MasterClass with the creator of balanced scorecard - Prof. Kaplan- @Hotel Mulia Jakarta/Indonesia, 18 January 2013. THE SECRET TO SUCCESSFUL STRATEGY EXECUTION"

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MASTERCLASS WORSHOP
W/ ROBERT S. KAPLAN
Hotel Mulia Jakarta
18 Januari 2013
Executing Strategy:
Senior Executives’ #1 Issue
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Most organizations have difficulty
executing their strategies
Our Research Identified Four Barriers to
Strategy Execution
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The Kaplan-Norton six-stage closed loop
management system for Strategy Execution
A Strategy Map and Balanced Scorecard provides the
foundation for a new strategy execution system
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Balanced Scorecard Terminology
Initiatives Are Selected to Help Close the
Performance Gap
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Initiative Mapping Grid Example
Alignment Framework
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A Cascading Approach Needs to Be Established
Before Aligning Individuals to the Balanced Scorecard
Align employees to the strategy: Four HR
processes
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Communicate “seven times seven different
ways” to make strategy everyone’s job
• Personal relevance brings the strategy to life
• Sustained communication uses different channels to get
the message across
• Leadership meetings
• CEO random visits to employees
• Quarterly Letter
• Learning lunches & informal discussions
• Intranet
• Working groups facilitated by HR
• Staff briefings
Dashboards articulate the critical link between strategy
management and operations management
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Operational Review Meetings:
Role for KPI Dashboards
• Frequent (daily, twice weekly, weekly)
• Departmental and functional
personnel
• Identify and solve operational
problems (late deliveries,
equipment downtime, supplier
problems)
• Promote continuous
improvement (better, faster,
cheaper)
Convene a Separate (Monthly) Strategy
Review Meeting
• Role for Balanced Scorecard and Time-Driven
ABC Reports
• Focus on the performance of objectives NOT
measures
• Why did we miss the target?
• What correcting actions should we consider?
• Are initiatives on schedule?
• Do you need more resources?
• Would an multi-functional task force help?
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Executives Monitor and Adapt the Strategy at
Monthly and Annual Strategy Review Meetings
Why do organizations fail to get results
from their Balanced Scorecard programs?
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BSC at VW Do Brasil
A Continous Processes
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Strategy Map: 15 Objectives
KPI : 44 Measures
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Broad approach for strategy execution
Act to Win Program
Mascot
Media
Learning Map -Rally Act to Win
Recognition Program
Strategy execution focus:
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Mascot to communicate the strategy
Several medias to achieve all levels
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The monitor plays a 70 second tutorial about
some aspect of the VW do Brasil strategy
Learning Map – Rally act to win
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Input Process Ouput OUTCOME
Recognition Program @Video
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Palladium Balanced Scorecard Hall of Fame for
Executing Strategy® By Industry 2000-2011
Strategy-Focused (Hall of Fame) Organizations
Use Five Strategy Execution Principles
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© 2012 David Norton and Palladium Group, Inc.
Managing strategy is managing change
Principle 1:
Mobilize Change Through
Executive Leadership
1.1 Leaders drive strategy execution
1.2 Executives make the case for change
1.3 Well articulated strategy exists
1.4 Leaders reinforce strategic priorities
1.5 Office of Strategy Management
established
“Execution is the most unappreciated skill of an effective
business leader”
Lou Gerstner , Former CEO, IBM
You can’t manage what you can’t describe.
Management Best Practice
Principle 2:
Translate Strategy
to Operational Terms
2.1 Strategy translated to strategy map
2.2 Strategy described
in Balanced Scorecard
2.3 Targets identified for all measures
2.4 Strategic initiatives rationalized
2.5 Accountability assigned
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© 2012 David Norton and Palladium Group, Inc.
Making the whole greater than the sum of
the parts. Management Best Practice
Principle 3:
Align the Organization to the
Strategy
3.1 Corporate role defined
3.2 Enterprise scorecard guides
business units
3.3 Business unit scorecards guide
support units
3.4 Scorecards align suppliers and/or
customers
3.5 Scorecards align Board of Directors
© 2012 David Norton and Palladium Group, Inc.
Strategy is formulated at the top and
executed from the bottom.
Principle 4:
Make Strategy Everyone’s Job
4.1 Strategic awareness created
4.2 Personal goals aligned
4.3 Personal incentives aligned
4.4 Competency development aligned
“A real and revolutionary opportunity lies in studying and
assessing how well-prepared a company’s people, systems and
culture are to carry out its strategy.”
Tom Stewart, Editor, Harvard Business Review
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© 2012 David Norton and Palladium Group, Inc.
To make strategy management sustainable, strategy
must be imbedded in the governance process
Principle 5:
Make Strategy a Continual
THE EXECUTION Process
PREMIUM Resource Management
5.1 Budget is linked to the strategy
5.2 Planning for HR/IT linked to strategy
5.3 Portfolio of strategic initiatives linked
to themes
Key Process Management
5.4 Process improvement linked to strategy
5.5 Best practice sharing in place
Learning and Control
5.6 Strategy reviewed and adapted on a regular
basis
5.7 Data and analytics guide strategy
Upps
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