Keeping score on the field and court is simple – the team that scores the most points by the time the clock reads zero, wins. Doing the same in business is considerably more difficult – the company that makes the most money over a given time period isn’t always the one that should be crowned the winner. Yet in the world of college athletics – where generating revenue isn’t the primary purpose of the endeavor- measuring positive performance across an entire organization often seems downright impossible.
Fortunately for athletic directors and leaders across the entire sports industry, the creation of the Balanced Scorecard (BSC) some quarter century ago helped revolutionize the performance measurement process by using non-financial metrics to reliably predict future organizational performance. The model allows for organizational management through means of four critical perspectives: financial, customer, internal processes, and learning and growth potential. More significantly, BSC is designed specifically to assist leaders in implementing and systematically monitoring the advancement of organizational strategy.
The Balanced Scored tracks metrics intended to answer four primary questions: 1) How do customers perceive our organization; 2) What must we excel at to be successful; 3) Can we continue to improve; and 4) How are we doing well financially?
Much like other non-profit ventures, or even revenue driven service industry businesses (e.g. hospitality), the BSC model translates well to collegiate athletic departments because of their dependence on both effective internal processes and management of constituents (fans, donors, campus community) in achieving successful organizational outcomes. Of course, the primary differentiator is that the success of a collegiate athletics department is almost never measured by financial performance, but rather the achievement of the results on the actual field of play.
The Customer/Stakeholder perspective requires us to define the various customer segments we are attempting to serve, for which in the world of intercollegiate athletics, there are four: student-athletes, outside constituents (e.g. fans, alumni, media), internal constituents (e.g. administration, campus community), and partners (e.g. sponsors). Each one of these groups is composed of individuals with different needs and expectations – amounting to different value propositions – that must be satisfied in order to achieve successful performance measures. For instance, while the number of games you win may be important to your fans, it may have absolutely no relevance to professors, while being of moderate importance to the student-athlete themselves when compared to their entire experience at the university. Likewise, what makes for an excellent game-day experience for fans (e.g. less commercials) may not always equate to the largest return-on-investment for your sponsors.
The Internal Business Process perspective forces us to ask what our department must do to both meet and exceed our customers’ expectations. As we already know, superb customer satisfaction is a result of the collective processes, decisions and actions our organization makes internally to drive external performance forward. Generally, internal operational processes are founded in systems and procedures within the organization that have the greatest impact on our employees – hiring, training and development, productivity. And all of these are heavily tied to our identified value proposition and program’s core competences. We can break down these operational processes into three areas: organizational, customer, and value creation.
Organizational processes govern the overall operation of our departments from the hiring of employees, to the relationship between program supervisors and coaches, coaches and student-athletes, as well as functions such as NCAA and institutional compliance. Customer processes include, but are not limited to: student-athlete satisfaction and graduation rates, the identification, management and retention of donors (e.g. development), the engagement of fans and the sourcing and servicing of sponsors. Lastly, value creation specifically refers to the actual enhancement and continued development of your department’s organizational and customer focused processes (i.e. enhanced sports nutrition and strength and conditioning for student-athletes).
While it is important to recognize what your customers and stakeholders want, and have ways to measure the internal processes that are necessary to deliver on those expectations, it is also important to remember that the rapidly shifting landscape of collegiate athletics creates a moving target for success. While some departments settle on just being “good enough,” those that truly excel understand the necessity of continually improving their existing product while also finding new ways to innovate and expand their capabilities.
Accordingly, the Learning and Innovation perspective helps measure how our organization grows through people. It requires us to create quantifiable benchmarks to ensure the learning and growth process of human capital within our department. How certain are you that your coaches are the absolute best they can be in their particular areas of expertise? What have you done to measure their competency outside looking at wins-and-losses? What have you really done to help your administrators and support staff grow as professionals outside attending the occasional NACDA seminar?
Lastly, the Financial perspective is a performance measure that helps your department determine whether its strategy, processes and execution are ultimately making an improvement to the bottom-line. This perspective can be subdivided into two separate strategic approaches – efficiency (reduce costs, identify and resolve deficiencies) as well as growth (generate new income streams, increase value delivered to customers).
These four perspectives are only as good as the Key Performance Indicator (KPI) that you tie them to. According to the Balanced Scorecard Institute, “KPIs are performance measures that indicate progress toward a desirable outcome. Strategic KPIs monitor the implementation and effectiveness of an organization’s strategies, determine the gap between actual and targeted performance and determine organization effectiveness and operational efficiency.” Thus once you decide the key objectives you choose to pursue in each perspective, you must then determine the most prudent indicators to use to measure your department’s progress in your pursuit of those objectives.
Utilizing the balanced scorecard within your department is a holistic approach that helps link the individual efforts and accomplishments of your coaches and administrators to department/program objectives. It creates a comprehensive feedback loop that allows you to test, validate and modify your approach to the strategies that you have implemented for your department or individual sports programs. Of course, it is important to understand that accumulating enough data to document correlations and causations between your various measures may take a considerable amount of time. Hence why the importance of patience with strategic plans as well as the hiring of new individuals (e.g. coaches) – no business unit can be judged on only a year or two’s worth of evidence.