As a follow-up to their first book, The Balanced Scorecard, Robert Kaplan and David Norton recently published The Strategy-Focused Organization,
describing a new organizational form that has emerged. They observed organizations that had vision, strategy and resource allocation flowing down from the top;
and implementation, innovation, feedback and learning flowing back up from the front lines and back offices.
Although strategy formulation continues to be important, the ability to execute strategy can be more important then the strategy itself.
The strategy-focused organization has three distinct dimensions:
1. Strategy
Strategy is the central organizational agenda
2. Focus
Incredible focus is created by aligning every resource and activity in the organization to the strategy
3. Organization
All employees are mobilized to act in fundamentally different ways
Kaplan and Norton have analyzed organizations that have achieved strategic focus and alignment and identified five common principles:
Principle One: Translate the strategy to operational terms
Principle Two: Align the organization to the strategy
Principle Three: Make strategy everyone’s job
Principle Four: Make strategy a continual process
Principle Five: Mobilize change through executive leadership
Kaplan and Norton also describe the use of a strategy map to help organizations see their strategies in a cohesive, integrated and systematic way. Strategy
does not stand alone; it is a step in a management process. Strategy moves an organization from a mission statement to work performed by frontline staff. The mission
must be translated so the actions of individuals are aligned and supportive of the mission.
The mission is a starting point¾it defines why an organization exists. The mission and core values remain fairly stable over time. The vision describes the desired
future state. Strategy is developed and evolves over time to meet the changing conditions of the external environment.
