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The Balanced Scorecard: Translating Strategy into Action
Books: Computers: Lotus Notes: Item 8
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The Balanced Scorecard: Translating Strategy into Actionby Robert S. Kaplan and David P. Norton
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52 of 55 people found the following review helpful: How Do You know if Your Organization Is Winning or Losing?, July 6, 2001 Reviewer:Robert Morris (Dallas, Texas) - I read this book when it was first published (1996) and recently re-read it. As Kaplan and Norton explain in their Preface, "the Balanced Scorecard evolved from an improved measurement system to an improved management system." The distinction is critically important to understanding this book as well as The Strategy-Focused Organization which they later wrote. Senior executives in various companies have used the Balanced Scorecard as the central organizing framework for important managerial processes such as individual and team goal setting, compensation, resource allocation, budgeting and planning, and strategic feedback and learning. When writing this book, it was the authors' hope that the observations they share would help more executives to launch and implement Balanced Scorecard programs in their organizations. The material is organized within two Parts, preceded by the excellent Preface and then two introductory chapters: "Measurement and Management in the Information Age" and "Why Does Business Need a Balanced Scorecard?" Logically, Part One examines measurement of business strategy; Part Two examines management of business strategy. Having read all of the 12 chapters, each concluded with a Summary of key points, readers are then provided with an Appendix: "Building a Balanced Scorecard." That process consists of a series of specific "tasks": (1) selection of the appropriate organizational unit, (2) identification of the SBU/corporate linkages, (3) completion of the first round of interviews during which key executives are briefed on the Balanced Scorecard program, (4) evaluation by the program's "architect" and other members of design team of feedback from various interviews, (5) conducting a "first round" workshop for the top management team, (6) conducting meetings during which the "architect" works with several subgroups, (7) conducting a "second round" workshop for members of the top management team, their direct subordinates, and an appropriate number of middle managers, (8) formulating the implementation plan, (9) conducting the "third round" workshop, and finally (10) Finalizing the implementation plan. Kaplan and Norton guide their reader through each stage of the process, suggesting all manner of strategies and tactics for consideration without inhibiting their reader from determining what is most appropriate for her or his own organization. Although decision-makers in larger organizations will derive substantial benefit from this book, it would be a mistake to assume that the Balanced Scorecard would not be appropriate to small-to-midsize organizations. On the contrary, it may be even more valuable to them because they have relatively fewer resources available; therefore, the consequences of a failed strategy have greater (in some instances fatal) impact. The two concepts of "balance" and "scorecard" are critically important. All organizations must formulate and then effectively manage those strategies which enable them to achieve an appropriate balance of various resources while taking full advantage of measurement devices by which to obtain relevant as well as accurate and timely data for their strategies' scoreboard. Kaplan and Norton obviously have all this in mind when suggesting, in the Appendix, "core" measures for finance (e.g. ROI/EVA), customer relationships (e.g. customer retention), and learning and growth (e.g. employee satisfaction). Those who share my high regard for this book are urged to read Kaplan and Norton's sequel to it, The Strategy-Focused Organization. It continues their rigorous excamination of what a Balanced Scoreboard can help all organizations to accomplish with effective management of a correct strategy.
From Publishers Weekly
As running a corporate?or government or not-for-profit?enterprise becomes increasingly complicated, more sophisticated approaches are needed to implement strategy and measure performance. Purely financial evaluations of performance, for example, no longer suffice in a world where intangible assets?relationships and capabilities?increasingly determine the prospects for success. Kaplan, a Harvard business School professor of accounting, and Norton, president of Renaissance Solutions, make a key contribution by describing and illustrating the balanced scorecard, a multidimensional approach to measuring corporate performance that incorporates both financial and non-financial factors. The concept of a balanced scorecard originated in a study group of 12 companies that met throughout 1990; since then, the authors have worked with several companies, including FMC Corporation, Brown & Root Energy Services, Mobil and CIGNA, to create scorecards and use them as a systematic means to implement new organizational strategy. Though still in the preliminary stages of development, balanced scorecards could represent the emergence of a new era of management sophistication, in which both the hard and soft variables of work life are taken into account in a rigorous, testable fashion. Kaplan and Norton provide an excellent, though dry, introduction to a new methodology of management.
Copyright 1996 Reed business Information, Inc.
From Library Journal
Kaplan (accounting, Harvard) and Norton, president of Renaissance Solutions Inc., created the "balanced scorecard" to assist businesses in moving from ideas to action, achieving long-term goals, and obtaining feedback about strategy. The balanced scorecard consists of four sections: clarifying and translating vision and strategy; communicating and linking strategic objectives and measures; planning, setting targets, and aligning strategic initiatives; and enhancing strategic feedback and learning. Because the writing is technically oriented and somewhat detailed, this work is geared toward scholars and high-level business planners. However, its clear organization makes reading and understanding the concepts much easier. Recommended for upper-level and graduate business students and senior practitioners in the strategic-planning field.?Randy Abbott, Univ. of Evansville Libs., Ind.
Copyright 1996 Reed business Information, Inc.
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