Managing Alliances with the Balanced Scorecard

Robert S. Kaplan; David P. Norton; Bjarne  Rugelsjoen

Article | Harvard Business Review

Managing Alliances with the Balanced Scorecard

by Robert S. Kaplan, David P. Norton and Bjarne Rugelsjoen

Abstract

The article addresses failures in strategic alliances and illustrates, via a detailed description of the successful strategic alliance between Solvay Pharmaceuticals Inc. and Quintiles company how the creation of a strategy map and Balanced Scorecard helps align the separate interests of alliance partners into a coherent joint strategy. These tools are then used to communicate the common vision to all alliance employees and establish a governance process that keeps everyone focused on achieving the alliance's strategic objectives.

Keywords: Alliances; Balanced Scorecard; Employees; Alignment; Corporate Governance; Interests; Management Practices and Processes; Goals and Objectives; Partners and Partnerships;

Format: Print

7 pages

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Citation:

Kaplan, Robert S., David P. Norton, and Bjarne Rugelsjoen. "Managing Alliances with the Balanced Scorecard." Harvard Business Review 88, nos. 1/2 (January–February 2010): 114–120.

Working Paper | HBS Working Paper Series | 2019

Intelligent Design of Inclusive Growth Strategies

Robert S. Kaplan, George Serafeim and Eduardo Tugendhat

Improving corporate engagement with society, as advocated in the Business Roundtable’s 2019 statement, should not be viewed as a zero-sum proposition where attention to new stakeholders detracts from delivering shareholder value. Corporate programs for sustainable and ethical sourcing practices, however, have fallen far short of solving the underlying causes of extreme poverty, extensive use of child labor, and threats to the environment and human health. We identify several causes to explain this disappointing shortfall in societal performance, including traditional company policies and incentives that inhibit the implementation of innovative, inclusive growth strategies. We propose the role for a new actor, a catalyst, to help companies forge new relationships with external funders, local intermediary companies, NGOs, and community leaders. The catalyst aligns the multiple stakeholders from multiple sectors into enduring, mutually beneficial relationships that produce more value than that currently produced when stakeholders connect only by transactional relationships. The catalyst attracts funding from public and private sources to invest in the new ecosystem, which can generate attractive financial returns while alleviating poverty and environmental degradation. Finally, the catalyst engages the multiple participants to collectively co-create explicit strategies and scorecards of metrics, which serve to motivate, create accountability, and enable an enduring governance model for a multi-stakeholder ecosystem.

Keywords: inclusion; sustainability; performance measures; Environmental Sustainability; Social Issues; Strategy; Governance; Corporate Social Responsibility and Impact; Business and Stakeholder Relations;

Citation:

Kaplan, Robert S., George Serafeim, and Eduardo Tugendhat. "Intelligent Design of Inclusive Growth Strategies." Harvard Business School Working Paper, No. 20-050, October 2019. View Details

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We applied a value (outcomes and cost) analysis to extracorporeal life support (ECLS), a relatively rare but very expensive ICU therapy with highly variable outcomes. To address the outcome component of the value approach, we created guidelines for ECLS delivery; to address the cost component, we applied time-driven activity-based costing to identify opportunities for more efficient care. We learned that patient and family preferences for more humane and sensitive end-of-life care, if respected, will lead to less intensive use of ICU resources. Patients will have outcomes concordant with their goals and preferences, and society incurs lower costs to help them achieve those preferences. Cost reduction can be achieved by increasing efficiencies in the delivery of care and minimizing care outside of locally developed appropriate use guidelines. Reducing ECLS demands on ICU resources allows these resources to be redeployed to patients who are more likely to benefit from them, which also helps the institution financially.

In 2016 the newly appointed surgeon general of the Navy launched a value-based health care pilot project at Naval Hospital Jacksonville to explore whether multidisciplinary care teams (known as integrated practice units, or IPUs) and measurement of outcomes could improve the readiness of active duty personnel and lower the cost of delivering care to them, their dependents, and local retirees. This article describes the formation of the project’s leadership structure; the selection of four conditions to be treated (low back pain, osteoarthritis, diabetes, and high-risk pregnancy); the creation of the care team for each condition; outcomes and costs measured; and the near-term changes in outcomes during the twelve-month pilot period. Patient outcomes improved for three of the four conditions. We describe factors that contributed to the project’s success. After the pilot concluded, the Navy combined the back pain and osteoarthritis IPUs into a single musculoskeletal clinical unit and established a similar IPU at another naval hospital and its clinics. The diabetes IPU was continued, but the high-risk pregnancy IPU was not. We offer several observations on the elements that were key to the success of the project, explore challenges and opportunities, and suggest that the pilot described here could be taken to greater scale in the Military Health System and elsewhere.

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Managing Alliances with the Balanced Scorecard

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