Introduction:
In “Alignment: Using the Balanced Scorecard to Create Corporate Synergies,” Robert S. Kaplan and David P. Norton present a comprehensive guide on how organizations can achieve strategic alignment and create synergies through the effective use of the Balanced Scorecard (BSC). The authors outline a framework that goes beyond traditional performance management, providing real-world examples and actionable insights. This summary captures the essence of the book by highlighting its major points, supported by specific actions and examples.

Major Point: Strategic alignment ensures that all components of an organization work harmoniously towards common goals.

Action: Conduct a strategy alignment workshop involving key stakeholders to map out how each unit’s goals and operations support the overall strategy.

Example: The book mentions Crown Castle International, which used the Balanced Scorecard to align its various units’ objectives, ensuring that the wireless infrastructure giant could effectively grow and manage its vast portfolio.

Major Point: The Balanced Scorecard consists of four perspectives – Financial, Customer, Internal Process, and Learning & Growth.

Action: Develop a Balanced Scorecard for your organization, ensuring each perspective is tailored to your strategic goals.

Example: Mobil North America Marketing and Refining Division used the four perspectives to shift from a financial-centric approach to a more comprehensive strategy, which resulted in improved financial performance and customer satisfaction.

Major Point: Successful alignment starts with a clear strategic foundation that includes mission, vision, and core values.

Action: Revisit and refine your company’s vision and mission statements, ensuring they accurately reflect your strategic goals and core values.

Example: Chemical Bank redefined its mission and vision statements to better align with its customer-centric strategy, which helped the bank improve its customer service and market share.

Major Point: To achieve alignment, the Balanced Scorecard needs to be cascaded down through all levels of the organization.

Action: Develop departmental and individual scorecards that align with the overall organizational strategy outlined in the central Balanced Scorecard.

Example: At the Royal Canadian Mounted Police, the Balanced Scorecard was cascaded from the national level down to individual departments, helping align officer activities with strategic objectives such as improving community safety.

Major Point: Linking individual and departmental objectives to the organization’s strategic objectives ensures that everyone is working towards the same goals.

Action: Use strategy maps to visually link departmental and individual objectives with the overall strategic objectives of the organization.

Example: The U.S. Army utilized strategy maps to ensure that each unit’s activities and objectives were directly linked to broader strategic priorities, which improved operational effectiveness.

Major Point: Aligning business units is essential for creating synergies and eliminating silos within the organization.

Action: Conduct regular inter-departmental meetings to identify and exploit synergies across business units.

Example: Siemens AG aligned its diverse business units by ensuring that each unit’s scorecard was closely linked to the corporate scorecard, which led to better resource allocation and project coordination.

Major Point: Effective leadership is crucial for driving and sustaining alignment within the organization.

Action: Ensure that top executives actively participate in alignment processes and communicate the strategic importance of alignment regularly.

Example: At CIGNA Property & Casualty, leadership’s commitment to the Balanced Scorecard was instrumental in the company’s turnaround, as leaders consistently reinforced the strategic objectives and alignment processes.

Major Point: Continuous communication and education about the Balanced Scorecard and strategic alignment are essential.

Action: Develop and implement a comprehensive communication plan that includes workshops, training sessions, and regular updates to keep employees informed and engaged.

Example: The City of Charlotte, NC, used extensive communication and training programs to educate its employees about the Balanced Scorecard, which helped in successful strategy execution at all levels of the municipal government.

Major Point: Regular measurement and tracking of performance against the Balanced Scorecard metrics are crucial for maintaining alignment.

Action: Establish a regular review process where performance data is analyzed, and necessary adjustments to strategies and operations are made based on the findings.

Example: The book discusses how Nova Scotia Power used performance tracking tied to their Balanced Scorecard metrics to make informed decisions, improving operational efficiency and customer service.

Major Point: Aligning incentives and rewards with the Balanced Scorecard metrics ensures that employees are motivated to achieve strategic goals.

Action: Design incentive programs that reward employees based on their contribution to the Balanced Scorecard objectives.

Example: DuPont Safety, Health, and Environmental Management used incentive programs linked to their Balanced Scorecard to reduce workplace incidents and improve overall safety performance.

Major Point: Resistance to change is a natural response; addressing it effectively is key to successful alignment.

Action: Create change management strategies that include stakeholder engagement, addressing concerns, and showcasing quick wins to build momentum.

Example: The book cites Federal Aviation Administration’s (FAA) experience in overcoming initial resistance by involving employees in the planning process and demonstrating early successes from using the Balanced Scorecard.

Major Point: Sustaining alignment over time requires commitment and continuous improvement.

Action: Implement a continuous improvement framework that regularly evaluates and updates the Balanced Scorecard to reflect changing business environments.

Example: Ricoh Europe sustained alignment by continuously refining its Balanced Scorecard and strategic objectives in response to market changes, ensuring long-term strategic success.

“Alignment: Using the Balanced Scorecard to Create Corporate Synergies” by Kaplan & Norton is a comprehensive guide that emphasizes the importance of strategic alignment for organizational success. By leveraging the Balanced Scorecard framework, organizations can ensure that all levels and units are working towards common goals, thus creating synergies and enhancing overall performance. The book provides actionable insights and examples from real-world organizations, illustrating how the principles of alignment and performance management can be effectively applied.

Key Actions for Implementing Book’s Advice:
1. Conduct strategy alignment workshops.
2. Develop and cascade the Balanced Scorecard.
3. Use strategy maps for linking objectives.
4. Organize inter-departmental meetings.
5. Engage leadership in alignment processes.
6. Implement comprehensive communication plans.
7. Establish regular review processes.
8. Design incentive programs aligned with strategic goals.
9. Develop change management strategies.
10. Embrace continuous improvement frameworks.

By integrating these practices, organizations can achieve a higher degree of alignment, fostering an environment where collaboration flourishes and strategic objectives are consistently met.