Develop the Organization Report Card
Strategy is a commodity, execution is an art.
—Peter Drucker
According to a recent McKinsey survey, transformations with clear, unambiguous metrics and milestones were over seven times more likely to succeed than those lacking such elements.
In Chapter 4, I talked about the importance of integrating business excellence into an organization’s strategic plan. In Chapter 5, I shared a model to integrate an organization’s desired culture with strategy. With the strategic plan created, the task now at hand is to deploy the strategy throughout the organization from the boardroom to the frontline, as well as to monitor performance in relation to the strategic directions.
While there are many frameworks to deploy organization strategy, the popular ones include Balanced Scorecard (BSC) and Hoshin Kanri. The Balanced Scorecard’s four perspectives, namely, financial, customer, process, and learning and growth, are comparable to Hoshin Kanri’s cost, quality, delivery, and education (CQDE). Between the two, I prefer the Balanced Scorecard methodology for two reasons: one, the terminology of the four perspectives resonates well with organization strategy, and two, it is easier to understand and communicate to the frontline than the X Matrix used in Hoshin Kanri (Figure 10.1).
Let me explain the methodology for strategy deployment through a real case implementation. Hospital Heal used the BSC framework for strategy deployment since the four strategic directions of its new strategic plan aligned more closely with the four perspectives of the BSC. The strategic deployment at Hospital Heal was undertaken in two steps:
1.Organization strategy cascaded to develop the hospital’s “Health Report Card.”
2.Hospital Report Card cascaded to develop department-level performance scorecards.
In this chapter, I will only focus on the first part, i.e., the process implemented for cascading the organization strategy to develop the hospital’s Health Report Card, which was completed in a period of twelve weeks. The following activities were undertaken in the sequence listed below:
Twenty hospitals across Canada in various stages of implementing Lean were randomly selected to understand the metrics they used for public reporting on their website (Figure 10.2).
Malcolm Baldrige award winners in U.S. healthcare were approached to learn about metrics chosen by them for measuring organizational performance.
Industry research was conducted on metrics used by the Canadian Institute for Health Information (CIHI).
Internal teams brainstormed possible metrics to support all twenty objectives of the new strategic plan.
Inputs were sought from the senior leadership team on key process and outcome metrics.
The hospital board approved the final metrics chosen for the report card.
A detailed metric sheet was developed to outline the formula, definition, data owner, baseline, and target, all in layperson terms, to support each metric on the report card.
An attractive, easy-to-understand layout of the Health Report Card was designed.
A web portal for posting the Report Card for sharing with the general public was developed.
Finally, the Report Card was published on the intranet and the hospital’s website.
Sensei Gyaan: Be very selective in terms of choosing the metrics for the organizational report card. Keep the key metrics to a manageable number of sixteen or less. Identify a mix of process and outcome metrics that are critical to quality, cost, delivery, safety, and morale.