Illustration of Drill Down Capability
Customer Key Requirement: Fast Shipping and Delivery
Balanced Scorecards
ISO 9001:2008 Registered
2009 Recipient of Baldrige National Quality Award
Getting Started
The Balanced Scorecard helps to address several questions in the Baldrige Criteria for Performance Excellence.
In our white paper Baldrige 101, we identified the ten
foundational first steps to anyone’s Baldrige journey.
Step seven on that list, Create a Comprehensive Balanced Scorecard, emphasizes the importance of measuring what you do. For purposes of this white paper, we
will give the case for using a balanced scorecard and define the steps to get started creating your own balanced
scorecard.
From the Baldrige Criteria for Performance Excellence,
Focus on Results and Creating Value: An organization’s
performance measurements need to focus on key results. Results should be used to create and balance value
for your key stakeholders – your customers, employees,
stockholders, suppliers and partners; the public; and the
community. By creating value for your key stakeholders,
your organization builds loyalty, contributes to growing
the economy and contributes to society. To meet the
sometimes conflicting and changing aims that balancing
value implies, organizational strategy should explicitly
include key stakeholder requirements. This will help ensure that plans and actions meet differing stakeholder
needs and avoid adverse impacts on any stakeholders.
The use of a balanced composite of process and survey
performance measures offers an effective means to communicate short- and longer-term priorities, monitor actual performance, and provide a clear basis for improving
results.
Key Definitions:
Balanced Scorecard—a list of key stakeholders and their key requirements, with accompanying data that indicates your
performance on each key requirement.
Shipping & Picking Productivity: 6/10/11 through 6/17/2011
Employee ID
Name
11111
22222
33333
44444
55555
Stan Frink
John Doe
Jane Doe
Jim Smith
Jill Smith
Home
Dept
Shipping
Picking
Shipping
Shipping
Picking
Packages
Shipped
202
678
472
392
187
Shipping
Hours
4.5
10.3
6.6
5.3
4.2
Packages
per Hour
44.9
65.8
71.5
74.0
44.5
Picking
Scans
Picking
Hours
364
2196
891
1548
1447
For more information:
www.AmericaNeedsBaldrige.com
qms@midwayusa.com
Information is free to share (copy and distribute)
provided proper attribution is provided to MidwayUSA.
2.2
15.1
4.4
9.9
10.6
Scans/Hr
165.5
145.4
202.5
156.4
136.5
Dashboard—a tactical display of measures that depicts how the organization (or some part of the organization) is doing
at a specific point in time. It may report measures on an hourly, daily or weekly basis. Typically the measures on the dashboard roll up into the balanced scorecard.
Goals—future condition or performance level that one intends or desires to attain.
Key Requirements—the most important needs of a stakeholder that must be met to achieve stakeholder satisfaction.
Stakeholders – any group or individual that is or might be affected by an organization’s actions and success.
Balanced Scorecards
Getting Started
The Steps for Getting Started
9001:2008 Registered
2009 Recipient of Baldrige National Quality Award
The Case for the Balanced Scorecard
Comprehensive Balanced Scorecard—A balanced scorecard is simply a list of key
stakeholders and their key requirements, with accompanying data that indicates
your performance on each key requirement. Data from your internal processes, as
well as survey data, can be used. The balanced scorecard should also display your
goals; i.e., 91% Student Satisfaction, 94% Patient Satisfaction, etc. The balanced
scorecard puts all of your important results on one page. Another benefit of the
balanced scorecard is that at any level of the organization it is the grade card of the
performance at that level. Whether at the Company, Department or Area level, you
can see shortcomings in performance that can be addressed. Depending on the
performance issue, you can determine the corrective action that may be required
and then feed it back into process improvement or possibly even the strategic
planning process.
1.
Stakeholder Key Requirements—Stakeholders are any group or individual that is or might be affected by an organization’s actions and success. Key Requirements are the most important needs of a stakeholder
that must be met to achieve stakeholder satisfaction. Each of your key
stakeholders will have their own set of requirements. For example,
employees want good compensation and benefits, advancement opportunities and a good working environment. Customers require competitive pricing and friendly service. Patients want friendly, knowledgeable doctors
and nurses and clear communication. Students want engaging teachers and accessible technology.
4. Identify comparative data—Your organization needs to know where it stands relative to competitors and to
best practices. Selection of comparative data requires that you set criteria for seeking appropriate sources
for comparisons—from within and outside your organization’s industry and markets. Examples of comparative data include industry data collected by a third party (frequently industry averages), data on competitors’
performance, and comparisons with similar organizations that are in the same geographic area or that provide similar products and services in other geographic areas.
Balance—Without proper balance you may not be meeting the requirements of
your key stakeholders and may be focusing on the wrong areas to improve. An
example would be the need to balance the Customer Key Requirement of competitive pricing with the Shareholder Key Requirement of profits and growth. If
you allow one to trump the other, you may lose Customers because of prices that
aren’t competitive or you may dissatisfy shareholders with lower profits. The balanced scorecard helps ensure that each stakeholder gets what they need without
sacrificing the needs of the other stakeholders.
Roll up and drill down capability of information—One of the things we learned
early on is that different levels and measures are needed at different levels in the
organization. Your senior leaders will be looking at broader, “rolled up” measures.
The more you drill down into the organization the more granular the measures will
be. The senior leaders need to be able to get to the detail only if a top level measure isn’t meeting the goal.
Identify your Stakeholders—The term “stakeholders” refers to all groups that are or might be affected by an
organization’s actions and success. Examples of key stakeholders might include customers, employees, patients, students, suppliers and taxpayers.
2. Identify Stakeholder Key Requirements—Key requirements are the most important needs of a stakeholder
that must be met to achieve stakeholder satisfaction. Ask your stakeholders what is important to them.
3. Identify Process and Survey Measures—Measures are needed to better understand how we are performing
toward meeting stakeholder key requirements. Ideally, both a process (leading indicator) and survey (lagging
indicator) measure will be identified for each stakeholder key requirement. Typically a process measure will
tell you how a process that is important to providing a stakeholder requirement is performing, and a survey
measure will tell you the stakeholder’s perception of their requirement being met. Both are integral to understanding your ability to meet your organizational goals.
5. Set Goals—The term goals refers to the future condition or performance level that you intend or desire to
attain. They can be both short– and longer-term. Goals are ends that guide actions. Goals can serve many purposes , including: clarifying strategic objectives and action plans to indicate how you will measure success;
fostering teamwork by focusing on a common end; encouraging “out-of-the-box” thinking (innovation) to
achieve a stretch goal; and providing a basis for measuring and accelerating progress.
6.
Create a plan to review and use the scorecard—Analysis supports a variety of purposes including comparing
your performance with competitors’ or with “best-practices” benchmarks. Performance analysis includes examining performance trends; organizational, industry and technology projections; and comparisons, causeeffect relationships and correlations. Through the analysis of data from your tracking processes, your
measures or indicators themselves may be evaluated and changed to better support your goals.
Scorecard Results Review—this is an overview of a sample Scorecard Results Review and illustrates the roll-up and drill down of scorecards and
measures.

Monthly Company Goal Performance, Company Scorecard and Customer Satisfaction and Detail are reviewed by senior leaders at monthly
results review meetings – Think of it as an executive summary.

Monthly Department Scorecard reviewed by the president and department head during monthly presidential
department results review

Area Process Measures – on intranet and reviewed in monthly department leadership teams meetings

Employee Performance – reviewed throughout the day by supervisors and employees

Company Daily Dashboard includes measures from multiple Key Processes which are displayed for the previous
30 days