7.4. Structured Processes for Managing Strategy Implementation
In addition to the aforementioned method of a more or less structured but also intuitive strategy implementation process (suitable particularly for smaller companies), an entire range of sophisticated, structured tools for managing strategy implementation can be utilized – amongst the more popular and fast-growing is the Balanced Scorecard method.
Balanced Scorecard (BSC)
The Balanced Scorecard is a widely-used tool for monitoring and implementing strategies as well as implementing a strategic management system within the company, developed by David P. Norton and Roberta S. Kaplan (Norton, Kaplan, 1993). 
It involves systematically translating the company vision and strategies into a comprehensive set of performance indicators (i.e. Scorecard), which will serve as the basis for the company’s implementation and assessment of strategy performance. The performance indicators should be set using a four perspective approach (four basic aspects of business):
-
Financial –a set of performance indicators which the company monitors, it should provide a measurable representation of the financial impact of the company’s realized activities as a part of the given strategy.
-
Customer – the company should define performance indicators and monitor performance for its primary customer segments.
-
Internal Efficiency – the company should measure or assess the performance of basic business processes (aspects), which serve as the backbone of the company’s competitive advantage.
-
Innovation and Learning – the company should define indicators for measuring and assessing its long-term ability to learn and grow
On the basis of these indicators, the company can monitor and assess short-term as well as long-term performance.
The table below offers several examples of how to formulate a strategy using the four perspective approach (see: above) by dividing it into operational goals (general goals, for now) and performance indicators. These are later further developed and arranged in sequential order (their planned development during the strategic period).
| Financial Perspective | Customer Perspective | ||
| Goals | Assessment Methods | Goals | Assessment Methods |
| Survive | Cash flow | New products | Percentage of sales from new products |
| Succeed | Quarterly sales growth | Quality of Distribution | Delivering products to customers on time |
| Thrive | Increase in market share and return of investments (ROE) | Partnership with Customers | Amount of newly created joint projects with customers |
| Internal Efficiency | Innovation and Learning | ||
| Goals | Assessment Methods | Goals | Assessment Methods |
| Excellent production |
Rate of production from entry to product delivery Unit cost |
Technological leadership | Time required for developing a new generation of the product XY |
| Product launch | Comparing number of the company’s newly launched products with the competition | ||
Examples of Developing the Corporate Strategy into Goals (adapted from Norton and Kaplan, 1992)
The purpose and objective of the Balance Scorecard, as well as most structured implementation methods and processes is, apart from the actual strategy implementation, attaining the monitored goals, eliminating strategy implementation obstacles such as: unfamiliarity with the monitored strategies and goals, lack of cohesion between goals and plans and specific performance indicators, personal obstacles, lack of knowledge, fear of the unknown, but also obstacles found in management, lack of cohesion between resources and given strategies etc.
Unfortunately, most companies face the dilemma that the further apart employees are from management, the less involved they are in the strategy creation process, and the more threatened they feel by the new strategy. Companies should then work on building trust, implementing strategies and involving all employees in the strategy creation process, in order to ensure successful strategy implementation.
