Many thanks to Stephen LaRoche for suggesting this topic (and thank you for your patience, Stephen; it took me many months to publish this post!)
What is the Balanced Scorecard?
The balanced scorecard is an integrated system for planning and management created by Kaplan and Norton, iconized in a four-quadrant dashboard but with much more ambitious goals and scope of an integrated strategy implementation system, including setting objectives (KPIs) in addition to monitoring results (see more on Wikipedia). The Balanced Scorecard approach was developed for use with an entire company or organization rather than a specific department, but it can be adapted successfully to the needs of support. The four quadrants of the Balanced Scorecard include:
- Financial performance
- Customer satisfaction
- Business processes (efficiency)
- Organizational capability
Why use a Balanced Scorecard ?
A balanced scorecard approach forces scrutiny of areas beyond standard financial measurements, and past the pure efficiency metrics that support organizations love to death. Its very structure helps contain an over-abundance of metrics. And it is familiar to non-support executives, so tends to be well accepted.
If you have trouble imagining a balanced scorecard, this example (for a regional airline) may be helpful.
Making the Balanced Scorecard work for support
If you’d like to adopt the structure of the balanced scorecard, the first step is to define KPI (Key Performance Indicators) for each of the quadrants. I like to start with stories. For instance:
- Financial: We want to contribute profits to the larger organization (or, for cost centers: we want to be thrifty of the organization’s resources)
- Customer satisfaction: We want customers to demonstrate high satisfaction with our services
- Business processes: We want our internal processes to run cleanly
- Organization: We want to do the above without burning our people out
Translating the stories into KPIs may yield something like this:
- Financial: hit the support revenue and support margin goals
- Customer satisfaction: achieve ratings of 8/10 on the transactional survey
- Business processes: keep the case backlog under 2 weeks’ worth of cases; achieve X unique visits to the support website
- Organization: unwanted turnover < 10%; 2 training days/head/quarter
Then, you need to decline the goals all the way to the individual contributor’s level. Some of the goals above translate perfectly to individuals. Others need adapting. For instance:
- Financial: close X cases per day on average
- Customer satisfaction: achieve ratings of 8/10 on individual surveys
- Business processes: close 80% of cases in one week or less; write or update knowledge base documents that are reused 25 times per quarter
- Organization: participate in 2 training days/quarter
Then, and only then, worry about how to extract the data from your various tracking systems. You may need to compromise some at this stage, but do not start with a compromise!
(And of course, review and repeat ongoingly.)
Do you use a balanced scorecard approach? How does it work for you?