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The Strategy-Focused Organization, then, comes at an auspicious moment. In a follow-up to their influential and popular 1996 book The Balanced Scorecard, Harvard Business School professor Robert Kaplan and consultant David Norton take their popular ideas about measuring success and show how to build an organization that puts those ideas to use.
Kaplan and Norton have rolled out their balanced scorecard model in hundreds of companies, including such marquee clients as Cigna, Mobil and UPS. They have built a successful consulting practice based on it and are now seeing other books crop up about using their tool.
Like many consequential management devices, the balanced scorecard is fairly straightforward. The authors argue that companies all too often focus on the wrong numbers. Managers obsess over outcomes or lagging indicators instead of harder-to-measure factors such as cycle time, customer satisfaction and levels of innovation. The solution is a more balanced scorecard, and in the first book Kaplan and Norton go into great detail on how to build one.
The underlying principles here are not new. The authors build on a tradition of process-focused quality initiatives stretching from Six Sigma and Total Quality Management all the way back to Frederick Taylor's scientific management. Kaplan and Norton, however, move the notion forward somewhat by more explicitly linking their measures to successful outcomes. Employees more easily see how increasing cycle time or reducing defects, for example, can affect financial performance and customer satisfaction.
The scorecard describes and tracks a company's given goals. Kaplan and Norton argue in their new book, though, that their approach can also help managers execute those goals by acting as a sort of corporate superego. "Measurement creates focus for the future because the measures chosen by managers communicate to the organization what is important," they write, somewhat grandly claiming that at many companies their scorecard system "replaced the budget as the center for management processes. In effect, the balanced scorecard became the operating system for a new management process."
Kaplan and Norton deliver on the subtitle's promise of showing how companies use the balanced scorecard. While at times the book reads a bit like a Harvard Business School case writ large no surprise, given that many of the examples cited were subjects of HBS case studies by the authors the book presents a wealth of finer points and stories about the tool in practice.
While the balanced scorecard promises great reward, it also calls for a large commitment. The authors suggest, for example, that every employee construct personalized balanced scorecards. They advocate regular, detailed communication of the numbers. Such practices can, if pursued too vigorously, channel an inordinate amount of time and energy to the process of "excellence" rather than the business of getting things done. Several quality-obsessed companies of the '90s fell prey to such habits.
Still, most companies could do far worse than overemphasize doing the right things. At a time when companies increasingly need to deliver on strategy rather than come up with the next big idea, Kaplan and Norton help pull together meaningful measures for a knowledge-based economy. A fairly simple idea, but as the authors argue, execution is everything.
I probably should have written this review a couple of years ago while the contents were fresh but I decided to give it a try anyways. Read morePublished 8 months ago by CARLOS L.
If you are working with Balanced Scorecards and haven't read this book, shame on you. :-)
Some many books reference the work of Kaplan and Norton but do such a poor job... Read more
Instead of a mere financial management, you can go with this tool to design a performance management process, based on strategies that reach any operational corner on your... Read morePublished 15 months ago by Pedro Lopez
The book was a referral. Its worth more that whats written.
It gives a complete picture of business strategy and its focus.
The book gives you a good review of the main BSC concepts and good ideas to implement this way of thinking in your company. I want to learn more about this topic!Published 19 months ago by Felipe Saavedra
I don't see anything wrong with the book. It was supposed to be used, but the pages were still very stiff as if it had never been opened.Published 20 months ago by Taylor R. Meadows
Kaplan, R. S., & Norton, D. P. (1996). The balanced scorecard: Translating strategy into action. Boston, MA: Harvard Business School Press. Read more