From Balanced Scorecard To “The science of strategy of execution”: 25 years of Research

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It’s been more than 25 years since Harvard Business School professor Dr. Robert S. Kaplan and cohort David P. Norton put forth the concept and research of the Balanced Scorecard, a practice of measuring whether the smaller-scale operational activities of a company are aligned with its larger-scale objectives in terms of vision and strategy. However, the culture and strategy remains relevant today. At this morning’s keynote at the Gartner Business Intelligence Summit in Washington D.C, Dr. Kaplan emphasized the growing need for strategy execution. In his presentation themed “Strategy Execution in a Dynamic World,” Kaplan pointed to recent Conference Board results. For the last two years, the number one top of mind priority has been whether or not senior management can execute. Up until November, the reigning number two issue had been generating top line revenue growth. As the economy began to tumble, the order changed and excellence in execution took over as the number two spot.

The foundation behind Balanced Scorecard is that financial measurements don’t reveal everything about an organization. Companies should, therefore, measure the areas in which they can change. Kaplan recommends the following steps for organizations to deliver strategic excellence:

  1. Mobilize change through executive leadership.
    Leaders should see the threats and the opportunities and communicate a vision to the organization, Kaplan said. There has to be a case or an agent for change. He drew the event for 9/11 as an example. September 11 led the FBI to overturn its 90 year old operational strategy and to deliver on a new mission. “It’s like playing tennis and you take lessons with instructor,” Kaplain said. “Once you get away from the lesson, you want to get back to what feels comfortable.” Don’t let that happen. Keep your strategy or your scorecard as constant reminder. Put it in your pocket if you need to — carry it everywhere, he said. Leaders truly have to own process of change. “It has to be your priority and you have to show you are personally invested in it,” Kaplan contended.
  2. Translate strategy to operational teams.
    Kaplan said, develop measures that affect word statements. Map out strategies visually. Look at the map and ask, “what’s missing?”
  3. Align the organization to the strategy
    Most organizations consist of multiple business units and it can be a struggle to get them all to work together on an intended goal. Kaplan displayed a photograph of a crew team. Does the team want the eight best rowers all in one boat? Probably not. It’s all about balance and creating a sense of common purpose, he said.
  4. Motivate to make strategy everyone’s job.
    Kaplan shared that this means aligning personal incentives with competency development. “Communicate seven times seven different ways,” he said, adding that personal relevance brings the strategy to life.
    sustained communication uses diff channels to get the message across
  5. Make strategy a continual process.
    Kaplan advised making strategy maps and encouraged feedback dashboards to keep employees in the loop.

There’s some great advice here. When asked how the economy impacts strategy, Kaplan recommended that people focus on some short term goals. “If you used to have 14 strategic initiatives, focus on five or six to give you a rapid payback,” he said. “Although you may need to redo your strategy and update your map and go through the steps all over again.” In other words, don’t be afraid to change.

Naous concept to the science of strategy execution: Creating Shared Value and Positive Impact.

“The science of Strategy Execution”: Creating Shared Value and Positive Impact is an extraordinary integration of management and practice from a strategy management perspective.Its objective to help readers make meaning from the Balanced Scorecard and Execution Premium.The result is an inspirational practice of the Balanced Scorecard and the Execution Premium that will resonate with every reader’s experience.

 Welcome to the new journey of the science of strategy execution: Creating Shared Value and Positive Impact