The Balanced Scorecard A Framework for Accountability

							 The Balanced Scorecard: A
Framework for Accountability
                  Presenters:
  Maureen Pettitt, Skagit Valley College, WA
 Doug Whittaker, Washington State Board for
    Community and Technical Colleges
   “Colleges and universities are moving
    into a period when they will be expected
    to provide not only data on the
    attainment of defined outcomes…but
    also evidence that results have been
    attained at a reasonable cost. [They]
    will have to specify their aims, stand
    ready to justify activities, demonstrate
    their contribution to objectives, and
    defend the cost of the enterprise.”
                 Berdahl & O‟Connell (1999). American Higher
                 Education in the Twenty-First Century.
     External Accountability
 Accountability performance indicators
  are developed for external audiences
  with limited areas of interest, resulting in
  measures that are “incomplete and one-
  dimensional views of performance.”
 Desired improvements are unlikely to
  occur “until performance measures are
  linked to the drivers of institutional
  effectiveness in a meaningful way.”
State Performance Measures
         Performance Measures            Number of States
  Graduation rates                            32
  Transfer rates                              25
  Faculty workload/productivity               24
  Follow-up satisfaction studies              23
  External/sponsored research funds           23
  Remediation activities/effectiveness        21
  Pass rates                                  21
  Degrees awarded                             20
  Placement data on graduates                 19
  Admission stds & measures                   18
  Total student credit hours                  18
  Number & % of accredited programs           13

               http://www.acct.org/policy/Accountability_Report.htm
       Internal Assessment
 To be useful internally, performance
  indicators must be tied to institutional
  values, goals, and objectives…
 …and the objectives must be translated
  into specific research problems that can
  be studied...and around which
  strategies for improvement can be
  developed.
Balanced Scorecard
            After publishing
             several well-
             received articles
             in HBR, Harvard
             professors Robert
             Kaplan and David
             Norton released
             their book in 1996
            Definition
 The Balanced Scorecard is a
 multidimensional framework that
 provides an „enterprise‟ view of the
 organization‟s overall performance
 by integrating financial measures
 with other key performance
 indicators.
“Think of the balanced
 scorecard as the
 dials and indicators in
 an airplane cockpit.
 For the complex task
 of navigating and
 flying an airplane,
 pilots need detailed
 information about
 many aspects of the
 flight...
They need information about fuel,
airspeed, altitude, bearing, destination
and other indicators that summarize the
current and predicated environment.
Reliance on one instrument can be
fatal.
Similarly, the complexity of managing
an organization today requires that
managers be able to view performance
in several areas simultaneously.”
                       Kaplan and Norton, 1992
       Balancing Perspectives
   Too often bad strategic decisions are
    made in an effort to increase the
    “bottom line” at the expense of other
    institutional goals. The BSC suggests
    that financial performance should not be
    viewed as the focus, but as the natural
    outcome of balancing other important
    goals.
       Four Strategic Issues
 Customer
 Internal business
  process
 Financial
 Innovation and
  learning
  Customer Perspective


“How do      – responsiveness,
customers      timeliness
see us?”     – product/service
               quality and cost
             – meet client needs
 Internal Business Process
        Perspective

“At what must   – accurate and
we excel?”        timely delivery of
                  services
                – effective systems
                  and processes
                – environmental
                  sustainability
    Financial Perspective

“How do we look   – budgets
to our key        – revenue
stakeholders?”    – capital
                    expenditures
                  – debt to asset
                    ratio
 Innovation and Learning
       Perspective

“Can we          – employee skills and
continue to        training
improve and      – use of technology
create value?”   – encouragement of
                   innovation
                 – continuous
                   improvement
Ultimate Balancing Act

          The ultimate balancing
          act in any organization is
          the one whereby the
          needs and requirements
          of multiple stakeholders
          are reconciled and
          integrated.
               Financial Perspective
               Goals     Measures




Customer Perspective                 Internal Business
Goals    Measures                       Perspective
                        Vision
                                   Goals      Measures



                   Innovation and
                Learning Perspective
                Goals    Measures
              Examples
 Ohio State University
 USC Rossier School of Education



             Exercises
 Southwest University
 Pacific Northwest College
           Strategic Planning
   An effective scorecard will identify a set
    of strategic questions, objectives, and
    measures that address the issue of
    adding value--and doing so at a rate
    that is better than the competition. This
    is the essence of strategy.
    Strategic Planning (con’t)
A balanced set of
indicators can
systematically
stimulate better
understandings and
deeper insights that
can form the basis
for strategy.
    Four Key Processes

 Feedback         Translating
 and              the vision
 learning



Business
planning
                Communicating
                and linking
        Four Key Processes
 Translating   the vision helps managers
  build a consensus around the
  institution‟s strategy and express it in
  terms that guide action
 Communicating and linking lets
  managers communicate their strategy
  institution-wide, and link it to unit and
  individual goals
   Four Key Processes (con’t)
 Business   planning enables the
  institution to integrate its business and
  financial plans
 Feedback and learning give institutions
  the capacity for strategic learning, which
  consists of gathering feedback, testing
  the hypotheses on which strategy was
  based, and making adjustments