wasq presentation heflin oct09 final

8/3/2019 WASQ Presentation Heflin Oct09 Final

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2009 ActiveStrategy, Inc. p. 2

Presentation Overview

Strategic vs. Operational Goals

Setting Strategic Goals

Creating a Balanced Scorecard

Deploying Scorecards to Execute Goals

Aligning & Prioritizing Improvement Initiatives

Linking Strategy to Action Plans via

Scorecards Best Practices

Tying this back to WSQA Criteria


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p. 3 2009 ActiveStrategy, Inc.

Strategic vs. Operational Goals

Operational

(Including operational measures &incremental improvement plans)

Amount of time spent on

strategic efforts (typical)*

Supervisor Director ExecutiveManager

*Includes critical few objectives & measures that need to be

improved plus key strategic improvement initiatives

Increased time spent on

strategic efforts (ideal)


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Setting Strategic Goals


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Defining Strategic Goals

Strategic Goals have the following components:

Perspectives high-level focus areas

Objectives verb-noun statements that reflect the

strategic plan (e.g., Improve CustomerSatisfaction)

Measures/Metrics - #, $, or % that indicatesperformance against an objective

Targets what the measure should attain

Initiatives improvement projects (e.g., ImproveCycle Time)


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Making Strategic Goals Actionable

Top-Level

BalancedScorecard

Operational framework tocommunicate, deploy and

execute plan

Visual simplificationof Strategic Plan

Key Strengths,Weaknesses,

Opportunities &Threats

SWOTAnalysis

P

rioritizedInitiatives

Strategic Goals

Alignedimprovement

StrategyMap


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Create a Strategy Map

What is a Strategy Map?

Visual simplification of strategic objectives

Shows cause and effect relationships

Helps ensure youre not missing any keydrivers


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Steps to Creating a Strategy Map

1. Prioritize SWOT outputs & convert toverb noun strategic objectives

2. Group objectives by perspective or high-level focus area

3. Identify cause-and-effect relationshipswith arrows


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The Anatomy of a Strategy Map

High-levelobjectives

(verb/noun)

Links showingrelationships

Perspectives

TraditionalScorecard

Perspectives


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Example Strategy Map for Public Sector

Note:Perspective names

and their cause &effect order change


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Next, Create a Balanced

Scorecard


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Creating a Balanced ScorecardStep 1: Transfer from Strategy Map

Transfer Perspectives and add Index numbers(1.0, 2.0)

Retain cause & effect hierarchy

Transfer Objectives into proper Perspectiveand add Index numbers (1.1, 2.1)


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Keep in Mind

Can use more or different perspectives(if appropriate), BUT BALANCE IS CRITICAL

Objectives must contain a verb (grow sales,

reduce complaints, etc.)

Keep objectives focused (7-12 max perscorecard)


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Perspectives & Objectives on BSC

Objective

Perspective

Index Number


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Creating the Top-Level BSCStep 2: Determine Measures

Should represent the best indication that anobjective is being met

Ask what outcomes your stakeholders desire

from the objective: Quality or defects

Revenues

Cost or productivity

Responsiveness or Cycle Time

Employee or Environmental Safety


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Creating the Top-Level BSCStep 2: Determine Measures

Keep to 1-3 measures per objective

One objective may be measured with two or

three dissimilar units of measures, e.g.

Customer Satisfaction may be measured by: Survey Results (Very Good)

Number of Complaints (4 per quarter)

Turnaround time (2 days)


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Lagging Measures

Lagging measures are reportedinfrequently, too late to prevent a problem

Examples are a companys critical high-level

outcome measures: Sales

Service Quality

Expenses

Customer Satisfaction


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Breaking Down a Lagging Measure

First Step Dimensional Measures

These break down a measure by its componentparts using the same units (e.g. Sales by

Division or Geography) Note: dimensional measures alone do not get

at the root causes of a problem


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Leading Measures

Leading Measures

break down an important measure into whatdrives it(e.g. # of quotes or size of pipeline)

Also called Cause & Effect or ProcessMeasures


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Leading Measure Examples

Examples:

Customer Satisfaction leads Revenues

Service Response Time leads Customer

Satisfaction

% Service Rep Availability leads ServiceResponse Time

Leading/Lagging are relative termsA leading measure in one area is likely a

lagging measure to another area


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2008 ActiveStrategy, Inc.

Top-Level Scorecard with Measures

p. 21


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Creating the Top-Level BSCStep 3: Align & Prioritize Initiatives

Initiatives are time-bound projects

They have defined resources

Also called Projects, Action Plans

Some are derived from the SWOT Analysis

They should be prioritized based upon:

alignment to an identified performance gap in astrategic area

size of the performance gap

resources required to improve

ROI, etc.


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Prioritize and Align Initiatives

Align current initiatives (time-boundimprovement projects) to measures

Cease initiatives that do not align and any that

align to measures that are meeting goals Consider new initiatives to address

underperforming measures

Aligned initiatives drive results by addressingroot causes


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A Prioritization Matrix


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An Example Completed MatrixColumn 4 Column 5

Column 1 Column 2 Column 3 Prioritization Factors(Enter 1, 3, or 5 in each see instructions below )

PriorityScore/Departments

Initiative UnderConsideration

DesiredOutcome ofInitiative

How Outcomewill be

Measured

Degree ofAlignment

to BSC

Need toImprove

Urgency Total CostOrganiza-

tionalReadiness

= product of factors fromColumn 4 (multiply all 5).

Also list key dept.needed to achieve it

1. Improvemargins

Improved

profitabilityPercent of

products meeting

margin goals

5 5 5 5 3 1875Operations

2. Improveproductivity in

manufacturing

Improved

throughout and

reduced costs

Percent of

departments that

meet productivity

goals

5 5 3 3 3 675Manufacturing

3. Implement newCRM system

Improvedrelationships

with key

customers

% of customersrenewing annual

service plans

3 5 3 5 3 675IT

4. Open newcustomer training

facility

Improvedknowledge of

key customers

% of customersattending training

1 3 1 5 1 15Customer Education& Facilities


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Great, the BSC is Finished!

Wellactually, this is just the beginning

The next step is to create a cascadedframework of scorecards

Create linked scorecards down & across theorganization

This is where you really start to deploy your

strategy and make it actionable


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What It Looks Like (Long-Term)Top-Level

Scorecard

Divisional orBusiness Unit

Scorecards Departmentor

FunctionalScorecards

Individual Employee Goals


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Why is Cascading Scorecards Critical?

It results in a proactive performance system

it communicates and translates the strategy to alllevels

when a critical top-level lagging measure isunderperforming, lower level causes can be easilyidentified

allows you to fix important problems before they

become high-level issues


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How to Cascade an Overview

Create linked, related (but not identical)scorecards for next organizational level

As you go, translate objectives to make them

meaningful to that area e.g.,Improve Customer Satisfaction might

becomeReduce Wait Times for Customers

Align measures to the translated objectives

e.g., % of Customers waiting more than 5 minutes


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Cascading Objectives &M

easures Using a ProcessMatrix Approach


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Tips on Using a Process Matrix Approach

Used to align business processes to strategicobjectives

Helps to identify their translated objectives &

leading measures Works best for functional and support areas

Process owners must be involved


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Create a Matrix for Each Area

List key

processes ofthe area

Corporate Objectives

1.1 GrowProfitableRevenues

2.1ImproveCust. Sat.

3.1IntegrateNew Tech.

InternalNetworkMgmt.

Cust.Data

CenterMgmt.

TechnicalSupport

ITsBu

siness

Processes O

utcome

p. 32


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Identify Outcomes & Intersections

Identifyprocessesthat moststronglysupport theObjectives






x

Cust.Data Ctr.

Mgmt.

x x

TechnicalSupport x xIT

sBus

inessProcesses O

utcome

s

Availability

DataCtr.

Rev.

Cu

st.Sat.

Resolved

calls

p. 33


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Translate the Objectives

DescribeObjectiveusing thatareas terms






3.1.1Improvenetworkreliability

Cust.Data Ctr.

Mgmt.

1.1.1 Maximizeservice

revenues

2.1.1Minimizecustomer

complaints

TechnicalSupport

2.1.2Improve call

resolution

3.1.2Leverage

ticketsoftwareI

TsCore

Processes

Outcome

s

Availability

DataCtr.

Rev.

Cu

st.Sat.

Resolved

calls

p. 34


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Align Measures Using the Matrix

Align measuresidentified in theprocesses tothe cascadedObjectives






3.1.1 Update

network speed% full

availability

Cust. DataCenter

Mgmt.

1.1.1 MaximizeASP revenues

$ service

rev/month

2.1.1 Minimizecustomer

complaints

# hours

downtime

TechnicalSupport

3.1.2 Leverageticket software

% of callsresolved

ITsCoreProcesses

p. 35


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Place On Appropriate Scorecard

Place objectives & related measures on theappropriate scorecard

Assign an owner to each to ensure

accountability Finally, establish goals for each measure to

track progress

Cascaded objectives & measures createalignment to top-level strategy


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Going From Strategy to

Action PlanAn Example Drill Down from

the City of Coral Springs Scorecards


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Police Scorecard

Click to drill

down


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Drill down reveals

Measure Details

Contributing

lower-levelmeasures

Alignedimprovement

Initiatives


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Additional Measure

Details (trend charts &

graphs, comparisons)


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ChartDetail

Crime by Type


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ChartDetail

Crime Rate

Comparisons


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Initiative Detail

Click to see

commentary from

Initiative Owner

about the initiative

and Action Plans


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Best Practices to Remember

Start with your strategy

Keep objectives to the critical few

Pick measures you can actually measure

and those that drive the right behaviors

Cascade & deploy (scorecards are NEVERperfect, so dont wait)

Review performance of scorecards regularly


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How Does This Fit Into the WASQ Criteria?

What WASQ categories does this type offramework address?

Why?


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Questions?


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Thank You for Participating

How to Drive Organizational Alignment toStrategy Using Balanced Scorecards

Presented by

Chris [email protected]

Please stop by the ActiveStrategy tableto learn more or visit www.activestrategy.com

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