Balanced Scorecard René Ewing Governor’s Special Assistant for Management and Quality Improvement Balanced Scorecard René Ewing Governor’s Special Assistant for Management and Quality Improvement October 1999

The Governor’s Vision... ake Washington a great state to live, work and raise a family

Make state government as innovative, efficient, and customer-friendly as the best private enterprises in our state. Make state government as innovative, efficient, and customer-friendly as the best private enterprises in our state. Restoring Trust in State Government

Fundamental Objective... o improve the performance of state government by increasing the value received by citizens as a result of our work o improve the performance of state government by increasing the value received by citizens as a result of our work

Primary Strategy... o change the culture of state government from a focus on process to a focus on results o change the culture of state government from a focus on process to a focus on results

Quality Initiatives  Sub Cabinet for Management and Quality  Quarterly Reporting System  Governor’s Quarterly Quality Awards  Performance Agreements  Self Assessment  Sub Cabinet for Management and Quality  Quarterly Reporting System  Governor’s Quarterly Quality Awards  Performance Agreements  Self Assessment

Next Steps...  Create Customer focused organizations  Establish performance management systems  Create Customer focused organizations  Establish performance management systems

Customer Focus...  Citizen Survey of service expectations  Establishment of customer service standards  Citizen Survey of service expectations  Establishment of customer service standards

Basic Tool for Performance Management... A “balanced scorecard” of performance measures to link strategy and action A “balanced scorecard” of performance measures to link strategy and action

What is the Balanced Scorecard?  A performance management system  Aligns and focuses organizational efforts and resources  Builds on existing performance management elements  Creates long-term value  Promotes and explains  Not merely a list of performance measures  A performance management system  Aligns and focuses organizational efforts and resources  Builds on existing performance management elements  Creates long-term value  Promotes and explains  Not merely a list of performance measures

Public Sector Balanced Scorecard... Mission Internal Processes Learning: Skills, Knowledge, Data, People Learning: Skills, Knowledge, Data, People Value and Benefit Customers and Constituents Financial and Social Cost

Translating Vision and Strategy: Five Perspectives... LEARNING and GROWTH To achieve our vision, how will we sustain our ability to change and improve? CUSTOMER and CONSTITUENTS To achieve our vision how should we appear to our customers? INTERNAL BUSINESS PROCESS To satisfy customers and public, what business processes must we excel at? FINANCIAL and SOCIAL COST While achieving our vision, how shall we minimize cost to the state and society? VALUE and BENEFIT To achieve our vision, what public benefits must we create? Vision and Strategy

Benefits...  Deploys the strategic plan  Focuses and aligns agency efforts  Tests cause-and-effect relationships  Tells the agency’s story  Family of measurement types reduces risk  Links performance measures to decision making  Deploys the strategic plan  Focuses and aligns agency efforts  Tests cause-and-effect relationships  Tells the agency’s story  Family of measurement types reduces risk  Links performance measures to decision making

Building Existing Performance Management Efforts...  Quality improvement  Regulatory improvement  Strategic planning  Performance budgeting  Performance agreements  Quality improvement  Regulatory improvement  Strategic planning  Performance budgeting  Performance agreements

Leadership Business Results Strategic Planning Customer Focus HR Focus Process Management Information and Analysis Relationship of Baldrige and Balanced Scorecard Malcolm Baldrige Systems Model Balanced Scorecard

Highly Successful Balanced Scorecard Initiatives... STRATEGY Formulate Leadership from the Top Communicate Strategy is Everyone’s Job Execute Unlock Hidden Assets Unlock Hidden Assets Navigate Strategy: A Continuous Process Strategy: A Continuous Process

Formulate Leadership From the Top  Create the climate for change  Create a common focus for change activities  Rationalize and align the organization 1. Leadership From the Top  Create the climate for change  Create a common focus for change activities  Rationalize and align the organization STRATEGY Formulate Leadership from the Top Communicate Execute Navigate

Communicate Make Strategy Everyone’s Job  Comprehensive communication to create awareness  Align goals and incentives  Integrate budgeting with strategic planning  Align resources and initiatives 2. Make Strategy Everyone’s Job  Comprehensive communication to create awareness  Align goals and incentives  Integrate budgeting with strategic planning  Align resources and initiatives STRATEGY Formulate Communicate Strategy is Everyone’s Job Execute Navigate

Execute Unlock and Focus Hidden Assets  Create the climate for change  Create a common focus for change activities  Rationalize and align the organization 3. Unlock and Focus Hidden Assets  Create the climate for change  Create a common focus for change activities  Rationalize and align the organization STRATEGY Formulate Communicate Execute Unlock Hidden Assets Unlock Hidden Assets Navigate

Navigate Make Strategy a Continuous Process  Strategic feedback that encourages learning  Executive teams manage strategic themes  Testing hypotheses, adapting, and learning 4. Make Strategy a Continuous Process  Strategic feedback that encourages learning  Executive teams manage strategic themes  Testing hypotheses, adapting, and learning STRATEGY Formulate Communicate Execute Navigate Strategy: A Continuous Process Strategy: A Continuous Process

Use of Performance Measures...  Compare  Learn  Motivate  Reward and celebrate  Promote and explain  Compare  Learn  Motivate  Reward and celebrate  Promote and explain

Chase’s Law... Wherever the product of a public organization has not been monitored in a way that ties performance to reward, the introduction of an effective monitoring system will yield a fifty percent improvement in the product in the short run.

In other words... What gets measured gets done or Inspect what you expect and it will happen What gets measured gets done or Inspect what you expect and it will happen

Ask Ourselves These Six Questions Did you do what you planned? 2. What happened? 3. Why do you think that happened? 4. What might you do differently? 5. What do you think would happen? 6. Which is the best choice? 1. Did you do what you planned? 2. What happened? 3. Why do you think that happened? 4. What might you do differently? 5. What do you think would happen? 6. Which is the best choice?

Our Challenge... To implement our wonderful plans To measure our plans and the ability to achieve our purpose and mission To learn from our mistakes and successes To make a difference in the lives of people in our state To implement our wonderful plans To measure our plans and the ability to achieve our purpose and mission To learn from our mistakes and successes To make a difference in the lives of people in our state

Thank You