Rolling up the sleeves
Earlier, we discussed how to describe the strategy, and how to measure it. With those two things, we’ve fulfilled the two required conditions to be able to measure the organization’s strategy. Time to roll up the sleeves and get to work!
Many strategic change projects fail
Now, the organization has to transition into deliberate action and the initiation and execution of strategic programs. Kaplan and Norton strongly believe in manifacturability. On paper, it all seems very logical. In reality, not nearly all strategic change projects succeed, not even all Balanced Scorecard implementation projects.
Strategy execution more important than quality
Research from the early 80s has shown that less than 10% of the technically adequately formulated strategies are implemented successfully (Kiechel, 1982). Another investigation among 275 managers proved that they think the capacity to successfully execute and manage the strategy is much more important than the quality of the strategy itself (Ernst & Young, 1998).
Management can’t focus the company
Kaplan and Norton also said that it’s better to have a less-than-great strategy that can be clearly communicated than the other way around. Kaplan and Norton have an explanation for the failed implementations. They presuppose that in the case of failure, management can’t focus the company’s activities. Management has to make sure that the organization is focused on its strategic goals. That’s where it often goes wrong.
That’s why Kaplan and Norton supplemented the Balanced Scorecard concept with five principles/steps. These serve as a foundation for the creation of a Strategy Focused Organization (2001):
- Translating strategy into operational goals.
- Designing the organization around the strategy to achieve synergy.
- Translating the strategy into daily activities.
- Strategy-forming is a continuous process.
- Initiating and mobilizing change through strong leadership.
Contact us for the right advice
Contact us freely for an appointment to discuss the possibilities for your organization with one of our implementation consultants.