The balanced scorecard is a key tool for articulating measures and targets for objectives. The BSC helps senior executives to implement strategy. Creating a BSC requires the executive team to translate the elements included in the strategy map into actionable programs of work. This is achieved through articulating measures and targets where appropriate, and initiatives for each component of the agency’s strategy. These metrics help the senior executive to translate complex concepts into a precise course of action, which articulates how the agency will implement its strategy and the results required.
Measures and targets are used to drive improvements and help agencies focus their people and resources on the priorities of the organisation. Good metrics are measurable and controllable, and demonstrate progress and goals, help to signal problems and verify when the agency reaches its targets.
To articulate measures and targets for the elements included in the strategy map, refer to the appropriate terminology below:
- A measure is a standard used to evaluate and communicate performance against expected results. Measures are normally quantitative in nature capturing numbers, dollars, percentages, etc. Reporting and monitoring measures helps to gauge progress toward effective implementation of strategy.
- A target represents the desired result of a performance measure. Targets make meaningful the results derived from measurement and provide agencies with feedback regarding performance.
It is also critical that senior leaders select a range of performance indicators:
- KPIs provide measures for the coming year (i.e. up to one year ahead)
- Strategic priorities provide mid-long term goals, which work best when they are multiyear and/or transformational.
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Well-defined indicators will help senior leaders to measure progress towards achieving the agency’s objectives, provide an early warning signal if the agency is not tracking to achieve a goal/s, and provide a logical link between individual performance agreements and the agency’s overarching metrics. Once identified, each measure and target developed should be validated.
Where possible, include the high level measures and targets on the completed strategy map. This will help senior leaders to communicate the agency’s strategic vision and highlight the metrics that will be used to measure progress towards the goal/s.
Measures and targets should only be set where meaningful data is available. Ambiguous measures obscure underlying metrics and will not help to measure performance. When articulating metrics for each objective, it is advisable to utilise meaningful metrics that are SMART (specific, measurable, achievable, relevant, time-based). Measures and targets should contain a mixture of lag and lead indicators:
• Leading Indicator ‐ indicators which are presumed to precede achievement of the objective
• Lagging Indicator ‐ indicators of actual performance.
Lastly, the measures and targets selected need to have relevance as these are cascaded to group and individual levels. Find the few metrics that resonate throughout the agency and implement to measure the agency’s performance.
Once the measures and targets have been identified, they should be validated.
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When the measures and targets have been identified and validated, senior leaders should articulate the initiatives that will implement and embed the strategy throughout the agency.
Defining the initiatives at the senior level creates consensus for how the agency will implement its strategy, and facilitates accountability for programs of work being assigned to specific senior leaders.
An initiative is the specific programs, activities, projects or actions the agency will undertake in an effort to meet performance targets. Initiatives should be prioritised (e.g. quick win, high priority, medium priority, low priority) to establish direction for the agency. Senior leaders also need to claim accountability for specific initiatives or parts of initiatives to ensure each project/activity is actioned, and to remove potential duplication of effort.
Initiatives need more time and focus, and should align with the strategic plans and priorities and organisational capabilities, such as transformation planning.
To articulate initiatives, consider the key drivers that will enable the agency to achieve the outcomes and strategies included in the strategy map. For example, for the customer outcomes, think about the programs, activities, projects or actions that will help the agency to meet/exceed the needs of the its customer segments. What actions and solutions are required to exceed customer expectations? What systems and resources are needed? Defining an initiative requires detailed planning of actions, timeframes and resources.
Prioritise the key drivers and translate these into initiatives to implement each component of the strategy map.
Deciding on initiatives also includes designing a complete program of change or transformation that may merge several of the initiatives into something more aligned which makes best use of resources. There would also be a need for a Transformation, Change or Program Office to govern and manage the program and to determine the priorities and any changes to the timeline.
Initiatives do not exist in a vacuum. Ensure you work with other parts of the agency in planning implementation to ensure a coordinated approach, as some initiatives may be transformational and drive at the top levels of the agency. Regularly discussing the progress of initiatives and any outstanding actions will ensure everyone is informed of the status of each initiative.