1. The American Red Cross:
Performance Measurement
Then and Now, and Applying the
Balanced Scorecard
By Bicky, Evgenii, Lavender, Natalie, and Sa

2. Overview
• Balanced Scorecard Method
• American Red Cross
• Old Performance Measurement System
• Description & Evaluation
• New Performance Measurement System
• Description & Evaluation
• Recommendations & Applying the Balanced Scorecard

3. Presentation’s Objectives
• WHAT the Balanced Scorecard is.
• WHY it is an effective performance measurement tool
• HOW the ARC makes use of the BSC.
• HOW the organization‟s performance is measured
with the BSC

4. What is Balanced Scorecard?

5. Balanced Scorecard History
Measurement
and
Reporting
1992


2000
1996
Articles in Harvard Business Review:

Enterprise-wide
Strategic
Management
Alignment and
Communication
Acceptance and Acclaim:
“The Balanced Scorecard —
Measures that Drive Performance”
January - February 1992
 “The Balanced
“Putting the Balanced Scorecard to
Work” September - October 1993
 Selected by Harvard
Scorecard” is translated
into 18 languages
“Using the Balanced Scorecard as
a Strategic Management System”
January - February 1996
1996
Business Review as
one of the “most
important management
practices of the past 75
years.“
2000

6. Before the Balanced Scorecard
MISSION
Why we exist
VALUES
What’s important to us
VISION
What we want to be
STRATEGY
Our game plan
STRATEGIC OUTCOMES
Satisfied
SHAREHOLDERS
Delighted
CUSTOMERS
Efficient & Effective
PROCESSES
Motivated & Prepared
WORKFORCE

7. With the Balanced Scorecard
Strategy Is a Step In a Continuum
MISSION
Why we exist
VALUES
What’s important to us
VISION
What we want to be
STRATEGY
Our game plan
BALANCED SCORECARD
Implementation & Focus
STRATEGIC INITIATIVES
What we need to do
PERSONAL OBJECTIVES
What I need to do
STRATEGIC OUTCOMES
Satisfied
SHAREHOLDERS
Delighted
CUSTOMERS
Efficient & Effective
PROCESSES
Motivated & Prepared
WORKFORCE

8. Reasons to use BSC

9. Four Perspectives of the Balanced
Scorecard

10. Learning and Growth
Perspective
• An organization's ability to innovate,
improve, and learn ties directly to its
value as an organization.
• How can we continue to improve and
create value for our services?

11. Business Process Perspective
• Must focus on critical internal operations
that enable the organization to satisfy
customer needs.
• To satisfy our shareholders, what business
processes must we excel at?

12. Customer Perspective
• Must know if their organization is satisfying
customer needs.
• To achieve our vision, how should we appear
to our customers?

13. Financial Perspective
• In the private sector, measure typically focused
on profit and market share.
• To succeed financially, how do we appear to
our shareholders?

14. Financial Perspective

16. Perspectives & Performance Measurement
CUSTOMER
OBJECTIVE MEASURE
FINANCIAL
WEIGHT %
BUSINESS PROCESS
OBJECTIVE MEASURE
WEIGHT %
OBJECTIVE MEASURE
WEIGHT %
LEARNING & GROWTH
OBJECTIVE MEASURE
WEIGHT %

17. The Balanced Scorecard: Benefits
• Sets clear goals, objectives, and measures across four critical
areas
• Creates interdependency and interrelationship of all four
quadrants; balance is key
• Provides leadership with the ability to build organizational
consensus around its priorities; creates organizational clarity
• Provides a vehicle that can hold staff and management
accountable for their results in a clear and consistent manner
• Can complement any existing strategic planning effort by
clearly identifying and prioritizing performance benchmarks
and targets

18. American Red Cross (ARC)
• Nongovernmental, nonprofit organization whose purpose
is to prevent and relieve human suffering
• Has a mission of providing relief to victims of disasters
and helping people prevent, prepare for, and respond to
emergencies
• Employees (13,000) and volunteers (875,000)
• 850 Chapters

19. Two Performance
Systems in Old Plan
• Re-chartering: Chapters had to answer 33 yes/no
questions.
• Standard of Excellence: Designed to improved the
chapter performance in the reach of fundraising, revenue
per population, service level, and community potential

20. American Red Cross
Strategic Plan
• Be America‟s partner and a leader in mobilizing
communities to help people prevent, prepare for, and
respond to disasters and other life-threatening
emergencies.
• Inspire a new generation of volunteers and supporters to
enrich our traditional base of support.
• Strengthen our financial base, infrastructure, and support
systems to continuously improve our service delivery
system.

21. Two Types of Chapter
Performance Standards
in the New System
• Core Requirements: Chapters should meet these basic
requirements.
• Critical Performance Standards: Fifteen out of thirty
standards are mandatory. The chapters are evaluated on:
- Chapters‟ past year performance
- Comparison against the performance of its peers

22. Chapters Evaluation
• Highly Performing Chapters: Meet all the core
requirements and exceed both chapter performance
standards. Awarded with “Recognition”
• Successful Chapters: Meet all the core requirements and
also meet and exceed the performance standards.
• Provisional Chapter: Meet all the core requirements but
lag behind in the Critical Performance Standards.
• Charter Review Required: Chapters who fail one or
more core requirements.

23. Evaluation of the New
Plan
• Ensures uniformity and meet minimum requirements.
• 17 core requirements do not directly support the strategic
plan
• Critical Performance Standards good measure of
evaluation.

24. Example
Multiplier
Performance Measurement
1
2
Percentage of fundraising expenses to related
contribution
3
Disaster readiness level
Percent of volunteers indicating ‘Excellent’
overall levels of satisfaction with their volunteer
experience

25. Measures that differ?
• Different scales
• What is considered „good‟?

26. Measures that differ?

27. Actual Score ÷ Total PerformanceWeighted Score
Total Weighted Score Score × Possible Weighted Score × 100 = Total Chapter Performance Score
Performance
Multiplier = Score
Conclusions:
•Hard to focus: too many measures; too
many categories
•Some measures don‟t drive strategy
•Just components, no alignment
g

28. Recommendations: Applying
the Balanced Scorecard
• Objectives need to drive
strategy, and be aligned
• Measures need to
encourage objectives

29. Be America’s partner and a leader in mobilizing communities to help people
prevent, prepare for, and respond to disasters and other life-threatening
emergencies.
Inspire a new generation of volunteers and supporters to enrich our traditional
base of support
Strengthen our financial base, infrastructure, and support systems to continuously
improve our service delivery system

30. Example

31. Be America’s partner and a leader in mobilizing communities to help people
prevent, prepare for, and respond to disasters and other life-threatening
emergencies.
Inspire a new generation of volunteers and supporters to enrich our traditional
base of support
Strengthen our financial base, infrastructure, and support systems to continuously
improve our service delivery system

32. Example

33. Be America’s partner and a leader in mobilizing communities to help people
prevent, prepare for, and respond to disasters and other life-threatening
emergencies.
Inspire a new generation of volunteers and supporters to enrich our traditional
base of support
Strengthen our financial base, infrastructure, and support systems to continuously
improve our service delivery system

34. Example

35. Be America’s partner and a leader in mobilizing communities to help people
prevent, prepare for, and respond to disasters and other life-threatening
emergencies.
Inspire a new generation of volunteers and supporters to enrich our traditional
base of support
Strengthen our financial base, infrastructure, and support systems to continuously
improve our service delivery system

36. Example

38. Alignment of Objectives

39. Conclusion