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The Balanced Scorecard: Translating Strategy into Action (Hardcover)
by Robert S. Kaplan, David P. Norton
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Management |
| Market price: ¥ 368.00
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A thought provoking method to achieving strategic alignment and an effective way to overcome strategic communications stalls. |
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Author: Robert S. Kaplan, David P. Norton
Publisher: Harvard Business School Press
Pub. in: September, 1996
ISBN: 0875846513
Pages: 322
Measurements: 9.6 x 6.4 x 1.2 inches
Origin of product: USA
Order code: BA00378
Other information: ISBN-13: 978-0875846514
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- Awards & Credential -
The Wall Street Journal Bestseller. |
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- MSL Picks -
The financial performance of an organization is essential for its success. Even non-profit organizations must deal in a sensible way with funds they receive.
In 1992, an article by Robert Kaplan and David Norton entitled "The Balanced Scorecard - Measures that Drive Performance" in the Harvard Business Review caused a lot of attention for their method, and led to their business bestseller, The Balanced Scorecard: Translating Strategy into Action, published in 1996.
In this book Robert S. Kaplan and David P. Norton develop and describe the Balanced Scorecard, a multidimensional approach to measuring corporate performance that incorporates both financial and non-financial factors.
The Balanced Scorecard method of Kaplan and Norton is a strategic approach and performance management system that enables organizations to translate a company's vision and strategy into implementation, working from 4 perspectives:
1. financial perspective,
2. customer perspective,
3. business process perspective,
4. learning and growth perspective.
- 1. Financial perspective: Kaplan and Norton do not disregard the traditional need for financial data. Timely and accurate funding data will always be a priority, and managers will do whatever necessary to provide it. In fact, often there is more than enough handling and processing of financial data. With the implementation of a corporate database, it is hoped that more of the processing can be centralized and automated. But the point is that the current emphasis on financials leads to the "unbalanced" situation with regard to other perspectives. There is perhaps a need to include additional financial-related data, such as risk assessment and cost-benefit data, in this category.
- 2. Customer perspective: recent management philosophy has shown an increasing realization of the importance of customer focus and customer satisfaction in any business. These are leading indicators: if customers are not satisfied, they will eventually find other suppliers that will meet their needs. Poor performance from this perspective is thus a leading indicator of future decline, even though the current financial picture may look good. In developing metrics for satisfaction, customers should be analyzed in terms of kinds of customers and the kinds of processes for which we are providing a product or service to those customer groups.
- 3. Business Process perspective refers to internal business processes. Metrics based on this perspective allow the managers to know how well their business is running, and whether its products and services conform to customer requirements (the mission). These metrics have to be carefully designed by those who know these processes most intimately. In addition to the strategic management process, two kinds of business processes may be identified: a) mission-oriented processes, and b) support processes. Mission-oriented processes are the special functions of government offices, and many unique problems are encountered in these processes. The support processes are more repetitive in nature, and hence easier to measure and benchmark using generic metrics.
- 4. Learning and Growth perspective includes employee training and corporate cultural attitudes related to both individual and corporate self-improvement. In a knowledge-worker organization, people are the main resource. In the current climate of rapid technological change, it is becoming necessary for knowledge workers to be in a continuous learning mode. Government agencies often find themselves unable to hire new technical workers and at the same time is showing a decline in training of existing employees. Kaplan and Norton emphasize that 'learning' is more than 'training'; it also includes things like mentors and tutors within the organization, as well as that ease of communication among workers that allows them to readily get help on a problem when it is needed. It also includes technological tools such as an Intranet.
The integration of these four perspectives into a graphical appealing picture have made the Balanced Scorecard method a very successful methodology within the Value Based Management philosophy.
In addition to this book you may want to consider the following books on the subject:
- Robert S. Kaplan:Alignment: Using the Balanced Scorecard to Create Corporate Synergies.
- Paul R. Niven: Balanced ScoreCard Step-by-Step: Maximizing Performance and Maintaining Results.
- Paul R. Niven: Balanced ScoreCard Step-by-Step for Government and Nonprofit Agencies.
- Nils-Göran Olve: Performance Drivers: A Practical Guide to Using the Balanced Scorecard.
- Robert S. Kaplan: The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment.
- Robert S. Kaplan: Strategy Maps: Converting Intangible Assets into Tangible Outcomes.
- Robert S. Kaplan: Putting the Balanced Scorecard to Work.
- Robert S. Kaplan: The Balanced Scorecard: Measures That Drive Performance.
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.
(From partly quoting David de Sousa, USA)
Target readers:
Executives, managers, entrepreneurs, government and non-profit leaders, corporate planners, professionals, academics, and MBAs.
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Robert S. Kaplan is the Arthur Lowes Dickinson Professor of Accounting at the Harvard Business School.
David P. Norton is the president of Renaissance Solutions, Inc. They are the authors of three seminal Harvard Business Review articles on the Balanced Scorecard.
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From Publisher
Here is the book-by the recognized architects of the Balanced Scorecard - that shows how managers can use this revolutionary tool to mobilize their people to fulfill the company's mission. More than just a measurement system, the Balanced Scorecard is a management system that can channel the energies, abilities, and specific knowledge held by people throughout the organization toward achieving long-term strategic goals.
Kaplan and Norton demonstrate how senior executives in industries such as banking, oil, insurance, and retailing are using the Balanced Scorecard both to guide current performance and to target future performance. They show how to use measures in four categories-financial performance, customer knowledge, internal business processes, and learning and growth-to align individual, organizational, and cross-departmental initiatives and to identify entirely new processes for meeting customer and shareholder objectives.
The authors also reveal how to use the Balanced Scorecard as a robust learning system for testing, gaining feedback on, and updating the organization's strategy. Finally, they walk through the steps that managers in any company can use to build their own Balanced Scorecard.
The Balanced Scorecard provides the management system for companies to invest in the long term-in customers, in employees, in new product development, and in systems-rather than managing the bottom line to pump up short-term earnings. It will change the way you measure and manage your business.
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| View all 8 comments |
Michael Hammer (Author of Reengineering the Corporation) (MSL quote), USA
<2007-01-02 00:00>
A landmark achievement. |
Richard E. Cavanaugh (President of The Conference Board), USA
<2007-01-02 00:00>
Kaplan and Norton's pioneering The Balanced Scorecard is required reading for those who seek to measure and manage successful business strategy. A landmark in the art of management. |
Manning (MSL quote), Australia
<2007-01-02 00:00>
Kaplan and Norton's book has become an industry standard, and deservedly so - effective implementation of a BSC is highly effective for an organization. The much-touted Six-Sigma program borrows very heavily from the ideas of Kaplan and Norton.
All of the other positive comments made by reviewers are valid, but my single criticism of this book is that it fails to adequately warn the reader of the tremendous technical issues that will arise when trying to actually source the data required. It's easy to put space for a statistic such as "customer satisfaction" into a scorecard, but actually determining that particular value implies an enormous amount of summarization of data from sales, complaints, returns, CRM and so on. Doing all of this requires many things to be accomplished beforehand, such as the standardization of business definitions (e.g. does each department use the same definition of "customer"? Without this consistency the statistic becomes meaningless).
If you are seriously investigating BSC as a management tool, you will need to get informed about Data Warehousing and Business Intelligence first. Without a firm foundation of low-level information integration and management, BSC just becomes another fluffy management gimmick. This is a shame, because it doesn't have to be that way - BSC can be incredibly valuable and efficient if implemented effectively.
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Michael Gering (MSL quote), South Africa
<2007-01-02 00:00>
Many organizations are in the process of implementing the “Balanced Scorecard,” yet some are struggling. Either they fail to implement the measures, or the measures fail to have the expected impact.
Organizations execute four 'mission critical' activities, for a scorecard to succeed. Each is more difficult than might appear and must be performed by a different part of the organization.
1. Articulating the strategy: Top management must articulate and disseminate the strategy. More than measuring success, a performance system communicates a strategy. Without a strategy, the performance measures become an "anything goes" exercise. "Anything goes in theory" means that "everything stays in practice."
2. Designing the measures: A core task team must design the measures to avoid uneconomic behavior. Poorly thought out measures create counter productive activity.
3. Operationalizing the measures: Once measures are defined, programmers operationalize and automate them.
Even revenue can be complicated in practice: When is it recorded, and what does it include. The task team may well find themselves getting what they asked for, and not what they wanted.
4. Getting the buy-in: Change management skills are needed to align the changes and create buy in. Dilbert cynically states that there are two steps to a great performance measurement system. 1) Gather information and 2) ignore it. For performance measurement to work, the system must be accepted, understood, and aligned to the reward.
The book, The Balanced Scorecard by Kaplan and Norton has become compulsory reading for middle management. It is very good, with the one weakness that it makes performance measurement look deceptively simple. |
View all 8 comments |
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