Alignment: Using the Balanced Scorecard to Create Corporate Synergies

It was a great book that help me to develop business strategy and align the resources including performance tracking.

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I ordered this for my boss. He said it gave him some direction for a project he is working on.

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 No

Alignment is a superb addition to the remarkable series written by Professor Robert S. Kaplan and Dr. David P. Norton. If you have not yet read Strategy Maps, The Balanced Scorecard and The Strategy-Focused Organization, you should begin with those books before reading this one. With each book in the series, you'll find out more about how to create and use balanced scorecards . . . and your organization will prosper because of it. Leaders have always found it much easier to formulate strategy than to turn strategies into accomplishments. As the authors note, many such organizations are like an uncoordinated 8-person rowing shell than a championship team. In studies of the Balanced Scorecard Hall of Fame organizations, the authors learned that organizational alignment is a more important factor than mobilization, strategic translation, employee motivation and governance in achieving superior results during execution. The authors identify eight essential check points for successful organizational alignment: 1. An enterprise value proposition (to lead strategic guidelines) 2. Board and shareholder alignment (to approve, review and monitor strategy) 3. Coordination between the corporate offices and the corporate support units (by creating corporate policies) 4. Coordination between the corporate office and the business units (business unit strategy matching the corporate direction) 5. Coordination between the business units and the support units (to create appropriate functional strategies) 6. Alignment between business units and their customers (an on-going to and fro) 7. Alignment among business support teams and their suppliers and external partners (to share problems and solutions) 8. Company support coordination (among the corporate support people and the business support activities) To get a sense of the whole process, be sure to turn to figure 9-1. The great strength of the book comes, however, in its many examples and case studies involving organizations like Aktira, Bank of Tokyo-Mitsubishi, Citizen Schools, City of Brisbane, DuPont Engineering Polymers, Handleman, Hilton Hotels, IBM Leasing, Ingersoll Rand, KeyCorp, Lockheed Martin Enterprise Information Systems, Marriott Vacation Club, MDS, Metalcraft (disguised name), Media General, New Profit Inc., Royal Canadian Mounted Police, Salmon recovery in Washington State, Sport-Man, Inc. Tiger Textiles (disguised name), and the U.S. Army. Bravo! Don't miss this book.