The balanced scorecard
Matthew is currently assisting the Independent Projects Trust (IPT) in their initiative to make the Public Prosecution Authority in KwaZulu-Natal more efficient and effective. In this article, Iole Matthews from IPT and Matthew explain the system they are using to manage and monitor the two-year programme in KZN.
What is the balanced scorecard?
A new approach to stategic management was developed in the early 1990s
by Drs. Robert Kaplan (Harvard Business School) and David Norton (Balanced
Scorecard Collaborative). They named this system the ‘balanced scorecard’.
Recognising some of the weaknesses and vagueness of previous management
approaches, the balanced scorecard approach provides a clear prescription
as to what companies should measure in order to ‘balance’
the financial perspective.
The balanced scorecard is a management system (not only a measurement
system) that enables organisations to clarify their vision and strategy
and translate them into action. It provides feedback around both the internal
business processes and external outcomes in order to continuously improve
strategic performance and results. When fully deployed, the balanced scorecard
transforms strategic planning from an academic exercise into the nerve
centre of an enterprise.
Historically, in business the financial results of the organisation
was the only thing that mattered. Kaplan and Norton argued that this traditional
focus on only financial results was inadequate for companies striving
to succeed in the information age. There was a need to ‘balance’
the financial aspect with other aspects of the business such as investment
in suppliers, employees, processes, technology and innovation. Kaplan
and Norton describe the innovation of the balanced scorecard as follows:
‘The balanced scorecard retains traditional financial measures.
But financial measures tell the story of past events, an adequate story
for industrial age companies for which investments in long-term capabilities
and customer relationships were not critical for success. These financial
measures are inadequate, however, for guiding and evaluating the journey
that information age companies must make to create future value through
investment in customers, suppliers, employees, processes, technology,
This resulted in the development of a balanced scorecard which suggests
that organisations are best viewed, and measured, from four perspectives:
- The learning and growth perspective
- The business process perspective
- The customer perspective
- The financial perspective
The learning and growth perspective
This perspective includes employee training and corporate cultural attitudes
related to both individual and corporate self-improvement. In a knowledge-worker
organisation, people — the only repository of knowledge —
are the main resource. In the current climate of rapid technological change,
it is becoming necessary for knowledge workers to be in a continuous learning
mode. Government agencies often find themselves unable to hire new technical
workers and at the same time is showing a decline in training of existing
employees. This is a leading indicator of ‘brain drain’ that
must be reversed. Metrics can be put into place to guide managers in focusing
training funds where they can help the most. In any case, learning and
growth constitute the essential foundation for success of any knowledge-worker
Kaplan and Norton emphasise that ‘learning’ is more than
‘training’; it also includes things like mentors and tutors
within the organisation, as well as the ease of communication among workers
that allows them to readily get help on a problem when it is needed.
The business process perspective
This perspective refers to internal business processes. Metrics based
on this perspective allow the managers to know how well their business
is running, and whether its products and services conform to customer
requirements (the mission). These metrics have to be carefully designed
by those who know these processes most intimately; with our unique missions
these are not something that can be developed by outside consultants.
The customer perspective
Recent management philosophy has shown an increasing realisation of
the importance of customer focus and customer satisfaction in any business.
These are leading indicators: if customers are not satisfied, they will
eventually find other suppliers that will meet their needs. Poor performance
from this perspective is thus a leading indicator of future decline, even
though the current financial picture may look good.
In developing metrics for satisfaction, customers should be analysed
in terms of kinds of customers and the kinds of processes for which we
are providing a product or service to those customer groups.
The financial perspective
Kaplan and Norton do not disregard the traditional need for financial
data. Timely and accurate funding data will always be a priority, and
managers will do whatever necessary to provide it. In fact, often there
is more than enough handling and processing of financial data. With the
implementation of a corporate database, it is hoped that more of the processing
can be centralised and automated. But the point is that the current emphasis
on financials leads to the ‘unbalanced’ situation with regard
to other perspectives.
There is perhaps a need to include additional financial-related data,
such as risk assessment and cost-benefit data, in this category.
You can’t improve what you can’t measure. So measures or
indicators must be developed based on the priorities of the strategic
plan, which provides the key business drivers and criteria for managers
to watch. Processes are then designed to collect information relevant
to these metrics and reduce it to numerical form for storage, display,
and analysis. Decision makers examine the outcomes of various measured
processes and strategies and track the results to guide the company and
So the value of indicators is in their ability to provide a factual
basis for defining:
- strategic feedback to show the present status of the organisation
from many perspectives for decision makers;
- diagnostic feedback into various processes to guide improvements
on a continuous basis;
- trends in performance over time as the metrics are tracked;
- feedback around the measurement methods themselves, and which metrics
should be tracked;
- quantitative inputs to forecasting methods and models for decision
The Baldrige Criteria (1997) booklet reiterates this concept of using
indicators in this manner to assist managers:
"A major consideration in performance improvement involves the
creation and use of performance measures or indicators. Performance measures
or indicators are measurable characteristics of products, services, processes,
and operations the company uses to track and improve performance. The
measures or indicators should be selected to best represent the factors
that lead to improved customer, operational, and financial performance.
A comprehensive set of measures or indicators tied to customer and/or
company performance requirements represents a clear basis for aligning
all activities with the company’s goals. Through the analysis of
data from the tracking processes, the measures or indicators themselves
may be evaluated and changed to better support such goals."
Linking the balanced scorecard to strategy
The balanced scorecard is therefore a descriptive rather than prescriptive
framework for implementing a strategy which can be shown like this:
Strategy does not (or should not) stand alone as a management process.
A continuum exists that begins in the broadest sense with the mission
of the organisation. The mission must be translated so that the actions
of individuals are aligned and supportive of the mission. A management
system should ensure that this translation is effectively made. Strategy
is one step in a logical continuum that moves an organisation from a high
level mission statement to the work performed by frontline and back office
Assessing recruitment procedures for the Zivuseni anti-poverty programme
In the last edition of Phatlalatsa, Moagi Ntsime described S&T's role in the Zivuseni Gauteng poverty alleviation programme. Here he describes two diagnostic evaluation studies focusing on recruitment procedures and the extent to which the programme reaches its intended beneficiary group.
What is a diagnostic evaluation study?
Diagnostic evaluation studies are normally fast turn-around and very
focused exercises with the aim to understanding in detail the challenges
facing the implementation process. However, it is important to bear in
mind that such rapid exercises may not be representative of the entire
programme; but they do ensure that managers have information on which
to base decisions and design interventions.
The main objective in carrying such exercises is to assist the implementation
team in carrying out their management mandate and (where appropriate)
steer the project in the desired direction. This is a monitoring function,
intended to equip managers to deal with issues as they emerge and quickly
institute corrective actions instead of allowing problems to worsen.
For the diagnostic studies reported here, we agreed in consultation
with the programme team to use two projects in Soweto that were part of
the first phase of the programme. The two projects were the Chris Hani
Baragwanath Nursing College and Isolihle Primary School. We wanted to
assess whether or not the programme implemented its recruitment guidelines
successfully, and what challenges it faced.
Pose questions to those directly affected
There are always lessons to be learned from the literature and documented
experiences from elsewhere, as well as the policy and programme documentation;
but it is always most valuable to pose questions to those directly impacted
on. The value is that they bring different perspectives to the fore which
can improve the programme strategies.
What we found
After conducting the interviews and analysing the data we noted that
projects were following similar processes in recruiting their workforce.
Beneficiaries are selected when a Cluster Manager forwarded his/her request
to the programme office for workers, specifying the labour requirements
– how many workers, for what types of work and over what duration
The programme office has a database of people who registered during
the Zivuseni registration process, from which they select people. However,
the database was designed such that it did not allow manipulation to ensure
that all those registered have an equal chance of being selected. The
programme officer responsible for administering the database confirmed
that it was difficult to ascertain whether a person had been selected
previously or not, and to do so manual recording had to be used. We are
pleased to report that as a result of this exercise and suggestions from
the Programme Steering Committee, the system has since been reformatted.
Zivuseni targets the unemployed and poorest members of the community
from sites identified as priorities for anti-poverty interventions. This
brings its own challenges.
Firstly, we found that many of those involved in the programme had been
unemployed for a number of years. Many had children to look after. According
to most of them, the programme was a huge relief to them, helping eradicate
some of their miseries. They were now able to buy food for their children
from the allowances they received for their engagement in the programme.
As one of them told us, ‘since my involvement in Zivuseni now my
children can go to school with something in their stomachs’.
While beneficiaries were appreciative of the changes Zivuseni brought
to their lives, the fact that it is a short-term employment creation programme
was of great concern. The programme aims to reach poor and unemployed
people, and the projects are short-term, often lasting not more than three
months. After this, rotation occurs and other members of the beneficiary
community are given an opportunity to work for three months.
Targeted areas: Source of labour
The programme design is that members of the workforce should come from
the communities where projects are being implemented. This requires tight
selection procedures and very clear explanations of the objectives of
the programme to all concerned – notably those who are poor but
whose local areas are not targeted for projects.
Members of the project team and workforce told us that a high proportion
of those who worked on projects were local residents. During the preparatory
stages of the programme, those who registered were urged to do so in their
respective localities to avoid disqualification. Members of the local
Community Steering Committees worked closely with the project team to
ensure this was adhered to. No-one can guarantee a watertight process,
but it is commendable that the programme is committed to ensuring an equitable
distribution of short-term employment opportunities.
The target beneficiaries for Zivuseni are women, youth, men and the
disabled. Each of these has to form a certain proportion of the workforce
with special emphasis on women who head single households. Achieving employment
targets is a contractual delivery of those responsible for implementing
the programme. The problem we have encountered elsewhere is that targets
for women are achieved by employing them at the very end of a project
to clean and tidy it ready for hand-over; or during the project to make
tea and 'help the men'.
It was encouraging to note that while the programme was struggling in
certain instances to reach its targets, women were performing same tasks
as their male counterparts. For example, in Isolihle Primary School in
Zola 3, women were involved in carrying out activities such as painting
classrooms, toilets and the roof; installing tiles; and renovating damaged
ceilings. This is extremely positive; and we hope our findings are more
broadly representative of Zivuseni.
There are other national and provincial government programmes which
could be confused with Zivuseni. This is obviously problematic, given
the specificities of each programme and the need to avoid sending out
contradictory messages. For example, Zivuseni is running parallel to Letsema;
in Letsema, community members are expected to work as volunteers and do
not receive an allowance. Robust communication strategies are commonly
the last part of a development programme (or second last, one above M&E);
this despite the self-evident need for communication.
'Low class work'
One of the most unfortunate trends that emerged from our diagnostic
evaluation studies in Soweto was that some beneficiaries do not want to
do ‘low class’ work. An example given was that just before
the World Summit on Sustainable Development, people were selected to join
a litter clean-up campaign. When they were informed that the project involved
picking up garbage, most declined.
Zivuseni is a short-term employment creation and poverty alleviation
programme. Therefore, it has ambitious overall objectives, it has a small
window of time within which to spread its net as widely as possible. It
cannot address all the poverty problems of the province and its municipalities.
It faces some real challenges: but is also making real advances.
Development aid to South Africa
South Africa's importance for promoting economic growth and poverty reduction in Southern Africa should be the main focus in future development assistance concludes a recent review of Norwegian development assistance to South Africa. The review, which S&T helped conduct, was led by Elling TjØnneland of the Christian Michelsen Institute (CMI) and Pundy Pillay, the former deputy director-general in the President's office. In this article, a summary of a CMI Policy Brief written by Elling, we highlight the major findings of the review. The report itself – From Aid to Partnership – A Joint Review of Norwegian South African Development Co-operation 1995-2001 – is available from www.cmi.no/public/2003/R2003-01.htm .
In 2000, South Africa's National Treasury carried out a major evaluation
of the aid inflow in the 1994-1999 period. It concluded that aid had played
a significant role in many areas. It assisted in transformation of institutions,
in developing new policies, in implementation and delivery of services
and in exposing South Africa to lessons and experiences from other countries.
This may have been achieved also without development aid, but then probably
at a much slower speed. In consolidating new and fragile democracies,
speed and swift action are important and sometimes crucial. However, the
evaluation also noted that the impact of foreign aid was highly uneven.
The aid was not sufficiently focused and the South African management
was not optimal. In particular, it was found that the Treasury had limited
capacity to facilitate donor co-ordination. The CMI review of Norwegian
aid reached similar conclusions with significant deviations.
The CMI review found that Norwegian development assistance to South
Africa has been well aligned with the policy priorities of this country.
Moreover, the assistance has been successful in facilitating and building
relations and co-operation between a range of institutions in Norway and
South Africa. For Norway, this is particularly evident and comprehensive
in higher education and research, and also in some state departments and
civil society organisations. Institutional co-operation has strengthened
political co-operation between the two countries in a number of areas.
However, the commercial interaction between the two countries has been
limited, and the CMI review concludes that the potential for such interaction
may not have been fully exploited.
Policies for a new democracy
The greatest impact of the Norwegian development assistance has been
on government processes such as developing new policies and planning institutional
reforms. The contributions with the best results have been in support
to fisheries and energy policy. These are also areas where Norway has
been in a position to offer highly competent technical assistance and
where Norway's own experience has been relevant. In fisheries the Norwegian
support focused on the policies and legislative framework addressing the
management of marine resources and the redistribution of fishing quotas.
Energy policy research and capacity building liberalised and re-regulated
the energy market.
Insufficient support to poverty reduction
The impact of the support to policy implementation and capacity building
has not been optimal. The Norwegian support has been characterised by
insufficient co-ordination and lack of overall vision. Frequently capacity
building was seen as just training and insufficient attention was paid
to the need to integrate capacity building into the plans of organisations
and institutions. Whilst support to the local government sector has been
relevant and effective this was not in the case in the direct support
given to poverty reduction and job creation initiatives. In fact Norway
withdrew its support and/or shifted its priorities when implementation
problems emerged on the South African side.
Support to civil society
Civil society has been a major recipient of Norwegian development aid.
These funds have been channelled both through Norwegian NGOs and directly
to civil society. In contrast to many other foreign donors, the Norwegian
funding has remained focused on smaller NGOs and community-based organisations.
Norway has paid limited attention to the use of South African NGOs in
order to improve implementation and service delivery in government programmes,
a shift that might have been more effective. There is however, limited
knowledge of the impact and the role of the Norwegian and other foreign
support to civil society institutions.
Prioritise the region
Norway has strongly emphasised the regional dimension in its support
to South Africa. Since 1999 Norway has attempted to build regional components
into all programmes. This has also been welcomed and supported by the
South African government. However, the achievements so far have been limited.
In most cases, the regional programmes are often limited to funds for
networking and participation in regional workshops. Nevertheless, the
review did find that many of these regional initiatives hold promise.
The main recommendation of the review revolves around the regional component.
South Africa. The Review concludes that support to regional development
efforts should be the key priority in the co-operation between Norway
and South Africa, especially as South Africa plays such an important role
in the region and because South Africa's leaders have the political will
and commitment to facilitate growth and development in Southern Africa.
However, the review does caution that regional development should only
be supported if:
- it is not confined only to supporting South African led activities;
- there is a strong emphasis on capacity building and institutional
- it is aligned with the policies and guidelines developed by regional
organisations and that the support assists with the further development
of these policies; and
- it prioritised security, stability and good governance, especially
in relation to SADC and the African Union/ NEPAD.
HIV/AIDS & discrimination
According to the 12th National HIV and Syphilis Sero-prevalence survey of women attending public antenatal clinics in South Africa, an estimated 4.74 million South Africans had HIV by the end of 2001. Every day people living with HIV/AIDS face a variety of problems because of discrimination. The Department of Health has recognised that fear of discrimination is a significant obstacle to persons coming forward for counselling, testing, support and treatment.
Noting the lack of data around the nature and extent of HIV/AIDS discrimination,
the Department commissioned Strategy & Tactics (S&T), in partnership
with the AIDS Law Project of the Centre for Applied Legal Studies, to
conduct baseline research on HIV/AIDS discrimination in South Africa.
The objectives of the research were to:
- profile the nature & extent of discrimination;
- examine the impact of discrimination, particularly on health-seeking
- highlight obstacles to creating a conducive climate for disclosure
- develop a draft strategy to counter discrimination.
Using multiple methods – a literature review, focus groups and
a random household survey – the focus of the research was on the
social and communal aspects of discrimination found in every day life.
Information from the literature and focus groups led to the development
of the following model for understanding discrimination, which was then
assessed using the survey data:
The data showed that low levels of fear, deviance and ignorance all contributed
to lower levels of discrimination. However, the influence that these factors
had on the levels of discrimination was not equal. The data highlighted
that the area of ignorance must be at the heart of any strategy to counter
Any strategy emanating from the Department of Health needs to take cognisance
of, and be informed by, the existing legislative and policy environment
in South Africa. In addition, a strategy for countering discrimination
needs to be informed by existing, relevant programmes and initiatives.
In essence there are two key components (which may not be mutually exclusive)
of any response aimed at countering discrimination:
- A legal and human rights response - which deals with legislative
review/reform, increased awareness of rights and increased access to
legal remedies for those affected by discrimination.
- A broader programmatic response - deals with knowledge of HIV/AIDS,
community perceptions/ awareness, access to health care and so on.