A Useful Intersection: The Balanced Scorecard And Ec2000

The new requirements of ABET’s EC2000 have caused the authors’ academic department to undertake a significant restructuring of its internal functions. This restructuring was guided in part by the ideas of object-oriented software development and in part by the ideas of the Balanced Scorecard. The object-oriented ideas led to creation of Process Teams and the Balanced Scorecard has been adopted as the management structure that guides department operations. In the present paper, a brief introduction to the ideas of the Balanced Scorecard is followed by a detailed description of how the Process Teams were formed and how the Balanced Scorecard was adapted to meet the needs of an academic department. Introduction ABET’s introduction of Engineering Criteria 2000 1 (EC2000) was, to use an overused phrase, a paradigm shift, in which many aspects of the accreditation criteria and the program evaluation process underwent significant change. In engineering terms, one aspect of the shift can be described as a shift of focus from “input” to “output.” Although examples of student work were, and are, an important component of an accreditation review, program faculty are now asked to do a much more extensive job of assessing and documenting the “abilities” that have been imparted to graduates by the program. Annual national meetings have come into existence with the express purpose of bringing together engineering educators to share best practices for outcomes assessment (i.e. Best Assessment Processes IV Symposium 2 ). Another example of change is that the new criteria require program faculty to define and publish Program Educational Objectives (PEOs) and Program Outcomes (POs), or their equivalents. ABET’s stated purpose in giving almost unlimited latitude to programs in defining their PEOs has been to encourage creativity and uniqueness within the engineering education community. Although there is room for originality in definition of the POs, it is the authors’ experience that programs either adopt the “a-k” abilities defined in the EC2000 document or view these as a minimal set to be supplemented with additional abilities appropriate to the particular program. In the new criteria, and in the instructions to program evaluators, there is a clear insistence that a program must develop and deploy processes to create an environment in which there is continuous P ge 923.1 Proceedings of the 2004 American Society for Engineering Education Annual Conference & Exposition Copyright © 2004, American Society for Engineering Education improvement in achievement of the program’s PEOs and POs. Although it had always been expected that program faculties continually strove toward program improvement, the old criteria did not require documentation of continuous improvement process for program accreditation. The primary purpose of the present paper is to share with other engineering educators how the authors’ department has attempted to create and institutionalize a continuous improvement environment that is effective, efficient, and that produces a continuous program improvement system aligned with the accreditation requirements of EC2000. That effort was guided by the collection of ideas espoused by Norton and Kaplan in “The Balanced Scorecard 3 .” With apologies to those authors, this paper presents a very abbreviated introduction to the fundamental ideas of the Balanced Scorecard (BSC). It is then shown how these ideas, which evolved in a for-profit business setting, have been adapted to serve an academic department for which success cannot be measured in earnings-per-share. Although any program choosing to build a continuous improvement environment upon the precepts of the BSC will produce a unique result, an in-depth presentation of the details of how the authors’ department implemented these principles is provided to illuminate the process. This process was neither quick nor easy. It is still a work-in-progress. In fact, by its very nature, it will always be a work in progress. As more experience is gained, it is expected that the level of effort required to implement the Balanced Scorecard will decrease, that the effectiveness and efficiency of the associated processes will improve each year, and that collectively the evolving structure will move the authors’ program toward continual improvement in achievement of its POs and PEOs. The Balanced Scorecard The first time that the ideas, processes, and structure of the Balanced Scorecard were collected, codified, and presented in a single document was the publication by Kaplan and Norton of a book of the same name: “The Balanced Scorecard: Translating Strategy into Action 3 .” Recognition that “success” for any modern organization requires regular assessment and improvement of multiple perspectives of performance lies at the heart of the Balanced Scorecard (BSC). This is a significant departure from some past practices in which the financial bottom line was accorded overriding priority in strategic planning and performance measurement. Although the insights on which the system was built were the result of a study of for-profit organizations, the BSC is being adapted to serve the purposes of not-for-profit organizations and governmental agencies. “Today over half of Fortune 1,000 companies in North America are using the Balanced Scorecard. ... many public sector organizations, including the US Army, the Australia Department of Defense, and many others such as the Texas Education Agency, have recognized its value and are using the scorecard.” 4 The engineering society with which the authors’ program is most closely linked, the American Society of Mechanical Engineers, recently stated that it “... has adopted its first Strategy Map, and is developing the measures, targets, and initiatives to achieve the objectives contained within the Strategy Map.” 5 Anyone who has been a faculty member for any length of time has probably been involved in at least one strategic planning exercise. These exercises have frequently produced a document defining the organization’s strategy, but they have not resulted in significant progress toward improvement of the program, department, college, or university. “A study of 275 portfolio managers reported that the ability to execute strategy was more important than the strategy itself 6 .” 8 “In the early 1980s, a survey of management consultants reported that fewer than 10 P ge 923.2 Proceedings of the 2004 American Society for Engineering Education Annual Conference & Exposition Copyright © 2004, American Society for Engineering Education percent of effectively formulated strategies were successfully implemented.” 7,8 The remarkable penetration of the BSC into the corporate and public sectors has given birth to associations, software vendors, and consulting companies offering to help adapt the BSC to a particular organization. 9,10,11 It is well beyond the scope of this paper to present all of the ideas on which the BSC is founded. Rather, the following paragraphs provide a very brief introduction to those ideas and to the associated structure and processes of the BSC. A study of a collection of companies from the banking, oil, insurance, and retail industries, led by Kaplan and Norton 3 in the early 1990s, revealed that success in the modern marketplace required a focus on continuous improvement of four perspectives of corporate performance: “financial performance, customer knowledge, internal business processes, learning and growth.” To begin building a BSC structure, the organization should write a Mission Statement in which it defines its core beliefs, identifies target markets, and identifies core products. Once the essential “reason for being” has been elucidated, the appropriate perspectives of performance can be defined. A perspective is a category of performance in which the organization should excel to accomplish its mission. The organization’s mission statement will determine if it is appropriate to simply adopt the perspectives of Reference 3. If not, (as is the case in the adaptation of the BSC to an undergraduate engineering program), substantially different perspectives may be required to achieve organizational success. Once the perspectives of performance have been defined, the BSC structure produces an environment of continuous improvement by repetitive execution of a cycle of processes through which the organization: • defines accomplishments to be pursued; • defines metrics by which to measure achievement of those accomplishments; • defines and conducts actions designed to produce the desired accomplishments; • evaluates the outcomes of the actions; and • then repeats the entire cycle. A somewhat standard lexicon has become associated with these processes. • An objective defines what is to be accomplished. To be meaningful, it should be timebounded, measurable, and reasonable. • A measure quantifies performance with respect to an objective. • An initiative is an action, or set of actions, designed to achieve an objective. • An outcome is a consequence of executing an initiative. Success, or lack of success in achiveing an objective is evaluated by outcome-based measures. The outcomes of one cycle should be a very strong influence on the objectives defined for the next cycle. Although it may be useful to synchronize some process within the organization, it is not necessary to operate all processes with the same periodicity. The size and mission of an organization will dictate the complexity of the BSC structure. A simple organization, such as an ad hoc committee tasked with a very specific mission, might only merit a few performance perspectives, all of the objectives and measures might be defined by the committee as a whole, and initiatives might be assigned directly to committee members for execution. However, for all but the smallest and most limited of organizations, some hierarchical BSC structure will be appropriate. In fact, one of th