Balanced Scorecard for charities and welfare organisations

Welcome to DRIVE, the start of your journey towards Operational Excellence.  In this example we will explore the use of the Balanced Scorecard in a charity or organisation that is focused on providing welfare and care services.  These services may be provided to the elderly, disability, disadvantaged or even animals.  What’s important is that the centre goal is to align the organisation behind maximising the welfare care provided from limited resources.

Most welfare charities and organisations operate on incredibly tight budgets as they seek to maximise the investment in providing care.  In the next few minutes we will explore the concept of the balanced scorecard and how taking a balanced view of your charity can deliver sustainable improvement in your performance and ensure that the benefit of every penny goes into providing a better quality of life for your patients.

Let’s first start by understanding the components that make up the DRIVE concept:

• D covers the direction your charity is taking or needs to take
• R is the financial resources that you need to finance your welfare charity
• I is about focusing on impressing your patients and stakeholders past, present and future
• V covers all of the processes you use to delivery your services to the welfare recipients
• And finally E, the Evolution Engine helps understand the impact of passion, performance and people in your charity or organisation.

In previous videos we have covered a more in depth explanation of the DRIVE concept.  Now let’s consider a simple, practical application to a welfare charity.

To do this, visualise a pyramid containing each of the elements of DRIVE stacked as shown.  We have already discussed that the best outcome is where strategy is driven down through the elements and performance is driven up.

This visual map will become our template for defining the areas of the organisation to be analysed and monitored and will highlight themes to be addressed that can create significant improvements.

The next stage is to consider the pyramid in a bit more detail.  The diagram is simplified for a charity, showing 12 areas to be reviewed.

The process starts with the goal of the charity, which will centre on providing the maximum welfare care to the chosen group. Ultimately, this is the goal behind which the entire organisation will be aligned.

Next are the financial resource measures.  Budget constraints will always be considerable in a welfare focused organisation, as demand for services will always outstrip supply.  Focus is also needed on any capital investment to improve care or services, and again close focus on expected returns, financial or non-financial, is critical.

The following layer considers what the patient or care recipient values in the charity’s offering.  Whilst this might seem a strange application to the customer perspective it can provide real value and ensure an efficient focus.  Firstly, the services being offered to the recipient are probably pretty clear and therefore tracking the quality and types of services is relatively straightforward.  Next is the charity’s reputation and image. Like in any organisation, installing confidence in the consumer is critical, no more so than in a caring service provider.  Finally comes patient relationship.  This is slightly different from a private company, where they would be looking to build and strengthen a relationship with a customer so that they engage or buy more.  For a charitable organisation, the relationship is likely to be very different – especially if, for example, the patient is not a human.  For this reason patient relationship should be extended to include other stakeholders who could be friends, family or interested parties such as governing or monitoring bodies.

Next is the ‘Vehicle’ of your organisation; the way in which you deliver your services to the recipient.  Again three areas need to be considered.  Firstly, those processes directly involved in delivering care services to the patient or recipient.  Secondly all those departments, processes and services that, whilst not directly involved with the patient’s treatment, play a very important part of the overall care provided.  The last area is the management of safety, quality and environment throughout the organisation.

The final part of the pyramid will deliver the biggest element of change, again split into three areas of consideration.  First is passion, which covers the level of morale in the charity and the effectiveness of the communication – these are inherently linked.  Next is the pipeline, a funnel to channel innovation through from concept to completion.  This pipeline may look to contain ideas in terms of future services, efficiency improvements or capital investment.  A continuous flow of ideas is vital here.  The final area for review is the skills capability of every staff individual, from temporary care assistant to the CEO.  A detailed skills matrix considering technical and soft skills, industry and local knowledge will highlight skills gaps that collectively could be having a significant impact on the effectiveness of your services.

This template will now enable a process of reviewing and monitoring a diverse set of measures that collectively will highlight themes running through the organisation. If managed effectively, these will DRIVE the quality and quantity of care provided in your charity.

The benefits and eventual outcomes of applying Balanced Scorecard to a welfare charity or organisation will vary hugely on the type of charity and the type of welfare offered. At the end of the day, it is about making sure that your charity is moving forward in the most effective way possible and that everyone is aligned behind the same goals.

Learn more about Balanced Scorecard for Charity organisations here, or get in touch with Inspired Change today for more information about applying it to your charity.

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