Such people feel that multiple measuressome financial and some nonfinancialare confusing and lead to ambiguous, often conflicting, signals about what the organization values. Norton focusing your organization on strategy with the balanced scorecard, 2nd edition your strategy s brilliant. How balanced scorecard companies thrive in the new business environment, harvard business school press. During the past 30 years, much attention has been focused on how companies can formulate new strategies for. Strategyfocused it organization, a balanced scorecard. In sum, the scorecard is a planning and management system that aligns business activities of the organization s strategy and vision and improves internal and external. Translate strategy into operational terms in order to be a strategy focused organization, you must put strategy at the center of your organization s. It provides the foundation for designing a balanced scorecard that is the cornerstone of a strategic management system. This case study authentically applies the concepts from our 2000 book, the strategy focused organization, to a large hr group, enabling it to become a strategy focused hr organization. Norton of the balanced scorecard collaborative in developing and improving the balanced scorecard during the past ten years, and i also wish to thank ellen l.
How balanced scorecard companies thrive in the new. Strategy implementation is as important as the strategy itself. Norton in 1996, robert kaplan and david norton introduced the balanced scorecard performance measurement method, which included not only tradi contents tional. Kaplan and others published the strategyfocused organisation find, read and cite all. Commentary transforming the balanced scorecard from. Furthermore, the scorecards new program establishment aligned a large scale network of suppliers and dealers to this strategy framework kaplan, s. Nortonrobert kaplan is the professor of leadership development at harvard business school. Building a strategyfocused organization ivey business.
Although each organization achieved strategic alignment and focus in different ways, at different paces and in different sequences, each eventually used a common set of five principles, which we refer to as the principles of a strategy focused organization, portrayed in figure 1. 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. The challenge for such a unit is to be responsive to the strategies and the needs. At this time, they said that the relationship between the drivers and the desired outcomes constitute the hypotheses that define the strategy.
Organization, robert kaplan and david norton share the results. Focusing your organization on strategywith the brilliantbut. First, the companys leadership may not have clearly articulated the strategy and communicated it to the entire organization. Norton harvard business school publishing company isbn 1578512506. Robert kaplan biography the strategyfocused organization. Toward a model of strategic human capital management using. In 1996, robert kaplan and david norton introduced the balanced scorecard performance measurement method, which included not only traditional financial measures but also such qualitative measures as employee satisfaction, corporate mission and customer loyalty. The key elements in creating a strategy focused organisation are as follows. The scorecard is a method that may predict the economic value combined by estimating the level of the diverse workforce, comprehensive organizational cultures, and wellmanaged diversity. Their book is divided into five sections that guide readers through development of a completely individualized plan that is created with strategy maps graphical representations designed.
Strategic performance measurement and management in nonpro. Converting intangible assets into tangible outcomes. Strategic management how balanced scorecard companies thrive in the new business environment the strategy focused organization by robert s. In the strategy focused organization, they show how the following five principles transform the balanced scorecard from a tool for. In the strategy focused organization, they show how the following five principles transform the balanced scorecard from a tool for performance measurement to a tool for creating a strategy. Kaplan and david norton continue to develop tools and concepts that help organizations get the most from their scorecard. The scorecard originated in the 1990s by robert kaplan and david norton. They create what kaplan and norton call a strategy focused organisation. How balanced scorecard companies thrive in the new business environment, harvard business school press, bostonmassachusetts 2000, 400 pages.
Scorecard performance measurement method, which included not only tradi tional financial. The balanced scorecardstrategy mapsriskbased performance managementbalanced scorecard success. In a strategy focused organization, its not just the top management who understand what the organization s basic strategy is. Strategic performance measurement and management in. Several years ago we introduced the balanced scorecard kaplan and norton 1992. Kaplan and norton define a strategy map as a logical comprehensive architecture for describing strategy. How balanced scorecard companies thrive in the new business environment. Strategyfocused it organization, a balanced scorecard reader. The strategyfocused organization university accounting service. Kaplan, who facilitated the scorecard implementation in most of the nonpro. The balanced scorecard was originally proposed to overcome the limitations of managing with only financial measures, which report outcomes but do not communicate the drivers of future performance. Translating strategy into action, which has been translated into 24 languages and won the.
These examples show how the balanced scorecard can be used to make explicit the financial strategy of a business unit, and how to customize financial objectives and measures to business unit strategy. This practical tool measures and assesses the diversity impact of different levels and business functions kaplan, s. The initial focus and application of the balanced scorecard was in the forprofit private sector. Balanced scorecard s interpretative variability and. A strategy map is a key tool in getting everyone on the same page at the same time. Kaplan and norton articulate the five key principles required for building. The strategy focused organization the summary in brief in 1996, robert kaplan and david norton introduced the balanced scorecard performance measurement method, which included not only traditional financial measures but also such qualitative measures as employee satisfaction, corporate mission and customer loyalty. The strategy focused organization, kaplan and norton. Their third book, strategy maps, goes into further. Building a strategyfocused organization ivey business journal. Kaplan and others published the strategy focused organisation find, read and cite all. Norton the complete summary in todays business landscape, it has.
Mobilise change building a strategy focused organisation usually involves significant culture change. Norton 35 using the balanced scorecard as a strategic management system by robert s. Translate strategy important to implement solid strategies the unique and sustainable ways by which organizations create into operational terms value. Pdf transforming the balanced scorecard from performance. Kaplan and norton assert that since the bsc focuses on both nonfinancial and financial measures together that drive the future financial performance of an organization, it can be considered as. Professor emeritus harvard business school honorary committee member. Kaplan and norton articulate the five key principles required for building strategy focused organizations. Everyone at every level understands the strategy and relates it to their daily activities. Kaplan and others published the strategyfocused organization. How balanced scorecard companies thrieve in the new business environment r. The balanced scorecard measures that drive performance. The strategyfocused organisation request pdf researchgate. 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.
An example of a generic strategy map can be seen below. We began with the premise that an exclusive reliance on financial measures in a management system is insufficient. Strategy cannot be implemented by the senior executive team. Oct 23, 2000 in the strategy focused organization, hbs professor robert kaplan and david norton, president of the balanced scorecard collaborative, share the results of ten years of research into companies that have implemented the balanced scorecard. Another problem is that many strategy documents represent a organization. In the strategy focused organization, kaplan and norton explain how companies like mobil, cigna, and chemical retail bank have effectively used this approach for nearly a decade, and in the process present a stepbystep implementation outline that other organizations could use to attain similar results. A bsc uses the language of measurement to more clearly define the meaning of strategic concepts like quality, customer. Norton in 1996, robert kaplan and david norton introduced the. Learn more about the balanced scorecard here on the tutor2u website. Drawing on more than 20 indepth case studies, they illustrate how major organizations have used the. Toward a model of strategic human capital management.
Their book is divided into five sections that guide readers through development of a completely individualized plan that is created with strategy. In the strategy focused organization, they show how the following five principles transform the balanced scorecard from a tool for performance measurement to a tool for creating a strategy driven. Already classic work of kaplan and norton on the application of balanced scorecards to create a strategy focused organization along 5 key principles. Focusing your organization on strategywith the brilliant. It requires that middle managers and frontline and service employees embed the strategy in their daytoday activities. How balanced scorecard companies thrive in the new business environment, harvard business school. In 1996, robert kaplan and david norton introduced the balanced. In the strategyfocused organization, robert kaplan and david norton share the results of ten years of. The strategyfocused organization hbs working knowledge. The strategyfocused organization how balanced scorecard companies thrive in the new business environment. The strategy maps value becomes evident when it is used as a tool that enables people to express and share strategic priorities. Norton the complete summary in todays business landscape, it has never been more principle 1. The ability to execute strategy can be more important than the strategy itself. Exclusive reliance on financial indicators could promote behavior that sacrifices longterm value creation for.
327 324 1510 589 78 520 1035 132 713 270 64 121 1481 740 957 1807 499 855 1174 1547 868