Duke Childrens Hospital was in a crisis and financial pressure was mounting in the 1990s. Expenses were rising while dramatic reductions in net margin were happening. While programs were slated to be eliminated, services were targeted for reduction. Staff productivity has fallen, patient and staff satisfaction was at an all-time low. DCH overcame the crisis by becoming a strategy-focused organization that aligned administrators and clinicians around a single integrated platform: the balanced scorecard. They designed this balanced scorecard to cater to their healthcare business.
The leadership officials of DCH developed a scorecard which was designed in a three step process. "The three steps of proven rapid-fire approach are to: get connected, get results, and get smarter."(Meliones, J) The first step is to establish key linkage. The primary goal is to quickly link the mission, strategy, objectives, targets, key performance indicators (KPIs), and initiatives across the organization, stakeholder within the hospital would be able to stay on the same final goal. Stakeholders can diagnose opportunities for improvement by providing critical management information in a single, integrated, and consolidated source. The scorecard stayed connected with these three vital areas. The first being key performance indicators which clearly defined that link the business and clinical aspects of health care. The second was staff satisfaction was related to preserving or increasing quality of care. The third is regulatory arena which maintains a focus that assures compliance of laws and procedures within the hospital.
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The second step was analyzing performance to get results. Performance data was collected to enhance
Hyde Park Electronics is a family-owned business based out of Dayton, Ohio which manufactures ultrasonic proximity sensors. Vincent Lewis the CEO of the company believed in keeping a balanced approach in the whole company. The CEO uses a visual reminder to constantly remind his staff that it's easy to lose track of the bigger picture and in the process lose business. Since the adoption of BSC they transitioned from a low volume company that sold custom machine controls to a narrow customer base, to a company that sells several high volume sensor lines through a big distribution channel. A breakthrough design in technology changed direction the company was headed and it became the savior product of the company. With the introduction of this new product the company strategy shifted to a penetration sales model. The company became more focus on product development and started a new plant facility.
The company before they adopted the BCS had an abundance of reports and data but little of that was usable information. Lewis wanted a simplified method of measuring the company which could help him run the business with more production. Lewis used a unique approach of counter balance with an offsetting measure that continually balances the metrics so one never outweighs the other. The financial metrics was one that management gravitas to because the company was very strong in that area but this is a short term measure which is focus more on events after they have occurred. Hyde Park lacked measures which contribute to the long term success of the company. They wanted something that was more proactive and something that will steer the business forward as to oppose to after the fact information which has occurred.
The four perspectives which are used in their BSC and used in the article were financial, operational quality, customer satisfaction, and learning and growth. With the information provided the company measures customer satisfaction not by a direct measure but an indirect metric. They felt that an increase in sales meant an acceptance of that product (Kaplan, RS, 2005). The BSC initial response by the company and employees was one of them feeling threaten by. The employees felt that by posting of data in a public area for all to see was one that management wanted them to work harder. They would eventually warm up to the concept that would show there increase efficiency in their hard work.
Second SME Company Futura Industries
Based in Clearfield, UT, Futura is an international company with more than 50 years of experience in aluminum extruding, finishing, fabrication, machining and design. Futura serves a high-end niche in a variety of markets with various types of customers. Its mission, Extraordinary Value through extrusion, is achieved a focus on their business purpose-meeting the changing needs of customers. Futura uses the BSC to focus on two competitive weapons; their ability to hire and retain the best people and their devotion to the customers (Gumbus and Lussier, 2006).
Always on Time
Marked to Standard
The company uses various metrics to measure performance and satisfaction of the employees. In an industry where the norms is more than 50 percent Futura annual rate is just 7 percent which is proof in itself that their employee relation are doing great. Futura approach to determining its customer satisfaction involves placing calls to twenty randomly selected customers each month and asking them a short survey about quality. The company uses this metric to compensate the employees. All employees are paid their base salary and have quarterly incentives based on the company performance. Internal Operation and learning and Growth are all intertwined with the employee and customer satisfaction points.
Third Company Southern Garden Citric
SGC is a sub-sidiary of United States Sugar Corporation and competes in a consolidated market for non-from-concentrated (NFC) orange juice. SGC is a Balance Scorecard Collaborative Hall of Fame winner. The information provided in the article only looks at the one side of the process operational efficiency (Gumbus and Lussier, 2006). This company uses an indirect measure to measure customer satisfaction. The company believes that if it gives a customer a great price and it delivers the product on time then the customer must be satisfied with the product. The company has no way of finding out it the customer is truly happy with the product and service.
In the three cases which I read on and studied the one that really has a made a true effort to see what the customers were feeling and saying is Futura. The other two companies are just thinking that they knew what the customer wants. They think that by providing a cheap product and delivery of that product on time then the customers must be feeling happy. They are thinking that higher sales mean a satisfied customer which can be further from the truth. The other two fail to get what we call in the army pulse on how things are really going with the product. True we can sell product cheap and deliver them on time but if we don't follow up with the customer on how that product is working then we have no idea how they are truly feeling. In that sense the measure is not truly customer centric as defined by the Business dictionary. Business dictionary defines customer centric as creating a positive customer experience at the point of sale and post-sale. These SME companies are more in inclined toward operational efficiency than they believe will make the products available at lower cost in good quality. This they hope will translate into higher customer satisfaction (Niven, P. (N.D.), 2010).
I don't believe that improved performance by these SME was due by their focus of their potential, prospective, and present customers. In Hyde Electronics it was more of revolutionary new technology. In Futura case is was more of a combination of learning and growth and customer satisfaction. Finally in SGC it was more due to improve internal operational. Futura was the only one that made a concern effort to see how the customers felt about the products thru surveys.
These companies were not really into measuring the customer's perspective. In this case two out of three used an indirect metric to measure customer satisfaction. They believe that with improved operational efficiency it was equivalent to customer satisfaction. The common theme of each of the three SME which was present was a focus on operational efficiency. This however was achieved differently by each SME. In Hyde Electronics case is was thru revolutionary new technology. With Futura it was more focus on learning and growth of employees. For SGC it was more of bringing together internal and external factor and making the supply chain more efficient.
Two of the three SMEs missed a great opportunity to improve their performance was by getting involved in measuring customer satisfaction. We sometime buy products not because there the best product but because we may have no alternative for that product which we buy. If companies focus more these aspect it will help in improving their efficiency and make more customers happier with their products.