- 05 Jul 2006
- Working Paper Summaries
Improving Corporate Governance with the Balanced Scorecard
The authors review the key roles of corporate boards and recommend a Balanced Scorecard approach to help boards work smarter, not harder. Kaplan and Nagel recommend a three-part Balanced Scorecard program: Part 1: An Enterprise Scorecard that includes enterprise-wide strategic objectives, performance measures, targets, and initiatives; Part 2: A Board Scorecard that defines and clarifies the strategic contributions and requirements of the board, and provides a tool to manage the board's performance; Part 3: Executive Scorecards, which define strategic contributions of top management and are used to select, evaluate, and reward senior executives. Key concepts include: Reforms such as Sarbanes-Oxley have increased the amount of work that boards need to do. A Balanced Scorecard approach can help boards use their limited time effectively. An enterprise strategy map and enterprise Balanced Scorecard should be the primary documents distributed to the board in advance of meetings. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Time-Driven Activity-Based Costing
Activity-based costing (ABC) has become popular in business writing and management circles. (An example of an activity would be process customer complaints.) However, calculating baselines for activities, developing the model, and retesting the model once it is implemented is time-consuming and costly. Kaplan and Anderson developed improvements in the process through what they call time-driven ABC. Time-driven ABC decreases the amount of data needed, and only requires estimates of two things: (1) the practical capacity of committed resources and their cost, and (2) unit times for performing transactional activities. Key concepts include: Building an accurate time-based algorithm in one facility will typically serve as a template that can be easily applied and customized to other plants, or even other companies in an industry. Time-driven ABC requires less time and resources to implement. At one company cited, it took two people two days per month to load, calculate, validate, and report findings, compared to the ten-person team spending over three weeks to maintain the previous (traditional ABC) model. Closed for comment; 0 Comments.
- 05 Jul 2006
- Working Paper Summaries
Creating the Office of Strategy Management
Organizations often fail to execute their strategy—failure rates may range as high as 60 to 90 percent. Successful companies align their key management processes for effective strategy execution. Creating a new corporate-unit level, the Office of Strategy Management (OSM), may help align management processes to strategy. The authors explain, among other topics, OSM core processes, desirable OSM processes, integrative processes, and positioning the OSM. Key concepts include: Strategy management is an emerging profession. Each organization must ask itself: What are we doing to make strategy management a core competency of our organization? Create an Office of Strategy Management, position it at the level of other senior corporate staff offices, and give it responsibility and authority for the nine key strategy management processes. Closed for comment; 0 Comments.
- 24 Apr 2006
- Research & Ideas
Managing Alignment as a Process
"Most organizations attempt to create synergy, but in a fragmented, uncoordinated way," say HBS professor Robert S. Kaplan and colleague David P. Norton. Their new book excerpted here, Alignment, tells how to see alignment as a management process. Closed for comment; 0 Comments.
- 26 Mar 2006
- Research & Ideas
The Office of Strategy Management
Many organizations suffer a disconnect between strategy formulation and its execution. The answer? HBS professor Robert S. Kaplan and colleague Andrew Pateman argue for the creation of a new corporate office. Closed for comment; 0 Comments.
- 09 Jan 2006
- Research & Ideas
When Benchmarks Don’t Work
Benchmarks have their virtues, but professor Robert S. Kaplan argues they should be saved for surveys of commoditized processes or services. From Balanced Scorecard Report. Closed for comment; 0 Comments.
- 08 Aug 2005
- Research & Ideas
A Balanced Scorecard Approach To Measure Customer Profitability
Happy customers are good, but profitable customers are much better. In this article, professor and Balanced Scorecard guru Robert S. Kaplan introduces BSC Customer Profitability Metrics. From Balanced Scorecard Report. Closed for comment; 0 Comments.
- 24 Jan 2005
- Research & Ideas
Rethinking Activity-Based Costing
Activity-based accounting looks great in the classroom, but too often fails in the field. In this Harvard Business Review excerpt, HBS professor Robert S. Kaplan along with Steven R. Anderson suggest a way around the obstacles. Closed for comment; 0 Comments.
- 30 Aug 2004
- Research & Ideas
Mapping Your Board’s Effectiveness
To be effective, board members must understand their company’s strategy. Professor Robert S. Kaplan offers methods for using the Balanced Scorecard and strategy maps to increase board power. From Strategy & Innovation. Closed for comment; 0 Comments.
- 02 Feb 2004
- Research & Ideas
Mapping Your Corporate Strategy
From the originators of the Balanced Scorecard system, Strategy Maps is a new book that explores how companies can best their competition. A Q&A with Robert S. Kaplan. Closed for comment; 0 Comments.
- 24 Nov 2003
- Research & Ideas
Boards and Corporate Governance: A Balanced Scorecard Approach
HBS professors Robert S. Kaplan and Krishna G. Palepu discuss a Balanced Scorecard approach to how companies can create shareholder value through more effective governance. Closed for comment; 0 Comments.
- 14 Jul 2003
- Research & Ideas
Keeping Your Balance With Customers
Using the Balanced Scorecard approach, Robert S. Kaplan, of Harvard Business School, and David P. Norton analyze the four essentials of customer management: customer selection, acquisition, retention, and growth. Closed for comment; 0 Comments.
- 19 May 2003
- Research & Ideas
Expensing Options Won’t Hurt High Tech
Will expensing stock options harm the competitiveness of start-ups? Not likely, say Zvi Bodie, Robert S. Kaplan, and Robert C. Merton in this Harvard Business Review excerpt. Closed for comment; 0 Comments.
- 23 Dec 2002
- Research & Ideas
Partnering and the Balanced Scorecard
Created in 1992, the Balanced Scorecard has become an effective tool for managing strategy. Now authors Robert S. Kaplan and David P. Norton propose using it to communicate values and vision to employees and partners. The payoff? Better strategic relationships with partners. Closed for comment; 0 Comments.
- 23 Oct 2000
- Research & Ideas
The Strategy-Focused Organization
In the ten years since it was introduced, Robert Kaplan's and David Norton's Balanced Scorecard has become not just a measurement tool but a means of putting strategy at the center of a company's key management processes and systems. Closed for comment; 0 Comments.
The Demise of Cost and Profit Centers
The Balanced Scorecard has proven to be a general and powerful performance management framework for units previously treated as profit and investment centers. The management control literature, however, identifies other organizational forms for decentralized units, including standard cost centers, revenue centers, and support units treated as discretionary expense centers. Starting from the example of a classic teaching case, Empire Glass Company, Kaplan explains how strategy maps and the Balanced Scorecard transform cost, revenue, and discretionary expense centers into strategic business units in their own right. Key concepts include: The foundation of management control systems has been enhanced by applying strategy maps and Balanced Scorecards to motivate, align, and evaluate the performance of diverse organizational units. The leading paradigm of organizational structure and control of just a generation ago—based on cost, profit, investment, revenue, and discretionary expense centers—is replaced by a framework in which every organizational unit can be considered a strategic business unit. Closed for comment; 0 Comments.