catalyst balanced scorecard

© Copyright Kurt Salmon Associates, 2004

The health care consulting group of Kurt Salmon Associates, Inc. (KSA) provides management advisory services in

facility planning, strategy, and information technology to multi-hospital systems, community hospitals, academic

medical centers, children’s hospitals, and physician group practices. Today, the group is among North America’s most

dedicated and experienced resources to health care providers. We work closely with our clients to raise the critical questions,

explore the full range of vision and possible innovation, and develop recommendations that can be implemented.

Foreword

Performance Management Systems | Navigating the Perfect Storm

HEALTH CARE ORGANIZATIONS CONTINUE TO BE BUFFETED BY A PERFECT STORM THAT IS BOTH POWERFUL IN FORCE AND

NATIONAL IN SCALE. This storm is a confluence of forces, including the economy, labor shortages, revenue pressures,

and industry interventions regarding demonstrable patient safety, quality, and performance.

In striving to navigate their local markets and reach their goals, health care organizations are devising and attempting

to implement various strategies, including revenue cycle management, clinical process redesign, and Six Sigma.

Drs. Robert Kaplan and David Norton of the Harvard Business School have observed that it is not necessarily bad

strategies that lead to inferior performance, but the inability to effectively deploy, communicate, monitor, and refine

those strategies.1

As organizations steer their way through dynamic and turbulent competitive environments, the corporate business plan —

a compendium of strategies, objectives, and goals — serves as the navigational chart leading them to superior performance.

The performance management system, as a business planning framework, strategy deployment tool, performance improve-

ment methodology, and measurement approach, is of growing interest throughout the industry as a means of bringing

the corporate business plan into the 21st century. Promising to transition corporate strategic planning from navigation

by the stars and whims of the wind, to a system of information technologies, automation, and the seamless flow of

information, intelligence, and best practices, performance management ensures the entire organization is working

toward a common purpose.

Many of Kurt Salmon Associates’ (KSA) clients, both in the health care and retail/consumer products industries, are

pursuing performance management initiatives to address the tactical gap between strategy definition and deployment.

The performance challenge is how best to link strategic objectives to high-performing operations.

Drs. Kaplan and Norton address this performance management limitation through the introduction of the Balanced

ScoreCard (BSC) in their seminal article and subsequent book, “The Balanced ScoreCard: Translating Strategy into Action”

(1996). The BSC is a performance management system for devising strategic objectives and translating them into a focused

set of performance measures which, in turn, focus and drive decision makers’ tactical and operational activities.

KSA considers the BSC and similar approaches, such as Management-by-Objectives (MBO), Malcolm Baldridge National

Quality Award criteria, and ISO 9000, to be performance management systems. These systems call for the development of

a corporate business plan, its communication to the workforce, and monitoring and feedback to ensure the workforce,

from CEO to staff nurse, is focused on working together in the pursuit of the business plan.

This KSA Catalyst explores the definition and application of BSC performance management systems within health care

provider organizations and considers enabling performance management information technology strategies and solutions

to help health care organizations navigate the perfect storm.

1

1Kaplan, Robert S., Norton, David P., “The Balanced Scorecard: Translating Strategy Into Action,” Harvard Business School Press 1996.

Kurt Salmon Associates | Catalyst, Summer 2004

A CRITICAL ELEMENT OF

ANY ORGANIZATION’S OVER-

ALL PERFORMANCE MAN-

AGEMENT SYSTEM IS KNOW-

ING WHERE THE ORGANIZA-

TION IS RELATIVE TO WHERE

IT WANTS TO BE. This per-

formance monitoring is achieved through the provision

of accurate, timely, and pertinent measurements to the

decision makers of the organization. Managers have long

recognized the need to measure organizational activities.

As the management adage goes: “If you can’t measure it,

you can’t manage it.” However, despite this recognition,

most health care organizations do not manage them-

selves with performance measurement systems that pro-

vide visibility into the full continuum of corporate activ-

ities that result in superior performance. Superior per-

formance is achieved with the effective synthesis of four

perspectives of corporate activities: 1) finances, 2) human

resources, and 3) internal processes, all integrated to

increase 4) the value proposition of health care delivery

to patients and other key stakeholders (see Figure 1).

A performance management system based solely on

measuring a single perspective, typically finances, has

limitations. Current health care performance measure-

ments are dominated by financial reporting indicators

(e.g., operating expenses, gross charges, case mix index,

average length-of-stay, in-

patient/outpatient vol-

ume). These traditional

measurements focus man-

agement attention on past

performance, and provide

only a short-term view of

achieving corporate objectives. Managers hone in on the

previous month’s expense budget numbers, rather than

balancing the evaluation and performance improvement

of the intangible assets: effective processes, skilled and

satisfied human resources, and the patient care value

proposition necessary to maximize performance across

the four perspectives. This is analogous to steering the

Queen Mary II to its port of call across two oceans by

virtue of only a speedometer and a rear-view mirror.

The theory of the BSC performance measurement frame-

work emphasizes the use of financial and non-financial

measures in a balanced manner. These measures are con-

nected to a cause-and-effect view of the organization’s

activities along the four performance perspectives. The

premise is that measuring and managing the learning and

growth of human resources and improving the effective-

ness and efficiency of internal processes will lead to

improved customer satisfaction and loyalty, which results

in superior long-term financial performance.


The theory of the BSC performance meas-

urement framework emphasizes the use of

financial and non-financial measures in a

balanced manner.

3

Charting the CourseOrganization Performance Measurement

This is Management Theory 101. The innovative heart of

the BSC approach is to explicitly select, gauge, and organ-

ize focused measures of the four performance perspec-

tives, and to deliver them to decision makers in a timely

and actionable manner via a BSC report.

The BSC, however, is more than a scorecard of key per-

formance measures. To truly measure performance for

purposes of evaluation and improvement, and not just

documentation, there must be a cause-and-effect connec-

tion between the business plan objectives and their oper-

ational realization. That is, employees and managers

must use performance measures directly related to their

daily tactical and operational activities — measures that

let Operations know when to turn left, when to slow

down, and when to stop.

Performance indicators that amount to documented

spilled milk (i.e., you lost $2 million in cardiology last

year) do not help managers achieve corporate strategies.

Did we lose $2 million because of missed cost objectives

or revenue objectives, or both? What processes and

essential resource capabilities are critical to improved

performance of the cardiology product line? Are our

patients dissatisfied with key aspects of service delivery

and/or medical care? Why? Each question requires an

element of outcome measurement in the BSC. Each out-

come measurement must also be linked in an explicit

cause-and-effect relationship to the measurement of a

supporting process or driver that enables the achieve-

ment of the goal (see Figure 2).

This outcome measurement is called a lagging indicator in

BSC parlance, as it measures what has already happened:

costs decreased, revenue increased, quality decreased.

The driver measurement is called a leading indicator, as it

measures the capability to achieve performance in the

future: 90% of cases are being managed by a critical path-

way; 75% of case managers have received Six Sigma

training. A scorecard that explicitly connects leading and

lagging measurements allows decision makers to take

action on processes that will improve desired outcomes.

An example: If for no other reason than habit, a cause-


4

Strategy

FinancialEconomic consequences of past actionsn Incomen Expensesn Profit marginn Cash flown Loss of sale

CustomerValue proposition delivered to customer segmentsn Patient, physicians, payers, communityn Customer satisfactionn Retentionn Acquisitionn Valued services

Business ProcessCurrent and new internal business processes in which the HCO must exceln Supply chain efficiencyn Achieving valued servicesn Effectiveness of caren Surgical infection raten Pathway compliance

Learning and GrowthInfrastructure to build long-term growth and improvementn Employee satisfactionn Human resource reskillingn Information technologyn Wound care training

Source: Illustrative example

FIGURE 1: BALANCED SCORECARD PERSPECTIVES

A “balanced” set of corporate performance indicators goes beyond the financial


and-effect chain begins with financial outcome measures,

such as product line profitability. One way to reduce

costs and increase profitability, at least for case-based

reimbursement, is to reduce length-of-stay (LOS) in a

medically responsible way. The LOS lagging outcome

measure requires a leading driver measure to indicate

how the desired LOS outcome is to be achieved. The per-

centage of discharges in compliance with developed crit-

ical pathways could be a meaningful driver measure.

An increased patient satisfaction score on the latest Press

Ganey survey indicates proper balance between aggres-

sive case management and patient satisfaction. Have

these improvements led to greater center of excellence

market share, and therefore revenue stream? There should

be a metric in place to answer this question. Dozens of

permutations exist for how performance measures can

relate to each other; and in turn, how the strategic objec-

tives they represent also relate to and affect each other.

Designing a Performance Scorecard

The BSC management system is as effective when

applied to an individual line of business as when applied

to the corporate-level business plan. To illustrate, we will

apply the BSC performance management system to a cor-

porate strategy to develop a cardiology center-of-excel-

lence service line. There are two broad tasks: devising the

service line business plan and designing the scorecard to

monitor and manage the performance of that business

plan. During a planning session, management and the

clinical team have identified three strategic goals for the

cardiology center-of-excellence:

1. Be recognized as the choice for cardiology cost/quality

performance in the region.

2. Identify, target, and lead in the three “customer” seg-

ments (patient, physician, and insurance product).

3. Improve the quality and efficiency of cardiology patient

clinical management.

5

Out

com

eD

rive

r

Learning

Wound care training% of staff decreases

Loss of sales increases

Post-surgery infection rate

increases

Satisfied patients decreases

Profit margin decreases

Process Customer Finance


FIGURE 2: BALANCED SCORECARD CAUSE-AND-EFFECT CHAINS

A planning team translates these goals into specific

objectives within each of the four performance perspec-

tives (see Figure 3). Outcome measures are then selected

to make each objective operational by answering the sim-

ple question, “How do we know if we have achieved this

objective?” Each objective is then assigned a perform-

ance driver measurement to monitor its achievability. In

this example, each measure is also given a trend indicator

to denote the desired direction, increasing or decreasing.

While there is no magic number of measures, research

supports a total of 25 to 30 performance indicators per

scorecard as ideal from a practical deployment and human

cognitive perspective. Measures should be accessible, rel-

evant, and easily understood. They should be balanced

between leading and lagging performance indicators and

short- and long-term goals. Another criterion for the

measure set is balance, such that no single measure out-

weighs or is improved at the expense of another. The

next step in charting the achievement of the business

plan is to design and build the performance management

system that will manifest the designed scorecard.


6


FIGURE 3: CARDIOLOGY CENTER-OF-EXCELLENCE BALANCED SCORECARD

STRATEGIC OBJECTIVES BY

DIMENSION

FINANCIAL PERFORMANCEn Achieve profitable growthn Improve operating performance

PROVIDER OF CHOICEn Improve hospitality of servicesn Improve/reinforce image to customer

segments

INTERNAL PROCESSESn Improve clinical innovationn Improve business productivity

EMPLOYER OF CHOICEn Upgrade staff competenciesn Create climate for action

LEADING DRIVER

i Length-of-stay vs. best-practice benchmark

h Payor contract development vs. plan

i Days to next appointment availability

h Advertising budget per cardiac bed

h $ in cardiology research programs

i % of first-time clean claims

h % of cardiology board certified physicians

h % of staff received Six Sigma training

LAGGING OUTCOME

i Average total cost per case

h Case mix adjusted occupancy rate

h Customer satisfaction survey

h Marketing focus group scores

i Resource consumption (index vs.

benchmark)

h Days in Accounts Receivable

h Strategic skill rating

h Employee satisfaction survey

PERFORMANCE MEASUREMENTS

AT THIS STAGE, THE CARDIAC

CENTER OF EXCELLENCE

PERFORMANCE SCORECARD

IS A TABLE-TOP PLANNING

EXERCISE. It is not radically

different than dozens of

planning frameworks put

forth throughout the histo-

ry of organization management science. The organization

must now determine how the performance scorecard will

be built and delivered to decision makers in a timely and

actionable fashion.

Information technology is one component of the solution.

Performance management information technology (PMIT)

actually encompasses much more than the delivery of a

performance scorecard. It can enable a broader perform-

ance management system, including the acquisition and

management of performance data, assisting with the

business planning cycle, operational and capital budgeting,

Six Sigma support, and information analysis functionality.

This Catalyst will focus on a performance management

system comprised of three capabilities: performance

monitoring, evaluation, and improvement.

PERFORMANCE MONITORING. Like a radar or Doppler

screen tracks a storm, effective performance monitoring

explicitly maps performance measures to the business

plan’s strategic objectives, goals, and initiatives and com-

municates their performance to stakeholders, including

Joint Commission on Accreditation of Health Care

Organizations (JCAHO), patients, payors, Centers for

Medicare and Medicaid Services (CMS), and the commu-

nity. The BSC report is the primary method of communi-

cating to management actual vs. expected performance.

Performance monitoring

can be strategic (long-

term) and operational

(real-time) in the type and

timeliness of its delivered

measures. While manage-

ment may need to under-

stand occupancy trends to

plan bed capacity and allocation for the next two years

(strategic), it must also know this week’s census and acu-

ity to plan adequate RN coverage for next week (opera-

tional). Each type of performance monitoring objective

indicates the need for different types of data sources, data

management processes, timeliness, and analytical meth-

ods for delivering information and actionable knowledge

into the hands of decision makers. Certainly strategic

monthly, quarterly, and yearly reporting is the primary

focus of the BSC. However, steering the organization

according to plan is only possible when measures are

operational and actionable as well.

EVALUATION. Performance monitoring allows manage-

ment to identify negative and positive performance

events and trends in a timely manner. Management must

then conduct root-cause analysis to drill down into layers

of performance information detail and isolate contribut-

ing factors. The ability to evaluate performance indicates

a broader requirement for integrating and normalizing

detailed performance data into a single managed per-

formance data resource. The data resource is made read-

ily available for analysis using a variety of decision sup-

port tools within an integrated performance management

system environment. Decision makers should be able to

navigate seamlessly from performance monitoring to

evaluation, prepared to take immediate action and make

knowledge-based decisions.


7

Performance management information

technology (PMIT) actually encompasses

much more than the delivery of a perform-

ance scorecard.

The ShipyardBuilding the Performance Management System

IMPROVEMENT. Once the underlying cause of a perform-

ance problem is evaluated, management and analysts

must redirect operational efforts and improve the under-

lying process(es) to stay on the course of the business

plan. The health care industry is increasingly adopting

Six Sigma and other performance improvement tech-

niques and applying them to performance management

systems by exploiting the performance data resource, the

BSC, and the collection of evaluation and analysis tools.

More advanced capabilities include business process

modeling and data mining techniques that can model

and explain variations and create “if-then” models for

improvement interventions.

A BROAD SET OF INFORMATION TECHNOLOGY REQUIRE-

MENTS MUST BE MET TO ENABLE THESE THREE CAPABIL-

ITIES OF THE PERFORMANCE MANAGEMENT SYSTEM.

Information technology is needed to acquire performance

data, organize it for reporting and analysis, and apply

various visualization and analysis tools to the organized

performance data. The performance management IT

components can be organized into three broad categories of

functionality: the BSC, data management, and business

intelligence.

THE BSC. BSC information technology enables manage-

ment to visually monitor and navigate an organization’s

business plan and performance measures against targets.

The BSC Collaborative is an organization that identifies

specific BSC technology functionality and certifies vendors

against that list. Key BSC functionality includes: n STRATEGY MAPPING OR VISUAL NAVIGATION of busi-

ness plan strategies, objectives, goals, and measures.n DATA VISUALIZATION, such as performance status icons

using stop-lighting (red, yellow, green).n DIRECTIONAL ICONS, GAUGES, DIALS, AND OTHER

VISUAL CLUES to alert management to growing prob-

lem areas.n LINE-OF-SIGHT FUNCTIONALITY linking individual staff,

and departmental and service line performance score-

cards to the corporate business plan. This serves the

BSC goal of ensuring every workforce member, depart-

ment, division, and vice president knows how and

how well it contributes to corporate strategy achieve-

ment. n COLLABORATION FUNCTIONALITY allows accountable

management to communicate, document, and collabo-

rate as a team when monitoring and evaluating per-

formance trends. There is no longer a need to play

phone tag with three department directors to explain a

variance to the CEO; an organization can interact

directly with the CEO within the environs of the per-

formance management system, with performance data,

trends, and management explanations all in one place.

DATA MANAGEMENT. Because the goal of the BSC is to

create views of the organization that extend beyond

financial elements, data regarding clinical care, quality,

patient safety, operations, administration, external

benchmarks, and competitor market share are also

required. Data must be sourced from a wide variety of

internal and external information systems and data col-

lection processes. The many disparate information

sources — internal and external, electronic and manual

— must be managed for the expressed purpose of per-

formance monitoring, evaluation, and improvement.

Data must be extracted, integrated, standardized, and

cleansed. The manifestation of this data management

technology and integrated data resource effort is a corpo-

rate performance data warehouse.

BUSINESS INTELLIGENCE. The management of an organi-

zation’s performance data is one side of the coin; the

tools, technologies, and methodologies to exploit that

data to generate actionable knowledge is the other. A set

of what is commonly termed Business Intelligence (BI)

tools provides drill-down, Web-based reporting, statistical

analysis, business activity monitoring, business process

modeling, data mining, data visualization, portal, and

dashboard functionality to complement and complete the

PMIT environment.


8

MUCH LIKE CLASSIC CORPO-

RATE BUSINESS PLANNING,

HEALTH CARE ORGANIZA-

TIONS NEED TO TAKE A CON-

SIDERED AND STRATEGIC

APPROACH TO DEFINING

AND DEPLOYING A PER-

FORMANCE MANAGEMENT

SYSTEM AND APPLYING INFORMATION TECHNOLOGY AS A

SOLUTION. A three-step PMIT strategy process is recom-

mended to assess where the organization is now, where

it wants to be, and how it will get there (see Figure 4).

STEP 1: The organization assesses the existing perform-

ance management system environment relative to best

practices and identifies corporate requirements. The goal

of the assessment is to identify management require-

ments with regard to access to performance information;

identify current capabili-

ties’ strengths and weak-

nesses; and evaluate exist-

ing applications, skill sets,

tools, and processes. The

assessment should identify

the inhibitors and accelera-

tors to adopting a new per-

formance management system and determine whether

the current analytical culture and management skill set are

able to exploit access to performance data and analytical

tools.

STEP 2: The next step is to define a future-state vision and

perform a gap analysis of the current environment.

Alternative performance management strategies for achiev-

ing the future state, assessing relative value propositions, and

recommending a preferred strategy to pursue are devised.


The strategy and solution set will depend

on the realities of the future-state vision

relative to the organization’s current PMIT

environment.

Sailing the High SeasPMIT Strategy

9

Examine Project Organization

Set Project Goals and Objectives

Assess Current PMIT Environment

Identify Strengths and Weakness

AssessPMIT Environment

Define Analytical Processes/ Culture Requirements

Define Analytical Requirements

Define Data Management Requirements

Determine Unmet PMIT Needs (Gaps)

Define, Evaluate, andSelect PMIT Strategy

Perform Marketplace Overview

Evaluate Technology Solution(s)

Select TechnologySolution(s)

Formulate Budget and Timeline Projections

Begin PMIT Implementation

STEP 1(Where are we now?)

STEP 2(Where do we want to go?)

STEP 3(How do we get there?)

Source: KSA methodology

FIGURE 4: THREE-STEP PMIT STRATEGY PROCESS

STEP 3: Upon senior leadership’s confirmation of a pre-

ferred performance management strategy, it is translated

into a tactical plan to pursue policy changes; skill set

development; business planning calendars; and technol-

ogy selection, acquisition, and implementation.

Performance management and assessment of the current

environment will undoubtedly give rise to several chal-

lenges for the organization to overcome as it embarks on

improving its strategic planning and deployment

approach. These challenges include:n Holding management accountable for performance.n Enabling accountability through performance-based

reward and compensation models.n Affecting policy and culture changes with respect to

corporate information access.n Building consensus and standardizing corporate per-

formance metrics across multiple perspectives, entities,

and departments.

In addition to organizational behavior and cultural chal-

lenges, a key PMIT strategy challenge is determining how

best to integrate and exploit existing data and analytical

solutions with potentially new PMIT components and

solutions.

Frequently asked PMIT strategy questions include:n Are broader requirements for data management and

analysis, automating the budget cycle, and integrated

business planning required, or is a visual dashboard of

performance indicators sufficient?n Does our Enterprise Resource Planning (ERP) vendor

offer a PMIT solution that can meet our health care-

specific requirements?

n How far can our existing financial decision support

applications take us in pursuing the goals of the BSC?n How well does the existing information technology

environment support the automated capture of clinical

data required for quality and patient safety perform-

ance indicators?

As these probing questions indicate, the scope of a PMIT

strategy and its associated tactical solution(s) can vary

widely. The solution may be as simple as a targeted niche

BSC product; it may include data warehousing, budget-

ing, and business planning within an ERP environment;

or it may include any solution map in between. The strat-

egy and solution set will depend on the realities of the

future-state vision relative to the organization’s current

PMIT environment.

Upon specification of a PMIT solution scope, assessment

of the current PMIT environment, and identification of

the gaps between the current environment and the

future-state vision, the organization must determine how

best to address the gaps and move toward the future-state

vision. Based on numerous technology planning and

selection projects, KSA has identified three broad PMIT

strategies (see Figure 5).

BEST-OF-BREED. Allows each entity, service line, and

department to determine how best to satisfy each of the

three PMIT components with a best-in-class solution for

BSC, data management, and business intelligence.

BEST-OF-FAMILY. Groups the PMIT components into

“functionality families” to be addressed by a smaller set

of vendors, reducing cost, support, implementation, and


10

Source: KSA methodology

FIGURE 5: THREE BROAD PMIT STRATEGIES

BEST-OF-BREEDn Each PMIT component is satisfied by

the “best” niche vendor solutionn Entity-/department-specific solutions

BEST-OF-FAMILYn Group PMIT solution components into

two “families” of functionality:

– Data Management (DM) and

Business Intelligence (BI)

– The Balanced ScoreCard (BSC)

END-TO-ENDn Further group PMIT solution into a single

suite of functionality: DM, BI, and BSC

integration challenges. Companies should strive to stan-

dardize best-of-family solutions as a single PMIT solution

set across the entire organization. The definition of the

functionality families can differ based on the realities of

an organization’s assessment and the identified gaps in

the PMIT environment. One definition could include data

management and business intelligence as one family

(one vendor) and the BSC as another. The BSC and busi-

ness intelligence could be yet another family coming

from one vendor and data management technology from

another.

END-TO-END. The perceived benefits of the best-of-family

strategy can be further expanded to a strategy in which

all the PMIT components are supplied by a single inte-

grated solution set from a single vendor. This strategy

works best when it is deemed by the organization during

the PMIT assessment that none of the three components

— the BSC, data management, or business intelligence —

are prevalent and/or enjoy a single, consistent strategy

and solution set across the organization.

11

PMIT VENDOR MARKETPLACE

Given the scope of an organization’s PMIT approach,

and the various possible strategies, many vendors

and solutions can be included in an organization’s

PMIT solution set. Several vendors’ business intelli-

gence and BSC products can be considered function-

ality families. Numerous niche vendors specialize in

BSC functionality as well. While accredited by the BSC

Collaborative, many of these niche solutions require the

acquisition and integration of business intelligence

and data management tools if such don’t already

exist. An organization lacking all three PMIT components

can consider a smaller set of end-to-end vendors

claiming to offer the components in an ostensibly inte-

grated environment. Figure 6 provides a PMIT market-

place overview based on KSA analysis. It is not an all-

inclusive depiction of potential vendors, but repre-

sents perceived leadership in the PMIT space.

Source: KSA marketplace analysis

FIGURE 6: PERCEIVED PMIT LEADERSHIP


VENDOR

ACTIVESTRATEGY

BUSINESS OBJECTS

COGNOS

CORVU

CRYSTAL DECISION

HYPERION

INFORMATICA

ORACLE

PBVIEWS

SAS

PMIT COMPONENT

BSC

BI, DM

BSC, DM, BI

BSC

BI, BSC

BI, BSC

DM

DM, BSC, BI

BSC

BI, DM, BSC

BEST-OF-BREED

PPPPPPPPPP

BEST-OF-FAMILY

PPP

P

PPP

END-TO-END

P

P

P

As the owner of a PMIT solution set, you will embark on the challenging voyage of deploying the policy changes,

process redesign, skill set development, and technology implementation to realize the future-state vision. Great

attention must be paid to ensuring key success factors are in place and managed within a continuous risk man-

agement program.

SECURE EXECUTIVE SPONSORSHIP. Senior management must sponsor a project of this magnitude and strategic

importance. The performance management system and PMIT must be treated as a strategic and mission-critical

initiative owned and sponsored by the CEO or his/her designee, in partnership with the CIO. This project will expose

and create numerous political challenges, require significant funding, and likely cause considerable cultural change.

Committed and astute executive sponsorship is critical to keeping the project alive, focused, and on course for success.

INVOLVE OPERATIONS. The involvement of stakeholders from operations, specifically patient care-related departments,

is also critical. The next level of performance improvement will be in patient care, quality, and clinical operations; not

finance, human resources, and materials. From strategy through implementation, stakeholders from ambulatory,

operating room, clinical, pharmacy, nursing, and senior management should be intimately involved, owning the project

and its success.

COMMUNICATE. Given the dramatic cultural change and broad scope of the project, constant and consistent com-

munication will stoke excitement and adoption of the PMIT environment. Starting with senior management, the “why

and how it will affect you” message should spread through the organization through existing communication channels,

as well as new ones, such as a performance management newsletter.

The BSC is used by more than 60% of Fortune 500 companies to measure performance and align operations with strate-

gies. Strategy is critical to guiding health care organizations through dynamic markets and ever changing competitive

environments. Outside competition, regulatory changes, and more sophisticated patient expectations are just some of

the factors driving organizational change. Only those organizations prepared to execute strategy and maximize business

performance will succeed. Performance evaluation predicated on the BSC helps integrate business and clinical perform-

ance at strategic and tactical levels by measuring, disseminating, and analyzing interrelated key performance indicators.

This Catalyst reviewed the challenges of devising and deploying an information technology strategy to enable the

goals of performance management and measurement in the stormy health care environment. Implementing PMIT

within the BSC performance management system can help align an organization’s mission, vision, and strategic plan

with its success-defining measures. Using PMIT can also create management tools to evaluate opportunities for

improvement and support knowledge-based decision making that will enable organizations to navigate successfully

into the 21st century.

Compass Points

We hope you found this Catalyst insightful and actionable.

For more information about how KSA can help your organization apply BSC performance management systems

and PMIT strategies and solutions to navigate the perfect storm, e-mail [email protected].

www.kurtsalmon.comOffices Worldwide