synergy and ensures that those linkages
actually occur.
Make strategy everyone’s
everyday job
To move strategy out of the boardroom
into the office and shop-floor and make
it ‘everyone’s everyday job’ is the pre-
eminent challenge for organizations
and this principle considers personal
scorecards and balanced pay-cheques’.
Make strategy a continual
process
Putting the Balanced Scorecard at the
heart of the organization’s management
system involves creating links from
strategy to budgets and also calls for a
robust learning process. An important
sub-component of this principle is
‘analytics and information systems’ (see
Appendix X regarding an RBPM software
solution that is architected according to
the Balanced Scorecard framework but
also integrates best risk management
practices).
Mobilize change through
executive leadership
Kaplan and Norton emphasize the make-
or-break influence of top management
and argues that if those at the top are not
energetic leaders of the process, change
will not take place.
Strategic diagnosis to
support strategy
One of the criticisms of strategy focused
organization that are premised on
balanced scorecard is that the balanced
scorecard is an operational tool and
must be supported by strategic diagnosis
tools. According to Kaplan and Norton
(2004), the balanced scorecard method
is a management technique that provides
a view of an organization from both
internal and external perspectives.
The
characteristic
of
the
Balanced
Synergy is the overarching goal of organiza-
tion design. Organizations consist of numerous
sectors, business units and specialized depart-
ments, each with its own strategy. For organi-
zational performance to become more than the
sum of its parts, individual strategies must be
linked and integrated. The corporation defines
the linkages expected to create synergy and en-
sures that those linkages actually occur.
Scorecard and its derivatives is the
presentation of a mixture of financial and
non-financial measures each compared to
a ‘target’ value.
The four main perspectives of the balanced
score card as presented by Kaplan and
Norton (2004), are Financial which
encourages the identification of a few
relevant high-level financial measures.
In particular, strategists are encouraged
to choose measures that answer the
question how do we look to shareholders?;
Customer: encourages the identification
of measures that answer the question how
do customers see us?; Internal Business
Processes: encourages the identification
of measures that answer the question
what must we excel at?; and Learning and
Growth that encourages the identification
of measures that answer the question how
can we continue to improve and create
value?
Strategic
diagnosis
consists
of
analyzing intentions and motivations
of organization leadership, skills and
strategic opportunities for organization
in the competitive context of global
environment. When these are integrated
with
opportunities
and
internal
capabilities, managers are able to identify
strategic organization potentialities.
Strategic diagnosis tools applied should
assist managers to analyze the context in
which the company operates, integrated
analysis of strengths and weaknesses of the
company compared to the opportunities
and threats of the environment, develop
critical success factors, analyze the
maturity of the business and competitive
position of the company as well as the
portfolio of products and business units
based on the company’s competitive
position and level of attractiveness of the
business for the company.
Managers should be able to cross-analyze
products and action markets to determine
growth opportunities by exploring the
possibility of crossover products
or
existing markets or create new ones, and
analyze competitive forces that influence
significantly the competitive dynamics
between firms in the same sector
They
should
drive
formalization
and deployment of strategy and its
representation and choose the indicators
(KPI’s) that will be used to measure
the strategy’s performance compared
to targets, and designing strategic risk
analysis models, strategic alignment
and cause-effect relationships between
strategic objectives.
Dr. Kellen Kiambati holds an MBA in
Strategic Management from the Kenya
Methodist University and a PhD in
Business Administration with a focus in
Strategic Management from JKUAT. She
is a member of the Institute of Human
Resource Management of Kenya. She can
be reached via: Kellenkiambati@gmail.
com.