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The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment
The creators of the revolutionary performance management tool called the Balanced Scorecard introduce a new approach that makes strategy a continuous process owned not just by top management, but by everyone. In The Strategy-Focused Organization , Robert Kaplan and David Norton share the results of ten years of learning and research into more than 200 companies that have implemented the Balanced Scorecard. Drawing from more than twenty in-depth case studies--including Mobil, CIGNA, and AT&T Canada--Kaplan and Norton illustrate how Balanced Scorecard adopters have taken their groundbreaking tool to the next level. These organizations have used the scorecard to create an entirely new performance management framework that puts strategy at the center of key management processes and systems.
Kaplan and Norton articulate the five key principles required for building strategy-focused organizations: 1) translate the strategy into operational terms, 2) align the organization to the strategy, 3) make strategy everyone's everyday job, 4) make strategy a continual process, and 5) mobilize change through strong, effective leadership. The authors provide a detailed account of how a range of organizations in the private, public, and nonprofit sectors have deployed these principles to achieve breakthrough, sustainable performance improvements.
Kaplan and Norton articulate the five key principles required for building strategy-focused organizations: 1) translate the strategy into operational terms, 2) align the organization to the strategy, 3) make strategy everyone's everyday job, 4) make strategy a continual process, and 5) mobilize change through strong, effective leadership. The authors provide a detailed account of how a range of organizations in the private, public, and nonprofit sectors have deployed these principles to achieve breakthrough, sustainable performance improvements.
416 pages, Hardcover
First published September 1, 2000
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March 30, 2013
A must-read book on execution for knowledge workers, managers, executives, and entrepreneurs.
November 28, 2012
This is a critical piece of work that should pass the test of time. In commenting on the value of this book, I'd like to draw some parallels with IT Architecture Frameworks as implemented today.
During the same period that Zachman was developing his IT Architecture Framework, various business and management thinkers were looking for ways to adequately capture the importance of the "intangible" or non-financial assets of the organization. Notable in this respect were the attempts of Yugi Ijiri (Momentum Accounting and Triple-Entry Booking, American Accounting Association, 1989), and Robert Kaplan and David Norton (The Balanced Scorecard, Harvard Business School Publishing 1996).
Especially the efforts of Kaplan and Norton were implemented by various large-scale organizations - often in a different way than anticipated by the authors themselves. In this book, Kaplan and Norton describe their earlier effort as follows: "We first developed the Balanced Scorecard in the early 1990s to solve a measurement problem. ...... But we (subsequently) learned that adopting companies used the Balanced Scorecard to solve a much more important problem than how to measure performance in the information era. The problem, of which we were frankly unaware when first proposing the Balanced Scorecard, was how to implement new strategies."
Messieurs Kaplan and Norton goes on to describe the cause and effect linkages between a company's Mission, the way it interprets its reality and its beliefs (Philosophy and Core Values), how it thinks the future is going to look like (that Vision thing...), its Strategies (or its hypotheses and plans on how to create value), and the actual consequences. As a result, the outcomes should generally lead to a more dynamic and innovative organization, where customers are constantly being provided a delightful experience and real value. In the final instance all this effort should lead to rapid growth and increased productivity, which together results in better financial performance, and happy shareholders.
Seen this way, they define the principles of a Strategy-Focused Organization as follows: translating the strategy to operational terms, aligning the organization to the strategy, making strategy everyone's job, making strategy a continual process, and mobilizing change through executive leadership. These are not just words; instead the methods they have developed have been physically applied at some of the largest and best-run organizations on this planet, with dramatic results. In their recent book "The Strategy Focused Organization" the authors supply many examples on how such insights have assisted Mobil, AT&T Canada, Sears, Fannie Mae, Chase Bank, JP Morgan, the US Department of Transportation, UPS, the State of Washington, and several others to dramatically deliver on their financial and "intangible" goals.
To Zachman's credit, his framework does include motivational constructs like goals, strategies, business plans, and rules. Also, he correctly identifies rapid organizational change as the basic driver for the need to build such a framework, exactly the same concept that has lead to the work of Kaplan and Norton.
However, it has become clear now that organizational change is a response to changing realities in the marketplace. Therefore any attempt to deal with this change should be subject to the organizations understanding of its reality, and its response to it - in other words: its strategy.
What Kaplan and Norton have brought to the table is a framework for creating value from strategy, and the realization that this implies a continual focus on strategy. In their understanding it is imperative that this focus, the logic thereof, and the flow (or how it effects every decision in the organization) is clearly spelled out to every employee. And, this process has to start at the top. According to them, "Experience has repeatedly shown that the single most important condition for success is the ownership and active involvement of the executive team. Strategy requires change from virtually every part of the organization. Strategy requires teamwork to coordinate these changes. And strategy implementation requires continual attention and focus on the change initiatives and performance against targeted outcomes. If those at the top are not energetic leaders of the process, change will not take place, strategy will not be implemented, and the opportunity for breakthrough performance will be missed."
Conclusion
Based on the logic, as well as the many success stories stemming from the adoption of the techniques of Kaplan and Norton, it makes definite sense to embrace the idea of focusing on strategy from a corporate perspective. If we do, then we also accept the fact that corporations should use Corporate Culture, Organizational Structure, and Technology to express their strategies.
As such, technology is very often the first line of defense in an organization's response to a change in reality. Therefore, it is becoming critical to reflect this state of affairs in such a way that everyone is aware of its importance. That explains why this also applies to the Zachman framework for Architecture.
At the same time this calls for a shift in approach. By subscribing to this view, it now becomes essential, not only to describe current architecture, or even future developments, but also to link the flow of architecture over time to its real cause - the dynamic strategies of the organization, which in turn is a reflection of changes in the business reality.
In short - An altogether delightful piece of progress. All management thinkers should be (at the very least) aware of this. Buy the Book!
During the same period that Zachman was developing his IT Architecture Framework, various business and management thinkers were looking for ways to adequately capture the importance of the "intangible" or non-financial assets of the organization. Notable in this respect were the attempts of Yugi Ijiri (Momentum Accounting and Triple-Entry Booking, American Accounting Association, 1989), and Robert Kaplan and David Norton (The Balanced Scorecard, Harvard Business School Publishing 1996).
Especially the efforts of Kaplan and Norton were implemented by various large-scale organizations - often in a different way than anticipated by the authors themselves. In this book, Kaplan and Norton describe their earlier effort as follows: "We first developed the Balanced Scorecard in the early 1990s to solve a measurement problem. ...... But we (subsequently) learned that adopting companies used the Balanced Scorecard to solve a much more important problem than how to measure performance in the information era. The problem, of which we were frankly unaware when first proposing the Balanced Scorecard, was how to implement new strategies."
Messieurs Kaplan and Norton goes on to describe the cause and effect linkages between a company's Mission, the way it interprets its reality and its beliefs (Philosophy and Core Values), how it thinks the future is going to look like (that Vision thing...), its Strategies (or its hypotheses and plans on how to create value), and the actual consequences. As a result, the outcomes should generally lead to a more dynamic and innovative organization, where customers are constantly being provided a delightful experience and real value. In the final instance all this effort should lead to rapid growth and increased productivity, which together results in better financial performance, and happy shareholders.
Seen this way, they define the principles of a Strategy-Focused Organization as follows: translating the strategy to operational terms, aligning the organization to the strategy, making strategy everyone's job, making strategy a continual process, and mobilizing change through executive leadership. These are not just words; instead the methods they have developed have been physically applied at some of the largest and best-run organizations on this planet, with dramatic results. In their recent book "The Strategy Focused Organization" the authors supply many examples on how such insights have assisted Mobil, AT&T Canada, Sears, Fannie Mae, Chase Bank, JP Morgan, the US Department of Transportation, UPS, the State of Washington, and several others to dramatically deliver on their financial and "intangible" goals.
To Zachman's credit, his framework does include motivational constructs like goals, strategies, business plans, and rules. Also, he correctly identifies rapid organizational change as the basic driver for the need to build such a framework, exactly the same concept that has lead to the work of Kaplan and Norton.
However, it has become clear now that organizational change is a response to changing realities in the marketplace. Therefore any attempt to deal with this change should be subject to the organizations understanding of its reality, and its response to it - in other words: its strategy.
What Kaplan and Norton have brought to the table is a framework for creating value from strategy, and the realization that this implies a continual focus on strategy. In their understanding it is imperative that this focus, the logic thereof, and the flow (or how it effects every decision in the organization) is clearly spelled out to every employee. And, this process has to start at the top. According to them, "Experience has repeatedly shown that the single most important condition for success is the ownership and active involvement of the executive team. Strategy requires change from virtually every part of the organization. Strategy requires teamwork to coordinate these changes. And strategy implementation requires continual attention and focus on the change initiatives and performance against targeted outcomes. If those at the top are not energetic leaders of the process, change will not take place, strategy will not be implemented, and the opportunity for breakthrough performance will be missed."
Conclusion
Based on the logic, as well as the many success stories stemming from the adoption of the techniques of Kaplan and Norton, it makes definite sense to embrace the idea of focusing on strategy from a corporate perspective. If we do, then we also accept the fact that corporations should use Corporate Culture, Organizational Structure, and Technology to express their strategies.
As such, technology is very often the first line of defense in an organization's response to a change in reality. Therefore, it is becoming critical to reflect this state of affairs in such a way that everyone is aware of its importance. That explains why this also applies to the Zachman framework for Architecture.
At the same time this calls for a shift in approach. By subscribing to this view, it now becomes essential, not only to describe current architecture, or even future developments, but also to link the flow of architecture over time to its real cause - the dynamic strategies of the organization, which in turn is a reflection of changes in the business reality.
In short - An altogether delightful piece of progress. All management thinkers should be (at the very least) aware of this. Buy the Book!
October 3, 2017
ای کاش این کتاب رو بزور هم که شده به مدیرهای سازمان های دولتی میدادن. شکی ندارم هضمش براشون سخت خواهد بود. اما احتمالا یک رنسانس در مدیریت دولتی کشور دور از انتظار نخواهد بود.
اساسا قلب مفاهیم این کتاب شباهت بسیاری به کتاب پرفروش "نوپای ناب" داره؛ با این تفاوت که نوپای ناب بیشتر رنگ کارافرینی داره و این کتاب رنگ و بوی سازمان های جاافتاده تر و باسابقه تر.
اساسا قلب مفاهیم این کتاب شباهت بسیاری به کتاب پرفروش "نوپای ناب" داره؛ با این تفاوت که نوپای ناب بیشتر رنگ کارافرینی داره و این کتاب رنگ و بوی سازمان های جاافتاده تر و باسابقه تر.
December 2, 2009
Kaplan and Norton invented the Balanced Scorecard, and this sequel tells how to implement changes the balanced scorecard brings to a business.
"A study of 275 portfolio managers reported that the ability to execute strategy was more important than the quality of the strategy itself!"
"In the early 1980s, a survey of management consultants reported that fewer than 10 percent of effectively formulated strategies were successfully implemented... a 1999 Fortune cover story of prominent CEO failures concluded that the emphasis placed on strategy and vision created a mistaken belief that the right strategy was all that was needed to succeed. 'In the majority of case - we estimate 70 percent - the real problem isn't [bad strategy but:]...bad execution.'"
Kaplan and Norton show how to integrate the four perspectives of the balanced scorecard - learning and growth, internal process, financial, and customer perspectives - linking them together into a coherent implementation plan. Outstanding!
"A study of 275 portfolio managers reported that the ability to execute strategy was more important than the quality of the strategy itself!"
"In the early 1980s, a survey of management consultants reported that fewer than 10 percent of effectively formulated strategies were successfully implemented... a 1999 Fortune cover story of prominent CEO failures concluded that the emphasis placed on strategy and vision created a mistaken belief that the right strategy was all that was needed to succeed. 'In the majority of case - we estimate 70 percent - the real problem isn't [bad strategy but:]...bad execution.'"
Kaplan and Norton show how to integrate the four perspectives of the balanced scorecard - learning and growth, internal process, financial, and customer perspectives - linking them together into a coherent implementation plan. Outstanding!
December 3, 2011
READ NOV 2011
The second in a four part series on strategy development and management. Kaplan and Norton do an excellent job of describing the nuances of creating a strategy-focused organization.
Best quotes; "The corporate scorecard should articulate the theory of the corporation" (p. 169); "The formulation of strategy is an art, and it will always remain so. The description of strategy, however, should not be an art [but more science]" (p. 104); "A strategic management system is a communication system, not a control system" (p. 323); and "People who have become good surgeons--cutting waste and inefficiency [costs] wherever they can find--don't suddenly become creative architects, designing new organizational forms and developing innovative growth strategies" (p. 358).
The second in a four part series on strategy development and management. Kaplan and Norton do an excellent job of describing the nuances of creating a strategy-focused organization.
Best quotes; "The corporate scorecard should articulate the theory of the corporation" (p. 169); "The formulation of strategy is an art, and it will always remain so. The description of strategy, however, should not be an art [but more science]" (p. 104); "A strategic management system is a communication system, not a control system" (p. 323); and "People who have become good surgeons--cutting waste and inefficiency [costs] wherever they can find--don't suddenly become creative architects, designing new organizational forms and developing innovative growth strategies" (p. 358).
December 13, 2014
I think the title is used as an eye-catcher. I thought this book was about developing world class strategies, but it wasn't.
I think this book is to promote the concept of the Balanced Scorecards and show you examples of companies who tapped into it and used it as driving the strategy rather than just managing the corporate's performance.
If you have a good idea about BSC and want to tap into it, then this book is for you. But, if you are looking for a book about strategies, then look for another book.
I think this book is to promote the concept of the Balanced Scorecards and show you examples of companies who tapped into it and used it as driving the strategy rather than just managing the corporate's performance.
If you have a good idea about BSC and want to tap into it, then this book is for you. But, if you are looking for a book about strategies, then look for another book.
August 19, 2013
A more in depth book than the previous "The Balanced Scorecard", The Strategy Focused Organization introduces new concepts, like the Strategic Map. Not as revolutionary as the first book, its reading will help people searching for more details in some subjects. The chapter dedicated to Mobil by itself justifies buying the book.
October 22, 2007
contoh-contoh yang di muat emang sangat membantu tapi tiap perusahaan bisa menyusun sesuai dengan strategy yang diterapkan.
December 18, 2008
This has very interesting concepts - there are a lot of case studies and it feels very much like a text book (of course, it should).
January 27, 2010
The Balanced Scorecard can be used in public as well as private organizations, and is a reliable source of growth and change in strategy development and focus within an organization.
July 14, 2011
good idea
May 16, 2013
It was unfortunately a re-iteration of The Balanced Scorecard (same author) with more focus on the strategy rather than the scorecard itself. The Balanced Scorecard already covers this, however.
August 1, 2013
may work in the commercial market; doesn't seem to apply in government
September 1, 2013
This book offers better approach than the first one because explains some steps for acheaving strategy through balanced measures.
February 2, 2008
A classic for anyone who works in an organization with more than 10 people.
August 12, 2014
muy bueno
January 8, 2025
It includes 5 parts: translating the strategy to operational terms, aligning the organization to create synergies, making strategy everyone's everyday job, making strategy a continual process, and mobilizing change through executive leadership. First part contains building strategy maps in various fields of activity; second part is about synergy; third part advises creating strategic awareness, defining personal goals and team objectives, and the balanced paycheck; fourth part is about planning, budgeting, feedback and learning; last part concludes with leadership and mobilization and how to avoid the pitfalls.
June 6, 2017
The concept and theory behind the balanced scorecard seems sound, yet I don't think the authors did it justice. There are plenty of examples of the principles in action through their case studies, but not enough how-to. Some templates would have also been nice.
December 12, 2020
An excellent guide to strategic execution using the Balanced Scorecard methodology. This is an old pub (2000), but the principles are still very applicable, especially coupled with SWOT and PESTEL analysis.
August 25, 2023
Really a functioning strategy book for large compqanies but I did find some stuff to take away for government work.
Read
January 16, 2016Given this was written in the late 90's and first published in 2001 the title could be considered rather ambitious for readers post the crisis. Nonetheless the message of focusing employees behind a unifying strategy that encompasses KPI's linked not only to the traditional financial goals but also the other non financial goals that drive the strategy. Of particular interest are the companies that are the subject of the case studies given that a number were failing in commoditised markets e.g. Mobil. There ability to segment the overall petrol forecourt market and focus the entire organisation from the leadership team to the tanker driver illustrates how a galvanised team can really deliver, going from the worst performance in the sector to market leader in under 5 years leading to their eventual takeover. The authors are sensible enough to admit that it doesn't always have such a happy ending with takeovers, new leadership or lack of commitment in the first place. What summarises the benefit of the balance scorecard approach so well is the analogy with tennis which I quote from the book;
Attempting to drive strategy by communicating and rewarding financial outcomes alone is a lot like teaching people to play tennis by explaining how to keep score. The class starts "love", proceeds quickly through "15, 30, 40", pauses for an advanced lesson on "deuce", and then explains "game". For students who get this far, the class continues by explicating "sets" and "tie-breakers". The instructor then tells the students, "OK, now yo know what the outcome you must achieve. Go out and win!" The students soon find their opponents' shots whizzing past them, while most of their attempts at returns end up hitting the net or flying out of bonds. At the end of the exercise, the students know the score - 6-0, 6-0, 6-0 and understand that this may not have been the desired outcome, but they have no idea how to improve their performance in future periods.
4.5 out of 5 as plenty to take away even if it can come across as a little out of date in places.
Attempting to drive strategy by communicating and rewarding financial outcomes alone is a lot like teaching people to play tennis by explaining how to keep score. The class starts "love", proceeds quickly through "15, 30, 40", pauses for an advanced lesson on "deuce", and then explains "game". For students who get this far, the class continues by explicating "sets" and "tie-breakers". The instructor then tells the students, "OK, now yo know what the outcome you must achieve. Go out and win!" The students soon find their opponents' shots whizzing past them, while most of their attempts at returns end up hitting the net or flying out of bonds. At the end of the exercise, the students know the score - 6-0, 6-0, 6-0 and understand that this may not have been the desired outcome, but they have no idea how to improve their performance in future periods.
4.5 out of 5 as plenty to take away even if it can come across as a little out of date in places.
August 27, 2016
Read my review (in Thai) at http://thaiscorecard.com/ContentDetai...
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