Process (1)
- 1. Putting the balanced scorecard to work: A four stage process
- 2. The four stages of the process Stage one: CLARIFY Stage two: SIMPLIFY Stage three: DESIGN Stage four: IMPLEMENT
- 3. Stage One: CLARIFY ● Everyone involved in this process must have a clear understanding of the organisation's strategy ● Strategy is usually communicated using the following elements: ○ Vision statement: presents a forward-looking view of what an organisation wants to become (Bamford, 2009) ○ Mission statement: communicates the purpose of the organisation, outlining how and where it plans to compete (Bamford, 2009) ○ Strategic objectives: performance areas which are critical to ensuring that an organisation’s strategy succeeds (Joyce, 1999)
- 4. Stage One: CLARIFY ● If you do not already have a vision, mission or strategic objectives in place, it may be worth thinking about these aspects so that you have a clearer idea of your strategy. ● If all employees are aware of the organisation's strategy, it makes it easier to agree upon the objectives that will be included in the scorecard
- 5. Stage two: SIMPLIFY ● The next stage is to simplify your strategy so that it can provide the basis for the scorecard ● This involves translating your strategy into performance indicators. ● Performance indicators describe expectations about performance and should be linked to your strategic objectives.
- 6. Stage two: SIMPLIFY ● For each indicator that you come up with, you must also set a corresponding, measurable target. ● In total, you should have around 15-20 targets (Kaplan and Norton, 1996; CIMA, 2005)
- 7. Stage two: SIMPLIFY ● If you find it difficult to think of performance indicators, ask yourself the following questions: ○ How do our customers view the organisation? What are their expectations? ○ What are the internal business processes that we must excel at in order to satisfy stakeholders? ○ How do the taxpayers/government view the organisation? What are their expectations in regards to budgets, efficiency etc.? ○ As an organisation, how will we ensure that we develop and improve over time?
- 8. Stage three: SIMPLIFY An example of simplifying strategy: Mission: To provide high quality care to all patients Vision: To ensure that patients longer and better quality lives Objective (1): Ensure that patients are happy with the level of care that they are receiving Performance indicator (1): % Patient Satisfaction Survey Target (1): Above 98%
- 9. Stage Four: IMPLEMENT ● The final stage is to implement the balanced scorecard. ● Usually this will involve introducing the tool through staff meetings, emails etc. ● As part of the implementation, employees should be made aware of the areas that they are responsible for ● Processes should be in place for how you plan to feed back the information from the scorecard
- 10. Stage Four: IMPLEMENT ● Once the scorecard has been implemented, this is not the end of the process. ● The scorecard needs to reviewed, updated and reported on frequently in order to be effective. ● Remember that the results of the balanced scorecard can be long-term. Do not expect changes to occur immediately
- 11. Putting the scorecard to work ● Although it may appear to be simple from this presentation, the implementation of the scorecard can be time-consuming and may be demanding in terms of personnel. ● Ensure therefore that enough time is dedicated to the process
- 12. Thank you for looking through this presentation. For more information on the balanced scorecard, click on the various links that are located around the toolkit.