by Deb Marshall and Monalu Packard

You’ve worked with the executive team to develop organizational strategies, and you’ve established a scorecard to better align the organization and its resources with those strategies. Everyone has taken a sigh of relief – but then you realize the work has just begun. Now you must execute your plan, meaning much more effort will be required within the “learning and growth” perspective.

The missing perspective

As executives have sought ways of becoming more efficient and competitive, the balanced scorecard – a management system that measures performance across four perspectives (financial, customer, process, and learning and growth) – has become more common with hospitals, physician practices, and senior service centers.

For the most part, these organizations have made tremendous strides in defining, aligning, and implementing their strategic direction. At the same time, many scorecards are lacking when it comes to defining and leveraging the “learning and growth” perspective.

This problem is easy to understand. For decades, we’ve focused on financial performance and associated measures (the “finance” perspective); the boards and stakeholders have demanded it from us. We’ve also worked hard to understand our customers’ and patients’ needs (the “customer” perspective); they are, after all, the reason we exist. At the same time, fewer stakeholders have pushed us to define and leverage the remaining two perspectives: “process” and “learning and growth.”

Why should this concern us? First and foremost, these two perspectives represent the richest source of leading indicators, which provides us with the best opportunity and investment to get things right the first time around, according to Robert Kaplan and David Norton in their landmark book, The Balanced Scorecard: Translating Strategy Into Action (Harvard Business School Press, 1996). Second, by not effectively defining the right business processes, we continue to measure things as we always have, not by the critical internal processes that we must excel in. Third, without strength in all four perspectives, we have little opportunity to leverage the alignment possible. Finally, and most costly to our organizations, we miss the opportunity to leverage the human capital in which we’ve invested our time and money.

Learning and growth

While the “process” perspective is important to your organization’s health and survival, in this article we will focus on the final perspective, “learning and growth,” which is all about human capability, capital, and culture. The “learning and growth” perspective is foreign, messy, and complicated – but it’s where you can gain the greatest competitive advantage. Choose to move forward into a new world, and the benefit will be clear.

Let’s begin by better understanding why Kaplan and Norton considered this perspective an essential part of the overall balanced scorecard. In The Balanced Scorecard, Kaplan and Norton say that the ability to meet ambitious targets for financial, customer, and process objectives depends on the organization’s capabilities for learning and growth. They go on to say that the enablers of learning and growth come primarily from employees, systems, and organizational alignment. Moreover, they believe that a core group of three employee-based measures – satisfaction, productivity, and retention – can be used to measure the investments needed in these three areas.

What does this mean? Everything starts with people, their capabilities, and their ability to drive innovation and improvement throughout the organization.

Practical steps

Are you finding your balanced scorecard more difficult to execute than anticipated? Consider these practical suggestions. You’ll never be finished learning and aligning, but these suggestions will move you in the right direction.

1. Get specific. Review your strategy maps and balanced scorecard, especially the “learning and growth” perspective. Ask your executive and human resources teams whether the plan is specific and detailed enough. Assign team members to ask other institutions about their strategy maps and scorecards. Ask team members to read books on the topics, and have them return to the group with suggestions for improvement. Tip: Keep an open mind. You may not be ready to take on some of the suggestions, but the effort is important.
   
   
2. Define expectations for senior staff and department managers. Organizations on the move realize it’s important to map out a strategic direction, as well as the roles for each position within the organization. In general, however, health care organizations haven’t adequately defined what they expect of leaders and managers. What skills and competencies do managers need to have if the strategy is to be executed? Some organizations adopt validated models that are already available; others craft custom models that reflect their new strategies. Tip: Less is more. Don’t overwhelm your managers and staff!
   
   
3. Model the right behavior. You can talk until you’re blue in the face, but if you don’t do what you say, all the training in the world won’t matter. The good news is modeling won’t cost a dime for consultants, programs, training, or new initiatives – and it provides tremendous value to all. Tip: As the chief administrator, ask yourself and your executive team to commit to one behavior at a time. Decide what’s most important, try it, then openly discuss what worked and what didn’t each month!
   
   
4. Define learning gaps. Now that a strategy and scorecard are in place, ask yourself if your organization has a) identified the skills and learning that will be required and b) taken the steps necessary to assess present gaps. Without a clear idea of how much of a gap is present and what is required to fix it, organizations will find it difficult to prioritize and support their employees’ and managers’ needs. This is not about asking your human resources staff to pull individual performance reviews; it’s about defining the skills required to implement your strategy and developing those skills within your organization. Tip: Reward positive change in yourself and others!
   
   
5. Eliminate barriers to performance. Once you’ve defined the gaps present and the skills required to close them, don’t assume the only way to improve is to provide training. Putting something new on the list is less important than removing things – especially obstacles. Sit down with groups after you define the direction and path for success. Ask them to highlight what gets in their way as they try to do their jobs. Tip: Listen to others; don’t judge and don’t critique. You’ll be amazed at how much you learn and how respected you are when you listen and act on ideas one at a time.

Building on success

Since you’ve already implemented a balanced scorecard, you’re probably interested in results and committed to your patients. Along the way, you’ve probably experienced success and frustration. That’s normal during large-scale change efforts, so don’t be discouraged. Continue the course and build on your past successes.

Deb Marshall, Wipfli’s HR consulting manager, is a seasoned HR professional with over 25 years of experience helping businesses make the most of their “people” opportunities and challenges. She can be reached at (715) 858-6923 or dmarshall@wipfli.com.

Monalu Packard is a Wipfli partner who works with CEOs and other organizational leaders to uncover and address business challenges relating to corporate structure, executive performance and systems effectiveness. Contact her at (608) 274-1980 or mpackard@wipfli.com.