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American Society for Public Administration - Vol. 28 No. 5 - July 2005 |
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ASPA TIMES
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Key Factors That Make a Balanced Scorecard Successful
Group Co-Sponsored by ASPA Offers Lessons Learned from Introducing and Using a Balanced Scorcard Jake Barkdoll and John Kamensky
Here's a list that will never appear on the David Letterman Show, but should be on every public manager's desk! After 44 monthly meetings, participants in the Washington, DC-based "Balanced Scorecard Interest Group," reflected on lessons learned in introducing and using a Balanced Scorecard. They compiled a "top ten" list based on their personal experiences and insights from presentations by a wide variety of federal agencies.
The "Top Ten" list (see sidebar 1) touches each of the four key stages in any successful Scorecard effort: design, develop, implement and sustain (or institutionalize) its use.
Design. Creating a successful Balanced Scorecard isn't a technical feat. The real challenges are in engaging leaders, managers, employees, customers and stakeholders in the design process. While some efforts are staff-generated, and make some progress, the really successful ones start with top leadership support. Fortunately "top level" can apply to the leadership level of a staff, a program, or a "parent" organization. It also helps if there is a 'burning platform' for change. Examples include Charles Rossetti's transformation of the Internal Revenue Service, Joe Thompson's efforts at the Veterans Benefits Administration and Tom Bloom's use of the Scorecard to better integrate the Defense Finance and Accounting Service.
With top leader support, the key concept is to measure the right things--things the customers, stakeholders and employees find value in--not everything. The Patent and Trademark Office, for example, had 280 measures in 2000. It reported only five agency-wide. Part of the ability to create a tight focus on which measures really matter is to create a governance process that engages key stakeholders. The IRS, for example, had its union president involved in the measurement development and reporting process. Another key element in design is for the system to build on work that has already been completed . The library system at the University of Virginia collected many data for years. It was only after it developed a Scorecard linking the data to what it did, that the data actually became useful and used.
Creating a communications campaign that explains how a Scorecard both reflects and drives a focus on mission is important to obtaining managerial and staff support for collecting and reporting new measures. When managers and staff see the value of the information, the content of their conversations change. For example, in the Program Support Center at the Department of Health and Human Services, its top leaders found a Scorecard helped set priorities for attention. Similarly, in the Public Buildings Service, every employee in every building got at least some training on how to use their building's key performance metrics to improve performance in their own jobs.
Implement. Developing and reporting Scorecard measures doesn't matter if they are not tied to the established administrative systems employees use regularly, such as the planning, budget development and implementation cycles. The Defense Finance and Accounting Service and the Defense Logistics Agency both use their Scorecard measures as part of their regular strategy and budget development and execution systems. The Department of Energy's procurement office found that its Scorecard helped it shift away from "program assessments" to "program management."
The credibility of the process and honesty in reporting are important factors, as well. The Public Buildings Service has teams of employees that meet regularly to discuss the ongoing data collection and reporting activities to ensure the process is not being "gamed." The Postal Service has a separate, third party collection and reporting system to ensure their stakeholders that their performance information is honest. And the Coast Guard has a measurement framework that lays out a "value chain" or "logic model" of the flow of information and how one set of measures influences the performance of another.
Sustain. The greatest challenge in most Scorecard efforts is to sustain them over time, especially if the champion of the initiative leaves. One way to assure continuity and support data credibility is to create information transparency that is as real-time as possible. This also makes Scorecard information useful to both senior and frontline managers. Instead of collecting and reporting performance data annually, for example, the Bureau of Land Management, the Natural Resources and Conservation Service and the Public Building Service all collect near real-time performance information that is made available on intranets to employees so they can compare performance and learn from their peers how to improve their own operations.
A key motivation for using Scorecard information is to align it with incentives. For example, the Public Buildings Service links its Scorecard to pre-negotiated performance targets in each region. Achieving the targets result in performance bonuses for the region. The regions, in turn, can use their bonuses for regional priorities and/or individual bonuses. The new government wide Senior Executive Service performance management system is organized around the elements of a Balanced Scorecard. This is expected to increase the number of Scorecards in use across the federal government.
Other Insights. In addition to the "Top Ten," the Group's participants offered additional suggestions for success. First, they recommended partnering with another organization that has been through the development process. There are many lessons to be learned informally! Second, they felt that a Scorecard approach can be seen as a learning tool, not just a measurement system. They felt that it creates a framework, a discipline and a common language within an organization and that, as this evolves, the organization's culture begins to change to be more performance oriented, more fact-based and more customer-centric. And finally, the experience of longer-term users of a Scorecard, such as the IRS, have found that as their cultures change, they can place less emphasis on the Scorecard as a measurement approach and view it more as a different way of communicating with each other.
Additional information about BaSIG and the case studied cited in this article is available on ASPA's website at : http://aspaonline.org/balancedscorecard and from Marty Ditmeyer, program associate, at 202 204-3608, or MDitmeyer@napawash.org.
ASPA member John Kamensky is a senior fellow with the IBM Center for The Business of Government and associate partner with IBM's Business Consulting Services. E-mail: john.kamensky@us.ibm.com
ASPA member Gerald (Jake) Barkdoll is a TREE (Theoretically Retired Ex Executive) who previously served as the director of USC's Washington Center and as associate commissioner of the Food and Drug Administration. E-mail: jakebarkdoll@msn.com
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