initiative to performance measures, so progress can be monitored.


  7. Automate and communicate — Define specifications for a scorecard portal and scorecard reports, based on the organization's specific measurement requirements, data sources (manual records, databases, surveys, interviews, etc.), and the scope of its scorecard system. Then assess software vendors' products against the specs.


  8. Cascade the scorecard through the organization — Meet with managers in each work unit to explain the purpose of the scorecard, the strategic initiatives, the measurement requirements, and the roll-up of unit-level scorecards into the organization-wide scorecard. Involve managers and, as practical, employees in defining metrics for their own processes.


  9. Collect data, evaluate and revise — Based on the performance data that are collected for the scorecard, decide how to revise the strategies, initiatives, and measures.
You can review an excellent public sector example of this process — from Mecklenburg County NC — here (first six steps – pdf) and here (final three steps – pdf). Mecklenburg County's latest reports on its "Managing for Results" system are here.

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