Posted on August 16, 2012 by

Five principles for creating a strategy-focused organization

Principle 1: Translate the strategy into operational terms

This principle comprises two sub-components: Strategy Maps and Balanced Scorecards that together describe the strategy and its implementation. It is by translating strategy into the logical architecture of a Strategy Map and a Balanced Scorecard that organizations create a common, understandable point of reference for everyone.

Principle 2: Align the organization to the strategy

Synergy is the overarching goal of organization design. Organizations consist of numerous sectors, business units and specialized departments, each with its own strategy. For organizational 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 ensures that those linkages actually occur.

Principle 3: 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’.

Principle 4: 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).

Principle 5: Mobilize change through executive leadership

Kaplan and Norton emphasize the make-or-break influence of top management: “If those at the top are not energetic leaders of the process, change will not take place.” Simply, if the CEO does not want the scorecard then don’t try to do it, the scorecard effort will fail.