Harmon Community Hospital developed the following series of if-then statements for its
Balanced Scorecard strategy:
• If employee turnover rate decreases and employee satisfaction increases, then the quality of health care service will improve.
• If the quality of health care service improves, then operating efficiency will increase and patient satisfaction will increase.
• If operating efficiency increases, then operating costs will decrease.
• If patient satisfaction increases, then market share will increase.
• If market share increases, then revenues will increase.
• If revenues increase and costs decrease, then profits will increase.
Required:
1. Prepare a strategy map for Harmon’s strategy as described by the series of cause-and-effect relationships.
2. Explain how a performance measure can act as both a lag variable and a lead indicator.
3. What if profits did not increase to the targeted level? Explain how this result could be attributable to either an implementation problem or an invalid strategy. What actions would likely be taken for each case?