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The KPI.org Blog

Tim Johnson Tim Johnson

Tim is a contributing author and Director at Jabian Consulting with over 32 years of experience in management and professional services management consulting. Areas of expertise include strategic planning, portfolio management, performance measurement/management, project management and business process improvement.

Why Strategic Planning Fails - Part 2

By: Tim Johnson

Jun 5, 2018 1451 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Generating Buy-in

This is the second installment in a blog series that discusses potential pitfalls that could hold you back from being fully successful in your strategic planning efforts. The first was ensuring that you have full leadership support before you begin the strategic planning initiative. As I started the first blog of the series, most things that I have been successful at in my life have been because I did it the right way and used the right tools. At the Balanced Scorecard Institute, we have the “Nine-Step Process” to building a strategic management system. We believe in this approach and we have helped hundreds of clients develop comprehensive strategic plans with a management system that enables them to effectively execute strategy. I myself have worked with over 80 organizations and have seen very successful strategic planning efforts and also those that were less so! I wanted to share some observations as to where those that were not as successful went wrong along the way.

The second pitfall I have experienced is people not buying in to the strategy as it is developed. As mentioned in Part 1, too many times I have seen a leader or small cadre of leaders piece together a strategy and then expect everyone to understand it and get on board. This is not what works! People tend to own what they help create. The more people you can involve in creating the strategy, the more people you have who understand it and support it in the halls and by the water coolers.

There are some key places where involving more people is easy to do and very helpful. The first is in generating ideas up front concerning the future environment in which the organization will exist. Externally what are the opportunities that will be available in the future? What are the threats that need to be considered and mitigated? Internally what are the strengths and weaknesses that could have the most strategic impact on our future success? By getting people to provide input you are first informing them on the process and second telling them that their ideas are valued. You can also involve people beyond the leadership team when developing measurable objectives, KPIs and initiatives. You can find people willing to step up and “own” an objective or to lead an initiative. Again, the more people that are involved, the more traction you are creating within the organization to help drive change and execution.

If this pitfall sounds familiar, then you might be interested in our Strategy Execution—Success Through Leadership workshop which addresses major obstacles and challenges faced in strategy efforts, and techniques on how to overcome them or let us facilitate your group to build support for the system.

Over the next few blogs we will explore five additional potential pitfalls I have seen that hold organizations back from realizing the many benefits to developing a strategy and a supporting strategic management system.

You can read Part 3 here.  Missed Part 1 of the blog series? You can read it here

Tim Johnson Tim Johnson

Tim is a contributing author and Director at Jabian Consulting with over 32 years of experience in management and professional services management consulting. Areas of expertise include strategic planning, portfolio management, performance measurement/management, project management and business process improvement.

Why Strategic Planning Fails - Part 1

By: Tim Johnson

May 30, 2018 1960 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

Gaining Senior Leadership Support

My father gave me an important piece of advice once that I will always remember.  “Always have the right tool for the job!”  Of course, I had to re-learn that lesson through the years a few times, but it really is good advice.  Most things that I have been successful at in my life have been because I did it the right way and using the right tools.  In the military they teach us to follow the process and meet the standards.  Of course, there are exceptions to any rule, but generally there are proven approaches available that help guide us to effectively and efficiently accomplishing what we undertake. 

At the Balanced Scorecard Institute, we have the "Nine Step Process" to building a strategic management system.  We believe in this approach and we have helped hundreds of clients develop comprehensive strategic plans with a management system that enables them to effectively execute strategy.  I myself have worked with over 80 organizations and have seen very successful strategic planning efforts and also those that were less so!  I wanted to share some observations as to where those that were not as successful went wrong along the way.  Over a series of seven blogs I wanted to share with you a handful of observations that could hold back a successful strategy initiative.  The seven that I will share are not meant to cover every potential pitfall, but they are definitely some of the most common fails I have seen in my experience.

The first pitfall has to do with not gaining Senior Leadership support before you begin the effort.  One of the first principles we stress in our Balanced Scorecard Professional Certification program is that if the leaders are not out in front of the strategic planning effort, it has zero chance of being successful.  I once had an executive approach me during our first break at a strategic planning offsite and tell me “I don’t like where this is going!  If I want them to have a strategy, then I will give them one!”  I was a bit taken aback and explained that if he was just to “pontificate” his strategy for his team to execute, then he would not be generating the needed buy-in to execute the plan later.  It would be his plan and his alone.  While he ended up eventually coming around, it could have been catastrophic if the key leader was not on board with the process and approach.  Additionally, not only should leaders be “okay” with developing strategy, they must be the biggest cheerleaders and talk about it in meetings, town halls, board meetings and any other opportunity they have to share the organization’s path forward.  Everyone needs to understand that the leaders completely support the effort, and the strategy will be executed.  Everyone involved must understand that there is “no turning back” and that its time to get on the bus!

If this pitfall sounds familiar, then you might be interested in our Balanced Scorecard Professional Certification course where leadership development, communications and change management action is discussed and becomes part of the strategy process or our Strategy Execution—Success Through Leadership workshop which addresses major obstacles and challenges faced in strategy efforts, and techniques on how to overcome them.

Over the next few blogs we will explore six additional potential pitfalls I have seen that hold organizations back from realizing the many benefits to developing a strategy and a supporting strategic management system.

You can read Part 2 here.

Howard Rohm Howard Rohm

Howard Rohm is the Co-Founder and President of the Balanced Scorecard Institute. Howard is an author, performance management trainer and consultant, technologist, and keynote speaker with over 40 years' experience.

Obfuscating Objectives

By: Howard Rohm

Feb 15, 2018 2857 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

One of our clients decided to build their strategy map and balanced scorecard themselves after some training. They created a draft strategy map with 12 strategic objectives, linked together in a cause-effect chain--the strategy map--that showed how value was being created for their customers and the owners of the business. A few months after the training, the number went from 12 objectives to 32. Why? – a lack of discipline around the strategy development process and a feeling by a few folks who did not attend training that “more is better”.

How many strategic objectives should there be on a strategy map? Ten, fifteen, twenty? Are more objectives better? How many are too many?  How few are too few?

A strategy map is a visual representation of a strategy—it’s a hypothesis of what an organization has to do to create value for its customers and owners. For a private sector business, the owners are the shareholders; for a mission-driven organization -- nonprofit or government -- the “owners” at the end of the value chain are the benefiting stakeholders, e.g., members of an association, citizens of a government.

Strategic objectives, when connected in cause-effect links, represent a strategy hypothesis that can be tested and progress monitored using strategic measures of performance—KPIs—developed as part of the strategy development process. A good strategy map requires good objectives.

Objectives are used to identify measurable strategic intended results; develop KPIs that measure strategy progress; identify, prioritize and track actionable initiatives; build employee accountability; and communicate corporate vision and strategy internally and externally. We’ve identified a set of best practices for creating strategic objectives and strategy maps from our training and consulting engagements worldwide:

  • Objectives are not start/stop activities or projects (those are initiatives)…objectives are continuous improvement activities that work together to produce value
  • Twelve to 14 objectives are a good number for a corporate strategy map (organization size doesn’t matter here)
  • Objectives indicate action and the potential for continuous improvement (Remember: strategic objectives are the DNA of your strategy—they make strategy actionable and understandable throughout the organization.)
  • Objectives should be balanced among the four perspectives in a scorecard
  • Objectives are “altitude sensitive”—if the strategic altitude is too high, it’s hard to translate “lofty” language into employee action…if too low, objectives will be framed in operational, not strategic, language
  • Prioritized strategic initiatives, linked to each objective, should propel the organization forward toward its goals and vision
  • Objectives should be measurable based on the associated intended results, to monitor progress toward accomplishment

Arguably one of the most important contributions to the science of management in the past two decades, strategy maps communicate the organization’s value proposition with clarity, both internally to employees so they can see how they “fit” in the organization, and externally to boards and other stakeholders.

Get strategic objectives and your strategy map right and your balanced strategic plan and strategy story will come alive quickly and clearly. These tools can help take your organization to the next level of performance.

You can learn more about strategic objectives and strategy mapping by reading our book, The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard, or by attending one of our worldwide training classes.

David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Types of KPIs: The Logic Model and Beyond

By: David Wilsey

Jun 5, 2017 9366 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

As part of the KPI Basics series of content we are developing as part of the launch of the KPI.org website, I thought I would introduce the different types of key performance indicators (KPIs). As I describe in the accompanying video, like to use a framework called the Logic Model to describe the first four types.

The Logic Model is a framework that is helpful for differentiating what we produce from what we can only influence. It is also helpful for separating between elements that are more operational versus those that are more strategic in nature. For every key process, we spend resources like time, money, raw materials and other inputs. Then every process has measurements that could be tied to that particular process. The outputs of my process are what we produce. Ultimately though, I want to create an impact with my work. Outcomes capture that impact.

Let’s look at some examples of these types of measurements in real life. If I am a coffee maker, my Input measurements might focus on the coffee, the water, or my time invested. My Process measures could have anything to do with the process of making coffee, from the efficiency to the procedural consistency. The outputs of my process would be the coffee itself. I could have a variety of measures around the quality of my coffee output. Finally, my outcome measures would be related to things I can only influence, such as if my audience enjoys or buys the coffee. There is certainly more value in measuring impact than there is operations. If my customer enjoys the coffee I am doing something right. But you really do need a mix of both to truly understand performance.

To fully understand all of the elements of strategy execution, I can then add a few other broad categories of measures to my story. Project measures monitor the progress of our improvement initiatives and projects and can be designed to improve operations or strategic impact. These track things like scope, resources, deliverables or project risk. In my coffee example, I might have a new branding campaign to sell my coffee.

Employee measures tell us if employees are performing well or have the right skills and capabilities needed. I might measure my employees’ skills in making coffee, for instance.

Finally, risk measures tell us if there has been an important change in a risk factor that could have a significant impact on our organization. For example, I might have a risk indicator that tells me if global coffee bean availability becomes a problem. 

The information that these different types of measures provide can be used to inform decision making. Using a family of measure like this can broadly inform your entire strategy.

To learn more about Key Performance Indicator development and implementation, please look into one of our KPI training or certification programs or visit kpi.org.

David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

How Did I Get an MBA Without Learning This?

By: David Wilsey

Mar 24, 2016 8620 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
Business Woman in classMost MBA programs pride themselves as being the ”practical” degree that will best prepare its students for any number of management roles. And I have to admit that I can point to that degree as a true turning point in my career. But it wasn’t until I became a Balanced Scorecard Professional (BSP) that I learned several principles that I have found to be key to being a good manager and leader.

  1. Help your team articulate a shared vision
    Many managers and leaders think that the key to success is to have a clear vision. But vision that is poorly articulated (or not at all) is just a dream. And simply dictating the vision to employees usually doesn’t work either. Change doesn’t happen because “I said so” or by assigning tasks without any context. Employees engage when they understand what we are trying to accomplish and why. Shared vision and change management happen through dialog, facilitation, and the development of a logical business case.

  2. Connect the dots between what employees are working on and desired outcomes
  3. A good supervisor makes sure that employees are completing their tasks. A good leader makes sure that employees are working on and completing tasks that move the organization toward a shared vision of the future. BSPs have been taught to articulate the difference between mission, vision, and strategy. They know how to organize their energy, measurements, and initiatives around a set of coherent strategic objectives. They know that many people are visual learners and so they use a strategy map to communicate how the dots connect. They know how to align department objectives with high level strategy and communicate to employees where they fit.

  4. Measure results (not just actions)
    Most managers know to measure project milestones as indicators of success, and unfortunately many strategic planners use this basic principle for KPI development. They define a handful of goals (e.g. Improve Brand Awareness), list all of the projects needed to reach those goals (e.g. website redesign), and then measure the completion of those projects as a measure of success (e.g. percentage of website redesign completed). Good leaders measure results. A redesigned website is nice, but I should be much more interested in whether or not it led to improved brand awareness.

  5. Develop strategy before KPIs
    The best KPIs in the world won’t help if they are designed to measure a half-baked strategy. The good news is that you don’t have to be a Steve Jobs-type visionary to develop an intuitive strategy by formally assessing your strategic situation and identifying a path forward using common methods like a SWOT, PESTEL, Customer Value Proposition, Blue Ocean Strategy, and other methods.

There are other such principles, such as how to identify drivers of future performance using Perspectives, how to use strategy to prioritize, how to set and reach reasonable performance targets, and many more. If you can think of any others, please add them in the comments section below.

If you are unsure about what a balanced scorecard or a Balanced Scorecard Professional is, please visit our website. 
David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

The Ultimate KPI Cheat Sheet

By: David Wilsey

Jun 9, 2015 15644 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
We’ve received a lot of interest in our new KPI Certification Program. In fact, one woman said she couldn’t wait until the first scheduled program offering. She also wanted to know if we had a handy list of the most important principles – she wanted a cheat sheet! So in the interest in tiding her (and others) over, below I have compiled a few of the most important KPI tips and tricks. There are many more of course, so if you think I’ve missed anything, please add them in the comments section below.

Strategy comes first!
A training student told me his organization is struggling to implement measures for brand equity, customer engagement, and a few others because they believed the measures didn’t really apply to their company. I asked him why they were implementing those measures if they didn’t seem to apply, and he said they had found them in a book. They had no strategy or goals of any sort, and yet somehow thought they had a measurement problem.  

KPIs found in a book of measures don’t necessarily mean anything in relation to your strategy.  If you don’t have a strategy and/or can’t articulate what you are trying to accomplish, it is too early for KPIs.

KPI Development is a Process
I am embarrassed to admit that the first time I facilitated the development of performance measures with a client, I stood in front of a blank flip chart and asked them to brainstorm potential measures. It was my first consulting engagement as a junior associate and the project lead had stepped out to take an emergency phone call. Even though I had a basic understanding of what good KPIs looked like, I couldn’t help the client come up with anything other than project milestones (“complete the web redesign by August”), improvement initiatives (“we need to redesign the CRM Process”), or vague ideals (“customer loyalty”). What I didn’t understand at the time is that you need to use a deliberate process for developing KPIs, based on the intended results within your strategy. And like any other process, KPI development requires continuous improvement discipline and focus to get better.

Articulate Intended Results Using Concrete, Sensory-Specific Language
Strategy teams have a habit of writing strategy in vague, abstract ideals. As you pivot from strategy to measurement, it is critical that you articulate what this strategy actually looks like using concrete language that you could see, hear, taste, touch or smell. A vaguely written strategic objective like Improve the Customer Experience might get translated into checkout is fast, or facilities are safe and clean. Improve Association Member Engagement might get translated into a result of members volunteer for extracurricular activities. I’ve seen strategy teams shift from 100% agreement on vague ideals to diametric opposition on potential intended results, indicating that their consensus around strategy was actually an illusion.  Use simple language a fifth-grader could understand to describe the result you are seeking. If you spend your time honing this intended result, the most useful performance measures almost jumps out at you.

It’s not about the Dashboard!
Dashboard software is great when it is used to support a well-designed strategic management system. Unfortunately, many people are more interested in buying a flashy new tool than they are in understanding how they are performing (a topic I’ve talked about before). KPIs are not about a dashboard. KPIs are about articulating what you are trying to accomplish and then monitoring your progress towards those goals. A dashboard is the supporting tool and too much emphasis on technology misses and often distracts us from the point.

It’s not about the KPIs!
Speaking of people missing the point, we have many clients who think this process begins and ends with the KPIs themselves. Unfortunately, some of these folks are simply trying to meet a reporting requirement or prepare for a single important meeting. This type of approach completely misses the power of KPI development, which is that KPIs provide evidence to inform strategic decisions and enable continuous improvement.

For more about how to improve KPI development in your organization, see our KPI Professional Certification Program or The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Gail Stout Perry Gail Stout Perry

Gail is co-author of The Institute Way. With a career spanning over 30 years of strategic planning and performance management consulting with corporate, nonprofit, and government organizations, she enjoys speaking, training, and writing, sharing her experience with others. She currently is the Chief Strategy Officer and VP Americas for Corporater.

Wigs, Pigs, and Desserts

By Gail Stout Perry

Jan 31, 2014 22694 Views 0 Comments FacebookTwitterLinkedInGoogle Plus
Some of our clients use Franklin Covey’s methods to improve human and organizational performance, including the use of WIGs (Wildly Important Goals). I’ve wrestled with how to integrate Covey’s approach, which is sometimes loosely or creatively applied, into the balanced scorecard framework in a way that is disciplined, consistent, and simple to understand.
   
Recently, it dawned on me that WIGs are really based on the concept of contribution – a concept we use when measuring performance in the balanced scorecard framework. So first, I need to explain the concept of contribution.

I recently wrote a blog (Skinny Jeans and the New Math) in which I was trying to watch my weight but could not directly measure my weight via a scale, so I used a correlate measure based on a pair of skinny jeans in my suitcase.  A different technique to measure something indirectly is to use a contributing measure.  A contributing measure is something you can measure directly and which you believe will influence the results on the thing that you cannot measure directly (in this example, my weight). I actually have two contributing measures that I use while traveling, but until now I haven’t told anyone my secret.  

Science has shown that several things contribute to weight gain or loss. I have chosen two that are within my control and are easily measurable: (1) How often I eat sweets while on a trip, and (2) How often my gym shoes actually get removed from my suitcase for a brisk walk around the hotel. By setting goals of one or fewer desserts per week (chocolate is my weakness) and using the gym shoes at least once a week, I can keep track of these two contributing measures, both of which will influence what the scale will say when I finally get home.
   
And that’s exactly what Franklin Covey’s WIG approach is.  It’s a series of contributing goals/measures in which one action influences resultant performance on another.
 
So, how can the Covey methodology effectively integrate with the balanced scorecard framework?  Here’s how:  An executive’s WIG must be based on either a strategic performance measure / target or on a strategic initiative.  These are two scorecard elements that are most likely to have actionable contributing factors that an individual can relate to.   The contributing WIGs (which individuals are tasked to create to support the executive’s WIG) are the individual activities or measurable milestones or measurable contributing indicators that ensure individual performance contributes to the overall executive WIG, thereby contributing to the execution of organizational strategy. To further align the Covey execution methods to the organization’s strategy, a disciplined process should be deployed at Tier 3 (individual and team performance objectives for the scorecard system) to ensure that the individual understands the strategic context of their personal and team WIGs.
 
To learn more about how different frameworks integrate into a logical, holistic system to improve organizational performance, we invite you to explore The Institute Way: Simplify Strategic Planning & Management with the Balanced Scorecard.  
David Wilsey David Wilsey

David Wilsey is the Chief Operating Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.

Hungry for Some Perspectives?

By David Wilsey

Dec 6, 2013 7092 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

RestaurantOne of the participants in a recent Balanced Scorecard Professional Certification workshop was struggling with the difference between Strategic Themes and Balanced Scorecard Perspectives. In fact, he fundamentally questioned the need for both.  His argument was that Themes and Perspectives are essentially both focus areas of some sort.  Finally, he asked that I show him how different restaurants would use the terms if they were to create a balanced scorecard.

His request actually proved to be a great teaching example. Different restaurants, because they are in roughly the same business, will use roughly the same four Perspective names. All restaurants have to hire and train cooks and other personnel, build or rent physical facilities and use technology of some sort (Organizational Capacity Perspective). All restaurants have to order, prepare, and serve food or otherwise provide a particular atmosphere / experience of some sort that depends heavily on efficient internal processes (Internal Process Perspective). All restaurants want to please customers of one segment or another (Customer Perspective) and they want to control costs and make money (Financial Perspective). Restaurants might tweak the names of these perspectives to match their specific culture, but the concepts will be the same.

It is in the Strategic Themes and the accompanying Strategic Results that the restaurants will likely be different.  Strategic Themes are derived from each restaurant’s unique mission, vision, values and customer value proposition.  One restaurant might specialize in Mexican cuisine and another Italian. One might deliver a low cost family experience while another might be focused on luxurious atmosphere and world class service.  Maybe one is trying to grow into a worldwide franchise with thousands of stores that all look alike and another is trying to be the finest unique restaurant in New York City.

These differences in competitive positions will result in different strategies as represented by the Strategic Themes.  For each Theme, there is a specific Strategic Result that the organization is trying to accomplish.  Strategic Results define the desired outcome or goal of the Theme and indicate how we will know success within the Theme.  Strategic Results are written in “end state” declarative language, like “we are number one or two in 20 geographic markets,” rather than describing future actions, e.g. “we will increase our marketing efforts”.

The point is that the organization’s business model determines what Perspective names you select and their sequencing for the strategy map.  But the specific strategy that you want to implement to compete in your chosen marketplace determines which Themes you select.  Together, Perspectives and Themes form the foundational framework for the resultant balanced scorecard.

For more on how to develop and manage strategy using Themes, Results, and Perspectives, please see The Institute Way – Simplify Strategic Planning and Management with the Balanced Scorecard.



Dan Montgomery Dan Montgomery

Dan is co-author of The Institute Way. An accomplished facilitator and trainer, Dan has a 30 year background as a manager, management consultant and executive coach. His previous professional consulting experience includes work with Accenture and Ernst & Young.

How the Mighty Have Fallen

By Dan Montgomery

Oct 7, 2013 6064 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

A few months ago, we got a call from a company asking for help with their balanced scorecard – something that happens every day.  What was surprising was that the company was one that was a former winner of the Balanced Scorecard Hall of Fame, and one that I had worked with years before.

A lot had happened in eleven years. All the original architects of the balanced scorecard had left for other organizations.  It was no longer used as a way to evaluate or update strategy.  Having been cascaded down to an individual employee level years before, what they now called “the balanced scorecard” was simply a way to set targets for employees, based on set objectives and measures.  It was run out of the HR department, where the caller was a mid-level manager. These objectives and measures had become decoupled from strategy, and had not been reviewed or evaluated in years.  What had once been a tool for individual employee alignment with corporate goals was now only a way to set annual targets for individuals. And without ongoing alignment, it was perceived that it was Corporate’s way to get the employees to jump higher every year.  HR’s complaint was that only 5% of the employees had responded to the most recent request for their annual targets.

No wonder!

When I asked the person I was talking with about whether there was a possibility of talking with their strategy function, she was surprised -  “Balanced Scorecard is an HR tool – I didn’t think it had anything to do with strategy!”

Sustaining a balanced scorecard takes ongoing leadership engagement, and needs to be the basis for ongoing strategic management conversations NOT a once year report card. Not only management, but all employees benefit from being involved in discussing strategy, identifying objectives, measures, targets and strategic initiatives at the level that they impact, and that impacts them.

For more on aligning individual objectives with strategy visit here.

Gail Stout Perry Gail Stout Perry

Gail is co-author of The Institute Way. With a career spanning over 30 years of strategic planning and performance management consulting with corporate, nonprofit, and government organizations, she enjoys speaking, training, and writing, sharing her experience with others. She currently is the Chief Strategy Officer and VP Americas for Corporater.

PS: Our Balanced Scorecard Saved The U.S. Army $26 Million

By Gail Stout Perry

Sep 30, 2013 11521 Views 0 Comments FacebookTwitterLinkedInGoogle Plus

I was working with an Army command at Ft. Sam Houston this week and had invited a special guest - Scott Hencshel - to address the group regarding the organizational challenges of implementing a balanced scorecard system within Army.  (Scott’s command is also stationed at Ft. Sam Houston -  Army Medical Department Center & School (AMEDDC&S), an Institute “Award for Excellence” winner.)  

As Scott was wrapping up, someone asked a final question, “What was the biggest benefit that AMEDDC&S realized after implementing its strategic balanced scorecard?”  Scott talked about alignment, focus, and data-driven decision making.  Then as he was making his way to the door he turned back and said, “Oh yeah, we immediately saved the Army $26 million.” 

Say what?!?!

AMEDDC&S is where the U.S. Army educates and trains all of its medical personnel – over 27,000 soldiers. One of the strategic measures on AMEDD’s balanced scorecard is “attrition rates.”  Before the scorecard was implemented, it was commonly believed that discipline issues were the primary reason for soldiers not completing their training programs – because resolution of these discipline issues were what consumed everyone’s time.  Once the scorecard was implemented, attrition was measured more thoroughly and two discoveries were made:

  1. Attrition was MUCH higher than originally thought.  The traditional calculation was flawed and attrition was actually over 34%.  That means 1/3 of those entering the medical training programs would “drop-out” thereby wasting the Army’s investment in their training.
  2. Academic performance, not discipline, was discovered to be the primary reason for attrition.

So as the scorecard team delved further, they looked for root causes of poor academic performance resulting in attrition incidents.  They discovered that a major cause was a lack of communication between the Brigade leadership and the AMEDDC&S faculty.  Students in the medical training program were being assigned Brigade duties that prevented them from having proper opportunities to study and prepare for classes and exams.   A prime example was students falling asleep during final exams due to having served Brigade guard duty the night before. 

Once the communications issues were corrected, overall attrition rapidly dropped from 34% to below 20%...thereby saving the U.S. Army $26 million.

PS:  Did I mention that I have the best job in the world?!?  It is extremely rewarding to hear about results like this.

For more examples of break-through performance, we invite you to read “The Institute Way: Simply Strategic Planning & Management with the Balanced Scorecard. 



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