Public Sector Performance Management: The Balanced Scorecard
The Balanced Scorecard – Acknowledged to fulfil Local, Provincial and National Government Compliance and Improve Service Delivery Success
With legislation promulgated to provide a platform for the improvement of service delivery in the South African Public Sector, all government entities are required to develop and implement a robust Performance Management System. The Balanced Scorecard has been shown to reign supreme in fulfilling the far reaching compliance requisites. Developed in 1996 by Professor Robert Kaplan and Dave Norton this performance management system has stood the test of time.
A PERFORMANCE MANAGEMENT SYSTEM THAT MAKES THE PUBLIC YOUR PRIORITY
The idea of The Balanced Scorecard, is to move managers away from focusing purely on financial outcomes and to consider a more balanced approach, linking multiple financial and non-financial measures to strategic objectives. Professor Kaplan has applied this methodology in numerous public sector organisations and says, “The Balanced Scorecard is easily adopted for use in public sector organisations simply by rearranging the scorecard to place customers or constituencies at the top of the hierarchy. It becomes about satisfying the public with improved service delivery. To satisfy the public, government must have finance, competence and technology to enhance organizational effectiveness.” It is for this reason the Balanced Scorecard enables public sector decisions makers to close the gap between vague mission and strategic goal statements and the operational activities and measures required to achieve those goals.
Kaplan goes on to say that for successful application in government entities, tangible objectives must be defined for customer constituencies. Financial consideration can play an enabling or constraining role, but will rarely be the primary objective. He evidences how the scorecard provides the rationale for their existence (serving customers and constituents), not simply containing spending within budgetary constraints, and most importantly becomes a tool to communicate both internally and externally the outcomes and performance drivers that improve service delivery and relevant outcomes.
LEADERSHIP PITFALLS CITED AS THE NUMBER ONE REASON BALANCED SCORECARD PROCESSES FAIL
Recent research conducted by Stellenbosch University (Khumalo, 2015) has shown that the institutional arrangement system of a performance management system requires more defined accountability, roles and responsibilities for the Executive Mayor, The Municipal Manager, Council and Senior Management. Professor Kaplan concurs with this. He cites the number one reason for Balanced Scorecard program failure as the lack of Executive Leadership and Ownership, with performance management programs being done by middle management teams only.
The Stellenbosch University research went on further to recommend that municipalities adopt the Balanced Scorecard along with the logic framework model. This performance management system will shift the focus from individual initiatives and programmes to intended service delivery outcomes that these initiatives are intended to achieve.
ANTICIPATING THE UNIMAGINED THINGS THAT COULD PREVENT YOU FROM EXECUTING YOUR STRATEGY SUCCESSFULLY: KAPLAN’S NEW RISK MODEL
Kaplan’s most recent work has evidenced that both private and public sector organisations are adept at executing strategy well. Where they fall short, is in anticipating the things (often unimagined) that can prevent you from executing strategy well. This is where his work on interactive and intrusive multi-level risk management processes comes in. He has studied recent public sector risk failures and devised a Balanced Scorecard model that reduces the tension that exists between Strategy and Risk Management. He advises organisations to develop three new scorecards; A Risk Event Scorecard, Risk Report Scorecard and a Key Risk Indicator Scorecard.
On 17th September 2015, Business Results Group, in association with GIBS and Strat.exe, will host Harvard Professor Robert Kaplan in presenting a one day programme on his latest insights into Leadership, Risk, Finance, People and Project Priorities to Co-create Shared Value.
To get more information about this BRG Progress Conference Event call Angela on 083 327 1593 or 0861 247 328. A full program agenda and conference details can be downloaded from //www.brg.co.za/speakers/prof-robert-kaplan/
- Khumalo, Nomgwadeni N.Y. A review of the Alignment between the Integrated Development Plan and the Performance Management System of the Capricorn District Municipality (Masters thesis, University of Stellenbosch, South Africa). Retrieved from http://www.scholar.sun.ac.za/ (2015)
- Kaplan, Robert S., and David P. Norton. Execution Premium: Linking Strategy to Operations for Competitive Advantage. Harvard Business Press, 2008.