Balanced Scorecard Strategies For Hr Ss Workshop May 10 2010a Chicago, Il
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Brief overview of HR Shared Services theory and application of the Balanced Scorecard and Dashboard System for Management
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Similaire à Balanced Scorecard Strategies For Hr Ss Workshop May 10 2010a Chicago, Il
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Balanced Scorecard Strategies For Hr Ss Workshop May 10 2010a Chicago, Il
- 1. Presented by Mr. Frederick S. ‘Rick’ Buchman Practitioners and Experts on Balanced Scorecard and Dashboard Applications, and Co-Authors, Balanced Scorecard Strategy for Dummies , Wiley & Sons, Inc. Sept 2007 March 10, 2010 Chicago, IL 08/28/11 IQPC HR SSO Summit, May 10, 2010 - Balanced Scorecard Strategies Workshop – Presenter: Frederick S. ‘Rick’ Buchman
- 4. Balanced Scorecard Strategies for HR Shared Services - The Four ‘Legs’ of a Balanced Scorecard 08/28/11 Business Process Performance Employee Knowledge, Skill and Competencies Customer Focus and Satisfaction Financial Performance Competitive Advantage On-Time First Time Right Exactly as Ordered Excellent Condition Cost Management Good ‘Handoffs’ In-Process Checks & Great Quality First Time Right Customer Focus Product Understanding Process Understanding Business Knowhow Teamwork & Feedback Continuous Improvement Revenue Profitable Margin Cost Management On-Time Performs as Desired Dependable Great Price Market Share Business Growth Shareholder Value
- 5. 08/28/11 Balanced Scorecard Strategies for HR Shared Services - Overview and Definitions Write down 4 general items related to each ‘Leg’. Then, code each item as S, O, or T for Strategic, Operational or Tactical. Customer Focus and Satisfaction Financial Performance 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________ 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________ Business Process Performance Employee Knowledge, Skills and Competencies 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________ 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________
- 7. 08/28/11 1. Establish your Strategy Map 2. Design the ‘Legs’ of Your Balanced Scorecard 4. Continuously Improve Feed ‘Forward’ Loops [Information, Orders,..] Feed ‘Back’ Loops [Quality, Issues, Timing, Performance, …] Feed ‘Back’ Loops [Quality, Issues, Timing, Performance, …] Feed ‘Back’ Loops [Quality, Issues, Timing, Performance, …]
- 8. 08/28/11 Balanced Scorecard Strategies for HR Shared Services Step 1 – Mapping your Strategy
- 11. Balanced Scorecard Strategies for HR Shared Services - An Example of a Strategy Map 08/28/11 A Company seeks to increase Market Share through Growth, providing added Value to customers through knowhow and performance, and increasing shareholder Value through improved Profitability and increased Margin performance ‘ Legs’ of the Balanced Scorecard Growth & Market Share Highly Regarded Expert in the Industry Increased Shareholder Value Customer Focus Create desire for our products, at our price Looked to for Expertise First Profitability Leader for our Shareholders Financial Performance Increasing Revenue, Price Competitive Higher Margins, Cost competitive Business Processes Deliver when, where, and how much, flexible to demand changes Demonstrated Best Practices, Leading-Edge Processes Cost Reduction, Efficient Process, Minimize Waste Knowledge, Skills and competence Demonstrated Leaders and Experts in the Industry Demonstrated Leaders and Experts in the Industry
- 16. 08/28/11 Balanced Scorecard Strategies for HR Shared Services Step 2 – Designing your Balanced Scorecard – Defining and Aligning the 4 ‘Legs’
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- 22. 08/28/11 Balanced Scorecard Strategies for HR Shared Services - Developing your Scorecard – Select Level: Enter your Key Performance Metrics (KPM) related to each ‘Leg’ of your Balanced Scorecard from Step 2: Customer Focus and Satisfaction Financial Performance KPM Units Target 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________ KPM Units Target 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________ Business Process Performance Employee Knowledge, Skills, Competencies KPM Units Target 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________ KPM Units Target 1. _____________________ 2. _____________________ 3. _____________________ 4. _____________________ ___ Company / Executive (Strategic) ___ Department / Division (Operational) ___ Section / Workgroup (Tactical)
- 23. 08/28/11 Balanced Scorecard Strategies for HR Shared Services - Defining the 4 ‘Legs’ of the Balanced Scorecard Enter your Strategies down the left side. Then, in each box, identify a specific initiative that will support achieving each strategy related to the specific ‘Leg’ of your scorecard. Financial Performance Customer Focus Business Process Performance Employee Skills & Capabilities Strategy #1 _________________ _________________ _________________ ________________________________________ ____________________ ____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ _____________________ ________________________________________ ____________________ ____________________ Strategy #2 _________________ _________________ _________________ ________________________________________ ____________________ ____________________ ____________________ ____________________ ____________________ ____________________ _____________________ _____________________ _____________________ _____________________ ________________________________________ ____________________ ____________________ Strategy #3 _________________ _________________ _________________ ________________________________________ ____________________ ____________________ ____________________ ____________________ ____________________ ____________________ ________________________________________ ____________________ ____________________ ________________________________________ ____________________ ____________________ Strategy #4 _________________ _________________ _________________ ________________________________________ ____________________ ____________________ ____________________ ____________________ ____________________ ____________________ ________________________________________ ____________________ ____________________ ________________________________________ ____________________ ____________________
- 24. 08/28/11 Balanced Scorecard Strategies for HR Shared Services Step 3 – Develop your Dashboards– Executive/Organization Department / Division Section / Workgroup
- 27. 08/28/11 A Real State Department of Human Services Finance set-up
- 29. Balanced Scorecard Strategies for HR Shared Services - Example of a Dashboard for an Airline 08/28/11
- 34. 08/28/11 Balanced Scorecard Strategies for HR Shared Services - Your Presenter…Frederick S. ‘Rick’ Buchman Mr. Buchman has over 25 years hands-on international strategic, operational and organizational transformation experience, spanning multiple industries from missiles and electronics to medical devices. He has been directing business improvement initiatives involving Strategy Planning, Lean and Six Sigma, Balanced Scorecard and Dashboard deployment, Operations, and Organizational optimization for the past 16 years, as both an internal and contract consultant, supporting the automotive, electronics, semiconductor, oil & gas, electromechanical, medical device, commercial and components industries, and working extensively with Engineering, Operations, R&D, Finance, HR and Legal divisions. Rick has also taught extensively at the graduate level for major institutions such as MSU (the Eli Broad Graduate School of Management), Towson and George Mason Universities, in strategy planning, problem solving, business management, value stream mapping, balanced scorecard and dashboard strategies, coaching and team leadership. His clients have included AT&T, Raytheon Corp., Hughes, Texas Instruments, Ford Motor Company, Allied-Signal, ITT, Husky Oil, Slumberger, Gerdau, Remy, Dura GmbH, GKN, and several US State and Federal Government agencies. Mr. Buchman has a B.S. in Mathematics, MBA in Business, and a Ph.D (ABD) in Business, and has been featured in International Who’s Who in Business, 2006.. Rick recently co-authored the Amazon Productivity Best-seller Balanced Scorecard Strategy for Dummies , with Mr. Charles Hannabarger and Mr. Peter Economy, published by Wiley and Sons, Inc. in September 2007 (English Language), and again in March 2008 (Dutch Language) and September 2008 (German Language). This book was also just recently voted (May 5, 2010) by the Channelinsider community #5 out of the top 21 ‘Must-Read Books’ for Business Success.
Notes de l'éditeur
- Introduction of Rick and Chuck, talk briefly on the title of the workshop, and then turn it over to Rick, to do the Agenda [next slide]
- RICK Talk to the workshop in May, what to expect: Specific application to HR Shared Services Interactive workshop, not just lecture. Attendees will be able to walk out with specific tools developed in draft, that they can then refine. So, Katherine, that is a brief overview of the Balanced Scorecard system for management, with some examples as to how it is being used today. KATHERINE ASKS A QUESTION HERE: What are the issues currently with HR and the Balanced Scorecard today? ANSWER: There is one important concern that has surfaced where Balanced Scorecards were deployed to support HR, specifically with respect to instances involving HR and applications of Balanced Scorecards that were used to conduct Annual performance appraisals. This is an incorrect application of the tool, and unfortunately, where this has happened, we see elevated sensitivities within the workforce regarding any type of scorecard after that, so there is no receptivity to doing it right at that point. We need to use the scorecard and dashboards to help us manage and optimized our business performance, rather than assessing individual performance. Thanks, Katherine, for the opportunity to talk with you and your audience today about the Balanced Scorecard. I would like to turn the reigns over to you at this point. [DONE]
- RICK Key points: Financial metrics are important!! However, Financial management is not enough Financial measure performance is often the result of good process performance, coupled with a competent and capable workforce, meeting or exceeding customer expectations on a daily, weekly and monthly basis. The Balanced Scorecard provides a sound Business Management System, or also called a System for Management (SFM) within some circles… So, let’s look at these 4 ‘legs’ in great depth, and how they interact… [Next slide]
- CHUCK Key points: The 4 legs interact, and so are co-dependant on each other for optimum overall organizational performance, to support this business management systems approach. Each Leg has distinct characteristics, which we will discuss in brief here, and go into more detail at the workshop. To see how this works, We follow a roadmap to developing your scorecard, so that all of the actions taken align with the business strategy, direction, and focus. Let’s take a look at this roadmap, and get a better understanding of what it take to deploy your scorecards successfully…. [Next Slide]
- CHUCK Key Steps: Establish your Strategy Map. - Aligns your scorecard with key organizational strategic initiatives. 2. Design the individual ‘Legs’ of your Balanced Scorecard. - Focus on each of the 4 aspects, and what you need to have in place to be effective. Design each ‘Leg’ with attention to the strategic, operational and tactical aspects needed, to maximize integration and collaboration throughout your organization. 3. Develop Department ‘Dashboards’ for Real-Time Performance management and adjustment. - Dashboards are ‘Real-Time Indicators’ of what is going on, providing performance intelligence with which managers can make decisions. Use the Balanced Scorecard for continuous improvement of the business entity. - Create a competitve advantage through continually assessing and improving performance of each ‘Leg’ of the Balanced Scorecard So, let’s take a look at the first step, that of creating your Strategy Map… [Next Slide]
- RICK Key points: Critical first step to a Business Management System – need to get the direction and focus right! It is also required so that everyone can see what is required from a strategic perspective, so that they can develop their specific goals and actions accordingly. Go through the steps briefly. Cover the value added. Let’s look at an example, to get a better understanding of this connection…. [Next Slide]
- RICK Key Points: DON’T READ VERBATIM!!!! This is a key table, that provides specific focus to each strategy, so that the organization can develop plans and metrics aligned to each ‘leg’ of the balanced scorecard. With this example, we see the top 3 strategies of the organization, and the focus to support them from each ‘Leg’ perspective. For Example, look at the business process focus to support growth, and then shareholder value…..notice the key items and what are the key drivers to support the strategies. Note also that we don’t force alignment, if it is not appropriate. For example, Financial Performance will directly impact Growth and Market Share, as well as Shareholder value, but will probably not influence how well regarded the company is as a Subject Matter Expert. KATHERINE ASKS A QUESTION AT THIS POINT: So, you have to understand the strategy of a business in order to develop the ‘balanced scorecard you would use to manage it? ANSWER: Yes, Katherine. Too often, groups launch into measuring their performance, focusing on what they track and manage, but don’t tie back to the overall strategic direction. This is vital, especially in today’s economy, where change is as fast as ever, and you have to have a fast and flexible way to see what changes are needed to stay ahead and retain your competitive advantage. 4. So, let’s take a look at how this might work for a Shared Services entity. An important note in this regard is to remember that Shared Services is an evolving industry, with players at the initial, advanced and high performing levels. We will look at this in the next slide, to get a better understanding of how we can apply the balanced scorecard approach within this developing business model….. [Next Slide]
- RICK Key point: This model helps us first determine where we are as a Shared Services entity, in terms of progressing levels of capability moving to higher levels of performance. This is very important, because where you are on this ‘ramp’ will influence the key strategic goals and direction for the organization, which is fundamental to establishing a sound strategy map. Note the different ‘stage’ descriptors: in the initial stages, Shared Services entities focus on each service provided and the quality aspects of how well it was done, in a standard way, with minimal variation and down time. In the advanced stages, they move to a more ‘systems’ approach, coupling similar/like services from a functional, geographic or client perspective, and also moving to a more complex system to enable greater flexibility for all involved. In the high performing stages, we see a more ‘holistic’ approach, implemented within a globally deployed, strategically focused capability. Once we know where you are in your deployment, we can then look at how to focus our resources and energy, based on the 4 ‘legs’ of our balanced scorecard, as depicted on the next slide…. [Next Slide]
- RICK Key point: DON’T READ VERBATIM!!! This table shows the alignment of the 4 ‘leg’ perspectives to a Shared Services provider perspective, as the provider matures and grows. Note that there are key things that change: focus, maturity, considerations, and magnitude/scale. (circle a couple under customer focus, to show the difference between initial and high performing entities…) Once we have our strategy identified, aligned and mapped, we can begin to design our balanced scorecard. Let’s take a look at what is a Balanced Scorecard…. Hand off to Chuck! [Next Slide]
- CHUCK Key points: Definition: The Balanced Scorecard is the cornerstone of the system for management, enabling real-time performance measurement, and providing up-to-date intelligence about the organization and what to focus on. This provides the decision makers critical information necessary to make adjustments and retain competitive advantage. The methodology to develop your dashboard starts with determining key focus areas and measures from the strategy map and deciding what key actions we need to take and how to measure them. In this respect, we will develop our measures based on 3 types of actions: Strategic, Operational and Tactical. Let’s take a closer look at these three, and get a better understanding of what they mean…. [Next Slide]
- CHUCK Note: Talk to the connections between strategic, operational and tactical, as they relate to the specific metrics selected. Use the Pen to circle key areas as you discuss differences and interconnections. Also discuss the need to build in anticipated changes per health care changes recently, and to have a way to detect future changes early, so as to enable management to detect, understand and adjust in a timely way to remain competitive. Now, let’s look at an example of a Balanced Scorecard…. [Next Slide]
- CHUCK Key Points: This is an example of a balanced scorecard. Talk to the format, use the pen. First the 4 ‘legs, then the indicators, (also known as key performance indicators [KPI], critical performance indicators [CPI], …), measures, …. Touch on the indicators and measures, for each leg, but briefly… only have 1-2 minutes for this slide! KATHERINE ASKS A QUESTION AT THIS POINT: How would you see this working in an HR Shared Services Environment? ANSWER: Katherine, I could see dozens of applications within HR Shared Services, from assessing customer satisfaction with the services provided to process measurement on how fast, good, and cost effective different services were provided, to determining possible gaps in capability within the organization and developing critical training courses to close them. And, given Rick’s model of ever increasing capability, we would see different goals and measures as the Shared Services groups evolved to higher levels as well, maybe adding measures to help optimize Excellence Center performance, highlight key skill needs, and enable breakthrough improvements to redesign and drastically reduce time and error rates. 3. With the dashboard in place, our next step is to develop the Dashboards we would put in place, to enable visibility and management information in real-time. Let’s talk about what is a Dashboard, and how it might look with some examples… [Next Slide]
- CHUCK Key Points: Dashboards provide the critical real-time visibility to the measures of the balanced scorecard at all levels. The steps surrounding the creation of a dashboard involve: First assessing the measures desired from the dashboard, Determine what you would want to see on an on-going basis, and then Design the dashboard, considering Key content, types of charts and graphs based on visual clarity, with some regard to format and keeping it simple. Finally, you put the dashboard into action, and adjust it/improve it through time. Discuss the value again, especially considering the real-time capability to see what it going on, and allows for real-time adjustment (hopefully avoiding rather than responding to issues, before they happen…) Let’s look at some examples, to illustrate dashboard design and integration….. [Next Slide]
- CHUCK Key point: Here, we see, looking at the Director’s Dashboard, the layout, with 6-8 key measures being tracked. We also see the Linking between the executive, management and workgroup dashboards. This is important, to ensure vertical alignment with the key measures involved from the scorecard. Now, let’s look at another example, that shows a different way to use charts, color and ‘meters’….. [Next Slide]
- CHUCK Key point: On this dashboard example, we see different types of charts, graphs and a ‘meter’ approach. This is particularly popular, and readily indicates if there is a problem with a key metric. Note also lots of color, and a sense of ‘balance’ on the page. Also, there are only 4 key areas, you want to have maybe no more than 10 or the dashboard gets cluttered. It is important to try to have key indicator flags to show immediately when something is not right (or better, when something is starting to waver, but is still ok… just needs some attention, adjustment, etc…) The next example is a little more complex, yet we can see how the whole operation works from the one page….. [Next Slide]
- CHUCK Key Points: This is an example of a fairly complex dashboard, with all components. It seems complicated, yet when we look at it, we can see everything, and can assess the ‘health’ of how the business is doing based on the charts. It could use some key indicators, to help the viewer see where there might be some trouble spots, if possible…. Use the pen, point out/circle key aspects of this dashboard, related to the 4 ‘legs’. For example, Revenue is financial, Flight data is operational process related, as is Top 10 Flights tracking, while Customers, and Flight disruptions are customer related. So, let’s wrap up, Rick. What can they expect from the Workshop? Hand off to Rick.. [Next Slide]