Measuring Organizational Performance

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Measuring Organizational Performance

• CACUBO 2007 Annual
• Ruth A. Johnston, Ph.D.
• Senior Associate Treasurer
• Office of Strategy Management
• University of Washington, Finance and Facilities
• 206-685-9838
• ruthj_at_u.washington.edu

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The University of Washington

• Founded November 1861
• 42,000 Students (undergraduate, graduate,
  professional)
• 990M Research Awards (largest federally funded
  public research institution in America)
• Campuses in Seattle, Tacoma and Bothell
• 17 major schools colleges
• UW Medicine (School of Medicine, University of
  Washington Medical Center, Harborview Medical
  Center, and UW Physicians Neighborhood Clinics)
• 1.7B Endowment

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University of Washington Finance and Facilities
includes

• Financial Management Financial Accounting,
  Financial Services, Payroll, Purchase Goods and
  Services, Research Accounting and Analysis, Risk
  Management, Student Fiscal Services
• Treasury and Investments
• Facilities Services
• Capital Projects Office
• Office of Strategy Management

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Real Estate Office Strategy Map
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Why Measure?
Why Measure?

• Respond to requests for information
• Need to show effectiveness in order to
• Keep or get more resources
• Influence decision makers
• Manage by facts
• Help your staff, leaders and boss understand your
  business
• Work better with process partners
• Share information with others (helps
• lead to discovery of new solutions)
• Try new things

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Ways We Get Information on Our Effectiveness

• Anecdotal (parents, students, staff, etc.)
• Letters, emails, calls
• Surveys
• Intuition
• Measurement
• Data Warehouses
• Benchmarking with others
• (constantly researching options helps identify
  methods that havent been thought of)

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Dashboard

• What do the gauges tell us?

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Evaluating and Measuring Effectiveness

• How do you know you are doing a good job?
• How do you know you are doing the right job?

• Takes a balance of measures
• Customer
• Financial
• Internal Work Processes
• Learning Growth

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What is the Balanced Scorecard?

• Robert Norton and David Kaplan (first published
  in 1992)
• Theory
• Key Definitions (strategy, initiative, goal,
  measure)
• Difference between operational and strategic
  measures

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Balanced Scorecard Strategy

• Strategy is an organizations plan to look
  forward
• Initiatives are the key action programs needed to
  achieve the strategy
• Illustrates patterns to examine past performance
• Measures are chosen to track success
• Targets are the level of performance needed

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Structure of the Scorecard

• Financial
• Financial performance
• Customer
• Identification of the customer segments and what
  they value
• Internal Process
• Work flow towards accomplishment of strategies
• Learning and Growth
• The employees, organizational structure,
  capacity, and training and development

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Measuring Performance

• What are your key processes?
• What do you do now to measure effectiveness?
• Where do you get the data?
• Do you have targets? How were they determined?
• What should you measure that you arent?
• How are you using your measures
• First think about these questions and then you
  will discuss with others around you.

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Metrics Template

• What information should be on your metrics pages?

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Financial Management Dashboard

• FM http//www.washington.edu/admin/finmgmt/

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Financial Management Dashboard
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Financial Management Dashboard
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Financial Management Dashboard
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Who Manages the Scorecard?

• Make it someones job
• Job components
• Align initiatives with strategy
• Work with staff developing measures
• Coordinate and present the data
• Update the process
• Periodically challenge and revise the measures
• Communicate

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How the Dashboard is Used

• To educate staff and leaders about current
  effectiveness
• To identify where process improvements should
  take place
• To build credibility
• To allocate resources
• To align operational with strategic work
• To provide incentives and rewards

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Learnings

• Leaders struggle when measures dont look good
• An iterative process its continual
• Should be a staff tool but managers use it more
• We need to build the staff capacity to do this
  work
• Requires honest and sometimes scary discussions
• Changes the culture
• Must talk about it and explain it well
• Must value feedback from staff and customers
• Must use it to identify and measure needed
  changes

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Importance/Value of This Work

• Its hard work but worth it
• Needs your commitment and leadership
• Builds your and your offices credibility
• Must review frequently (after each term)
• You improve what you measure
• Helps gain support
• Review and understand trend lines and plan
  accordingly
• Helps with focus
• Dynamic and ever-changing

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Selected Readings/Resources
By Robert Kaplan and David Norton

• The Balanced Scorecard Measures That Drive
  Performance. Harvard Business Review (HBR) 70,
  no. 1 (JanuaryFebruary 1992) 7179
• Putting The Balanced Scorecard To Work. HBR 71,
  no. 5 (SeptemberOctober 1993) 134147.
• The Balanced Scorecardtranslating Strategy Into
  Action. Boston Harvard Business School, 1996.
• Using The Balanced Scorecard As A Strategic
  Management System. HBR 74, no.1 (JanuaryFebruary
  1996) 75.
• Balanced Scorecard Collaborative (training,
  consulting, materials) http//www.bscol.com/