Improving Performance with the Balanced Scorecard (and the King)

2015-02-03_17-02-18It’s been said that frameworks are a dime a dozen… but you have to have one. Prior to 1990, many businesses focused their measurement on finance alone, which tended to discourage continuous improvement and innovation. These companies lacked a systemic model.

In 1992, the Harvard Business School devised the four quadrant Balanced Scorecard, “a fast but comprehensive view.” Instead of isolating a single issue to the potential detriment of other important factors, the Balanced Scorecard sought to integrate four key perspectives: the customer, internal business, innovation and learning, and finance.

Last fall, Recovery Innovations (RI) adapted this tool for its own improvement efforts, and in January 2015 we recognized our first recipient for outstanding performance related to its four domains. This RI team member has led measurable performance above and beyond normal expectations, and the success has been comprehensive.

What does comprehensive success mean according to RI’s Balanced Scorecard? (Click to download.)

For RI, the framework is simple. It outlines four major domains and specifies how to measure the baseline and improve performance.

Each program/team leader rates their program by circling the most accurate description in each of four quadrants using a simple Likert scale.

Domain 1 – Customer Perspective: How well does your team and program reflect RI’s recovery principles and practices to customers?

  1. Inadequately reflected by both team and program.
  2. The team is cordial and friendly to the customer (which RI refers to as guests, students, citizens) but privately reveals a lack of respect and hope; the program has gaps.
  3. The team is no better or worse than teams in other traditional Behavioral Health Agencies; the program is also the same.
  4. The RI Mission Statement is sporadically reflected by team members and program – varies per team member and issue.
  5. The RI Mission statement is consistently reflected by all team members and the program to all customers.

Domain 2 – Finance & Productivity: How well does your program and team use your available daily capacity (staffing, space, and resources) to optimize your services?

  1. We experience insufficient daily capacity usage (under 50%) in staffing, space, and resources.
  2. Our daily capacity varies by never falling under 50% and occasionally getting close to 95% in 1 or 2 of the 3 areas.
  3. Our daily capacity is generally close to 95% or greater in 1 area but usually remains significantly under in 2 areas.
  4. Our daily capacity is at 95% or greater in at least two of the areas and usually remains significantly under in 1 area.
  5. We have consistent optimal use (>95%) of capacity in all three areas.

Domain 3 – Internal Business: How well do you know your business, i.e., demonstrable data, outcomes, and real time performance compared to goals?

  1. Inadequate due to time-consuming, paper tracking process with outdated information.
  2. Somewhat, but I acknowledge gaps in what I need to know in real-time.
  3. Adequate due to workarounds using paper and system for information.
  4. Above average knowledge, but not fully real-time and not fully paperless.
  5. Excellent knowledge due to collaborative team review and a paperless process.

Domain 4 – System Leadership: How high would your local System of Care (SOC) such as Law Enforcement, Emergency Responders, and Mental Health Funders rate your program and team’s relevance to the SOC’s mission and purpose for people with behavioral health challenges? (their perception)

  1. Not relevant
  2. Relevant as one option among many
  3. Very relevant for folks with lower needs, but no impact for majority of people with highest needs
  4. Highly relevant much of the time for people with high needs
  5. Indispensable for people with high needs (the SOC’s “go to” place for getting people to the best service)

2015-02-03_16-41-06The goal is not exemplary performance on one or two of the four domains, but “balanced” optimization across all four. The total score is calculated by summing the answers across the domains.

RI and many organizations have a strong mission and values, but the Balanced Scorecard helps with the strategic vision, bringing a vital view to the organization’s effectiveness as observed from 30,000 feet. Otherwise, we can falsely assume success based upon an incomplete analysis. For example:

  • The services are exemplary from the customer’s perspective (recovery-oriented, hopeful, and engaging), but the program benefits far too few for the capacity in which the county, state, or health plan leadership have invested.
  • The crisis program is full and engaging, but the individuals served are largely self-referrals, those with substance abuse issues, and not primarily those with the highest psychiatric needs or those where law enforcement and emergency departments are involved
  • The services are full, engaging, and fit the target population highest in need, but the program cannot document the effectiveness through readmission and/or escalation data (limited to anecdotal stories)

You get what you measure, and RI has a new way of celebrating success based on its Balanced Scorecard: The Velvet Elvis.

You’re probably wondering “Why a Velvet Elvis?”

Five years ago, longtime Maricopa County behavioral health leader Chris Damle and I were brainstorming a fun way to celebrate individual performance on our teams, and one of his prior employers had used a tacky portrait of a velvet Elvis. His wife found an appropriate replica and the rest is history. (You might be surprised how many current leaders across Phoenix have written their name on his frame at some point over the past several years.)

It was awarded based on nominations, which anyone could provide, but only my direct reports chose the final winners. We developed a couple simple rules for the holders:

  • We didn’t talk about the why. (It’s self-evident we would joke.)
  • Elvis must be proudly and prominently displayed.
  • There were no time frames associated with possession. Some individuals kept the King for weeks, and occasionally, some held him for mere hours.

ComicBook-App (1)So, after a well-deserved year’s vacation, the Velvet Elvis reemerged in January at Recovery Innovations. Sarah Blanka (pictured below) leads the Recovery Response Center in Peoria, Arizona, which features a West Valley Retreat and Living Room (RI language for 23-hour observation and sub-acute inpatient, respectively) and is the first recipient at RI of the Velvet Elvis (“V.E.”) Award.

Sarah, Irma Stewart, Elizabeth Timko, and the RRC team have demonstrated material improvements across the board and were recognized with the Balanced Scorecard “V.E.” as a result. Their achievements:

  • System Leadership Perspective: Responsiveness with local law enforcement yielded a positive letter from Phoenix Police Department’s Nick Margiotta to local West Valley precincts encouraging higher utilization of the facility.
  • Internal Business Perspective: Nearly 100% increase in the number of individuals transported to the facility by local law enforcement over the last year.
  • Finance & Productivity Perspective: Improved “throughput,” faster referral access times, and stronger coordination with partner organizations Community Bridges, ConnectionsAZ and CPR.
  • Customer Perspective: Overall better experience, less likely to be holed up in Emergency Department, faster access to care, better engagement, and collaboration with peers focused on hope and recovery.

Congrats to Sarah and the RRC team, and I’m hoping another success story quickly ferries the Velvet King of Rock ‘n Roll to another RI location!

Reference: The Balanced Scorecard – Measures that Drive Performance (Harvard Business Review, 1992.) Special acknowledgment to Chris Martin and the RI Learning Team, my collaborators on adapting the tool for RI.

Velvet Elvis Fact: At some point, individuals began adding their own mark to this coveted prize (click below), and the 2015 King barely resembles his original 2010 self. He now has actual hair on his head… and chest, as well as a guitar pick, blue cape, and more.


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