1. Overview of the Balanced Scorecard Concept IDM 404 Spring 2014 Dr. Joan Burtner Associate Professor, Department of Industrial Engineering and Industrial Management

2. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 2 Balanced Scorecard (BSC) Developed by Robert Kaplan and David Norton in the early 1990s Definition: A tool that translates an organization’s mission and strategy into a comprehensive set of performance measures that provides the framework for a strategic measurement and management system Source: Kaplan, R. and Norton, D. The Balanced Scorecard. (1996) Boston: Harvard Business School Press.

3. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 3 Balanced Scorecard Benefits Concept: An organization’s strategies and their execution are important factors in performance improvement Potential benefits  Increased financial returns  A more market-oriented, customer-focused strategy  Greater alignment between employees and company goals  Improved collaboration  Strong focus on strategy  Accountability for performance at all levels of the organization

4. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 4 Links Strategy and Performance in 4 Areas Learning and Growth Perspective Internal Process Perspective Customer Perspective Financial Perspective

5. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 5 Basic Graphic of Original Concept Source: http://www.institute.nhs.uk/quality_and_service_improvement_tools/quality_ and_service_improvement_tools/balanced_scorecard.html http://www.institute.nhs.uk/quality_and_service_improvement_tools/quality_ and_service_improvement_tools/balanced_scorecard.html Accessed Feb. 28, 2013

6. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 6 Typical Graphic of Concept Source: http://balancedscorecard.org/portals/0/images/balancedscorecard.jpg Accessed Feb. 25, 2014

7. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 7 Typical BSC Measures in Healthcare Source: http://www.activestrategy.com/strategy_execution/example_balanced_scorecards.aspx Accessed Oct. 18, 2009 http://www.activestrategy.com/strategy_execution/example_balanced_scorecards.aspx

8. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 8 Value Stream Management for Lean Healthcare Original areas  Learning and Growth Perspective  Internal Process Perspective  Customer Perspective  Financial Perspective Oakview Hospital (Tapping, et al)  Learning and Growth Perspective = Satisfaction  Internal Process Perspective = Service  Customer Perspective = Quality  Financial Perspective = Finance

9. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 9 Implementation of the Balanced Scorecard Value Stream Management for Lean Healthcare (2009) Authors: Don Tapping, Sue Kozlowski (CSSBB), Laura Archbold (RN, BSN,MBA), and Todd Sperl (MBB) Seven step implementation process  Identify team  Understand organizational strategy  Determine levels for measurement  Identify goals (targets) for each measure  Create Balanced Scorecard  Build Goal Card  Monitor the Balanced Scorecard

10. Spring 2014IDM 404 Dr. Burtner ~ Balanced Scorecard Slide 10 Value Stream Management (VSM) Perspective “The Balanced Scorecard is the starting point for Value Stream Management for the Assess phase. It is an evaluation of the current “state of facility health” and will be the driver for all Lean projects.” page 74 Value Stream Management for Lean Healthcare (2009) Authors: Don Tapping, Sue Kozlowski, Laura Archbold, and Todd Sperl