Book Reviews

Go To Hopkins & Company Homepage

Go to Executive Times Archives


Go to Book Review List


The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment by Robert S. Kaplan and David P. Norton




Click on title or picture to buy from




I admit to a bias in favor of clear scorecards that reflect performance indicators that mean something in the day to day life of a worker in an organization. Robert S. Kaplan and David P. Norton came up with what they called the Balanced Scorecard in prior articles, books and speeches. Their new book, The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, represents the best articulation of the concept and execution yet. Executives working at any organization will gain something of value from reading this book which I highly recommend. The structure of the Balanced Scorecard involves the creation of performance measures from four perspectives: financial; customer; internal (process) and learning and growth.

Some organizations use too few or too many performance measures. Time and events can prove that companies select the wrong indicators of success. Kaplan and Norton tackle complexity and the frequent challenge of implementing contrasting strategies. The book is replete with clear examples, often of actual company scorecards. You have the tough work of figuring out whether this approach will help your organization. The Strategy-Focused Organization provides a useful roadmap should you choose to proceed. Here’s an excerpt relating to staff and support functions (the yellow pages test is credited in a footnote to Skip Stitt who applied it in putting the City of Indianapolis’ services up for competitive bids with the private sector; Kaplan wrote about this previously):

“Most staff groups and support functions can be subjected to the ‘yellow pages’ test. Corporate managers can look in the Yellow Pages of the phone book and find independent companies that supply virtually all of the services currently provided by internal shared service departments. For an internal support group to be maintained within an organization, it should either supply the service internally at a lower price than what could be acquired from an external supplier, or it should offer a differentiated value proposition that is superior to that from an external vendor. Most support functions, however, do not have an explicit strategy – operational excellence, product leadership, customer intimacy – that demonstrates how they create competitive advantage for their parent corporation.
When shared service units cannot outperform external competitors, companies should outsource those functions. When outsourcing, companies can contract with their suppliers using a Balanced Scorecard rather than with just financial measures. This enables them to get the value and service levels they desire, not just a low price.”

I consider the Balanced Scorecard as an effective tool in managing performance and in communicating with clarity what’s important to an organization, and what results individuals are expected to achieve to contribute to the organization’s success.  

Steve Hopkins, September 12, 2001


ã 2001 Hopkins and Company, LLC