Our Blog

Managing Strategy and the Balanced Scorecard Framework

Posted July 30, 2012 4:11 PM by Ted Jackson

One of my favorite clients forwarded me an article from the McKinsey Quarterly last week called "Managing the Strategy Journey." He said that this article flowed nicely into what they were doing (with our help) with the Balanced Scorecard framework. The premise of the article is that you need to have regular strategy dialog at the senior leadership level.

I completely agree with the premise of this article, and I think the authors Chris Bradley, Lowell Bryan, and Sven Smit have some really nice points throughout. The authors propose a process of periodically reviewing corporate aspirations, creating a process of formulating strategic initiatives, and integrating the initiatives execution into the financial management of the organization. This sounds like consultant-speak, but they did a good job of explaining this over the course of the article.

As I read it, I found myself wondering, how do they know that the corporate aspirations are still relevant, and what guides them to create particular strategic initiatives? To me, this question was left a unanswered in the article. What I think would be particularly helpful to the organization undergoing change in the article would be to have a strategy management framework, or the Balanced Scorecard, as a reference to challenge their assumptions.

In this first step, we have helped many organizations go through a strategic visioning process by conducting a SWOT analysis and creating a change agenda. We validate or refine the vision and mission and ultimately help create a strategy map as a key framework to express the strategy. Objective statements contain the key assumptions of the strategy.

In the second step, we help organizations develop measures and targets for their strategy. If you have some leading and lagging indicators of performance, you will have an early warning system to let you know if your strategic assumptions are still valid.

The authors then argue that the strategic initiatives need to be integrated with the financial planning and budgeting process. I completely agree, but I think there is more to it than that. You must also integrate your HR and customer management processes with your strategy as well. When strategy is at the center of the management process (not financial planning), you can turn the direction of a large company much faster than you can otherwise.

This is a really nice article by Chris Bradley, Lowell Bryan, and Sven Smit, and I think it will prove particularly relevant to those organizations that have a solid strategy management process in place.

The actual title of the article is "Managing the Strategy Journey" rather than "Making." The direct web reference is https://www.mckinseyquarterly.com/Managing_the_str...
# Posted By Eric Rinehart | 9/11/12 8:16 PM
Eric, Thanks for your comments, I made the changes in the original post. - Ted
# Posted By Ted | 9/12/12 7:13 AM
add comment »