The Balanced Scorecard in Public Libraries

Joe Matthews September 2006

What Is a Balanced Scorecard?

The Balanced Scorecard

The idea of the scorecard is to describe the essential ingredients of organizational success. Its underlying philosophy Provides a tool for clearly communicating the goals and priorities of the library.

The Balanced Scorecard

Translates an organization s mission and strategy into a comprehensive set of performance measures and provides the framework for strategic measurement and management.

The Four Perspectives

Customer Perspective:
Creating a sustainable differentiated value proposition is the heart of strategy

Product/Service Attributes


Quality, Availability, Selection, Functionality, Price

Relationship


Service, Partnering

Image


Brand

Internal Perspective


Operational Efficiency


Supplier relationships, produce products & services, distribute to customers, manage risk

Customer Relationships


Provide desired services/products, provide convenient processes, provide customized services

Innovation


Process innovation, manage capital projects

Learning & Growth Perspective is all about Readiness



Competencies


Total Quality Management process improvement capabilities, developing a culture of assessment

Technology


Software, local area network, wide-area network, library information system, Web site, portal

Climate for Action



Process improvement: Do it better, faster, cheaper

Financial Perspective

Productivity Strategy
 

Become a cost leader maximize use of existing assets

Revenue Growth Strategy

  

Revenues from new customers Increase existing customer revenues Grants, fund raising

Who is Using the Scorecard?

    

Companies Federal government State and local government Non-profit agencies A few libraries

The Balanced Scorecard Framework Is Readily Adapted to Non-Profit and Government Organizations

Public Value and Benefit Individual & communitybased outcomes Customer Perspective Service attributes & satisfaction Internal Processes Efficiency & productivity Financial Perspective Accountability & value

Learning & Growth Staff skills, technology & climate for action

Library Balanced Scorecard

Customer

Information Resources

Internal Processes

Organizational Readiness

Financial

Why Adopt a Balanced Scorecard?

Formulate and communicate a new strategy for a more competitive environment Each staff member s actions are guide by the strategies and goals of the library

Change

Alignment

Focus

Provides management with a tool for monitoring progress towards achieving the library's vision

Value Chain

Drivers Inputs

Process

Outputs Immediate Intermediate Ultimate Outcomes Outcomes Outcomes

External causes

$$ Staff IT

Activities

Products and services delivered

Time Cost Quality

Change in attitudes, beliefs or behaviors

Societal impact

Facilities Equipment

Relationship to Plan

Drivers Inputs

Process

Outputs Immediate Intermediate Ultimate Outcomes Outcomes Outcomes

Budget

Strategies

Goals/Objectives

Vision

Starting Point
   

Mission Statement (the present) Values Statement The Vision (the future) The gap between now and the future leads to a plan of action to achieve the vision. How we get to the future involves strategies.

Principles of a Strategy-Focused Organization



Mobilize change through executive leadership Translate strategy to operational terms Align the organization to the strategy Motivate to make strategy everyone s job Govern to make strategy a continual process

People and their managers are working so hard to be sure things are done right, right, that they hardly have time to decide if they are doing the right things. things.
Stephen R. Covey

Barriers to Strategic Implementation

The Vision Barrier
Only 5% of staff members understands the strategy

The People Barrier

Only 25% of managers have incentives linked to strategy

The Management Barrier

9 of 10 companies fail to execute strategy

85% of top management teams spend less than 1 hour per month discussing strategy

The Resource Barrier

60% of organizations dont link budgets to strategy

You Can t Manage Strategy With a System Designed for Tactics

Today s management systems were designed to meet the needs of stable organizations that are changing incrementally.

The Balanced Scorecard assists an organization to align and focus all its resources on its strategy!

The Failure of Strategy

"You can either take action or wait for a miracle to happen. Miracles are great but they are unpredictable."
Peter Drucker

Types of Strategies
Customer Intimacy Innovative Services Operational Excellence

Strategies translate what customers want into what libraries must deliver!

Strategy Is A Hypothesis About What Drives Organizational Success

Mission

Vision

Strategy

Operations

Results or Outcomes

Customer Requirements

Identify the key performance drivers that lead to successful strategy execution

Strategy Maps
A visual tool for describing and communicating your strategies. The best strategies are a set of themes focused on the value-creation process. The map shows the cause-and-effect relationships of the strategy among the various perspectives

Interrelationships


Strategy maps tell where we are going and why Scorecards explain how well we are doing and provide guidance for what can be next Budgets tell how

Value of the Strategy Map



Assists the library in identifying cause-and-effect relationships Helps develop a predictive model

Cause-and-Effect Relationships
Vision achieved Satisfied customers Efficient internal processes Skilled employees Aligned resources
Mission/Vision Customer Focus Internal Processes Org. Readiness Financial

  

 

Sample Strategy Map

Customers
Increase Satisfaction Lower Wait Time

Internal Business Process Organizational Readiness

Lower Cycle Time

Reduce Process Steps Improve Skills

Increase Network Capacity

Budget

Demonstrate Accountability

Reduce Costs

How To Select Performance Measures

Performance Measures Problems

 

Too many measures and no focus Entrenched or no measurement systems Unjustified trust in informal feedback systems Fuzzy objectives

What Needs to be Measured

Is derived from what needs to be accomplished strategy! There needs to be a balance (not too many measures) and focus (measures that reflect strategy. Trends are more important than the value of a particular measure.

Performance Measures
Combination of:  Leading and lagging measures  Financial & non-financial measures  Input, process, output and outcome measures  Internal & external measures

Performance Measures Should Help Us Decide:

Are We Doing Things Right?

Are We Doing The Right Things?

(How?)

(What?)

Input

Process

Output

Outcome

Input: Resources, including budget and workforce Process: Activities, efforts, workflow Output: Products and services produced Outcome: Results, accomplishments, impacts

Identify Targets


When targets are used, performance improves an average of 16% Use stretch targets SWAG targets

Select Initiatives


Have an impact on achieving your strategies Identify responsible individual, implementation schedule, resources required, budgetary implications Look for ways to eliminate it, simplify it, or automate it

Sustaining the Scorecard



Management s Focus use the scorecard to drive meeting agendas Develop a culture of assessment Cascade the scorecard Communicate your scorecard

Remember!

The Library Balanced Scorecard is about management and change first; the use of performance measures is second.

Resources
For more information about scorecards, visit www.ci.carlsbad.ca.us/imls Joseph R. Matthews. Measuring for Results: The Dimensions of Public Library Effectiveness. Westport, CN: Libraries Unlimited, 2004.

Questions?

Definitions

Mission: What we are about ( Our mission is to provide . . . ) Vision: What we want to be in the future ( Our vision is to be the leading providers of . . . ) Perspectives: Different views of our library (Customers, internal processes, employees & capacity, financial and . . . Information resources, Public value and benefit) Customers: Direct beneficiaries of our services or products (citizens) Stakeholders: The universe of people with an interest in what services we provide and how well we do it) Outcomes: What results are desired; our planned accomplishments (Note: Improved customer satisfaction is a by-product when customers received their desired outcomes.) Goals: What we want to achieve by a certain time (increase number of city residents who use the library on a quarterly basis by 10%)

Definitions
Strategies: How we intend to accomplish our vision and goals; our approach or game plan Objectives: Strategy components; action items that must be accomplished (improve staff skills, decrease costs) Strategy Map: A visual tool that shows cause-effect relationships among strategy components Outputs: What is produced (number of reference transactions) Performance Measures Lagging: Indicators of success (number of customers served last month) Leading: Predictors (performance drivers) of future success (increase in staff skills and knowledge) Target: Desired level of performance for a performance measure (customer satisfaction target = 95%) Initiatives: Action programs that will achieve our performance goals (provide 24/7 online reference service)