RCMP and the Balanced Scorecard:
Mounties attain excellence with management tool
by Paul Crookall
Being featured in Harvard Business Review is a tremendous accolade.
The RCMP has long been known as one of the top police forces in the world. But when Commissioner Giuliano Zaccardelli took over the top job late in 2000, he felt passionately that they could do even better – a prerequisite to cope with budget crunches, the new modern comptrollership regime, and changing threats from organized crime and international terrorism.
Having just read Robert Kaplan and David Norton's book, The Strategy Focused Organization, Zaccardelli decided to use the Balanced Scorecard as a management tool. He was clear in his first directional statement: "There are two goals I would like all of us to have achieved over the next year – I want the RCMP to become a strategy-focused organization, and I want us to build an organization of excellence."
Four years later, the RCMP was in the Balanced Scorecard Hall of Fame, inducted after achieving break-through results in the areas of improvement in stakeholder satisfaction and internal efficiencies. The RCMP model facilitates horizontal participation and drives internal and external integration. Their innovative and successful use of the balanced scorecard methodology is piquing public sector interest, and in March 2006 was featured in the Harvard Business Review.
What is the Balanced Scorecard?
Recognizing some of the weaknesses and vagueness of previous management approaches, the balanced scorecard approach provides a clear prescription as to what organizations should measure in order to 'balance' the financial perspective.
The balanced scorecard is a management system (not only a measurement system) that enables organizations 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 center of an enterprise.
"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, and innovation."
The balanced scorecard suggests that we view the organization from four perspectives, and to develop metrics, collect data and analyze it relative to each of these perspectives:
· The Learning and Growth Perspective
· The Business Process Perspective
· The Customer Perspective
· The Financial Perspective
The Balanced Scorecard and Measurement-Based Management
The balanced scorecard methodology builds on some key concepts of previous management ideas such as Total Quality Management, including customer-defined quality, continuous improvement, employee empowerment, and – primarily – measurement-based management and feedback.
Outcome Metrics
You can't improve what you can't measure. So metrics must be developed based on the priorities of the strategic plan, which provides the key business drivers and criteria for metrics that managers most desire 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 provide feedback.
So the value of metrics is in their ability to provide a factual basis for defining:
· Strategic feedback to show the present status of the organization 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 support systems.
Building a Balanced Scorecard
Assistant Commissioner Keith Clark and Superintendent Ronald Mostrey of the RCMP’s Strategic Policy and Planning Directorate played an instrumental role in the implementation of the balanced scorecard. A small group of implementers was trained in the methodology, and then trained senior management and helped them develop their scorecards.
Based on a comprehensive environmental scan, the Senior Executive Committee (SEC) developed its own scorecard and selected five strategic priorities (themes) to focus on. The Commissioner assigned deputy commissioners to champion Strategic Priority Working Groups for each of the priorities (while they maintained their other responsibilities). Each group is a multidisciplinary team consisting of executives (at the director general level and above) from the operational business lines as well as corporate support such as HR, Communications, Finance and IT. The Balanced Scorecard was used to articulate the strategy for each of the strategic priorities.
The Scorecards offered a balance of lead and lag indicators, to measure tangible and intangible elements of the strategies. The SEC and Priority scorecards were supported by aligned scorecards from each of the 14 Divisions (Provinces and Territories) and Headquarters business lines, each with objectives and initiatives tailored for their unique environments.
The Scorecard currently in use has five themes to achieve the Mounties' mission of ‘safe homes, safe communities’:
1. reduce the threat and impact of organized crime
2. reduce the threat of criminal terrorist activity in Canada and abroad
3. prevent and reduce youth involvement in crime, as victims and offenders
4. contribute to the confidence in Canada’s economic integrity through crime reduction
5. contribute to safer and healthier Aboriginal communities.
According to their clients, the RCMP is getting better at delivering their service. Using the Common Measurements Tool developed by the Institute for Citizen-Centred Service, agreement with ‘the RCMP gives timely service’ rose to 83% from 70% in three years. For the key theme of safer, healthier Aboriginal communities, the detachment commanders met with Aboriginal community stakeholders and sought consensus on what their top priority around policing was, and then together developed and implemented a plan to address their priority. As a result, now 81% of First Nations, Métis and Inuit community leaders who responded to the survey say they have a good working relationship with the RCMP, up from 61%.
How did that happen? "Because we are out there working on local issues within the national Strategic Framework," Clark says.
Rather than dictating national plans, each division and detachment volunteered how they could contribute to the national strategy. For example, the Criminal Intelligence Directorate realized organized crime was preying on Aboriginal communities, so major drug investigations were launched and drug busts followed.
"We do an environmental scan which informs our discussion and determination of strategic priorities,” Clark advises. “We then develop national strategies for each that then cascade down to our service lines and business lines. For example, the terrorism working group was not meeting some of its objectives. The root of the problem was a lack of capacity in their Criminal Intelligence Directorate. The Directorate was understaffed, because Classification wasn't able to get the Directorate’s new positions classified, because they themselves were understaffed. So, with HR at the table, the group decided to put resources into hiring classification staff to resolve the bottleneck. If there's a problem in one area, it’s everybody's problem, but we have the right people, at the right level, at the table who can not only find a solution, but also put it into action."
"Using the balanced scorecard methodology," Mostrey notes, "all of our divisions are aligned with the national priorities and use the same tool to drive out performance for their local priorities."
The RCMP has developed its own system for tracking performance metrics, what they call a 'dashboard’. "Rather than a software program, we developed an excel spreadsheet to track progress and aggregate measures, colour coded to reflect attention needed (red, yellow, green), updated each 90 days. This becomes the agenda for our management meetings. IT solutions sometimes drive the process; we've done the opposite – our performance management process is driving our IT solution. It’s practical and simple. If you over-complicate it, people won't buy in." The intellectual property for the RCMP dashboard has since been licensed to a private company.
Accountability
Besides driving the internal agenda, the scorecard is also great for internal and external accountability, Mostrey revealed. "Instead of hearing 'everything is good' and then at the end of the year finding a problem, we know within 90 days. We're always focused on results and are accountable for achieving the desired outcomes. This positions us well to report on our progress to the Government of Canada, Canadians, and our stakeholders.”
The Scorecard's co-originator, Robert Kaplan, has found the same thing with his other public sector clients. In an interview, Kaplan cautioned that The Federal Accountability Act will not necessarily lead to improved performance and accountability. "A similar Government Performance and Results Act in the USA evoked the response of 'What's the least I can do to comply with this.' They treat it as a separate effort run by a separate work unit that is told, 'Let's come up with some performance measures and you guys collect the data and report as necessary, but don't interfere with us too much'."
"The real challenge,” Kaplan observes, “what they have done in the RCMP, is to say 'since we have to be accountable anyway, let's use this as a plus rather than a compliance. Let's build a strong management system. And let's be accountable for our strategy rather than just saying what's the minimum we have to do. Let's not just use this for reporting to Treasury Board, let's use it to run our organization internally'.
"I've always felt that legislation like the Accountability Act should be used as a trigger. Let's decide internally what are the most important outcomes we're trying to achieve and let's put a stake in the ground – this is what we're trying to deliver to the citizens of Canada."
Accountability, after all, is about telling your story, the good and the bad, the successes in achieving one's mission as well compliance with regulations. The Balanced Scorecard achieves that balanced reporting and helps by highlighting the drivers of those outcomes in the organization's processes, people, data systems, and culture.
Increasingly, private sector companies are using Six Sigma to improve performance. Kaplan says Six Sigma is relevant to the public sector as well: "It is a powerful tool, it teaches you how to fish, to solve problems and remove roadblocks. And the Balanced Scorecard teaches you where to fish – it gives strategic direction…helping determine what are your important outcomes, what processes you need to do well to deliver on your commitments. And that's where you should assign your black belts."
The techniques can be used by good organizations that want to get better. "The better the quality of the leadership," Kaplan notes, "the more powerful this tool is because good leaders recognize the need to achieve results by communicating vision and strategy to all employees, engaging them, motivating them to help and succeed – and then holding them accountable for results."
But if an under performing organization has good leadership, the same techniques can be used effectively. "Employees are willing to be led, they want a sense of purpose, they want to understand how they can contribute to their organization and to the welfare of their country. So they are just waiting for this."
The techniques, however, don't transform managers who are just surfing time and collecting a paycheque.
While the RCMP didn't involve IT extensively in its scorecarding, we asked Kaplan about the use of the tool in IT organizations. "IT, HR, finance and other support groups can't develop strategy in isolation. They need to understand the organization's strategy, then align with it, determine the specific steps they will take to align with the mission and create value. Their success depends on the value they create for their agencies," he observes. "IT needs to build trusted, warm relations and migrate them to consulting skills – they need to be involved in strategy."
Lessons Learned
Clark and Mostrey are often asked for advice by other departments considering their strategic framework. "One key to success is keep it simple. We created our own 'dashboard.' We integrated risk management into the process. We are able to look at horizontal progress, not just by silos. CEO full support is essential. They need to be vocal and visible and repeat it over and over, with passion. It's change management 101.
“Another key is consultants – get them to work with a small team who understand the culture of the organization and who will keep the knowledge imbedded once the consultant leaves. And customize it for your environment and language – we seconded experts from Statistics Canada to help us design our survey measurements. We let managers tell us what measures they will use, and they refine them as we go along.
"But strategy isn't about the measure, that is just an indicator of your success. It is all about whether you achieve your end state."
