Alignment: Using the Balanced Scorecard to Create Corporate Synergies (Hardcover)

~ (Author), (Author) "ON FALL AND SPRING WEEKENDS, we often see eight-person shells racing up the Charles River separating Boston and Cambridge..." (more)
Key Phrases: enterprise value proposition, alignment checkpoint, business unit partnerships, Media General, Harvard Business Review, New Profit (more...)

Editorial Reviews

Product Description

Applying the Balanced Scorecard Approach to Corporate-Level Strategy

Most organizations consist of multiple business and support units, each populated by highly trained, experienced executives. But often the efforts of individual units are not coordinated, resulting in conflicts, lost opportunities, and diminished performance.

Robert S. Kaplan and David P. Norton argue that the responsibility for this critical alignment lies with corporate headquarters. In this book, the authors apply their revolutionary Balanced Scorecard management system to corporate-level strategy, revealing how highly successful enterprises achieve powerful synergies by explicitly defining corporate headquarters’ role in setting, coordinating, and overseeing organizational strategy.

Based on extensive field research in organizations worldwide, Alignment shows how companies can build an enterprise-level Strategy Map and Balanced Scorecard that clearly articulate the "enterprise value proposition": how the enterprise creates value above that achieved by individual business units operating alone. The book provides case studies, actionable frameworks, and sample scorecards that show how to align business and support units, boards of directors, and external partners with the corporate strategy and create a governance process that will ensure that alignment is sustained.

The next breakthrough in strategy execution from the field’s premier thinkers, Alignment shows how today’s companies can unlock unrealized value from enterprise synergies.

About the Author

Robert S. Kaplan is the Baker Foundation Professor at Harvard Business School. David P. Norton serves as President of the Balanced Scorecard Collaborative/Palladium.

Product Details

• Hardcover: 302 pages
• Publisher: Harvard Business Press; illustrated edition edition (April 24, 2006)
• Language: English
• ISBN-10: 1591396905
• ISBN-13: 978-1591396901
• Product Dimensions: 9.2 x 6.2 x 1.2 inches
• Shipping Weight: 1.4 pounds (View shipping rates and policies)
• Average Customer Review: 4.3 out of 5 stars  See all reviews (9 customer reviews)
• Amazon.com Sales Rank: #161,965 in Books (See Bestsellers in Books)

Customer Reviews

Most Helpful Customer Reviews

40 of 41 people found the following review helpful:

2.0 out of 5 stars A repeat of the other two books - little help for those who need alignment, May 10, 2006

By	M. McDonald (Chicago, IL United States) - See all my reviews (TOP 1000 REVIEWER)    (REAL NAME)

If you are a CIO, Head of HR, or other so called "support" function looking for help on how to align with the business, this is not the book for you.

My suggestion is to skip this book, or if you must check it out of the library or buy it used. The book you want is Kaplan and Norton's first book called "The Balanced Scorecard" which is very good and is just repeated in this book. Next I would purchase the HBR article on Strategy Maps (September 2000). Those two works cover all of what is in this book and they have a stronger implementation flavor.

Alignment is a persistent issue facing every organization and operating unit with the organization. This book does not provide the practical or actionable advice needed to give business leaders the tools and techniques need to make progress in this critical area.

If you want to know why please read on.

Kaplan and Norton are the undisputed masters of issues related to scorecards and their ideas in that area are used by leading organizations everywhere with great success. Unfortunately as they have tried to expand beyond scorecards there work in this area (this book and The Strategy-Focused Organization) have not come near the mark in my opinion.

Alignment is a critical issue in today's dynamic and changing environment. Unfortunately the authors approach alignment in a very simplistic way: create a strategy map, then create a scorecard and you will get alignment. Sorry but just using these two tools do not cut it to handle such a tough issue and this book shows it.

Like "The Strategy Focused Organization" Kaplan and Norton seek to use case studies to help illustrate their points. For that they are to be commended. However, the case studies they use are very shallow, read more like corporate press releases and product testimonials. That is a shame and a real weakness of this book as Alignment is a complex issue and simply saying 'we sat down created a Balanced Score Card and a Strategy Map and we were aligned' does not address the issues nor provide insight for the reader.

The reason for such a low score on this book is the lack of help it provides the people who most are in need of alignment CIOs, HR and to some extent finance. Kaplan and Norton dedicate Chapter 5 to "Aligning support functions" and right away you know the mindset they are applying.

For K and N, alignment is a process of completing their deliverables and they treat IT, HR, Finance and any other support function as "staffed with expert specialists whose culture is quite different from that of managers in line operating units. Consequently, support groups frequently become isolated from the line organization ... executives of business units accuse them of living in HQ based silos and being incapable of responding to local operating needs." (Page 120)

Their solution for IT, HR and Finance alignment puts these organizations back into the 1960's as they advise these functions to read the business strategy map and scorecard and then create your own - separate but not equal - scorecard based on the services you can provide. That works if all you want IT and HR to do is provide basic services, but if you want to gain competitive advantage, or if you are a CIO, HR or CFO who wants to link into and align with the business this approach puts you at arms length and something apart.

Kaplan and Norton should know better and more importantly I have to believe that there are case studies that do not treat IT, HR and Finance as support functions but integral parts of the business strategy. The fact that they could not find these cases where there is one strategy map that the whole company could align around, give the impression that they are looking at the issue of alignment with the wrong lens.

11 of 12 people found the following review helpful:

4.0 out of 5 stars Translate, cascade and align your strategies, March 23, 2006

By	Peter Leerskov "The Strategist, www.lace.dk" (Denmark) - See all my reviews (REAL NAME)

This book is about organizational alignment. It is the fourth in a series of thought-leading books on how to translate strategy into actions - via balanced scorecard, strategy maps, and the strategy-focused organization.

The authors start with a wonderful story:
Imagine an eight-person shell racing up the river populated by highly trained rowers, but each with different ideas of how to achieve success. But rowing at different speeds and in different directions could cause the shell to travel in circles and perhaps capsize. The winning team invariably rows in beautiful synchronism; each rower strokes powerfully but consistently with all the others, guided by a coxswain [corporate center], who has the responsibility for pacing and steering the course of action.

Unfortunately, many firms are like an uncoordinated shell. They consist of strong business units, each populated by highly trained, experienced and motivated executives. But the efforts of the individual businesses are not coordinated.

Unsurprisingly, the authors suggest that their four scorecard perspectives on financials, customers, processes, as well as growth/learning also could be used to create organizational alignment and also find synergies, e.g.
- FINANCIAL: acquiring and integrating other firms, monitoring and governance processes, skills in negotiating with external entities (capital providers, etc.)
- CUSTOMERS: leverage common customers (cross-sales), corporate brand, common customer value propositions across the world,
- PROCESSES: exploiting core competencies in product or production technologies, sourcing or distribution skills, etc.
- LEARNING AND GROWTH: Enhancing human capital thru excellent HR practices, leveraging a common technology, sharing best-practices and knowledge.

The book does not only focus on how to align the corporate-level and businesses, it also covers how to align towards support functions (finance, IT and HR), external business partners (customers, suppliers) and even the board.

Don't buy this book as your first on scorecards. It requires that you have read some of the previous published articles or books by the author team. However, if you are a balanced scorecard practitioner, then this book adds yet another dimension to our understanding of how to make scorecard systems work in an organization.

Being a corporate strategist, I can use most of this thinking in my day-to-day work - and I can highly recommend it to all other scorecard insiders.

If you're interested in Balanced Scorecard, you should obviously read the core by Kaplan and Norton - especially the "Strategy-Focused Organization". But I also recommend a very capable book by the Swedes Olve et al (2003) - "Making Scorecards Actionable: Balancing Strategy and Control" - that even includes some thinking on why balanced scorecards go wrong - and what to do about it. Paul Niven (2005) does the same in his "Balanced scorecard diagnostics".

If you're even more interested in performance measurement systems, then do also consider "Performance Prism" by Neely et al (2002) that takes performance systems to the next level. Personally, I don't believe they've designed balanced scorecard's successor, but they have many interesting perspectives on stakeholders, choice of measurements, and the relationship between cause and effect.

Peter Leerskov,
MSc in International Business (Marketing & Management) and Graduate Diploma in E-business

8 of 9 people found the following review helpful:

5.0 out of 5 stars Their most important book thus far...., June 7, 2006

By	Robert Morris (Dallas, Texas) - See all my reviews (TOP 50 REVIEWER)    (REAL NAME)

After their article "The Balanced Scorecard - Measures That Drive Performance" appeared in Harvard Business Review" (January-February, 1992), Kaplan and Norton co-authored four books in which they expand and fine-tune several of their core concepts about the Balanced Scorecard. What we have in this volume is a brilliant analysis of how to use the Balanced Scorecard to create corporate synergies. As they observe in the Preface, they have identified five key principles "for aligning an organization's management and measurement systems to strategy":

1. Mobilize change through executive leadership.
2. Translate strategy into operational terms.
3. Align the organization to the strategy.
4. Motivate to make strategy everyone's job.
5. Govern to make strategy a continual process.

When gathering the information needed to write this book, Kaplan and Norton rigorously examined more than 30 organizations which include Bank of Tokyo-Mitsubishi, Citizens Schools, Hilton, IBM, Lockheed Martin, Media General, and the U.S. Army. Note how different these organizations are in terms of their respective products and services, markets, and potentialities for aligning their management processes and systems to the given strategy. I assume that the diversity of the exemplary enterprises during Kaplan and Norton's selection process was deliberate because they are convinced - as am I - that if the core principles of the Balanced Scorecard are applied effectively, any organization (regardless of its size or nature) can create highly beneficial synergies by getting its management and measurement in proper alignment with its strategy. In this book, Kaplan and Norton explain how to do that. Obviously, it is difficult to achieve such alignment and even more difficult to sustain it. Although a cliché, it remains true that change is the only constant. Moreover, change seems to occur much more rapidly now than ever before. What is in proper alignment today may not be tomorrow...or by the end of today

Nothing within an organization's structure can be in proper balance unless and until it is in proper alignment. Hence the importance of prioritization and, especially, of proportionality (e.g. allocation of resources). Here is a brief excerpt from Chapter 10. "The Balanced Scorecard, since its introduction in 1992, has evolved into the centerpiece of a sophisticated system to manage the execution of strategy. The effectiveness of the approach is derived from two simple capabilities: (1) the ability to clearly describe strategy (the contribution of Strategy Maps) and (2) the ability to link strategy to the management system (the contribution of Balanced Scorecards). The net result is the ability to align all units, processes, and systems of an organization to its strategy." With this brief statement, Kaplan and Norton suggest the interdependence of strategy, alignment, and executive leadership.

In my opinion, this is the most important book written thus far by Kaplan and Norton. In it, they develop in much greater detail many of the same concepts they examined in previous books but they also share what they have learned over the years about devising, implementing, and then sustaining (while fine-tuning) the "sophisticated system" to which they refer in the excerpt just provided. Their collaborative thinking, as is also true of every organization they discuss, continues to be "a work in progress."