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Playgrounds and Performance Results Management at KaBOOM! (A) Case Solution

Solution Id Length Case Author Case Publisher
1085 1498 Words (5 Pages) Herman B. Leonard, Marc J. Epstein, Laura Winig Harvard Business School : 306031
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KaBOOM has presented itself as an emblem of courage, initiative, and change at a social level. The organization has presented itself as model for other organizations with the amount of success it has seen.  Being a nonprofit organization, the KABOOM mission has always been social welfare.  However, the organization’s three-tier strategy has proven to be overlapping, confusing and difficult to monitor independently. Particularly it's Lead and Seed strategic framework overlapped in many areas. A particular problem was that the company did not evolve its strategy but branched it out where a problem area existed in the former. The main reason was the corporation’s poorly planned and vaguely defined objectives. KABOOM developed its strategies from its mission and values; an important aspect of strategic management is the development of SMART objectives that lead to the formation of effective strategies. Objectives then lead to the formation of realistic planned strategies. KABOOM’s corporate-level strategy was concentration but being a nonprofit organization, it should have focused on managing its funding before the implementation of Lead that stifled its resources in the short-run. This resulted in the formation of its seed strategy, which functioned in a similar manner as to lead, but did not replace Lead, resulting in overlapping data and conflicting performance measures.

Following questions are answered in this case study solution

  1. Evaluate the strategy of KABOOM!

  2. Develop a balanced scorecard to help the board measure the performance of the company

  3. Use the financial indicators to evaluate the performance of KABOOM! over time

  4. What type of leadership would be appropriate at KABOOM

  5. What is the view on the Emergent strategies at KABOOM!

Case Analysis for Playgrounds and Performance Results Management at KaBOOM! (A)

Develop a balanced scorecard to help the board measure the performance of the company

 

GOALS

MEASURES

FINANCIAL

  • Ensure a stable flow of funds

  • Expense reduction

  1. Increase funding partnerships by 10%

  2. Increase funds flow from funding partners by 20%

  3. Give more control to communities for resource allocation.

CUSTOMER

  • Build brand reputation

  • Ensure satisfaction

  1. Increase national awareness by 35%.

  2. Maintain consistent developmental and maintenance support

  3. Initiate community awards for enhanced performance.

  4. Increase number of playgrounds by 15%.

INTERNAL OPERATIONS

  • Mobilize workforce

  • Increase efficiency

  1. Increase volunteer workforce by 15%.

  2. Maintain process and quality consistency.

  3. Minimize paper/data inventory.

  4. Work on annual objectives and streamline strategy to achieve operational excellence

LEARNING AND GROWTH

  • Employee loyalty and development

  1. Focus on employee development and learning through skill-development.

  2. Motivate volunteers through rewards and recognition.

  3. Enhance the environment's safety

  4. Encourage employee feedback.

The Balanced Scorecard helps assess an organization’s performance by setting targets pertaining to financial performance, customer knowledge, internal processes, and learning and innovation. The chart will help identify areas of improvement. These targets are measured against periodic reports to manage deviations. Since KABOOM in a nonprofit organization, its main source of funding includes community and corporate partners. Ensuring stable partnerships will help enhance the provision of adequate service to the community. The company’s ultimate customers are children and communities that will benefit from a safe play-place. To achieve customer satisfaction they need to be appreciated. Improving community awareness and providing consistency in operations and support will serve as a motivator. One of the major obstacles in achieving operational efficiency is the excessive amount of performance data of which there is no way to measure. The company should work on defining performance objectives and KPIs to know what to measure how to measure it and what data to consider for it. At times, employees provide valid and valuable feedback that can help increase operational effectiveness. Employees need to be educated about what is happening and what role they play, hence, the learning target.

Use the financial indicators to evaluate the performance of KABOOM! over time.

KABOOM is a nonprofit organization; the financial performance of the organization will require modification in basic performance measurement ratios. Firstly, horizontal analysis of the income statement will help us assess the performance of KABOOM over the years. Secondly, my aim was to calculate the DuPont Analysis for the organization. Since any data on corporate liabilities is not present in the case study and assuming that the corporate assets are equal to equity, DuPont ratio will not be an effective measure given the present data. A tabular representation of key indicators is given.

RATIO

2000

2001

2002

Net Profit Margin = Net profit/operating revenue

(6.935)

3.802

(8.733)

Grant Ratio = Grant expense / grant income

0.42

0.62

0.09

Increase in community funding

18.9%

97%

40.6%

Increase in partner funding

31%

123%

(31%)

Partner funding ratio = partner funds/operating revenue

77.8%

79.5%

60%

ROA = Net income/total assets

(0.04%)

0.12%

(0.05%)

Total assets = value of volunteer service + value of donations + special events funds + change in net assets/net profit.

The table clearly shows that funding partners constitute a significantly large proportion of the total operating revenue, which eventually affects the total net income. The amount of funds obtained from partners is an important source for KABOOM for covering expenses. As it is obvious from the table in 2002, the amount of partner funding drastically reduced because of which the total net income declined to influence related ratios. Besides that, the total construction costs also increased by almost 45% which may have led to the negative net income. KABOOM should focus on decreasing construction expenses and collaborating with firms to provide funded raw materials in return for positive publicity.

What type of leadership would be appropriate at KABOOM!

Leadership in any organization is essential in mapping the direction of the organization. A leader needs to guide, direct, motivate and seek feedback. Effective leadership at a welfare organization at KABOOM needs to be one that supports and motivates. A problem observed in the increasing amount of workload on the board members for planning and implementing as well as acting as volunteers. Moreover, the CEO also has to manage as well as drive performance at all levels. Since this organization is still developing and defining its objectives and strategies, leadership at such an organization needs to be situational.

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