Will strategic
planning and the balanced scorecard bring our customers true happiness?
a presentation to the LIANZA Conference, New Zealand, 17th October 2000
Helen Livingston,
Deputy University, Librarian Deakin University
Updated 27 September, 2006
Background
Deakin
University is a metropolitan and regionally based university in Victoria,
Australia with six campuses.In1999
the student population was 30,000, with 20,000 students studying on-campus
and 10,000 studying off campus.In
addition, a further 40,000 students study through the University’s commercial
arm—Deakin Australia—which provides training and higher education opportunities
to staff of corporations, government departments and to members of professional
associations.
Deakin
University Library provides a comprehensive library service on all six
campuses, and an off campus service for students based anywhere around
the globe.The Library has an EFT
of 135.
Key
issues facing the Library are:
·Rising
staff costs (including unfunded pay rises);
·Increased
user demand for service
·Fluctuations
in the Australian dollar which seriously affect the Library’s ability to
purchase overseas material for the Library collection;
·Decreasing
levels of government funding.
The
Library’s “product” is not a tangible one, but rather exists in the minds
of its customers.Ultimately, the
measure of the Library’s success is based on the success of its students
and staff.In turn, two strategic
questions are relevant for the library:
First,
as members of the University community, did students and staff find and
access the resources they required to achieve their teaching and learning
objectives?
Secondly,
have students and staff acquired excellent information and research skills
to assist them with their lifelong learning?
How
to find out what our customers want?
In
1996, the Library began to focus on its strategic plan as a means of developing
future direction.Involving and engaging
stakeholders in the process was seen as a key issue.This
was achieved through discovering the value our customers placed on the
Library service
What
is a Value Model?
A
value model is a set of “specifications” for excellence.Although
deceptively simple (“just” a list of critical attributes of an experience,
or a set of criteria that define excellence) it is powerful in its potential
application.A Customer Value
Model, for example, is a set of “specs” provided by the customers themselves,
describing the experience they want to buy.Each
factor is the result of a careful thinking process about the total concept
of value involved in the experience being evaluated.Taken
together, all of the Value Factors form a composite model of excellence.In
the case of customer value, it is the set of critical attributes of the
customer’s experience which, if skillfully delivered, will win and keep
the customer’s loyalty.
A
value model may also involve a set of service or product irritants.If
present, they significantly cloud the customers’ perception of any value
being delivered by an organisation.Service
irritant factors are a particularly important part of a value model and
should not be treated with fear or reprisals by management.They
are often overlooked by the more traditional research methods and when
encountered for the first time can seem disheartening for management, who
often want to concentrate on the positives.
Service
irritants can reveal a path to service excellence, which would not normally
be obvious.Sustainable advantage
may be possible in some industries from concentrating on irritant removal
alone.
How
Does the Value Modeling Process Work?
The
Value Modeling process departs from conventional focus group methods in
several significant ways.The differences
are crucial to the validity and comprehensiveness of the output.
Conventional
focus group research, particularly for market research, typically uses
one of two preferred methods:
I.A
free-form discussion, in which the moderator helps participants express
their views and then later analyses the thematic content of the discussion.This
method tends to be favoured when the objective is to discover attitudes
or views not already familiar to the researchers.
II.A
highly structured procedure, in which the moderator follows a series of
pre-established questions (known as a research protocol), and records
the answers of the participants for later statistical review.This
method tends to be favoured when several moderators conduct multiple interviews
and later integrate the findings.
Both
methods have their advantages, their preferred situations, and their drawbacks.
The
Customer Value Study process avoids certain disadvantages of both of the
customary methods, and adds several key advantages:
With
the Critical Irritant Factors and the Critical Value Factors, each Customer
Value workshop has two sets of outputs, one expressing the negative experiences
and one expressing the desired positives
A
crucial part of the Customer Value Study process is the review and consolidation
of the results by the organisation’s representatives themselves, rather
than by the consultants.In contrast
to the customary form of focus group research, in which the consultants
compile and analyse the results and present a set of findings, in the Customer
Value Study process the client organisation’s management takes that role.Working
with the consultants in a special review and consolidation meeting, the
managers discuss the findings in detail, summarise them into a single agreed
model, and formally adopt that model as a primary management tool for evaluating
and improving the organisation’s delivery of value.
Deakin’s
workshops were externally facilitated, by Austin Thompson and Associates,
Pty. Ltd
The
objectives of these workshops were to:
·Understand
the Hierarchy of Value which clients attach to specific attributes of the
Library
·Identify
aspects of the service which irritated, annoyed or frustrated clients
·Measure
clients’ perception of current performance in the areas identified as being
of high value
·Determine
any gaps between clients’ perception of value, and their perception of
current performance compared to what Library staff assumed these to be.
The
survey technique employed was based on a focus group approach using the
'OptionFinder
Decision Support System'.™.In
this procedure each participant uses a hand-held wireless keypad to register
his or her rating of first, the perceived level of severity of the Service
Irritants and second, the relative importance of each Value Factor.It
also records the polling data for later analysis. This
technology has the advantage of enabling clients to offer their thoughts,
opinions and perceptions about service quality anonymously, thereby ensuring
that their feedback is reliable and accurate.
In
all, nine workshops were conducted during 1996 and 1997.They
involved Academic Staff, Students, Researchers, Off Campus Students and
the Executive Committee. From each of them, Customer Value Models were
developed.
The
workshops each lasted for four hours and consisted of:
·Individual
workbook exercises
·Gathering
information from clients about the services they currently value and those
factors which annoy or irritate them
·Collecting
and structuring ideas into ‘Customer Value Elements’ using the Affinity
Diagram technique
·Prioritising
the Customer Value Elements using OptionFinder™.
·Measuring
the Library’s current performance of the Customer Value Elements using
Optionfinder
·Group
discussion
·Final
vote where clients voted on each of the Value Elements in light of the
discussion
Library
staff participated as silent observers in the process.Their
role was to project themselves into the clients’ frame of reference and
respond, as they believed the clients would respond.This
provided information about what clients believe is important, and, at the
same time, highlighted any gaps in perception between clients and Library
staff.
After
each workshop, Library staff remained to analyse information generated
in the morning session.As a result,
they developed a Hierarchy of Irritants and an Action Plan to address issues
that could be tackled in the short term.
The
tables below are the Hierarchy of Values and Irritants for Researchers.
However, all 9 workshops over the two-year period showed a consistent hierarchy.
The
Combined Hierarchy of Values was:
-
Current
relevant comprehensive collection
-
Competent
Friendly Proactive staff
-
Access
to comprehensive electronic resources
-
Timely
responsive service
-
Improved
access to journals
The
Hierarchy of Irritants also remained constant across the nine groups:
-
Inadequate
loans and returns
-
Unsatisfactory
photocopy service
-
Poor
physical environment
-
Lack
of current periodicals
Access
to an adequate collection was clearly the highest value for all groups
of customers
Library
staff accurately guessed the highest value but were less accurate with
the perception of the move towards an electronic environment and also the
lesser ranked value elements, for example Library staff wrongly predicted
the emphasis on “free’ services to the customer.
The
table above and below show that the level of performance on the key values
was also not a surprise to the Library staff present.
Knowing
what users required from the Library was the first step. The Library then
needed a way to translate all the useful information into action, find
a way to engage all Library staff and then evaluate progress.
From
the results a strategic plan was developed and structured to reflect the
issues of central importance to the key stakeholders.
The Library
settled on a mission statement to encapsulate the core driving force for
all the staff.
We help people learn
Formulating
a strategic plan from all the data took many weeks of team effort. Part
of the process was committing ourselves to a shared vision and working
through the many barriers that were raised as Library staff grappled with
staying focussed on the results of the workshop. The strategic plan has
now been through four iterations, as we gather more data and as we achieve
more of our original targets. At first it was also difficult to track progress
throughout the year and during 1997 and 1998 the Library searched for an
acceptable method of tracking strategic progress. In 1998 he Balanced Scorecard
was adopted to drive the process of translating customer values into achievable
objectives.
What
is the Balanced Scorecard?
RobertKaplan
and David Norton from Harvard Business School first presented the BSC in
an article The Balanced Scorecard- Measures that Drive Performance Harvard
Business review Jan/Feb 1992.
There
is nothing new or original about the notion of combining a number of measures
in a compact description of an operation. Traditional methods of measuring
performance focussed on financial indicators. Within the library sector
this limited range of indicators made it difficult to measure the progress
of a library against its strategic goals.
Even
within the profit sector, financial statements cannot properly capture
the kind of measurements that companies need today.High
quality services, intellectual capital, skilled employees, prompt and reliable
services, responsiveness efficient and adaptable business processes are
all intangible assets which are important but the their presence or absence
does not show up on a balance sheet and does not alert employees, customers,
shareholders and the community to the real worth of an company or enterprise.
The
Balanced scorecard emphasizes that financial and nonfinancial measures
are all part of a system that gives information to every part of the organisation.
They
are part of a top down driven process, driven by the mission and strategy
of the Business Unit. The measures are a balance between external measures
for customers and shareholders and internal measures of business processes,
innovation and learning and growth. A balance must also be struck between
measures of past performance and measures that drive future performance.
It is possible to use the Balanced scorecard as a strategic management
system to manage strategy over the long run.
The
process in a nutshell
Clarify
and translate vision into strategy
Communicate
and link strategic objectives and measures
Plan,
set targets and align strategic initiatives
Enhance
strategic feedback and learning.
The
scorecard is made up of4
Perspectives:
The
purpose of the Balanced Scorecardis
to guide, control and challenge an entire organisation towards realisinga
shared conceptionof the future.
Within
the perspectivesthe vision is expressed
as a number of more specific objectives Measures and targets are set and
the organization then puts in place action plans to meet the set targets.
From
Deakin’ client value workshops we ascertained the hierarchy of values
(or value models) of our clients and these have been used to define the
objectives within the fourperspectives.
For each Objective there are a number of high level performance indicators
that are relevant in our environment. The high level performance indicators
cascade down to Unit level indicators and, into individual performance
indicators in the Performance & Planning review process.
The
challenge of “migrating” the Balanced Scorecard from the private sector
to the Library was overcome by looking at the Charlotte City Council case
study and other public sector bodies using the Balanced Scorecard, as well
as by reading Balanced Scorecard texts.
Temporary
teams were set up under each of the four perspectives to refine the objectives
and to develop a set of indicators and measures to track performance in
areas of strategic importance to the Library.This
process has been repeated each year as we continually redifine our strategic
measures for the year. The objectives have remained fairly constant to
reflect the constancy of the values of our customers.
As
part of the strategic planning process Deakin University Library’s articulated
three core values, which pervade the strategic objectives of the Library’s
internal process perspective of its Balanced Scorecard:
1.“We
will commit ourselves to the pursuit of excellence in providing library
and information services.”
2.“We
will constantly match resources and services to the needs of our community.”
3.“We
will continually enhance and share our knowledge and expertise, and support
each other as a team.”
The
Balanced Scorecard has caused the Library to totally revise the way it
presents and uses planning and management information.The
scorecard has profoundly influenced management and hopefully once all bedded
down, all other levels within the organization.
The
Library finds that its Strategic Plan is aligned to the Balanced Scorecard
objectives, and the budget is aligned to the Strategic Plan and the Balanced
Scorecard.Targets and measures are
in place and the Library is budgeting to meet those targets.The
strategic plan and the Balanced Scorecard are both reflected in the Library’s
value statements to customers and in the Library’s Service Level Standards.
Since
1998, the Library’s annual report has been presented using the BSC framework.Also
aligned to the framework are its operational plans, its policies and procedures,
its staff training and development plan, and its risk register.The
Library is also considering changing the Library structure to reflect the
Balanced Scorecard framework.Agenda
items for the Library Management Group meetings also adopt a Balanced Scorecard
framework!
The Hierarchy
of Irritants and a Hierarchy of Value from 1996 and 1997 were used as the
basis of a set of Customer Value Workshops in1999 to test the Library’s
progress in meeting customer values.
This
study took the form of six ‘Quasi-Quant’ Validation workshops - so called
because they enable a reasonably close, but less than exact, quantitative
measure of qualitative service attributes. The objectives of the workshops
were:
·To
provide an effective methodology for determining client needs and expectations,
and assessing current performance in regard to identified User groups –
Undergraduate Students, Higher Degree Research Students and Academic Staff.
·To
provide a framework for the development of strategies which meet the needs
and expectations of Library users.
·To
validate for the selected user groups:
-
The relative importance of the
Customer Value Factors (hierarchy of needs and expectations),
-
Current performance in meeting
the identified client needs and expectations,
-
Any gaps between User and Library
Staff perceptions of services and current performance,
-
Those features of the service
which disappoint, annoy or anger Users (Hierarchy of Irritants), and
-
Any gaps between User and Library
staff perceptions of Irritants.
Customer
Value Factors
Fourteen
Customer Value Factors were identified when the outputs from previous Research
Workshops were consolidated.
ACurrent,
relevant, comprehensive collection
A Library collection that is
up to date and meets all my information needs
BExtensive
electronic access
Technology
that is reliable and up to date, and access to comprehensive and current
electronic material, both at the university and remotely
CAccess
to competent, friendly, proactive staff
Proactive, knowledgeable staff
who are approachable and helpful
DTimely,
responsive service
Prompt and personal service
that is focused on client needs
EFacilities
and equipment conducive to learning
A pleasant, functional, physical
environment that supports learning and research
FSufficient
funding to maintain free core services
Funding levels that maintain
free core services and provide value-added services
GEffective
library skills training
A
commitment to empowering users by providing ongoing training that meets
identified needs
HEasy,
reliable access to, and delivery of, library services
User
friendly interfaces, accurate shelving, easy location of, and access to,
materials and services
IFlexible
loans system
A
borrowing system that is responsive to needs, and provides equitable access
to resources
JAccess
to material in other libraries
Linkages with other libraries
to enable access to their information and resources
KUser
friendly, accurate catalogue
A catalogue that is comprehensive,
accurate and easy to use
Opening
hours that are flexible and meet my needs
MServices
clearly communicated
Responsive
communication about orders and new purchases, and clearly communicated
services
NEnvironmentally
responsible
The
Library acts responsibly at all times to minimise damage to the environment
and to discourage waste
Conclusions
after the implementation of the Balanced scorecard
·Our
performance has improved on the highly valued services.We
have lessened or lowered the level of irritation about services that are
highly valued.
·There
has been significant progress, in fact outstanding progress.Eleven
out of fourteen Value Factors are being performed at or above an expected
level.
·Over
all the level of Irritation dropped from 31% in 1996, to 17% in 1999.
Deakin
University Library is now working to fit individual performance planning
and reviews (PPRs) into the framework: thus achieving performance measurement
at individual, work unit and library levels.
Overall,
the Library found it easy to adjust to the Balanced Scorecard because the
leadership team had already gone through a strategic planning process designed
to help them focus their efforts and define their objectives.Developing
a Balanced Scorecard with appropriate measures and targets was a logical
progression.In turn, defining the
Library’s strategic objectives was straightforward because the executive
team had gathered extremely useful and detailed feedback about the Library’s
services from its customers.
The
Balanced Scorecard is a framework that can be easily explained and understood
by staff and others.
Library
staff have a sense of where they are going (strategic directions); they
know if they are achieving what they set out to achieve (operational plans,
Balanced Scorecard); and staff know the priorities (strategic plan).As
a result, staff morale is high and Deakin University Library gets many
accolades from the University who can see that the Library is doing what
they want and doing it well.The
University can also see how the Library’s strategic plan aligns with the
University’s strategic plan, and therefore how the Library is contributing
to the achievement of the University’s strategic objectives.
The
Balanced Scorecard has provided the Library with a quality management and
continuous improvement tool that can be incorporated into all aspects of
library practice.This ensures that
quality issues are mainstreamed, rather than set apart under “quality management”
where they run the risk of being seen by staff as something extra.The
Balanced Scorecard is a tool for monitoring all facets of the Library’s
work and service delivery.It is
really a strategic management tool not just a performance measurement system.
The
Library has successfully adopted and applied the Balanced Scorecard to
a service environment.The extent
to which the Balanced Scorecard will continue to influence the management
planning process will be dependent on staff support and continuing tangible
improvement of planning and operational processes.Indications
are however that the Balanced Scorecard has provided Deakin University
Library with the means to focus activity without losing sight of customer
and customer values.
Deakin
University Library
Summary
of Strategic Objectives and Measures for 2000-2002
1.
CUSTOMER PERSPECTIVE
1.1
Satisfy demand for information
1.1.1
Availability of required information
1.1.2
Information literacy skills
1.2
Positive customer experiences
1.2.1
Academic staff satisfaction
1.2.2
Student satisfaction
1.3
Help the University transform teaching and learning
1.3.1
Involvement in teaching and learning
2.
INTERNAL PROCESSES PERSPECTIVE
2.1
Improve significantly the process of obtaining information assets
2.1.1
Student reading
2.1.2
Donations
2.2
Improve significantly the process of storing information assets
2.2.1
Alignment of assets
2.2.2
Findability
2.3
Improve significantly the process of delivering information assets
2.3.1
Electronic interfaces
2.3.2
Delivery options
3.
LEARNING AND GROWTH PERSPECTIVE
3.1
Skilled, responsible and adaptable staff
3.1.1
Competency
3.2
A supportive environment for innovation and action
3.2.1
Staff satisfaction
3.2.2
Staff initiated changes
3.3
Technology to transform our future
3.3.1
Investment level
3.3.2
High impact changes
4.
FINANCIAL PERSPECTIVE
4.1
Enhance the Library’s capacity to support University strategies
4.1.1
Income from other sources
4.1.2
Partnerships
4.2
Improve asset utilization (space, information assets and equipment)
4.2.1
Study amenities
4.2.2
Use of information assets
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