Using the Balanced Scorecard as
an FQHC Strategic Planning
Framework
Bonita Springs, Florida
July 29, 2008
Gregory Wolf
Senior Consultant and Chief Technology Officer
a Stroudwater Associates company
Balanced Scorecard Overview
Bonita Springs Conference, Florida CHC
Today’s Agenda
• Balanced Scorecard Overview
 Balanced Scorecard Definition and Objectives
 Linking FQHC Strategy to a Scorecard
 Introduction to Strategy Maps
• Strategy Mapping Exercises
• Candidate Indicators/Scorecard
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Balanced Scorecard Overview
Bonita Springs Conference, Florida CHC
The Balanced Scorecard is
a framework that helps
organizations
translate strategy into
operational objectives that drive
both behavior and performance.
Kaplan and Norton’s The Strategy Focused Organization
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Balanced Scorecard Overview
Bonita Springs Conference, Florida CHC
The Balanced Scorecard
measures strategy.
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Balanced Scorecard Overview
5
Bonita Springs Conference, Florida CHC
“Strategy has never been more
important”
Business Week
“Less than 10% of strategies effectively
formulated are effectively executed”
Fortune Magazine
“In reality, strategy is less than half the
battle. .. In the majority of cases – we
estimate 70% – the real problem isn’t
[bad strategy]…. It’s bad execution.”
“Why CEO’s Fail,” Ram Charan and Geoffrey Colvin
Fortune (6/21/99)
Balanced Scorecard Overview
6
Bonita Springs Conference, Florida CHC
What is Strategy?
1. Strategy is the creation of a unique
and valuable position.
2. Strategy requires trade-offs in
competing –what NOT to do.
3. Strategy involves a “fit” among a
hospital’s activities.
Balanced Scorecard Overview
7
Bonita Springs Conference, Florida CHC
Why Do Strategies Fail?
The Vision Barrier
Only 5% of the work force
understands the strategy
The People Barrier
Only 25% of managers have
incentives linked to strategy
The Management Barrier
Four Barriers to
Strategy
Execution
60% of organizations don’t link
budgets to strategy
The Resource Barrier
Kaplan and Norton’s The Strategy Focused Organization
85% of executive teams spend
less than one hour per month
discussing strategy
Balanced Scorecard Overview
Bonita Springs Conference, Florida CHC
BSC Objectives
• Provide a framework to translate strategy into
operational terms
• Create a systems approach to form an
integrated Strategic Management Process
• Provide a tool for communicating the:
– strategy
– processes and systems required for implementing the
strategy
• Draw a cause and effect roadmap in a one page
strategy map
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Balanced Scorecard Overview
9
Bonita Springs Conference, Florida CHC
The Balanced Scorecard tracks
performance of the factors that
create long-term economic
value in an organization
Customers
– Customer Focus: satisfy, retain and
acquire customers in targeted
segments
– Clinical/Business Processes: deliver
the value proposition to targeted
customers
– Organizational Learning & Growth
– Financial Health and Accountability
Finances
Processes
People
Balanced Scorecard Overview
10
Bonita Springs Conference, Florida CHC
MISSION
VALUES
VISION
STRATEGY: Our game plan
The Balanced Scorecard
STRATEGIC INITIATIVES: What we need to do
PERSONAL OBJECTIVES: What I need to do
STRATEGIC OUTCOMES
Satisfied
COMMUNITY
Delighted
CUSTOMERS
Efficient &
Effective
PROCESSES
Motivated &
Prepared
WORKFORCE
Balanced Scorecard Overview
11
Bonita Springs Conference, Florida CHC
The Balanced Scorecard Provides a Four Perspective Framework for
Boards to Translate Strategy Into Operational Terms
The Mission
Vision and Values
Financial Perspective
What financial
resources are
required to fulfill
our mission?
 Measurement is the
language that gives
clarity to vague
concepts
 Measurement is
used to
communicate, not
simply to control
• Profitability
• Growth
• Operational
Efficiency
Customer Perspective
What do customers
want, need, or
expect?
• Confidence
• Service
• Quality
Internal Perspective
To satisfy our
customers, at which
clinical/business
processes must we
excel?
• Patient Safety
• Operational
Improvement
• MD Needs
Learning and Growth
What type of
culture, skills, and
technology are
required?
• New Skills
• Strategic
Awareness
• Technology
Balanced Scorecard Overview
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Bonita Springs Conference, Florida CHC
Southwest Airlines
Strategic Theme:
Operating Efficiency
Financial
Profitability
Lower Costs
Increase
Revenue
Statement of
what strategy
must achieve
and what’s
critical to its
success
How success
in achieving
the strategy
will be
measured and
tracked
Objectives
Measurement
Target
• On Ground Time
• On-Time
• 30 Minutes
• 90%
The level of
performance
or rate of
improvement
needed
Key action
programs
required to
achieve
objectives
Customer
Flight
is on time
Internal
Lowest
prices
• Fast ground
Fast ground
turnaround
Learning
Ground crew
alignment
turnaround
Departure
Initiative
• Cycle time
optimization
Balanced Scorecard Overview
13
Bonita Springs Conference, Florida CHC
Southwest Airlines
Strategic Theme:
Operating Efficiency
Financial
Profitability
Lower costs
Customer
Flight is
on Time
Increased
Revenue
Lowest
Prices
Objectives
• Profitability
• More
Customers
• Fewer planes
• Flight is on •
time
Lowest prices
• Fast ground
Internal
Fast Ground
Turnaround
turnaround
alignment
Ground Crew
Alignment
• Market Value
• Seat Revenue
• Plane Lease
•
•
Cost
FAA On Time
Arrival Rating
Customer
Ranking (Market
Survey)
Target
Initiative
• 30% CAGR
• 20% CAGR
• 5% CAGR
• #1
• #1
• Quality
•
management
Customer
loyalty
program
• On Ground Time • 30 Minutes • Cycle time
• On-Time
• 90%
optimization
Departure
• Ground crew
Learning
Measurement
program
• % Ground crew • yr. 1
stockholders
• % Ground crew
trained
70%
yr. 3 90%
yr. 5 100%
• ESOP
• Ground crew
training
Balanced Scorecard Overview
14
Bonita Springs Conference, Florida CHC
PRESENT
FUTURE
(Event-Driven Learning)
(Continuous Learning)
Review Strategic
Issues
(30%)
Discuss
Implications
(30%)
Review Past
Performance
(40%)
THE QUARTERLY
REVIEW MEETING
The Balanced Scorecard Collaborative
• Provide input to strategic issues currently
being worked
• Dialogue about performance
– Explain anomalies
– Suggest solutions
– Identify issues
Review Strategic
Issues
(60%)
• Identify strategic issues for next
discussion at next group meeting
• Review performance data
(available on-line)
Discuss
Implications
(30%)
Review Past
Performance (10%)
BETWEEN THE
MEETINGS
THE QUARTERLY
STRATEGIC
REVIEW MEETING
Balanced Scorecard Overview
Bonita Springs Conference, Florida CHC
Strategy Mapping
Exercises
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Balanced Scorecard Overview
Bonita Springs Conference, Florida CHC
RPM Briefing Book Review
and Web Demo
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Balanced Scorecard Overview
Bonita Springs Conference, Florida CHC
Balanced Scorecard Report
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