Back to Score Keeping…

In the first blog of this two-part series, we explored the concept of Balanced Scorecards, and why they are a valuable tool for measuring and managing performance. In this blog, we share a bit of our process for developing balanced scorecards. FMP’s team of measurement experts knows how to identify performance criteria that are relevant to our clients’ specific strategic objectives and mission. These criteria may differ from the four major ones Kaplan and Norton identified, particularly depending on the industry, level of assessment (e.g., organizational; programmatic), systems in place, and the mission of the organization. For example, a client may wish to assess their full talent management strategy to include attrition rates, time to hire, and employee productivity. That may result in a desire to evaluate and compare metrics for specific processes or practices, such a training initiative. For that, FMP would collaborate with the client to determine what outcomes are expected of the training such as “post-training knowledge acquisition” and “pre- to post-training performance changes.” We could also establish more global metrics such as cost, time to implement, and return on investment (ROI) to compare investments in training versus other human resource practices such as recruitment of new talent. 

We work closely with our clients to determine the criteria that needs to be measured, identify key performance indicators, and define the rating scales and methodologies for capturing the relevant data. While we understand organizational efficiency is an important focus for many of our clients and recognize that it defines much of how we execute our services, we also know efficiency is not a sufficient condition for organizational effectiveness but rather a subset of effectiveness. With this expertise in hand, our approach, at a high level, to developing Balanced Scorecards involves the following tactics.

1. Review and refine strategic objectives: This involves gaining perspectives from key stakeholders and leaders about the mission and goals the organization has over the next few years. This may also involve speaking with industry experts to help identify emerging trends the organization needs to consider to position itself well for the future.
   • Goals need to be S.M.A.R.T. to have utility. This means Specific, Measurable, Achievable, Relevant, and Time-Bound.
2. Specify relevant metrics: In collaboration with the client, we identify performance metrics that are important for our client’s organizational success. While this typically includes developing key performance indicators (KPIs) that are directly tied to the strategic objectives (step 1), some clients may determine broader operational metrics are also desired. The balanced component of the scorecard is about identifying both meaningful financial as well as non-financial metrics that may be driving key financial and operational impacts.
3. Develop criteria and scales: Each metric is typically measured along a continuum. Our team will develop scale points and anchors to define and capture progress along that continuum. Our measurement experts work closely with our clients to determine the total range for each scale and the distance between each scale point. This ensures quantitative (e.g., % or count differences) and qualitative (e.g., level of growth) data are clearly articulated, and each point is equivalent in distance from each other.
4. Establish a schedule for data collection and reporting: Tracking performance on a regular and frequent basis is key to ensuring accountability and taking immediate mitigating actions if a task or initiative is at risk.
5. Promote accountability and alignment of performance systems: FMP recognizes the value of the scorecard resides heavily in the extent to which it is adopted by leadership from the top down and the extent to which other reward systems and performance management practices, such as annual performance appraisals, are tied directly to it. Thus, FMP works closely with our clients to establish a communications plan and strategy for introducing the scorecard as well as recommendations for promoting its integration into other existing systems and practices within the organization. 
6. Engage in a continuous improvement mindset: As a baseline, leaders and the workforce should always be held accountable for tracking performance against the scorecard. Moreover, it is imperative to closely track industry trends that indicate the need to revise the scorecard. Further, when measurement of certain metrics reveals deficiencies, we work with our clients to conduct a root cause analysis to identify the source of those deficiencies and recommend remediation practices.
7. Design data visualization platforms to aid in use: FMP has data analysts and data visualization experts who work closely with our teams to ensure easy digestibility of and engagement with the scorecards. By creating dashboards and/or integrating the scorecard outputs into an interactive dashboard, leaders can easily help their staff see where improvements are needed and where progress has been gained.

Long story short, it is time to abandon any notion that scorekeeping is bad. We embrace it for our favored sports teams, why not also use them it to help our organizations position themselves well? With our clients, FMP helps establish concrete metrics that support continuous improvement and cultivate a culture of performance excellence throughout our clients’ organizations.

Candace Blair Cronin has her master’s and Ph.D. from Penn State University in Industrial-Organizational Psychology. Dr. Blair Cronin is proud to have worked for more than 24 years with private and public sector client at Federal, state, and local levels to help them achieve tangible, cost-effective results. When Dr. Blair Cronin is not partnering with her clients on important initiatives, she is working hard to keep pace with the active social lives of her four teenagers and her small zoo of household pets. In addition to her family, a big passion of Dr. Blair Cronin’s is advocating for children in foster care and informally mentoring foster and adoptive parents.