The Adapted Balanced Scorecard
Kaplan’s Adaptation of the Balanced
Scorecard Framework to Nonprofit
Organizations
The Mission rather than the financial shareholders
objectives drive the organization’s strategy.
Financial Perspective
If we succeed, how will we
look to our financial donors?
Customer Perspective
To achieve our vision, how must we
look to our customers/recipients?
Internal Perspective
To satisfy our customers, financial
donors, and mission, at which
business processes must we excel?
Learning and Growth
To achieve our vision, how must our
people learn and work together?
Source : Robert Kaplan. Strategic Performance Management in Non profit Organizations.
Definition
• The balanced scorecard is a
management system and
measurement system that enables
organizations to clarify their vision
and strategy and translate them into
action. It provides feedback around
both the internal business processes
and external outcomes in order to
continuously improve strategic
performance and results.
The Balanced Scorecard :
What Should be Measured?
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Although measures should be tailored at various levels of an
organization, measurement categories should be consistent
across an organization. Key categories may include:
– Financial Sustainability
– Operational Efficiency
– External/Market Impact
– Mission Accomplishment
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Additionally, organizations should establish, track, and
coordinate benchmarks within each category.
The Balanced Scorecard :
The 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
A Sample Social Enterprise Balanced
Scorecard
Financial Sustainability
• Revenue growth
• Diversification targets
• fundraising targets
• Profitability/Margins
• Budget Adherence
• Cost Reduction Goals
• Cost efficiency
• Earned Income Targets
Operational Performance
• Cycle Time
• Labor Productivity
• Product/Service Cost
• Quality Targets
• Employee Satisfaction
• Employee Turnover Rate
External Market Impact
• Customer Satisfaction
• Contract Retention
• Market Share
• Clients
• Funders
• Brand Equity
• Return on Development Investment
• Community impact
Mission Accomplishment
• Improved Rehab Results
• # of jobs created; new
contracts
• Long term job
sustainability/retention
• Reduced welfare dependency
• New skills/tools developed
• # of GEDs
Balanced Scorecard Brainstorming
An effective way to structure the Balanced Scorecard
brainstorming process is to focus on one quadrant at a
time.
Within each quadrant, we use a four step approach to
clarify measures:
1. Brainstorm organizational issues
2. Prioritize the most pressing or important issues
3. Determine organizational objectives that will
effectively address the issues
4. Develop measures to track organizational
performance against each objective
Balanced Scorecard Brainstorming
The first place to begin thinking about measurement is at the macro or enterprise
level. How would the President/CEO measure the success of his/her organization?
Financial
• Revenue Growth
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External Market Factors
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Internal/Operational
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Mission
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Integrating The Balanced Scorecard
(Senior Management Level)
The next step would be to focus on Senior Leadership’s ability to support
the President/CEO.
Financial
• Profitability/Margins
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External Market Factors
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Internal/Operational
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Mission
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Integrating the Balanced Scorecard
(Management Level)
The selection of categories and measures should be compatible with the
organizational culture and strategic objectives
Financial
• Cost Reduction Goals
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External Market Factors
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Internal/Operational
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Mission
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Integrating the Balanced Scorecard
(Staff Level)
Please note: It can sometimes take up to 3 years to take the scorecard concept to
this level within an organization.
Financial
• Departmental Cost Reduction Goals
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External Market Factors
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Internal/Operational
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Mission
• Personal Best
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