Baker Foundation Professor
Photo: Stuart Cahill
BOSTON — These days, successful companies seem to have a system for everything. From acquiring new customers to managing customer relationships, and from quality management to performance measurement, industry leaders have realized that having systematic processes in place reduces risk, prevents oversights, and assures the best chance of delivering results. Yet, despite this insight, most companies still haven't developed a system to manage their most important process: how to develop and execute their strategies.
In The Execution Premium: Linking Strategy Operations for Competitive Advantage (Harvard Business School Press), Harvard Business School Professor Robert Kaplan and David Norton, president of the Balanced Scorecard Collaborative, show that companies using a formal system for implementing strategy consistently outperform their peers. So why do so many companies still fail to operationalize their strategy? The authors argue that while many of the tools needed for effective strategy deployment already exist, no framework has been developed that links the various strategy implementation elements together.
In previous books like The Balanced Scorecard and The Strategy-Focused Organization, Kaplan and Norton showed readers how an emphasis on strategy can unite an organization and drive increased levels of performance. In The Execution Premium they bring together all their work to create a comprehensive new management system that companies can use to sustain world-class strategy execution. Their six-step process teaches readers how to:
- Develop strategy by clarifying goals and conducting strategic analysis;
- Plan strategy by selecting theme-based measures, targets, and initiatives, along with accountability for performance;
- Align organizational units and employees to strategy;
- Plan operations through priority setting and resource allocation;
- Monitor and learn from operations and strategy;
- Test and adapt strategy.
To oversee all these processes, the authors introduce a new organizational function, the Office of Strategy Management (OSM). The OSM serves as a kind of orchestra leader - coordinating activities across functions and business units and keeping everyone synchronized over time. The result is an organization that gains a real execution premium by being able to quickly and reliably execute its strategy.
"This superb text provides the long-sought link between strategic planning and implementation," said Dr. Gary Gottlieb, president of Brigham and Women's Hospital in Boston. "The use of strategy maps and the Balanced Scorecard in well-described cases demonstrates both the brilliance of the approach and the usefulness of these tools for even the most senior executive."
Robert S. Kaplan is a Baker Foundation Professor at Harvard Business School, a member of the Accounting Hall of Fame, among numerous other awards, and co-founder and chairman of the Balanced Scorecard Collaborative, Inc., a company dedicated to the worldwide awareness, use, enhancement, and integrity of the Balanced Scorecard as a value-added management process. He was on the faculty of the Graduate School of Industrial Administration of Carnegie Mellon University from 1968 to 1984, serving as dean from 1977 to 1983. He is also co-developer of activity-based costing. Kaplan has authored or co-authored twelve books (including The Strategy-Based Organization and Strategy Maps), fifteen Harvard Business Review articles, and more than 120 papers.
David P. Norton, who earned a doctorate in business administration from Harvard Business School in 1973, is founder and president of the Balanced Scorecard Collaborative. Previously, he was president of Renaissance Solutions, Inc., a consulting form he cofounded in 1992, and of Nolan, Norton & Company, where he spent seventeen years in the field of strategic performance management.