Performance Management & Strategy Execution Blog: The Glue

Do Strategy Maps Work in Government - Part III

This is the third in a series about strategy maps in Government. Also see Part I and Part II.

How Understanding Competition Leads to a "Circular" Strategy Map

After going through the development of a strategy map with a government or mission-based organization, an interesting mental phenomenon often occurs. It is the realization that competition does exist, and it comes in the form of budgets and financial survival.

Many government leaders believe they do not have true competitors and many believe that the financial health is not the ultimate outcome. However, going through the strategy mapping process will alter this thinking. Here is why.

When developing a strategy map, understanding and role-playing one’s competition is a useful exercise that helps an organization understand what competitive activities must occur to remain unique and compelling. This concept may only seem relevant to the private sector and not to government.

Individual government departments do not typically consider themselves to have competition or to be affected by the forces caused by competition. A library department may not believe it competes with Barnes and Noble. A park department may not believe it competes with shopping malls or private museums.

 

However, they all compete for their own existence. This competition exists between departments and other state and local agencies. They compete for public and political recognition, for prioritization, and ultimately for budgets. The process of developing a strategy map helps make this reality more clear.

Use BSC together with LEAN to achieve Hospital Safety results

According to a September 19th article in the Wall Street Journal (http://blogs.wsj.com/health/2007/09/18/more-hospitals-lag-than-leap-on-quality/), just over 1/3rd of the hospitals they surveyed have adequate hand-washing policies to prevent the spread of antibiotic-resistant infections.  This should be frightening.  You would hope the results would be better coming from hospitals that volunteered to be surveyed on the topic.  With the recent push from hospital quality experts to utilize LEAN methods and the attention of IHI, AHA, CMS and others on the topic, why do so many hospitals struggle with Safety?  Answer: they still need the Oversight, Accountability, and Support offered by a balanced scorecard framework.

LEAN thinking in healthcare is not new.  I recall reading a 2004 IHI Innovation Series white paper called “Improving the Reliability of Health Care.” (www.ihi.org), where Thomas Nolan discussed many LEAN topics.  For those of you who would like a quick, high level LEAN overview, see the "high level overview of LEAN methods in hospitals" section of this post.

Informed Executive Oversight– the Hospital executive team will know their business, but they may not know what role they play in a LEAN Hospital. When the Executive team looks at their balanced scorecard and sees a LEAN initiative aligned to a top level safety measure, they need coaching to know what to expect.  For example, if they spot a LEAN initiative on their scorecard that is expected to improve results, they need to expect to see information regarding the current and future state value streams.  Without informed executive oversight, Hospital executives often hear best guesses during scorecard reviews rather than systematic Root Cause Analysis.

Accountability - for LEAN to work, it requires CHANGE.  There will be changes to processes across the silos of the hospital.  Only through repeated, structured reviews with each impacted scorecard team can you ensure that those accountable don't escape.  Without executive visibility to who's accountable and how they are performing, the status quo will likely continue and NOTHING WILL CHANGE.

Getting Executives Involved & Enthusiastic About Strategy Execution

If you're driving toward Strategy Execution or Performance Excellence within your organization, you know how critical it is to get the executive team to be as passionate as you are about this effort. If you're having trouble building this enthusiasm among members of your senior management team, perhaps the following approach can assist you. I've seen it work wonders.

Once you've held a strategy session to develop your key strategic objectives for the coming year that will live on your scorecard, assign each top level objective to one of the executives on the senior team, making it clear that they will be responsible for identifying and managing the right measures, stretch targets, and cross-functional initiatives to achieve their objective across the organization.

They will be the “Executive Sponsor” for deploying and achieving that objective for the entire organization. Use an Objective Charter to help the executive identify the business case for the objective (why it is important and what problem it is addressing), the measures and targets, the potential initiatives, and the individuals who will lead the initiatives.

Thanks for nothing, Boss.

Of the many things described by the term "Performance Management," one flavor is all about the "human" or "human resources" aspects of getting better results. There are lots of "Human Capital Management" (HCM) vendors, lots of hype, some good blogs, and just maybe some real results. 

Many of these vendors describe their personal goal management modules as "performance management." They may even let you link a goal or two to a list of corporate strategy statements, but be wary of people who have this approach in mind when they discuss performance management.

The HCM approach differs greatly from the "strategy execution" approach to performance that we espouse, which entails a much more rigorous approach to aligning people to corporate strategy.

Yes, I know things like talent management and compensation management (especially) can be really tricky, but from what I'm seeing, most of the action in this Human Capital space is around automating reviews and managing employees' personal goals. And they tend to be fairly simple applications in this regard.

In addition to this skepticism I have about the degree of linkage and strategic alignment most HCM vendors can provide, what I find myself scratching my head about the most is the functionality many of them tout to expedite and automate the employee review process.

Do Strategy Maps Work in Government? - Part II

Continuing from my previous post on Strategy Maps in Government:

At the Top of the Organization
Taking another look at larger governments, how do you create a true strategic plan across the top of this type of organization, yet still find a way to execute on time, to quality, and within limited budgets? Let’s start with just the top-level planning.

Most of the strategic plans I have seen are organized by major categories of outcomes – not stakeholder perspectives. These outcomes might be public safety, outdoor community spaces, and building and construction. Within the strategic plans, specific goal or objective statements are articulated that state exactly the essence of the desired outcome. Attached to these goal or objective statements are typically measures of some representation of achievement of the outcome.

As mentioned in Part I, the elected bodies often bring diverse and numerous individual agendas to the planning table to address the needs of their constituents. In large and culturally diverse areas, this can create a very broad set of goals and objectives. Is it possible to achieve consensus and reduction to the critical few within such a governing body? Possibly, but it is not likely.

Don't Blame the Hammer: Why Balanced Scorecards Fail

Some studies say as many as two thirds of US companies have a Balanced Scorecard, yet other studies show that fewer than 20% have been able to drive true results.

Why such a gap? Like any tool, success versus failure depends on how well the Balanced Scorecard is used. You can't blame the hammer for shoddy construction practices. Yes, you need good tools. That's a given. But the best hammer in the world can't make up for unskilled workers, poor building design, or an insufficient supply of nails.

What are the biggest usage problems that keep this tool (the Balanced Scorecard) from succeeding?

Do Strategy Maps Work in Government? - Part I

Over the past several years, I have been working with numerous large and small City, County, and State governments and related entities.  Most of the work has entailed consultative support to mature their methodologies from "Results Oriented" models to more Balanced Scorecard-based models, to support better strategy deployment, ensure appropriate outcome measurement and bottom-line effectiveness of the management system, as well as the automation of existing business plans into ActiveStrategy Enterprise software.

Without a doubt, there is tremendous ‘cultural’ focus on outcomes.  Everyone talks about them, most are trying to measure them, and the political bodies publicize them.  It is obvious to me that the era of defining the role of government in terms of the outcomes it produces is here.  Citizens expect it, government employees strive for it.

The Valley of Despair: Avoiding a Strategy Execution Pitfall

When I read Crossing the Chasm, by Geoffrey Moore 15 years ago, it had a big impact on my understanding of how people accept technology.  Though it is a bit dated, it still rings true today. 

What stuck with me most is the concept of the technology adoption curve.  Basically, this states that your techies lead (or bleed) the way with new technology and visionaries/early adopters follow closely behind.  Things don't get really fun until the pragmatists and conservatives get on board (like my 92-year-old Grandmother who just started using CDs to listen to books on tape). At that point a technology is mainstream and society really begins to benefit.

So what does this have to do with getting better business results?  Good question.  There are two factors at work here:

Get the Check. Cash the Check.

When boiled down to its simplest form, there are really two top-level processes which comprise most any business:  Get the check. Cash the check. 

There are certain things a business needs to accomplish in order to “Get the check”, and there are certain things the organization has to deliver in order to “Cash the check.”  To execute these key processes, the business requires two ingredients – resources (people, facilities, technology), and organizational structure.

How effectively the business organizes itself, applies its resources, and executes its processes will determine its customer satisfaction and ultimately drive financial success or failure.

Finding the Data You Need for Your Scorecards

I’ve seen balanced scorecards with as few as nine measures and monster scorecard hierarchies that eventually drill into thousands of measures. Whether yours is large or small, you'll run into questions about where to find the data you want to track on scorecards. Across industries and even in government, a "rule of thirds" seems to hold: you are already reporting 1/3 of the data you need, another 1/3 is “around here somewhere,” and you can’t get at the last third — yet.

• The first third. Most of this data already exists in reports or dashboards currently being produced. Often, you will only need a level or two of summary from a given report. Unfortunately, there can be A LOT of reports where you need only a few data elements. 
• The second third. These are measures that can exist in lots of forms: scribbled on a post-it in someone’s cube, on the excel spreadsheet that Jane in marketing keeps, on reports from external vendors or partners, or inside that rickety old legacy system everyone is afraid to touch. Tracking down all of this data can be a lot of work but it is also a relatively quick win when you start managing performance with it.
• The last third.  This is the "Boy, it would be great to measure this" stuff. I tell executives (note: only the executives) to leave these on a scorecard (as place keepers) if they really think the organization can get around to measuring them in the coming year*. Then, it's up to the executive to push and prioritize people to come up with a plan to actually measure these. Lots of these don’t end up getting measured, but some do and they can actually have a huge impact.

This "data audit" process can take up a chunk of time in a Balanced Scorecard/Strategy Execution implementation, so plan accordingly in your project plan.

 

Wherever you end up getting your measure data, make sure you come up with good, clean definitions. The definition should explain exactly what the data element is, where it comes from, and give an example calculation if applicable. If there are ten definitions of revenue in a company and your scorecard doesn’t explicitly call out which one you're measuring, you are going to create more questions than you answer.

* So actually, the rule of thirds can be self limiting: if you eliminate a lot of the measures you won’t be able to get to, you will end up with less than a third in the category.