Kaplan norton on strategy management

After a string of innovative successes in the early s, Chrysler had hit a dry spell. Once the design phase had been completed and scorecards had been cascaded throughout the company, the strategy group maintained responsibility for the data collection and reporting processes for the scorecards. Where Chrysler broke new ground was in the roles assumed by the strategy group. The group took the lead in preparing scorecard-related materials to communicate the strategy to the more than 90, employees.

Russo began to brief Zetsche before each management meeting about issues that had been revealed through the scorecard reporting and that required management attention and action.

In his capacity as a member of the executive team, Russo followed up after each meeting to make sure that the required items were communicated and acted upon. As a result of this proactive involvement in agenda setting and follow-up, the responsibilities of the business strategy function expanded to incorporate many new cross-enterprise strategy execution processes. The U. A central project team at the Pentagon headquarters, under the leadership of the Army chief of staff, developed the initial scorecard, which the Army called the Strategic Readiness System SRS.

The project team also selected the software to be used for scorecard reporting and established systems and processes so that the scorecard would be regularly populated with valid, timely data. In the next phase, the team helped to cascade scorecards to 13 major subcommands and subsequently to more than subsidiary commands throughout the world. The centralized project team provided training, consulting, software, and online support for the dispersed project teams.

It established and took ownership of a strategy communication program. The Army team created a Web site that was accessible from around the world in both classified and unclassified versions, developed an online portal and library containing information about the SRS, wrote articles about the initiative, published a bimonthly newsletter, conducted an annual conference, led periodic conference calls with SRS leaders at each command level, and conducted scorecard training, both in person and on the Web.

This extensive communication process was critical for educating soldiers and civilian employees and gaining their support for the new strategy. A unit with responsibility for the implementation of strategy becomes a convenient focal point for ideas that percolate up through the organization. The creation of a central office for strategy execution may appear to risk reinforcing top-down decision making and inhibiting local initiative, but it does just the opposite.

These emerging ideas can then be put on the agendas of quarterly and annual strategy reviews, with the best concepts being adopted and embedded in enterprise and business unit strategies. The OSM is a facilitating organization, not a dictating one. Most of the organizations we have studied follow the path Chrysler and the Army took: The Balanced Scorecard project team incrementally and organically assumes more and more responsibilities on its own initiative. From these cases, we have learned what functions an effective OSM must perform and how an OSM must relate to other functions within the organization.

As a consequence, a few organizations we advise have recently opted to make the creation of an OSM an early and integral part of their scorecard initiatives. As the chief executive of the nonprofit that manages the supply of blood products for all of Canada except the province of Quebec, I instituted an office of strategy management to help me cope with three big challenges in implementing a strategic agenda.

First, I spend a great deal of time dealing with external demands and constituents. In addition to reporting to the board of directors of my organization, Canadian Blood Services CBS , I must also focus on the 12 Canadian provincial and territorial governments that provide its funding. So I have limited time and information with which to manage internal issues. Also, while many people believe that chief executives wield direct and easy influence, the reality is that any CEO has a difficult time influencing his or her organization.

I want to exert my influence indirectly and in a way that empowers my executives and creates an environment in which they can lead and manage their parts of the organization. My third challenge is staying informed. Information, particularly bad news, is filtered before it gets to me. Before our OSM was implemented, we were spending way too much time debating the quality of our information—obviously an unwieldy way of executing strategy and a very time-intensive way of conducting management meetings.

I see the Balanced Scorecard, managed by an office of strategy management, as a way of overcoming these three barriers to success. The Balanced Scorecard empowers executives, as opposed to invading their territory and undermining their authority. It gives me performance management information that is aligned at all executive levels and appropriately validated before it comes to my attention. Much of management is a search for the truth.

The Balanced Scorecard provides me with easy access to timely, unfiltered information about our strategy implementation. Because of my urgent need to accomplish change, I followed the unconventional route of establishing an office of strategy management at the outset of our Balanced Scorecard project.

I also wanted the OSM to report directly to me—that was a way to highlight the importance of this office to my strategic agenda.

But the OSM needed other clearly defined linkages or relationships, too; I want change at CBS to come from within, not to be imposed from above.

I did not create the new corporate-level OSM unit lightly. The OSM has primary responsibility for most of these processes, but not all. For example, in , the OSM led the project team that developed the strategy maps and scorecards for the enterprise, our three operating divisions, and two support units—human resources and information technology. For example, the chief financial officer has primary responsibility for budgeting, with the OSM playing a coordinating role.

We launched the OSM with three full-time individuals. The OSM leader is a vice president and a member of the executive management team; her position in the organization is consistent with the importance we give this function. She leads and facilitates the integration of strategy into all our core processes. In addition, we have two individuals reporting to the OSM leader to provide day-to-day management of the office; to manage the multiple work streams and cross-functional teams; to lead and facilitate meetings; to educate people on the Balanced Scorecard and other strategy-focused practices and tools; and to perform analyses of problems, performance, and metrics.

This should be the right complement of individuals to help support the leader of the OSM, and ultimately the rest of the executive team, in undertaking our ambitious change agenda for this year. What should people designing an OSM bear in mind as they embark on the project? Some of these activities—specifically those involved in creating and managing the scorecard, aligning the organization, and setting the agenda for monthly strategy reviews—are the natural turf of an OSM.

No small thing, bearing in mind that often, the implementation of a constructed strategy is the biggest challenge. Although the previous book of Kaplan and Norton already spent 64 pages on strategy maps, you can find the best and most comprehensive treatment of them including lots of examples in the book on the right:. More strategic management and corporate finance models. Communicating and Cascading the Strategy. How to Communicating and Cascade the Strategy? Summary of Strategy Maps.

Strategy balances contradictory forces. A lot of that transformation was done in introducing the so called ' Strategy Map ' SM What is a strategy map? Close Privacy Overview This website uses cookies to improve your experience while you navigate through the website.

Out of these, the cookies that are categorized as necessary are stored on your browser as they are essential for the working of basic functionalities of the website. We also use third-party cookies that help us analyze and understand how you use this website. These cookies will be stored in your browser only with your consent. You also have the option to opt-out of these cookies.

Business planning. Feedback and learning. Read more on Balanced scorecard or related topics Strategic planning , Budgets and budgeting and Strategy execution. Robert S. David P. This is a subscriber-only article. Subscribe Now I'm already a subscriber. Forgot Password? I'm a subscriber, but I don't have an HBR.

Unfortunately, that means we have to temporarily suspend subscriber syncing. We apologize for the inconvenience. Enter your subscriber email address. We need a little more information to find your subscription. Continue I want to try again with a different email address.

Need help getting access? Have questions?