As a performance management tool, balanced scorecards give managers a mixture of financial and non-financial metrics in order to help assess whether the organization is meeting strategic objectives. Insurance Networking News asked MetLife AVP of Business Transformation Practices Ashish Gupta, who helped develop the balanced scorecard approach within MetLife's ITG organization, how insurers can best leverage these tools.
INN: How can insurers drive operational accountability and improve service delivery by employing a balanced scorecard approach?
AG:Balanced scorecards provide detailed metrics that enable a holistic view of an entire operation. For example, in the Information Technology Group (ITG) of MetLife's Technology & Operations organization, we are currently using a balanced scorecard approach to help us assess our financial performance, as well as our key processes and our associates' success. This approach enables ITG to thoroughly evaluate its complete performance, which will help identify performance issues, conduct root cause analysis and drive data-based decision making. To complement this approach, ITG is focused on incorporating metrics to allow managers to better gauge future performance and address any forecasted challenges.
According to one of ITG's CIOs, Larry Blakeman, balanced scorecards have helped his team gain increased transparency around its operations, enabling it to quickly address challenges. In addition to helping to identify and define key performance indicators (KPI) that drive performance and cost, scorecards provide additional quantitative data, which, in conjunction with qualitative data, enable a better understanding of root causes and trends.
INN: What role does the scorecard play in performance management?
AG: By closely aligning the outcomes measured by scorecards with their vision, strategic objectives, goals and metrics, organizations can successfully leverage balanced scorecards to transform strategy into action.
Within ITG at MetLife Tech & Ops, the overall vision and strategy has been tightly linked to the KPIs and supporting metrics to help maintain focus toward the desired goal. Additionally, when performance shortfalls arise, a balanced scorecard can be used to develop key action plans to correct course. At a high level, balanced scorecards can help functions better align with enterprise-level strategies and goals.
INN: How can organizations identify KPIs that best align with value drivers and customer proposition?
AG: Organizations need to assess their internal core capabilities, processes and product offerings in order to identify their KPIs for driving value. To paint a more robust picture, organizations should evaluate their key customers' needs and wants, as well as "dissatisfiers" and exciters from their perspective. Armed with these analyses, organizations are then prepared to identify the KPIs that will both drive business performance and customer satisfaction.
Within MetLife's ITG organization, we achieved a holistic view by conducting voice of the customer (VOC) interviews and leveraging the Goal Question Metric framework to survey internal stakeholders and business partners. Through this process, we identified the KPIs to achieve our organizational goals, as well as ensured they aligned with internal and external stakeholders. However, these KPIs are flexible to adapt to future input from internal/external stakeholders.
INN: How can the balance scorecard approach drive change toward a more effective culture of accountability and responsibility?
AG: Within MetLife's ITG organization, we are focusing on four key elements of balanced scorecards to drive business transformation, and even cultural change.
* Key decision makers' KPIs provide metrics that encourage a complete assessment of performance.
* Robust, data-based, leadership decision-making processes focus on creating accountability through action planning and root cause analysis.
* Supporting communication and training programs that ensure a high level of understanding and engagement by all ITG associates.
* An intuitive user interface and agile technology provide current information based on the integration of 20-plus systems in the back-end to create a consolidated view of performances in various areas.
