Balanced Scorecard For Government: A Real Life Example

Inforamation for local governments wanting to implement the Balanced Scorecard.
Balanced Scorecard For Government: A Real Life Example
Inforamation for local governments wanting to implement the Balanced Scorecard.

We recently had the opportunity to speak with with Alan Shorthouse, the Assistant Director for the Resource Management Department in Olathe, Kansas, to discuss Olathe’s implementation of the Balanced Scorecard (BSC). If you are involved in local government and are considering the BSC as a strategic framework, keep reading—Alan has a lot of great advice and wisdom about the subject.

How did Olathe decide to implement the BSC?

I’d like to say it was my idea and everything has gone smoothly, but that’s not the full story.

It all started in 2000. We had a new city manager on board, and we went through an audit of service levels and accomplishments—and it didn’t go very well. We had very little data supporting why we were doing the things we were doing, and we didn’t know what our priorities were.

In response, we decided to hire a consultant to come in, and that was the first time we were introduced to the Balanced Scorecard framework. Initially, we placed too much of an emphasis on producing a large catalog of performance measures, when we should have spent more time asking ourselves why we were measuring those things. The framework was helpful, but we soon realized we needed to rethink our execution.  

We did a lot of talking about how we could take our Balanced Scorecard framework to the next level. We came to the conclusion that the missing piece was, “How do we better articulate our strategy and execute it correctly?” So we made the decision to keep the Balanced Scorecard framework, but start again from scratch to create a new strategic planning process, and develop an entirely new organizational scorecard.

Walk us through your strategic process. What does your scorecard look like today?

We felt good about our vision statement—“Setting the Standard for Excellence in Public Service”—but we asked ourselves, “What does that mean for an employee who is doing landscaping or working at a water plant?” Out of that question came our new Organizational Scorecard, which uses the Balanced Scorecard framework to present a visual representation of what is important to our community and everyone in our organization.

Let’s walk through our scorecard.

First, you’ll see we’ve listed our values on the left side and put our vision statement at the top. We did a community strategic plan about 10 years ago, and out of that came the six categories we call the “Community Focus Areas.” These are the descriptions citizens noted that we needed to focus on in order to meet their expectations.

After that is the City Council’s input into the scorecard, which is refreshed every two years.  It gives their thoughts on what is important, and includes short-term goals.
After the city council’s piece is refreshed, then the leadership team members (all of the directors and assistant directors) step in. We take all of that information and figure out what we need to do to support the community and council priorities, as well as our own. The outcome? The “Organizational Goals” (we call them “bubbles”) at the bottom of the scorecard. They show the value proposition we deliver, like “Advance Safe & Secure Transportation Choices.” Whenever we refresh this section, we ask ourselves:

  • Are these goals accurately articulated?
  • Are these goals meaningful to employees?
  • Can these goals be understood by anyone who reads them?

We like to visually demonstrate our entire strategic process through a “strategic cycle” (shown below). At the top, there are a few inputs—Community Strategic Plan, Vision/Values/Mission, and Comprehensive Plan—which all feed into our organizational scorecard. Our organizational scorecard flows into our department scorecards, where each department responds to the organizational scorecard by creating a business plan by stating which of the goals they support most and respond to. (For example, the police department most supports the goal for a “secure community.”) Each department then creates a business plan, which is submitted for discussion with the city management office. The plan describes how the department will operate and details about objectives, strategies, projects, and activities.

To the right, we have the program and employee scorecards. Public works, for example, is in charge of the water program, the sewer program, and the streets program. And each of those programs should develop objectives that support the Public Works department’s higher level goals. In addition, every employee has their own scorecard, which is called a performance planning document. This helps them know what they’re expected to do, the reason they’re doing their job, and that the projects they’re working on are supporting city goals.

The Resource Allocation piece at the bottom is important, because all of the business plans feed into our budgeting process. After department business plans and resource requests are submitted for discussion and approval, there are often adjustments made before they’re locked down. The “Feedback Loop” helps us look at the data throughout any given time period and determine if we’re meeting the desired results of each business plan. That way, we can understand what adjustments may need to be made for the next iterations of the scorecard.

Our annual performance reports help us visualize the measures that support each of our objectives (or goals). The image below is an excerpt from one of our goals, which is “Strengthen our Safe & Secure Community.” It is a partial list of measures in their current status. We review our key performance indicators on a monthly basis to ensure that we’re trending in the right direction, and we review them thoroughly on an annual basis to see if we’ve hit our targets.

What are the greatest benefits that you’ve seen since implementing a scorecard?

At the highest level, a major benefit is that the scorecard has helped us build trust with our citizens. We do a lot of presentations, and we’re big on citizen surveys. We’ve actually done them since 2000, which may be longer than anyone in country. We used to do these annually, but we see so much success with them that we now do them quarterly. Simply put, we ask citizens to tell us how we’re doing. We have such a high response rate because they know we value their responses, and as we refresh our scorecard and business plan, a great deal of it is based on their input. This process is a great exercise in transparency with citizens.

Another major benefit of the Balanced Scorecard for government is that it forces you to look at four perspectives, instead of focusing solely on financial measures. For example, our bottom perspective is “an engaged workforce.” We know that our employees are the foundation for everything we do, and that an engaged workforce is a key element in achieving our organizational goals.

Our employees know that they have an important, defined role to play, and that is critical for our success. Starting with their first day on the job, we talk to them about the Balanced Scorecard and how it should be meaningful to them in their work. We have 30-day follow-up meetings about whether they’re seeing the priorities, goals, and measures in play in their work groups. We have encountered some employees who don’t like using the BSC framework, because they feel as though their other responsibilities are more important. I typically tell those individuals that if they integrate the framework, it should help make their job easier—not harder.

What advice do you have for a government organization considering the BSC?

  1. You absolutely must have support from the top. If the CEO (or municipal equivalent) isn’t the constant champion of your strategic planning process, it will fail, because it isn’t easy.
  1. You need full participation from every work segment during strategic development. This simply cannot be developed successfully in silos; it needs to be organized at a high level, taking into account what is good for everyone, not just the individual work groups.
  1. Having more measures does not mean you have a better system. Not everyone agrees with me here—I’ve heard some people say you need more measures, but I think you just need the right measures. You need to not only know what you’re measuring, but why you’re measuring it. If a particular measure isn’t in line with your goals, quit measuring it—you’re wasting your time.
  1. Having Balanced Scorecard software for collecting and visualizing data in a simple way is imperative. You don’t want to just collect data, you want to use it. You should look for a system.

This is one of the best changes we made during the transition from a broken, measure-heavy scorecard framework to a complete Balanced Scorecard. The system we had in place didn’t collect or organize data well. Now we have loads of organized information that we can use to help us make data-driven decisions. So whatever system you choose, make sure it will help you organize in this way.

A big thanks to Alan Shorthouse of Olathe, Kansas, for making this interview possible, and for sharing his insight with our readers.


What are balanced scorecard perspectives?

The balanced scorecard (BSC) is a strategic management tool that helps organizations track their progress towards their goals. It is based on four perspectives: financial, customer, internal business processes, and learning and growth.

How do you implement a balanced scorecard?

There are four steps to implementing a balanced scorecard:

- Develop a strategic planning process. This includes getting input from the community, city council, and leadership team.

- Create a visual representation of your organization's goals, called a scorecard. This should include your vision statement, community focus areas, city council priorities, and organizational goals.

- Develop departmental scorecards that align with the organizational scorecard. Each department should identify which organizational goals they support and create a business plan that outlines how they will achieve those goals.

- Develop employee scorecards that align with the departmental scorecards. Each employee should have a performance planning document that outlines their individual goals and how they contribute to the organization's goals.

How does a balanced scorecard work?

A balanced scorecard works by tracking performance measures in each of the four perspectives. This data is then used to make adjustments to the organization's goals and strategies.

How does a balanced scorecard improve performance?

A balanced scorecard can improve performance by forcing an organization to look at four perspectives instead of focusing solely on financial measures. This helps the organization to consider the needs of its citizens, employees, and processes. The balanced scorecard also helps to ensure that everyone in the organization is working towards the same goals.

Why is a balanced scorecard important for an organization?

A balanced scorecard is important for an organization because it forces them to look at four perspectives instead of focusing solely on financial measures. It helps them consider the citizen, employee, and process perspectives. This can lead to a more well-rounded view of the organization's health and success.

Balanced Scorecard For Government: A Real Life Example

Ted Jackson

Co-Founder & Alabama Native

Ted is a Founder and Managing Partner of ClearPoint Strategy and leads the sales and marketing teams.

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