Balanced Scorecard and Government Entities
Moving Forward at the Illinois Department of Transportation

By Sandra S. Lang

E-mail Story
Print Story
Government entities are generally not considered to be models of good business management. The state of Illinois, however, is trying to change this perception. In 1999, Illinois began a strategic planning initiative (SPI) using the balanced scorecard (BSC) as the vehicle for change. The initial goals were performance management and public accountability, which required viewing the Illinois public as a customer whose opinion of government performance was of paramount importance.

Performance management, or managing-for-results, entails purposefully using an entity’s resources with specific organizational and program goals in mind. Public accountability requires rendering an account or explanation to the public for performance assessment purposes.

The Illinois Department of Transportation (IDOT) was an early participant in the SPI. In the summer of 1999, an IDOT task force recommended the BSC approach as the means for translating its strategy into performance measures. As such, it communicates long-term strategy through specific short-term objectives congruent with that strategy. It also encourages management to develop bonus and reward systems in line with that strategy. BSC serves as a constant reminder of where the organization wants to be and where it stands in the process. It provides direction for planning short-term objectives important for achieving the overall strategy, as well as a check on how the organization is doing in fulfilling those objectives.

A revised vision statement for IDOT was developed by the strategic management team, executive officers, and 10 division/office directors. The department requested proposals from potential consultants, and Science Application International Corporation (SAIC), of McLean, Va., was selected. The consultants from SAIC aided in finalizing the mission statement. A long-range strategic plan is generally used when initiating a BSC; however, as with any governmental entity, administrative change was a consideration. In lieu of a specific five-year plan, IDOT elected to determine overall guiding principles. These guiding principles are more general in nature and can be applied across administrations without the disruption that a change in long-range plans might necessitate.

The consultant facilitators then conducted a SWOT analysis: an in-depth look at IDOT’s strengths, weaknesses, opportunities, and threats. The results of this analysis served as a guide for developing the BSC perspectives and measures.

The next step was to develop the BSC. The four perspectives—customer satisfaction and partnerships, best business practices, learning and growth, and delivery of programs and services—were decided upon. During this development stage, the strategic management team met weekly to develop three to four objectives for each perspective and targets or measures for each, for a total of 14 (Exhibit 1). A program manager was then appointed—a crucial step, because research has found that success often depends on the presence of a champion or leader who is committed to the project’s success. Subsequently, the divisions and offices, as well as many of the bureaus within them, developed BSCs of their own under the same four perspectives with similar objectives. The means selected to achieve those objectives differed with each subentity.

Specific information necessary to determine the progress of the SPI was readily available because measures were put in place that could be examined. Dramatic results were seen in the Division of Highways (DOH). As part of the customer satisfaction perspective, the DOH decided to make Illinois motorists more aware of highway maintenance and construction projects. Signs admonishing motorists to drive more slowly (produced in the childlike handwriting of someone whose “mommy or daddy” might be working on the site) not only made the motorist more aware, but reaped benefits. Deaths and injuries went down after the signs first appeared, from 38 fatalities in 2000 to 36 in 2001, 31 in 2002, and 11 for the first six months of 2003. Four surveys of Illinois motorists have been taken since the inception of the SPI, with increased levels of satisfaction regarding the areas addressed. As a result of the first survey, DOH took specific actions, such as improving the processes for removal of debris and dead animals from roadways and increasing night work and off-peak construction activities to ease congestion. All four of IDOT’s and DOH’s targets under customer satisfaction and partnerships were addressed by these actions.

One objective under the customer satisfaction and partnerships perspective called for establishing and publishing protocols for answering inquiries and assessing or coordinating existing communication channels. Specifically, a mail response project was undertaken, as a result of which the response time to inquiries from the public went from 30–35 days to approximately 16 days. Also, the status and location of all correspondence now can be checked at any point, which was not possible prior to undertaking the mail response project.

Two years into the SPI, the IDOT conducted a study of employee reaction to the project. An initial goal at the governor’s office and IDOT had been to improve the decision-making process. At IDOT there was also a focus on improving communication priorities for tactical action regarding internal processes, administrative and budget functions, customer service programs, and grant processes and support programs. The survey questions and subsequent discussion groups covered a broad range of topics and asked for before-and-after examples. Exhibit 2 provides a sampling of these just as they were given. Another survey item asked participants to sum up SPI at that time, and during the discussion groups those descriptives were ranked. With one exception, communication was a clear winner in each of the nine groups. Several individuals commented that the SPI had made people more cooperative regarding requests simply because they now understood why the requests were being made. Overall, people felt that the SPI was an unfinished project, but that the improved communication had opened the door for improved cooperation, coordination, and success throughout the organization.

Adapting to Fit

Because of the adaptability of the BSC to “fit” to the entity implementing it, BSC has been shown to be a useful tool in both the public and private sectors of for-profit organizations. It is also adaptable for use in not-for-profit and governmental organizations. At IDOT, simply listing their goals communicated a message to the employees: “These are the things that are important to us. These are the results you will be expected to produce and be rewarded for.” Having specific objectives is important to the success of any entity, and knowing what the objectives of an organization are gives employees focus.

Another attractive feature of BSC is that it can be changed without rewriting the entire plan. As one objective is met, it can be replaced. If an objective is not met, action can be taken to clarify, change, or more carefully delineate that objective in terms that will make achieving it possible.

This adaptability has been beneficial at IDOT. The BSC has undergone three iterations and is in the process of a fourth. Completed targets have been removed. After the terrorist attacks of September 11, the objective “Assist appropriate agencies to ensure ongoing security of transportation services in the face of credible threats or attacks” was added to the BSC. In 2002, this objective was changed to read “Provide the safety, repair, and continued operation of transportation services in response to credible threats or attack.”

It is logical that BSC should become an important planning tool for an organization, no matter the type of entity.


Sandra S. Lang, PhD, CPA, is an assistant professor of accounting at McKendree College, Lebanon, Ill.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 



The CPA Journal is broadly recognized as an outstanding, technical-refereed publication aimed at public practitioners, management, educators, and other accounting professionals. It is edited by CPAs for CPAs. Our goal is to provide CPAs and other accounting professionals with the information and news to enable them to be successful accountants, managers, and executives in today's practice environments.

©2009 The New York State Society of CPAs. Legal Notices