Mr. Frederick S. Rick Buchman: Presented by

Balanced Scorecard Strategies and HR Metrics
Presented by
Mr. Frederick S. ‘Rick Buchman
Practitioner and Expert on Balanced Scorecard and Dashboard Applications, and

Co-Author, Balanced Scorecard Strategy for Dummies, Wiley & Sons, Inc. Sept 2007
September 13, 2010

Chicago, IL
IQPC HR Metrics Summit, Sept 13, 2010 - Balanced Scorecard Strategies

8/28/2011 Workshop – Presenter: Rick Buchman 1
Discussion of the Workshop
For this Workshop

 Objectives of the course:
 Understand the fundamentals of the Balanced Scorecard and
Dashboard approach within an HR framework, (specific to HR
Metrics), and be able to:
 Develop a framework for your Strategy Map
 Devise the elements for each ‘Leg’ of your Balanced Scorecard
 Design your Dashboard Concept
 Conduct of the course:

 Some introductory lecture, mostly interactive, individual work
 Majority split into research time, collaborative, evaluative and
presentation materials
 Total time – about 140 min.
8/28/2011 IQPC HR Metrics Summit, Sept 13, 2010 - Balanced Scorecard Strategies 2
Workshop – Presenter: Rick Buchman
Overview and Definitions
What is meant by the term “Balanced Scorecard?”

 Traditional “Scorecards” are mostly Financial Based
 Revenue, Margin, Profit, Cash Flow, Budget Compliance, …
While these are very important to a company, they do not tell the
whole story… and decisions based on these metrics may not
work… (like wagging a dog…)
 “Balanced Scorecards” look at the multiple dimensions of an

organization, Primarily focusing on:
 Customer Satisfaction and Focus
 Financial Performance
 Business Process Performance
 Employee Knowledge, Skills and Competencies
The Four ‘Legs’ of a Balanced Scorecard
Business Process Employee Knowledge,
Performance Skill and Competencies
Per Delivery Plan On-Time Works Great! First Time Right

First Time Right Great Price! Durable Customer Focus
Exactly as Ordered Product Understanding
Excellent Condition Customer Process Understanding
Cost Management Satisfaction Business Knowhow
Good ‘Handoffs’ and Focus Teamwork & Feedback
In-Process Checks & Loyalty Selective Continuous Improvement
Great Quality Confident Responsive
Financial
Performance
Revenue Profitable
Margin Cost Management
Competitive Advantage
Market Share Business Growth Shareholder Value
Write down 4 general items related to each „Leg‟, related to HR Metrics.
Then, code each item as S, O, or T for Strategic, Operational or Tactical.
Customer Focus and Satisfaction Financial Performance
1. _____________________ 1. _____________________
2. _____________________ 2. _____________________
3. _____________________ 3. _____________________
4. _____________________ 4. _____________________
Business Process Performance Employee Knowledge, Skills and
Competencies
1. _____________________ 1. _____________________
2. _____________________ 2. _____________________
3. _____________________ 3. _____________________
4. _____________________ 4. _____________________
Small Group Discussion
 Small group discussion:
 Get into groups of 5-6, sorted by Strategic, Operational or Tactical.
 Focusing on the specific HR Metrics you are focusing on, discuss
each ‘Leg’ and the items you have written down. Share your
thoughts with the other members of your discussion group. [15
minutes]
 Ask questions for clarification, understanding. No Judging.
 Feel free to change, add, correct your notes, based on your
discussion.
 Be prepared to talk briefly about what your group talked about,
and any key insights discovered during the discussion.
[General group review and summary – 5 minutes]
 Update your notes for the next step.
The 4 Steps to Implementing Balanced Scorecards
1. Establish your Feed ‘Back’ Loops

Strategy Map [Quality, Issues, Timing, Performance, …]
2. Design the ‘Legs’ of

Your Balanced Scorecard
Feed ‘Forward’ Loops

[Information, Orders,..] 3. Develop Executive &
3. Develop Executive &
Department
3. Develop‘Dashboards’
Executive &
Department
3. Develop‘Dashboards’
Executive &
Department
Department‘Dashboards’
‘Dashboards’
4. Continuously
Feed ‘Back’ Loops Improve Feed ‘Back’ Loops
[Quality, Issues, Timing, [Quality, Issues, Timing,
Performance, …] Performance, …]
Step 1 –
Mapping your Strategy
Strategy Mapping for a ‘Balanced Approach’
 What is “Strategy Mapping?”

 Maps the key organizational strategies to the ‘Legs’ of your scorecard
 How is it done?
1. Identify the top 3-4 organizational strategies
2. Set up a Matrix to align to the 4 ‘Legs’ (Customer, Financial, Process,
Competencies)
3. Identify Key Alignments, Actions, and Metrics
4. Link to and Design Department Dashboards for Real-Time
Management and Adjustment
 How does it add value?
 Ensures Actions, Focus are aligned to Strategic Direction
 Enables Real-Time Response and Adjustment to Changes
Strategy Mapping for a ‘Balanced Approach’
 Key Concepts
 There is an important difference between an Objective or
Goal, and the Strategy to achieve it.
 Objective or Goal: This is the desired ‘End State’ to be achieved by
the organization. It can be a financial (Make $XX Million Net Profit), Market
(Own XX% Market Share), or any other specific, measurable target.
 Strategy: This is the method that the organization will employ, to achieve its
objective or goal.
Example: Objective: Achieve 15% increase in Market Share in 3 yrs.

Strategy: Add new major clients, through: 1) Acquiring 3-5
smaller competitors, 2) Converting 20 potential
clients from competitor companies
• KISS – “Keep It Simple Strategically ” – Strategy should SM
be clear and explainable to anyone within 60 seconds or less.
HR – Current Processes and Practices alignment to Balanced
Scorecard ‘Legs’ - Survey of 100 Medium to Large Companies
Employee
Business
HR Current Processes & Practices Strategy Customer Financial Knowledge,
Processes
Skills
Employment – filling positions, hiring, … X X X

Compensation and Benefits – pay, benefits, X X X
Diversity X X
Training and Development X X X
Career Development & Progression X
Labor relations X
Environment, Health and Safety (EHS) X
Employee Performance & Evaluation X X X
Turnover X
Current HR Processes and Practices are NOT well aligned in a ‘balanced’ way to meet
the needs of the business, nor do we see a strong relationship toward customer
Satisfaction, organizational goal achievement or overarching / long term strategies.
Source: BBI Study, 2010
An Example of a Strategy Map
A Company seeks to increase Market Share through Growth, providing added
Value to customers through knowhow and performance, and increasing shareholder
Value through improved Profitability and increased Margin performance
‘Legs’ of the Growth & Market Highly Regarded Increased

Balanced Share Expert in the Shareholder Value
Scorecard Industry
Customer Create desire for our Looked to for Profitability Leader
Focus products, at our price Expertise First for our Shareholders
Financial Increasing Revenue, Higher Margins,
Performance Price Competitive Cost competitive
Deliver when, where, and Demonstrated Best Cost Reduction,
Business how much, flexible to Practices, Leading- Efficient Process,
Processes demand changes Edge Processes Minimize Waste
Knowledge, Demonstrated Leaders Demonstrated Leaders

Skills and and Experts in the and Experts in the
competence Industry Industry
HR – Metrics
HR – Key Metrics Considerations:
 HR Capability Requirements of the Organization
 Technical skills, knowledge and competencies to design, produce, deliver,
and support the products and services
 Other skills and capabilities necessary – leadership, project management,
functional competencies (i.e. financial competency, systems thinking,…)
 HR Practice skills, knowledge and competencies – Career planning/
employee development, coaching/facilitating, problem solving, conflict
management, Communication skills, …
 HR Processes & Systems
 Those processes which the HR department/group manages and executes
to support the organization – staffing/hiring, resource planning, training
and development,, compensation and benefits, performance appraisals,
personnel data management, labor relations, succession planning, …
Source: The HR Scorecard – Linking People, Strategy and Performance, by Becker, Huselid
and Ulrich, HBS Press, 2001
Current Considerations – Some thoughts about what’s important
Elements of a High Performing Organization
- Leadership - Motivation / Alignment
- Talent - Positive Work Environment
Source: Understanding the Balanced Scorecard; An HR Perspective, by
James Creeland, Copywrite HR.Com 2002
Goal alignment – achieving definable Return on Investment (ROI)

To effectively achieve ROI, you must link the training experience and utilization to
the impact on the business, and allow for real-time adjustment…
Source: The Human Resources Scorecard – Measuring the Return on Investment, by Phillips,
Stone and Phillips, published by Butterworth-Heinemann, 2001
5 „Core Principles to Effective “Talent Management”

• People Equity Framework
• Strategic Focus on Talent Management
• Align your Talent Management Practice to Trends & World Environment
• Measure Talent Manager per Business Performance
• Talent Growth
Source: Reinventing Talent Management: How to Maximize Performance in the New
Marketplace, by William A. Schiemann, published 2009 by Wiley & Sons, Inc.
Strategy Mapping
 Discuss potential issues for Managing Human Resources and how
best to measure success, relate to Strategy Mapping and the 4 ‘legs’
of the Balanced Scorecard. Discuss how they might be addressed.
Share your thoughts with the other members of your discussion
group. [15 minutes]
discussion.
 Update your notes for the next individual exercise.
Strategy Mapping –– Select Level: ___ Company / Executive (Strategic)
___ Department / Division (Operational)

Write down your Objectives/Goals,
and specific Strategies: ___ Section / Workgroup (Tactical)
Top 3-4 Objectives/Goals: Top 3-4 specific Strategies:
1. _____________________ 1. ____________________
Key Metric________________ _______________________
Target (2010)_____(3 yr)_____ _______________________
2. _____________________ 2. _____________________
Key Metric________________ _______________________
Target (2010)_____(3 yr)_____ _______________________
3. _____________________ 3. _____________________
Key Metric________________ _______________________
Target (2010)_____(3 yr)_____ _______________________
4. _____________________ 4. _____________________
Key Metric________________ _______________________
Target (2010)_____(3yr)_____ _______________________
Step 2 –
Designing your Balanced
Scorecard –
Defining and Aligning the 4 ‘Legs’
The Balanced Scorecard
 What is a “Balanced Scorecard?”

 Business Multi-Discipline Tracking and Management Tool to help
achieve and sustain desired performance levels , based on 4 ‘Legs’:
Customer Focus Financial Performance
Business Process Performance Employee Knowledge, Skills & Competence
 How is it created?
1. Determine the key focus areas and measures for each ‘Leg’, tied back
to the strategic direction, from the Strategy Map
2. Decide the Strategic, Operational and Tactical Actions to be tracked
and measured for your group
3. Design your Balanced Scorecard, get concurrence and deploy
 Ensures Actions, Focus are linked to key goals, and measured
Tying Strategic, Operational and Tactical to the 4 ‘Legs’
STRATEGIC LEVEL
• TIMEFRAME: 3 TO 5 YEARS
• ASSESSMENT
• SELECTION
• DEPLOYMENT
• REVIEW: AT LEAST MONTHLY
OPERATIONAL LEVEL
• TIMEFRAME: 1 YEAR
• ASSESSMENT
• SELECTION
• DEPLOYMENT
• REVIEW: AT LEAST WEEKLY
TACTICAL LEVEL
• TIMEFRAME: REAL TIME
• ASSESSMENT
• SELECTION
• DEPLOYMENT
• REVIEW: REAL TIME, DAILY, WEEKLY
Strategic, Operational and Tactical Focus – An Example
Balanced Scorecard Worksheet - Strategic, Operational, Tactical
- Example: Health Care Shared Services - Business Process 'Leg'
Process Objectives Process Measurement Target

Strategic - Align strategic direction with upcoming health care - Anticipated compliance, and Risk levels - 100%
legislation
- Benchmark 'best practices' for business process - Comparison to 'Best Practices' over time - Meet or Exceed
performance, and establish achievement targets,
strategies
- Overall focus on Customer Satisfaction - Customer Satisfaction Indices - >98% Monthly
Operational - Comply with existing and upcoming health care - Business Process Compliance to Legislation - 100%
legislation Requirements
- Effectively Plan and Operate at optimum cost - Staffing levels/Indices, Operational Process - Indices targes are 1.0
efficiency - staffing levels, operational process Cost Indices, Waste reduction, Response, - Waste Reduction: 25% year over year
costs, reduced waste, … Customer Satisfaction operational indices, - Response: TBD
and overall Process Performance - Overall Process Performance: >95%
Tactical - Comply with legislated requirements for daily - Compliance to legislated requirements - 100%
operation
- Manage business and operational processes to - Compliance to budget weekly, Monthly, with - 100% or better
budget actions in place
- Meet daily, weekly and Monthly operational goals - Goal acheivement - on/off track - On track, or plans in place to recover
- Ensure Customers needs are satisfied daily - Customer Satisfaction Indices - >98%
- Conduct Admin functions in a timely manner - Cycle time, First Pass Yield, Rework and - Improvement 25% year over year
process capability
Another Example of a Balanced Scorecard
Scorecard Indicator Measure Units Target
Leg
Knowledge Employee feelings about Employee complaints Complaints 0
and Growth work Employee suggestions Ideas suggested and 10% more each year
implemented
Employee feelings about Employee turnover Turnover <5%
qualifications Training and Developmen t T&D numbers 25% per year
Movement within Sears
Employee feelings about the Growth Successions 15% per year
future
Internal Service oriented Handling situations First Pass Yield >95%
Business Movement of merchandise Inventory levels/Turnover
Process Helpful to Customers Ease of processes Cycle Time >5 per year
10% better each year
Value Merchandise
Customer Customer ideas and Number of ideas from Number, type >300 per year
Focused recommendations customers suggested and % Implemented >10%
implemented $ Saved/Improved >$5M each division
Customer impressions Customer surveys
Customer Retention % Return customers Percent, by demographics >10% each year
New Customers % Increased customers Percent, by demographics >10% each year

Financials Investment return ROA $$ $XXXX
Profit Operating Margin Percent YY%
Sales Gross Revenue $$ Sales $$MMMM
Growth Revenue Growth over last Percent ZZ%
year
Draft Working Balanced Scorecard Example

[Retail sales Corporation - Worldwide]
Developing your Balanced Scorecard
 Discuss different aspects for HR Shared Services and Outsourcing,
relate to the 4 ‘legs’ of the Balanced Scorecard. Share your
thoughts with the other members of your discussion group. [15
minutes]
discussion.
 Update your notes for the next individual exercise.
Company / Executive
Developing your Scorecard – Select Level: ___ (Strategic)
Department / Division
Enter your Key Performance Metrics (KPM) related to ___ (Operational)
each ‘Leg’ of your Balanced Scorecard from Step 2: Section / Workgroup
___ (Tactical)
KPM Units Target KPM Units Target
1. _____________________ 1. _____________________
2. _____________________ 2. _____________________
3. _____________________ 3. _____________________
4. _____________________ 4. _____________________
Business Process Performance Employee Knowledge, Skills, Competencies
KPM Units Target KPM Units Target
1. _____________________ 1. _____________________
2. _____________________ 2. _____________________
3. _____________________ 3. _____________________
4. _____________________ 4. _____________________
Defining the 4 ‘Legs’ of the Balanced Scorecard
Enter your Strategies down the left side. Then, in each box, identify a specific
initiative that will support achieving each strategy related to the specific ‘Leg’ of
your scorecard.
Financial Customer Focus Business Process Employee Skills &
Performance Performance Capabilities
Strategy #1 ____________________ _____________________ _____________________ ____________________

_________________ ____________________ _____________________ _____________________ ____________________
____________________ _____________________ _____________________ ____________________
_________________
____________________ _____________________ _____________________ ____________________
_________________
Strategy #2 ____________________ ____________________ _____________________ ____________________
_________________ ____________________ ____________________ _____________________ ____________________
____________________ ____________________ _____________________ ____________________
_________________
____________________ ____________________ _____________________ ____________________
_________________
Strategy #3 ____________________ ____________________ _____________________ ____________________
_________________ ____________________ ____________________ ___________________ ____________________
____________________ ____________________ ____________________ ____________________
_________________
____________________ ____________________ ____________________ ____________________
_________________
Strategy #4 ____________________ ____________________ _____________________ ____________________

_________________ ____________________ ____________________ ___________________ ____________________
____________________ ____________________ ____________________ ____________________
_________________
____________________ ____________________ ____________________ ____________________
_________________
A Potential Risk with HR Metrics
How good is your data?
How can you know?
How do you ensure your information is reliable?
 Utilizing Measurement Systems Analysis (MSA)
 Resource multiple sources – validation
 Check often, always ask where the information came from,
and what is the basis for any conclusions or decisions made
 Use the ‘Smell Test’ – if it “smells or feels funny”, don’t just
accept or act on it, check it out to be sure, especially if it is
something different or particularly ‘interesting’.
The criticality of the decisions that depend on this information
demand reliability, which requires rigorous discipline in ensuring
the highest levels of quality and accuracy.
IQPC HR SSO Summit, May 10, 2010 - Balanced Scorecard Strategies
8/28/2011 Workshop – Presenter: Frederick S. ‘Rick Buchman 25
Step 3 –
Develop your Dashboards–
Executive/Organization
Section / Workgroup
The Dashboard
 What is a “Dashboard?”
 Visual Management Tool that provides Real-Time critical information on key
business measures, to enable timely decisions, based on the 4 ‘legs of the
Balanced Scorecard:
Customer Focus Financial Performance
Business Process Performance Employee Knowledge, Skills & Competence
 How is it created?
1. Assess your business operation/process, and determine what you would need
to see on an on-going basis, in order to assess the ‘health’ of your
operation/department, as related to each of the 4 ‘legs’
2. Design your Dashboard to provide Real-Time, up to date intelligence on
these measurements
3. Install the Dashboard, test it, and improve on it, and make it part of your
daily management system.
 Ensures Actions, Focus are continually aligned to key performance goals
Developing your Dashboard
 Consider various ways to portray, arrange and

display your visual and graphical indicators.
 Important points:
 Must clearly indicate when something
requires attention
 Should be simple
 Easy to understand
 Flow naturally
 Use Color, different shades…
 Updated in real time
 Flexible to requirements changes
Example of Exec, Mgmt and Workgroup Dashboards
A Real State Department of Human Services Finance set-up
Dashboard Example – Ad Group
LEGEND:
Home page
Dept Web Pages
Key Points:
-Lots of Color, Graphics, Charts, clearly labeled, and well understood by all.
- Set up so that an executive or manager can look it over quickly, and should
be able to spot something out of whack immediately.
Example of a Dashboard for an Airline
Strategy Mapping
Small Group Exercise
 Small group Exercise:
 Imagine you are members of an HR Shared Services organization.
As a group, on a Flip-Chart, lay out a Dashboard, considering
everything we have discussed. Be sure to include aspects related to
all 4 ‘Legs’ of the Balanced Scorecard, but specifically to your ‘level’
and how you would measure your organizational performance. [15
minutes]
 Update your notes for the final individual exercise.
Developing your Dashboard – Select Level: Company / Executive
___ (Strategic)
 List various visual and graphical ways to show current
and updated status of your metrics, for each ‘Leg’, based ___ (Operational)
on the metrics you chose for your Scorecard. Section / Workgroup
 Suggestions: ___ (Tactical)
- Red, Yellow, Green Indicators - Gauges, Meters
- Bar, Pie, Line, Radar Charts - Combinations
Business Process Performance Employee Knowledge, Skills, Competencies
Company / Executive
Developing your Dashboard – Select Level: ___ (Strategic)
 Layout your Dashboard: ___ (Operational)
Section / Workgroup
___ (Tactical)
Wrap up
 What we covered today:
 Understand the fundamentals of the Balanced Scorecard and
Dashboard System for Management
 Develop a Framework for Mapping your Strategy
 Devise the Elements for each ‘Leg’ of your Balanced Scorecard
 Design and layout a Dashboard for your particular level and
management requirements
 Where you can go to get more information:
 Web
 Books
 Industry Examples
 Other Resources
 Remember…..
o No ‘One’ answer for you, many different ways
o Try something, and then adjust, but get it out there soon, and
don’t be afraid to make changes and adjustments
o Keep it Simple, Clear, Effective. Use the 20 second rule…
- Your Presenter…Frederick S. ‘Rick Buchman
Mr. Buchman has over 25 years hands-on international strategic, operational and organizational
transformation experience, spanning multiple industries from missiles and electronics to medical
devices. A certified Black Belt and Master Black Belt in Lean Six Sigma, He has been directing
business improvement initiatives involving Strategy Planning, Lean and Six Sigma, Balanced
Scorecard and Dashboard deployment, Operations, and Organizational optimization for over 20
years, both internally and as a contract consultant, supporting the automotive, electronics,
semiconductor, oil & gas, electromechanical, medical device, commercial and components
industries, and working with Engineering, Operations, R&D, Finance, HR and Legal divisions. Rick
has also taught extensively at the graduate level for major institutions, including The „Eli Broad
Graduate School of Management‟ at MSU, and at Towson and George Mason Universities, in
strategy planning, problem solving, business management, value stream mapping, balanced
scorecard and dashboard strategies, coaching and team leadership. His clients have included
AT&T, Raytheon Corp., Hughes, Texas Instruments, Ford Motor Company, Allied-Signal, ITT, Husky
Oil, Slumberger, Gerdau, Remy, Dura GmbH, GKN, and several US State and Federal Government
agencies. A retired 28 year US Army Officer, Mr. Buchman has a B.S. in Mathematics, an MBA in
Business, and a PhD (ABD) in Business, and has been featured in International Who‟s Who in
Business, 2006, and recently presented at the HR Shared Services Summit earlier this year in May
in Chicago.
Rick recently co-authored the Amazon Productivity Best-seller Balanced Scorecard Strategy for
Dummies, with Mr. Charles Hannabarger and Mr. Peter Economy, published by Wiley and Sons,
Inc. in September 2007 (English Language), and again in March 2008 (Dutch Language) and
September 2008 (German Language). This book was also just recently voted 5th out of the „Top 20
Must-Read Books‟ by the Channel Insider Community, May 5, 2010, and #2 of Business
Productivity books by Amazon, Sept. 6, 2010. Mr. Buchman currently resides in Louisville, KY.

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Balanced Scorecard Strategies and HR Metrics

Practitioner and Expert on Balanced Scorecard and Dashboard Applications, and

September 13, 2010

IQPC HR Metrics Summit, Sept 13, 2010 - Balanced Scorecard Strategies

For this Workshop

 Conduct of the course:

What is meant by the term “Balanced Scorecard?”

 “Balanced Scorecards” look at the multiple dimensions of an

Per Delivery Plan On-Time Works Great! First Time Right

Customer Focus and Satisfaction Financial Performance

1. Establish your Feed ‘Back’ Loops

2. Design the ‘Legs’ of

Feed ‘Forward’ Loops

 What is “Strategy Mapping?”

Example: Objective: Achieve 15% increase in Market Share in 3 yrs.

• KISS – “Keep It Simple Strategically ” – Strategy should SM

be clear and explainable to anyone within 60 seconds or less.

Employment – filling positions, hiring, … X X X

‘Legs’ of the Growth & Market Highly Regarded Increased

Knowledge, Demonstrated Leaders Demonstrated Leaders

Goal alignment – achieving definable Return on Investment (ROI)

5 „Core Principles to Effective “Talent Management”

___ Department / Division (Operational)

Top 3-4 Objectives/Goals: Top 3-4 specific Strategies:

 What is a “Balanced Scorecard?”

Process Objectives Process Measurement Target

Customer Retention % Return customers Percent, by demographics >10% each year

New Customers % Increased customers Percent, by demographics >10% each year

Draft Working Balanced Scorecard Example

Strategy #1 ____________________ _____________________ _____________________ ____________________

Strategy #4 ____________________ ____________________ _____________________ ____________________

 Consider various ways to portray, arrange and

Dept Web Pages

Customer Focus and Satisfaction Financial Performance

Business Process Performance Employee Knowledge, Skills, Competencies

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Strategy #1 __________ _ _ __________

Strategy #4 __________ _ __________