Improving Government Performance
Using the Balanced Scorecard to Plan and Manage Strategically
Howard Rohm President and CEO, the Balanced Scorecard Institute
Are programs, services, and staff aligned around a shared vision of the future? Do government leaders have a clear strategy for delivering cost-effective services for citizens and other stakeholders, and is that strategy communicated with clarity, both internally and externally? Do you have a disciplined way of choosing priorities among competing programs and services, under tighter and more stringent budgets? How are you keeping score and communicating progress toward the vision? If you need to make hard choices among competing ...view middle of the document...
But “What measures should we use?” is not the first question……the first question is the vision question: “What are we trying to accomplish?” and the second question is the strategy question: “Are we doing the right things?”… operational questions (e.g., “Are we doing things right?”) come later. Performance measure scorecards are of little value, as most organizations just take easy to capture measures and populate a dashboard for executives and managers. Not much strategic there. There is a lot of value in building a strategic scorecard system that engages employees in strategic thinking and managing and measuring strategy execution. Strategy-based scorecard systems are widely used worldwide to communicate an organization’s shared vision to everyone, improve alignment, focus on what matters the most, drive budget formulation, and improve program and service tracking. These scorecard systems are used at country, state, agency, ministry, and municipal government levels. A strategic scorecard system is built around organization strategic objectives critical for creating value for citizens and other stakeholders, around programs and services that make the objectives actionable, and around the value creation chain (called a strategy map) that defines what must be done to be successful. Good scorecards focus on outcome and output performance measures that provide real business intelligence and contribute to the achievement of operational excellence, employee excellence, and government organization success. Starting with a strategic view of how the organization creates value for citizens and stakeholders, the scorecard system links strategy to what must be done operationally to be successful.
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The logic of building a scorecard system and using the system as the organization strategic planning framework is shown in the figure below. Starting with an understanding of citizen and stakeholder needs, the strategic components of the scorecard system are developed and validated. The components include mission, vision, core values, strategic perspectives (i.e., performance dimensions), strategic themes and results, strategic objectives, an organization-wide strategy map, performance measures and targets, and strategic initiatives. Programs and services are then linked to strategy and a strategic budget is formulated. Operational and program plans, usually annually, follow. Organization alignment comes from linking the components in an orderly fashion and communicating the organization’s story of how value is created for stakeholders.
How does one go about developing such a scorecard system? We developed the Balanced Scorecard NineStep To Success™ framework shown in the figure below, to build and implement strategy-based scorecard systems. Separate versions of the framework are available for business and industry, non-profit, and public sector organizations...