Integration - Causal Chains and Strategy SLP

Integration - Causal Chains and Strategy SLP

The balanced scorecard approach is a useful tool, applicable to most organizations for identifying strategic action plans. One of the most important advantages for a balanced scorecard is that it is able to provide information in a synthetic manner, making it easy to digest for decision makers, who often don't have the time to analyze all the deeper details, especially when the decision sometimes needs to be made on the stop or in a very limited period of time.

In the case of the Cattaraugus Rehabilitation Center Mission (CRCM), a first look over the balanced scorecard gives immediate information about the strategic objectives of the organization, over four pillars: financial, customer, internal and learning. These range from containing costs and improving patient outcome to personnel objectives (recruiting and retaining the best employees) and to financial objectives such as increasing revenues.

Another argument in support of the synthetic approach that the balance scorecard provides is that it shows the decision makers at once what the main objectives are. In the case of CRCM, as a non-profit, its primary strategic objectives appear to be containing costs, including through administrative efficiency, and improving patient outcomes. The other strategic objectives are also important, but are instrumental in helping achieve these primary objectives than as singular ones.

The balanced scorecard helps one better understand why these two are the most important objectives. CRCM is a non-profit and, as such, it is not interested in maximizing its profits, like other organizations. It is primarily interested in realizing its core activity, which is to improve patient outcome, to ensure that the patients receive the proper care for which they come to the center.

However, financial health is essential for a non-profit as well and CRCM cannot control as well its influx of revenue as it can control its costs. Financial health is thus ensured by minimizing costs and CRCM is doing so by improving administrative efficiency rather than through other approaches that could affect its core activity and related processes.

Another advantage that the balanced scorecard offers, as hinted in the previous paragraphs, is that it shows how the objectives are correlated, how one strategic objective impacts another. This correlation of strategic objectives presents everything in an integrated manner and not in a way that could be potentially less well organized. The decision maker is able to see immediately which objectives are linked together.

The balanced scorecard also has the advantage of the metrics and performance measures. Without these, the decision maker has no clear perspective of what the strategic objectives actually mean. For example, the fact that the strategic objective is to improve patient outcome means nothing unless, as in the case of the CRCM, this is linked to a performance measure, namely the patient success rate.

The idea of the performance measure is that a target can be associated to these and the leadership will work in order to reach that particular target. CRCM has set, as its target, increasing the patient success rate to 98%, as well as having the patient outcome at 90%. All these are targets that, if attained, will allow CRCM to conclude that it has reached its strategic objectives.

Nowhere is the balanced scorecard as concrete as when it comes to the initiatives that the organization is planning to implement in order to reach its strategic objectives. This is also a clear way of moving forward rather than dealing with more abstract notions such as the strategic objectives could become.

For example, in the case of CRCM, as seen, one of the strategic objectives is to reduce costs and administrative efficiency is seen as a way that this efficiency could be achieved. The organization has moved forward to determine how this administrative efficiency could be achieved. One such approach is to implement new technologies, include, for example, a computer-assisted diagnostic modeling software. New software can also be employed in order to help the organization improve the performance of its employees, as well as to improve employee retention and other performance measures.