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Drs. Kaplan and Norton recently shared with us the future of the most powerful management concept of the past 75 years (according to Harvard Business School). As published in the CGMA inaugural issue a few days ago, the gurus lay out five key guidelines for this framework in the future:
1. Collaborate with external constituents, such as key suppliers, customers and alliance partners, to develop a strategy map that describes and communicates the strategic relationship; once developed, the map and scorecard are used to govern and guide the relationship.
2. Realize that cities and provinces, and even nations, around the world are using our framework for describing and communicating strategies for competitive advantage, and then successfully implementing their visions with our strategy execution system.
3. Use the strategy map as a jumping-off point for risk management, especially the identification and management of strategic risks.
4. Use the strategy map as a central change management tool.
5. Expand the role for analytics in the strategy execution system.
Read more at:
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
Decision Making,
ESM General Information,
Initiative Management,
Innovation,
Operational Reporting,
Reporting,
Risk Management,
Strategy Maps,
Sustainability
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Posted
2/8/12
@ 2:48 PM
by ESM Team ESM Team
Now that the Execution Premium book by Drs. Kaplan and Norton has been out in the market for a number of years, let's take a look at the benefits that can be realized through the XPP implementation in your organizaiton. Let's take it a couple stages at a time. Stage 1 and 2 looked at Develop the Strategy and Translate the Strategy. Now let's look at stages 3 and 4: Align the Organization With the Strategy and 5: Plan Operations. In these stages, the strategy has been clarified with scorecards and strategy maps at the enterprise level so now they need to be cascaded down into the business and support areas to ensure vertical alignment. Individuals might employ personal Balanced Scorecards and development plans to link the performance review process with the strategy. A communication program around the strategy is also paramount. The organization can begin to link strategy to key processes, driver models, and dashboards. Rolling forecasts and dynamic resource allocation are often found around the operational planning step.
STAGE 3: ALIGN THE ORGANIZATION WITH THE STRATEGY
- Defines the corporate role so that organizational units receive strategic guidance & direction
- Cascades strategy maps and scorecards to ensure organizational alignment to the strategy
- Leverages synergies between corporate, SBU, shared services, and other units to ensure alignment
- Communicates the strategy so that everyone understands his/her role in executing it
- Aligns team and individual goals and incentives to ensure the behavioral changes required for success
STAGE 4: PLAN OPERATIONS
- Identifies critical processes required to execute the strategy
- Establishes cross-functional business teams to drive performance across organizational boundaries
- Develops rolling forecasts and dynamic resource allocation to link strategy and operations
- Implements driver based planning to identify the critical levers of performance
- Creates operational dashboards that identify the key performance indicators that drive performance
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
Decision Making,
ESM Development Team,
ESM Features,
ESM General Information,
ESM Tips and Tricks,
Initiative Management,
Innovation,
Operational Reporting,
Personal Balanced Scorecard,
Reporting,
Risk Management,
Software as a Service,
Strategy Maps,
Sustainability
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Posted
9/7/11
@ 2:25 PM
by ESM Team ESM Team
The ESM team is hard at work innovating, designing and building ESM 6. This effort began in February 2010 and will continue through to Beta launch in early 2012. Through our recent surveys, direct client requests, and guidance from Drs. Kaplan and Norton and Palladium’s strategy consulting experts, we’ve compiled over 200 potential enhancements to include in this release.
As our developers share these new enhancements with the larger ESM team, we get more and more excited about where the ESM community is pushing the application. After all, it is you, the client, who’s advancing our application as you use it in your organization and provide us with feedback.
Some of the latest features to be built include automatic status indicator roll up across the scorecard. For example, milestone performance status indicator can impact the overall initiative status indicator, which in turn impacts objective performance status indicator. Objective status indicators can also automatically set based off of cascaded objectives and underlying measures. Measure can be automatically set by either data roll up or status color roll up. Objectives then roll up into perspectives and themes and then ultimately into an overall scorecard performance. It will be up to you if you activate this feature and just how far you want automatic status color setting to go in your organization.
We’ve also seen a new measure charting interface, allowing for unlimited data series, data calculations between columns, and multiple charts that can be displayed against the same measure data set. We will enable much more complex data roll up since different underlying measure series can feed into various higher level measures. For example, historically ESM required final calculated numbers such as a target, actual, variance, and forecast. With ESM 6, if desired, those raw data calculations can be done right in ESM or sourced in from data sources or data bases. We will also enable period groups for month to date, quarter to date and year to date summary series. Our measure charting enhancements should remove any restrictions users have felt in the past with complex measure calculations, roll up, and visual charting.
As we continue our development efforts we look forward to sharing our development efforts with you.
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I just came across an excellent account of the Balanced Scorecard effort undergone at the Royal Botanic Garden Edinburgh. In this paper, BSC champion and strategy director, Alasdair Macnab, along with Chris Carr and Falconer Michell from University of Edinburgh tell the implementation story. They focus their research on how the Balanced Scorecard approach can be successfully adopted for nonprofit businesses. The team also reviews why the Executive Strategy Manager was selected as the preferred solution and how it streamlined the data reporting and presentation while providing leadership and employees froma cross the organization critical line of sight into the strategy.
Key findings cited from the paper include:
Just as strategies are specific to an organisation, the balanced scorecard (BSC)/strategy map can and should be adapted to suit an individual organisation to leverage the full power of the BSC system.
• The effort and commitment required from senior management involved in transforming strategy management processes should not be underestimated as individuals/departments will become more accountable for their actions, particularly in the public sector, and resistance to change may be experienced as a consequence.
• If an effective costing system is developed, such as the one described in this report, management will see how their staff are directing their efforts, particularly important in knowledge based organisations.
• With their intimate knowledge of the organisation, the management accountant is well placed to become very involved or direct the transformation process to manage strategy execution leading to improved effectiveness/profitability of the organisation. In this way the management accountant becomes more of a strategic partner to the business.
• The research relates primarily to the practitioner who should find it helpful as the work is based on research subject to academic rigour but is translated into a pragmatic approach via the case study; thereby demonstrating its usefulness to a real organisation.
See:” Implementation of the balanced scorecard and an alternative costing system at the Royal Botanic Garden Edinburgh,” available at the following link:
Access the full report here
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Balanced Scorecard,
BSC Hall of Fame,
Business Leadership,
Client Success,
Competitive Advantage,
Decision Making,
ESM Development Team,
ESM Features,
ESM General Information,
ESM Tips and Tricks,
Initiative Management,
Operational Reporting,
Reporting,
Risk Management,
Software as a Service,
Strategy Maps,
Sustainability
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Posted
7/22/10
@ 11:43 AM
by ESM Team ESM Team
In the July-August 2008 BSR, Frigo and Barrows' publication indicated that strategy mapping can be used for competitor analysis. The strategy map provides a holistic view of of how operations are linked to organization strategy. Experts in competitive intelligence, Fuld and Chodnowsky, drive this idea further by proposing that the Kaplan-Norton Execution Premium Process (XPP) framework can be utlized in helping organizations gain competitive intelligence. The July-August 2010 BSR article, "Mirror, Mirror: How to Enhance the Execution Premium Process with Competitive Intelligence", Fuld and Chodnowsky propose the concept of mirror strategy maps.
By creating a mirror strategy map of the competition, businesses can acquire the acumen to increase their competitive advantage. Before analyzing the competitor, an external analysis must be conducted to develop a greater understanding of the market and its future direction. For instance, businesses may use the PESTEL (political, economic, social, technological, environmental, and legal) analysis to study the market landscape. Furthermore, an in-depth analysis of industry-specific areas helps the organization generate information on the competition. Researching these areas drives the creation of the mirror strategy map.
When creating the mirror strategy map, analysis of the competition is completed at the operational and strategic level. At the operational level, competitors can be analyzed through strategic measures, such as KPIs (key performance indicators). Benchmarking serves as an important tool in creating the mirror strategy map, by explaining the differences and gaps between the company and its rivals. Additionally, businesses must look at operational and strategic risks. Companies can monitor their operational risks through established key risk indicators (KRIs)-- particular thresholds where the market or competitors pose a threat. At the micro level, studying the KPIs can indicate any potential strategic risks. Strategic risks are also monitored in the overall in market data, which can pinpoint areas of growth and potential threats.
To learn how to fully execute the XPP process in gaining competitive intelligence, please navigate to the BSC Library in My ESM.
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The energy at the EMEA Summit held in Madrid this week was electric. Over 200 delegates were in attendance to hear the latest and greatest around the Execution Premium Process. The Summit kicked off with Santander’s Growth Story, from key note speaker Mr Juan R. Inciarte, Executive Board Member and Head of Strategy, Grupo Santander. An essential component to Santander’s growth was their risk management policy and ability to prepare for and obtain opportunity at the appropriate times. Santander’s Growth Story set the tone of the Summit and highlighted what would be a key theme throughout the sessions: risk management. Dr. Kaplan described a better process to manage an organization’s risk; a scorecard devoted to scorecard management to better facilitate risk decision making and better leverage an organization’s assets. Although I was unable to sit in on the full discussion around risk management, it was evident delegates were energized by this topic and left the session fueled with ideas.
For more information about Risk Management navigate to the Strategy Execution Library found in the ESM.
