Raising Quality through the Balanced Scorecard: The Case of the Chartered Quality Institute

Adopting the Balanced Scorecard

With organizational excellence and improvement the core focus of the CQI's work, it is not surprising that it is committed to continually improving its own performance in growing the appreciation of quality management professionals in society and increasing the ranks of qualified Chartered Quality Professionals. In mid-2009 the CQI launched its first Balanced Scorecard system, with facilitative support from the Advanced Performance Institute (API). Adopting the Balanced Scorecard was the decision of Chief Executive Officer (CEO) and Director General Simon Feary, who joined the organization in early 2008, explains John Weston, the CQI's Head of Training. "We had a strategic plan in place and the CQI was moving from strength to strength, achieving chartered status and growing the number of CQI Chartered Quality Professionals and IRCA certified management systems auditors. However, in early 2009 we concluded that we had too many strategic goals and that we could become even more performance oriented if we refined these down to a number that was more focused and manageable. In looking for an appropriate solution, the CEO spoke with colleagues from other professional institutes and partner organisations and found that some had gained significant benefits from using the Balanced Scorecard approach," he says. Following some research into the topic the CEO decided that the scorecard was a promising approach to assist the CQI in simplifying and better managing its strategic goals. In keeping with best practice advice that is stressed in the scorecard literature Weston, who would assume day-to-day responsibility for managing the Balanced Scorecard, underlines the absolute importance of CEO support when implementing a Balanced Scorecard programme. "The Balanced Scorecard represented a major change to how we managed the business and in particular strategy." he says. "Simon Feary's determination that the Balanced Scorecard would be built, implemented and become our core management tool was by some distance the most important critical success factor."

Performance Benefits

And although a recent implementation, the Balanced Scorecard is already proving a success within the CQI. The process of building the scorecard led to a reduction of strategic goals (or themes) from an unwieldy six to a more focused three (around growing the CQI's profile, developing a learning profession and organizational excellence - which is essentially around learning and growth). "The scorecard has proven a powerful mechanism for managing these themes on a daily, weekly and monthly basis," says Weston, adding that being able to present the themes and their objectives, metrics, etc within one relatively small document has been central to better strategy management. But according to Weston probably the main benefit has been that the scorecard has enabled a broader, enterprise-wide view of performance than was previously the case. "We are quite a complex organisation in that we have five business areas," he says. "Historically, we have tended to view the performance of the component parts separately and in isolation from the rest. Through the Balanced Scorecard we can now see the wider picture, and managers from one business unit can see and appreciate the work of others and how the work of one unit supports the others."

Creating the Balanced Scorecard

The process of building the Balanced Scorecard began with an API facilitated workshop to more fully explain to delegates (which was about 11 employees and included all of the six strong executive management team) what the Balanced Scorecard is and the benefits it brings to organizations and that it could deliver to the CQI. "This initial workshop was very important to us," explains Weston. "It was very useful to have external facilitation to help us to really get our heads around the scorecard and to see clearly how we could work with it, and benefit from it, as a management tool." A second API facilitated workshop focused on distilling the strategic themes and discussing the content of the Strategy Map. API then drafted an initial Strategy Map, which was debated and further developed by the executive management team. The Strategy Map of the CQI's Balanced Scorecard framework marks an innovative departure from the classic map (as described by scorecard co-creators Harvard Business Professor Robert Kaplan and consultant Dr David Norton). Conventionally, the map hierarchy descends from finance at the top through customer, internal process and learning and growth perspectives. With the vision and themes (what we must excel at) placed the top, the CQI map descends through customer (what we have to do), process (what we have to be good at) and learning and growth, people and resources (what are our enablers). The financial perspective is positioned vertically - to the left of the map - and supports each of the perspectives. The CQI's Strategy Map is shown in Figure 1. Placing the finance perspective alongside the other three perspectives enables a not-for-profit organization (where making money is not a primary directive) to acknowledge that judicious financial management plays an important role in the delivery of the objectives within each "non-financial," perspective. "Placing the financial perspective vertically has worked well for us," explains Weston. "Although financial performance is not the be all and end all for the CQI we do have financial inputs and outputs within the objectives that support our strategic themes, and these can be identified and

measured. This we find leads to better overall financial management." The CQI Strategy Map contains just 15 objectives. Keeping the number of objectives to the "vital few" is a scorecard best practice and was also important for the CQI which, given the resources at its disposal, had a goal at the outset to simplify the management of its business, and in particular its strategy.

Defining the Strategic Objectives

Although on the map the objectives are described through focused one-liners (important for capturing on a one page map) they are more fully fleshed out in a supporting description that acts as a bridge between the objectives and Key Performance Questions (KPQs). Within the CQI's Excel-based scorecard system these descriptions are captured within the "scorecard" component of the Balanced Scorecard system that also includes the KPQs and KPIs. As an example, the objective within the process perspective "Increasing influence and making our voice heard," is more fully described as "We aim to develop a PR Profile, identify and influence the right people (key influencers and catalysts) and use them to make our voice heard and create a need for the services we offer." As a further example, the process objective "publish and share knowledge," is further defined as "we aim to provide high quality knowledge services for our members through our Qualityworld publication and our CQI and IRCA websites."

Key Performance Questions

As cited, once the broader objective descriptions are in place, the next stage in creating the scorecard system is to identify the KPQs. The KPQs themselves serve as a critical bridge between the strategic objectives and the Key Performance Indicators (KPIs). KPQs (which are an innovation of API) serve as a filter, enabling the organization to identify the strategic performance questions that the KPIs will answer and therefore helps to ensure that the most appropriate KPIs are chosen (those that most fully answer the questions).

Designing KPIs

Using the aforementioned objectives as examples, consider how KPQs and KPIs are articulated within the CQI. The objective "Increasing influence and making our voice heard," is supported by the KPQs "How effective is our campaigning in making quality a strategic issue with the business media?", How effective is our campaigning in making quality a strategic issue with the Government?" and "To what extent are we increasing our profile to target markets?" These KPQs enabled the identification of the following KPIs, "quality and quantity of coverage in business media - column inches," "progress against specific campaign plans," and "progress against sector plans." The objective "publish and share knowledge," is supported by the KPQs "To what extent is our content of the right quality and relevance (are we giving people what they want)? and To what extent are we distributing our content effectively (are we giving to them in the format they want)?" The supporting KPIs are "Qualityworld reader survey" and "membership survey, customer feedback." According to Weston, within the CQI management meetings the senior team constantly analyses, and where required refines, the KPQs and KPIs. "We are continually asking ourselves whether we are asking the right questions and measuring the right things," he says, "This has been particularly evident is some of the areas where we have not had a history of measurement or where the identified strategic competence is relatively new to us, such as around profile raising."

Aligning Projects and Initiatives

Within the Balanced Scorecard framework the CQI has also identified 14 key projects that support Strategy Map objectives, such a project called "profile raising - up and running," that aims to further develop the CQI's profile. Furthermore, and also captured within the spreadsheet-based scorecard framework, is a project resources and plan that, says Weston, "helps the CQI to detail all of the projects against each other and better manage and allocate our resources."

Heat Map

Weston points out that the use of a Heat Map (which is a colour-coded Strategy Map that shows how well the organization is progressing against its strategic objectives (green = everything good, yellow = some issues, amber = bigger issues, and red = not good at all) provides the management team with a powerful steer for deciding where to allocate scarcer resources - people and money.

Aligning Risk Management

The Heat Map is also proving useful in ensuring that the CQI more effectively prioritizes the management of its risks. The CQI operates a formal risk management process using a risk register. The CQI's 11-strong Board of Trustees (essentially an external Board of Directors) is made aware of any risks that fall within specific parameters through established reporting processes. "Placing our main risks alongside the scorecard is a recent innovation for the CQI," explains Weston. "Previously we had a very detailed risk register which we've now simplified and pulled together. By placing it next to the Balanced Scorecard, and using the Heat Map technique, we can better manage our risks on an ongoing basis," he adds.

Management Meetings

That the complete Balanced Scorecard framework is used to better manage the whole CQI business is ensured by making the scorecard the "agenda" for the monthly management meeting, where issues flagged up through the Heat Map are discussed and corrective actions identified. "We also have a fuller discussion on some aspect of a strategic theme and explore some of the key projects we are working on," explains Weston. "The scorecard drives the discussions within the monthly meetings." Moreover, the CQI holds formal weekly meetings to discuss progress against key projects. Performance of projects is also assessed and monitored using the colour-coded system and corrective actions are identified and taken where appropriate.

Performance Dashboards

Presently the CQI has only created an enterprise-level Balanced Scorecard system. Although there has been internal debates as to whether to devolve the scorecard to individual areas, the general feeling is that is not necessary given the small size of the organization. Rather, the CQI is presently in the process of developing a series of "performance dashboards." These dashboards, which will be captured and presented electronically, will essentially comprise the most important KPIs for each area. These KPIs will roll back up to support the enterprise level strategic objectives, KPIs, etc. "The dashboards will make it easy-to-understand performance at a glance" says Weston, who explains the difference in focus between a scorecard and a dashboard. "The scorecard is much more complex in the information it contains and is the main management tool for ensuring that we are on target against our strategic goals," he says, "whereas the dashboard is a summary of the key things that are important at a devolved level." As much as anything, the purpose of the dashboards is to better communicate performance to staff and other stakeholders. The management team has already taken the Balanced Scorecard to a meeting of the Board of Trustees, where it was well received, according to Weston , and it "will help us engage our 11,000 members, 15,000 certified auditors and 300-plus active volunteers in progressing the CQI strategy throughout the UK and overseas"..


Moving forward, Weston believes that being a "living document" the Balanced Scorecard will continue to evolve as performance challenges, priorities and learnings develop. Indeed, he states that there is some scorecard evolution almost every time the management team meets. "This is a significant improvement on our previous strategy documents that were basically set and inflexible from year to year," he says, concluding that. "As an organization we have a lot of things to focus on, but the Balanced Scorecard helps us to keep a handle on the critical few things that really matter and that really make a difference."

Bernard Marr is a globally regognized big data and analytics expert. He is a best-selling business author, keynote speaker and consultant in strategy, performance management, analytics, KPIs and big data. He helps companies to better manage, measure, report and analyse performance.
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