Case analysis methods and applications

¶ … Peel Memorial Hospital in Brampton, ON, was at a crossroads in 1995, without a meaningful mission statement and floating along with no measurable targets. Not surprisingly, employees lacked direction. Complicating the matter was that the regional health boards and provincial health ministries had undergone a period of structural change, which combined with strong growth in the Peel Region, was putting pressure on existing health care facilities. But overall, the major issue facing Peel Memorial was an overall lack of strategic direction.

Performance Management

The performance management tool that was chosen to help Peel Memorial was the balanced scorecard. The balanced scorecard sees performance as being driven by four domains: customer, operations, the learning & growth dimension and the financial dimension, all driven by a strong strategy and vision. The balanced scorecard was implemented with the help of Xerox Quality Services, a consulting firm.

The first way that the balanced scorecard helped Peel Memorial was that it forced the organization to have a meaningful, coherent mission and vision. The prior mission statement tried to be all things to all people and ended up meaning nothing to anybody. The balanced scorecard then provided Peel with a framework for performance measurement and evaluation, based on the different dimensions. More importantly, it focused the organization on finding the links between seemingly disparate success measures, so that the strategies implemented would improve all major metrics, rather than require the organization to make tradeoffs between key success elements.

One of the major tenets of performance management is that once there are objectives, and a pathway to achieve them, then there also needs to be ways to measure those objectives and ensure that there is accountability for managers with respect to implementing the strategies effectively. Having performance targets that are achievable, realistic, but also require significant effort is important. One of the strengths of the balanced scorecard with respect to performance management is that it creates links between different desirable outcomes. In other words, when the company is setting strategy is has a much better understanding of its business and the key success drivers. When an organization like Peel barely has a mission statement, much less success measures, its activities are not focused. Moreover, different activities might conflict with each other, rather than complement each other. So the balanced scorecard in particular enforces performance management by getting management to think about its strategy in terms of what set of strategies will complement each other. The result will be strategies that management can successfully implement, in all areas of the company.

Alternatives

There were no alternatives presented for the Peel management; the case is written by the former CEO describing what happened. There were other options at the time perhaps. The status quo was not really an action, but there are other performance management systems. However, the author only notes the use of the balanced scorecard and did not elaborate on how this particular system came to be used over other comparable performance management systems. Normally, if the case was written at a point where a decision still had to be made, it would leave the reader with a few options, the balanced scorecard among them. Other performance management systems would also be options, as would a sloppier, ad hoc approach where the mission statement is revised and some objectives are identified.

Recommendation

The case is past tense, so there is no recommendation to make. The CEO was right to adopt the balanced scorecard, because health care in Canada is a public good. Thus, there are many different success measures, depending on the stakeholder. Consumers want high quality care; government wants costs minimized; employees and their unions want a good workplace and management wants a well-run facility. The balanced scorecard seems almost purpose-built for public sector businesses like Peel Memorial, where the disparate needs of the different stakeholders all must be met.