Let me ask you three questions about your Public Sector balanced scorecard:
1) What categories of measures are you using on your scorecard? Do they describe how change will occur?
2) Do you represent the multiple strategies that you are implementing, for instance cost reduction through policy decisions, simplifying operations and also perhaps preventative measures?
3) Do you accurately represent measure how your various service delivery models are working? Through partnerships, through collaboration, through, joined up working or even through Big society thinking?
You see I came across a model of the Public Sector balanced scorecard put out by Max Moulin of the Sheffield Hallam University. In it he suggests a collection of perspectives that include, for instance, operational excellence. Unlike Max, working with my clients I have not found that mixing a strategy such as “operational excellence” with a perspective is helpful. In Norton and Kaplan’s balanced scorecard thinking, the perspectives are independent of the strategy. How you serve customers’ needs and the population (customer perspective), whilst delivering within budget (financial perspective) , and satisfying the political demands (regulatory perspective) relies on what you choose to do(process perspective) and is underpinned by your organisational capability and capacity (in balanced scorecard perspective terms this is Learning and growth).
In the model we use strategies such as “operational improvement” should work across these perspectives. So increasing your ability to implement lean processes, should improve your processes efficiency and lower costs, whilst creating better outcomes for the community (and keeping the politicians happy). So, there is as aspect of operational excellence in each perspective. The same is true to any other strategy such as policy change, preventative activities or outsourcing your services to a third party to deliver, or what ever strategy is chosen.
We believe strategies should not be confused with perspectives. Strategies work independently across the balanced scorecard perspectives informing a strategy.
This is the main reason I wrote a paper on”The public sector strategy map” for the PMA (Performance Management Association) Newsletter.
Over the past 10 years we have developed balanced scorecards working with all sorts of public sector organisations ranging from central government and the MOD, through to many parts of the NHS, Fire Service and City Councils. In developing a scorecard (balanced scorecard) you first have to ensure you capture their business or service delivery model and also identify their strategy for change.
If you fail to identify their strategies for change, and simply collect measures in perspectives that look like sensible categories (such as “operational effectiveness”) the effect will be you will see what has gone on, but not what is driving your strategy and change.
Using a public sector strategy map, with the generic public sector strategy map structure and then imposing the service delivery model and strategies over the top, will ensure that the set of measures you eventually create on your scorecard will be ones that inform and drive your strategy.
The paper is to be published in the Performance Management Association’s newsletter for September. If you want to learn how to make better Public sector balanced scorecards drop me an email and I’ll send it to you.