Strategy Maps And Balanced Scorecards

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Strategy Maps andBalanced ScorecardsUsing Business Tools to AlignStrategies and Communicate ValueProfessor Sheila CorrallInformation School, University of Sheffield

Strategy Maps and Balanced ScorecardsMeasurement and Communication‘Strategy maps and Balanced Scorecardsconstitute the measurement technology formanaging in a knowledge-based economy.‘By translating their strategy into thelogical architecture of a strategy map andBalanced Scorecard, organizations create acommon understandable point of referencefor all their units and employees.’(Kaplan & Norton, 2001: 11) Information School / The University of Sheffield 2010

The BalancedBusiness ScorecardA strategic performance measurement framework,providing a comprehensive view of business performanceand relating measurement to strategy, vision and mission– invented by Kaplan & Norton (1992, 1996).

Balanced Business Scorecard A strategic performance measurement systemenabling broader assessment of organisationalperformance than traditional indicators Helps managers look beyond financial metricsand physical assets to customer measures andintellectual capital (e.g. innovation and learning) Combines 20-30 measures from 4 perspectivesto give a fast but comprehensive and balancedview of how an organisation is performing(Kaplan & Norton, 1992) Information School / The University of Sheffield 2010

The Balanced Business Scorecard4 Perspectiveson performance Financial orshareholder Customer orservice Internalprocess Innovationand learning(Kaplan & Norton,1992, 1996) Paul Arveson 1998 http://www.balancedscorecard.org

Benefits of the Balanced Scorecard Not only provides a fast comprehensive view ofbusiness performance, but also connectsmeasurement with strategy and vision In addition, the customer focus encouragesorganisations to direct management attentiontowards critical processes (rather than functions) The balanced approach has made the systempopular with organisations in the public sectorand with academic, national and public libraries Information School / The University of Sheffield 2010

Translating aMission intoDesiredOutcomesMissionWhy we existCore ValuesWhat we believe inVisionWhat we want to beStrategyHow we plan to get thereBalanced ScorecardHow we will know that we have arrivedStrategic Initiatives(Kaplan &Norton,2001: 73)What we need to doPersonal ObjectivesWhat I need to doStrategic ectiveProcessesMotivated and PreparedWorkforce

The MissionFunder PerspectiveCustomer Perspective‘If we succeed, how willwe look to our taxpayers(or donors)?’‘To achieve our vision, howmust we look to ourcustomers?’BalancedScorecardfor thePublicSectorInternal Perspective‘To satisfy our customers andfinancial donors, which businessprocesses must we excel at?’Learning and Growth Perspective‘To achieve our vision, how must ourorganization learn and improve?’ Information School / The University of Sheffield 2010(Kaplan &Norton,2004: 8)

Information Literacy ScorecardShareholder/financial perspectiveHow do we look to our funders?Customer/service perspectiveHow do we look to our clients?GoalsGoalsMeasuresMeasures Satisfaction rating(e.g. evaluations bystudents of teaching)Penetration Participation levels(e.g. % taught unitswhere IL embedded)Economy Unit costs (e.g. markingstudent bibliographies)Growth Income generated (e.g.IL courses delivered tolocal businesses andprofessionals)QualityInternal/process perspectiveWhat must we excel at?Innovation/learning perspectiveCan we continue to improve?GoalsGoalsMeasuresReliability Percentage downtimeEfficiency Trainee hours permember of teaching staffMeasuresNew modes Online products (e.g.custom VLE tutorials)Expertise Qualifications gained(e.g. PGCert in L&T)

Critical Success FactorsLessons Learned from BSC Deployment1. Define and communicate clearly the library mission.2. Ensure strong leadership and management support.3. Measure the right things, not everything.4. Aggressively communicate the performance results tothe library’s constituency.5. Align incentives creatively to the BSC metrics and findnew ways of motivating staff.6. Make change based on BSC analysis, and demonstratethat change is data driven.(Lloyd, 2006) Information School / The University of Sheffield 2010

Strategy MappingA strategy development and strategic management system,which uses Kaplan & Norton’s (1992) four perspectives todefine goals and show their cause-and effect relationshipsin an easy-to-read one-page summary that can becommunicated throughout the organisation.

Strategy Maps Concept introduced by Kaplan & Norton (2000) as aframework for developing and implementing strategiesbased on the Balanced Scoredcard perspectives Strategy maps use the BSC framework to defineobjectives related to the four perspectives and thendisplay their important cause-and-effect relationships They enable managers to capture their plans in an easyto-read one-page graphical summary and to connectvision, strategy and resources at all organisation levels A key feature of the model is its emphasis oncommunicating the strategy to the whole workforce Information School / The University of Sheffield 2010

MissionWhy we existValuesWhat’s important to usVisionWhat we want to be‘The balanced scorecardis a step in a continuumthat describeswhat value is andhow it is created’StrategyOur Game PlanStrategy MapTranslate the StrategyBalanced ScorecardMeasure and Focus(Kaplan &Norton,2004: 33)Targets and InitiativesWhat we need to doPersonal ObjectivesWhat I need to doStrategic icient and EffectiveProcessesMotivated and PreparedWorkforce

Library Strategy Map Contents‘Library Strategic Plan on a Page’ Vision and/or Mission (Purpose) statement Strategic (Key) Themes and Objectives groupedunder the four Balanced Scorecard perspectives Customer Value Proposition or Customer/User NeedsFinancial Sustainability or Funders’ RequirementsInternal Process or Improving EffectivenessLearning and Growth or Potential (Staff Development) American examples have 12-13 objectives,British examples have 30-31 objectives Information School / The University of Sheffield 2010

Library Strategy Map Guidelines‘Visual framework for a library’s strategy’A good strategy map will link together the overall customer value proposition,OrganizationalReadinessPerspective the desired productivity goals for internal processes the capabilities required from the library itself (staff skills,information technology and leadership), the characteristics of a physical collection and electronicdatabase provision, the budget and other financial resources required todeliver the library’s vision Information Resources PerspectiveMatthews, 2008: 58

Strategy map template with intellectual capital items (Kaplan & Norton, 2004: 55)

Examples of LibraryStrategy MapsGerman National Library of Science and Technology,Johns Hopkins University The Sheridan Libraries,Leeds University Library, McMaster University Library,University of Virginia Library, University of Warwick Library

German National Library of Science and Technology (Düren, 2010: 162)

JHU Library StrategyMapStrategy MapMission: To advance research, teaching, learning at Johns Hopkins University by providing relevant andsignificant collections, services, and instruction for faculty, students, and staff. The Sheridan Librariesthrough the University Libraries Council partners with other Johns Hopkins Institutions libraries tomaximize support for our constituents while minimizing costs.Customer NeedsFinancial Perspec4veEnsure fast, easyaccess to resourcesand services neededfor research andteachingProvideproductive, usercenteredworkspaces(virtual andphysical)Minimize costsDevelop strongsupport baseInternal ntegrate andstrengtheninstructional andresearch supportservices andprogramsProgramsExpand and preserveaccess to informationincluding digital librarydevelopmentOpera4onal EfficiencyIdentify and improveprocesses andinfrastructure withgreatest impactCreate productiveresearch, learning, study,and social spaceLearningAndGrowthRecruit, develop, andretain productivehighly qualified staffPromote an adaptive,collaborative, diverse, engaged,innovative workplaceCreate a culture ofassessment andaccountability

Leeds University Library Strategy Map 2006-07

Strategy MapFinancesLearning &GrowthInternal ProcessesCustomerMission: advance teaching, learning and research at McMaster by teaching students to be successful, ethical informationseekers, facilitating access to information resources, providing welcoming spaces for intellectual discovery and promotingthe innovative adoption of emerging learning technologiesCreate world-classteaching &learningenvironmentsImprove discovery ofand access toscholarly resourcesMarketing andCommunicationsPromote the Library’srole in the discovery,dissemination, andpreservation ofknowledgeDevelop highlytrained,technologicallyfluent superlativestaffServicesStrive forexemplary servicethat is responsiveto user needsOperational EffectivenessEnhance the Library’scommitment to strategicplanningIntegrate the Libraryinto the University’steaching, learning,and research missionNurture a healthy,collaborative, anddynamicorganizationAlign the Library’s budgetwith the University’s missionTrack efficiency andeffectiveness of Libraryprograms and servicesGrow anevidence-basedcultureEncourageinnovation andrisk takingIncrease alternate sources ofrevenue e.g. fundraising,grants and revenuegeneration

Facilitate world-class research, teaching and learning through leadership in the creation, access, use, and preservation ofinformation and knowledge for scholars at the University of VirginiaCustomer PerspectiveFinancial PerspectiveWelcomingCustomer Needs:Easy access tosuperbinformation andresourcesspaces thatpromoteproductivity andcollaborationServices andprograms that addvalue toscholarshipIncreasefinancial basefor unrestrictedfundsFocus onresources &services withhigh ratio ofvalue to costMaintain fundinglevels to responsiblysteward theUniversity’sknowledgeresourcesInternal ProcessesMarketing & CommunicationsPromoteLibrary asintellectualcrossroadsStrategic Skills / WorkforceLearningAndGrowthRecruit, develop, and retainproductive, highly qualified staffLibrary ServicesDevelop effective digitalservicesAlign administrative, technical,and public service prioritiesInfrastructureImplement space andtechnology upgrades to supportcutting-edge services andinitiativesOperational EfficiencyPrioritize strategicprograms andadjust budget andstaffing accordinglyCulturePromote culture of assessmentand accountabilityDevelop “community” model ofleadership and organization

University of Warwick Library Strategy Map 2009/10

Example of anInformation LiteracyStrategy MapBased on data collected in investigating the development ofinformation literacy strategies in a sample of institutions

Information School / The University of Sheffield 2010

References – Primary SourcesKaplan, R.S. & Norton, D.P. (1992) ‘The balanced scorecard: measuresthat drive performance’, Harvard Business Review, 70 (1), 71-79.Kaplan, R.S. & Norton, D.P. (1996) The Balanced Scorecard:Translating Strategy into Action, Harvard Business School Press.Kaplan, R.S. & Norton, D.P. (2000) ‘Having trouble with your strategy?Then map it!’, Harvard Business Review, 78 (5), 167-176.Kaplan, R.S. & Norton, D.P. (2001) The Strategy-FocusedOrganization: How Balanced Scorecard Companies Thrive in the NewBusiness Environment, Harvard Business School Press.Kaplan, R.S. & Norton, D.P. (2004) ‘Measuring the strategic readinessof intangible assets’, Harvard Business Review, 82 (2), 52-63.Kaplan, R.S. & Norton, D.P. (2004) Strategy Maps: ConvertingIntangible Assets into Tangible Outcomes, HBS Press. Information School / The University of Sheffield 2010

Library Balanced Scorecard Case StudiesCribb, G. & Hogan, C. (2003) ‘Balanced Scorecard: Linking strategicplanning to measurement and communication’, 24th Annual IATULConference, 2-5 June 2003, Ankara, Turkey.http://epublications.bond.edu.au/library pubs/8/Lloyd, S. (2006) ‘Building library success using the BalancedScorecard’, Library Quarterly, 76 (3), 352-361.Pienaar, H. & Penzhorn, C. (2000) ‘Using the Balanced Scorecard tofacilitate strategic management of an academic information service’,Libri, 50 (3), 202-209. www.librijournal.org/pdf/2000-3pp202-209.pdfPoll, R. (2001) ‘Performance, processes and costs: managing servicequality with the Balanced Scorecard’, Library Trends, 49 (4), andle/2142/8367/librarytrendsv49i4j opt.pdf?sequence 1 Information School / The University of Sheffield 2010

Library Strategy Maps and Case StudiesDüren, P. (2010) ‘Public management means strategic management:how can libraries fulfil the requirements of the new publicmanagement?’, Library Management, 31 (3) 162-168.Leeds University Library (2007) Library Strategy Map atthews, J.R. (2008) Scorecards for Results: A Guide for Developinga Library Balanced Scorecard, Libraries Unlimited [covers bothBalanced Scorecards and Strategy Maps].University of California Berkeley (2010) Library Bindery Strategy rary bindery strategy mapUniversity of Warwick Library (2009) Library Strategy Map /main/basics/about/aims/ Information School / The University of Sheffield 2010

Recommended ReadingKaplan, R.S. & Norton, D.P. (2004) ‘Measuring the strategicreadiness of intangible assets’, Harvard Business Review,82 (2), 52-63– covers the extension of the Learning and Growth perspective tointellectual capital and its incorporation in Strategy Maps.Kaplan, R.S. & Norton, D.P. (2008) ‘Mastering themanagement system’, Harvard Business Review, 86 (1),62-77– includes a useful resource list for strategic planning. Information School / The University of Sheffield 2010

Any Questions?Sheila Corralls.m.corrall@shef.ac.ukInformationSchool, The University of Sheffield www.shef.ac.uk/is Information School / The University of Sheffield 2010

Balanced Scorecard Measure and Focus Targets and Initiatives What we need to do Personal Objectives What I need to do Satisfied Shareholders Delighted Customers Efficient and Effective Processes Motivated and Prepared Workforce ‘The balanced scorecard is a step in a continuum that des

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