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The
Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the
New Business Environment by Robert S. Kaplan and David P. Norton Recommendation: •••• |
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Click on title or picture to buy from amazon.com |
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Score! 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. 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 |
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ã 2001 Hopkins and Company, LLC |
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