The Strategy-Focused Organization

by Robert S. Kaplan and David P. Norton
(Harvard Business School Press)

Following the success of their 1996 bestseller, The Balanced Scorecard, Robert Kaplan and David Norton have published a new book based on their analysis of some two hundred organizations that have implemented balanced scorecards, the performance management system that the pair developed in 1992. In The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment, the authors delve into how successful businesses have taken their groundbreaking tool to the next level.

Kaplan, the Marvin Bower Professor of Leadership Development at HBS, and Norton (DBA '73), president of the Balanced Scorecard Collaborative, Inc., found that the diverse companies that used the balanced scorecard framework built new management systems that had many things in common. Each of the successful organizations they studied, including Mobil, CIGNA, and Duke Children's Hospital, used the balanced scorecard to align and focus all resources on strategy. The authors document how executives institutionalized the focus on strategy by adapting their organizations' culture, structures, and management systems.

Kaplan and Norton outline five requirements for building a strategy-focused organization: translating strategy to operational terms, aligning the organization to the strategy, making strategy part of everyone's job, managing strategy as a continual process, and mobilizing change through strong leadership.

The Strategy-Focused Organization also introduces a new framework called the strategy map. By analyzing hundreds of scorecards over the last decade, Kaplan and Norton have mapped the patterns that have repeatedly emerged into generic templates that allow companies to describe their strategy clearly and move on to what really matters — making it work.

"In today's business environment, strategy is more important than ever," write the authors. "This book shows how leaders can shape their own companies and meet the challenges and reap the rewards of a new competitive era."

Breaking the Code of Change

Edited by Michael Beer and Nitin Nohria
(Harvard Business School Press)

With the restructuring and upheaval that has characterized life in the corporate world over the last two decades, the ability to anticipate and respond to variable and uncertain business conditions has become an essential CEO survival skill. "The challenge of change has given rise to a CEO labor market that places a premium on a person's track record in leading change," write HBS professors Michael Beer and Nitin Nohria, editors of a new book of essays titled Breaking the Code of Change. Despite its importance, Beer and Nohria assert that the process of change remains poorly understood, and only a third of corporate change initiatives succeed.

After encountering widely divergent assumptions by leading executives about organizational change, Beer, the Cahners-Rabb Professor of Business Administration, and Nohria, the Richard P. Chapman Professor of Business Administration, organized a 1998 research conference at HBS in order to gain a better understanding of the phenomenon. The conference brought together academics, consultants, and CEOs for case discussions and debates on their differing approaches to the issue. Breaking the Code of Change, presented in a point-counterpoint style, is an edited collection of pairs of opposing papers given by conference participants. Each of the seven sections of the book offers two contrasting viewpoints followed by an analysis of the differing perspectives.

As a result of the conference, Beer and Nohria have mapped out two dominant and conflicting archetypal theories of change. Theory E is based on the creation of economic value, often expressed as shareholder value, whereas Theory O is centered on building long-term organizational capabilities. "These approaches are guided by very different assumptions by corporate leaders about the purpose of and means for change," they write.

In a book that could have been subtitled "the power of paradox," Beer and Nohria argue that "either/or" is a false choice. Instead, executives will need to synthesize Theories E and O to develop businesses that both satisfy shareholders and survive as viable institutions in the long run. "This framework," write the editors, "will aid researchers and practitioners as they engage the inherent, often unarticulated, tension between enhancing economic value and developing organizational capability as ends and means of change."

HBS Press Books in Brief

(Harvard Business School Press)

The Art of Possibility: Transforming Professional and Personal Life, by Rosamund Stone Zander and Benjamin Zander, offers a set of breakthrough practices for creativity in all human enterprises. Infused with the energy of the Zanders' dynamic partnership, the book fuses Ben's extraordinary talent as a mover and shaker with Rosamund's genius for creating innovative paradigms for personal and professional fulfillment. In lively counterpoint, the authors convey a deep sense of the role possibility can play in every aspect of our lives.

Hidden Value: How Great Companies Achieve Extraordinary Results with Ordinary People, by Charles A. O'Reilly III and Jeffrey Pfeffer, counters the prevailing wisdom that companies must chase and acquire top talent in order to remain successful. The authors argue that the source of competitive advantage already exists within every organization and that how a firm creates and uses talent is far more important than how the firm attracts it.

The Entrepreneurial Mindset: Strategies for Continuously Creating Opportunity in an Age of Uncertainty, by Rita Gunther McGrath and Ian MacMillan, offers a practical blueprint for thinking and acting in environments that are fast-paced, rapidly changing, and highly uncertain. It provides both a guide to energizing the organization to find tomorrow's opportunities and a set of entrepreneurial principles individuals can employ to transform their competitive arenas.

Done Deals: Venture Capitalists Tell Their Stories, edited by Udayan Gupta, provides a revealing history of the venture capital industry as told through the first-person accounts of more than 35 industry leaders. From an inside analysis of today's hottest deals to what VCs look for in a business proposal, the collective wisdom of this elite group becomes an invaluable primer on what it takes to succeed in the high-stakes start-up world.

The Evolving Bargain: Strategic Implications of Deregulation and Privatization, by Willis Emmons, explores the impact of deregulation and privatization on company strategy in industries worldwide and shows how these dynamic processes shape the critical evolving relationship, or bargain, between governments and affected enterprises.

To order HBS Press books, call 800-545-7685 or visit www.hbsp.harvard.edu.

Correction: The book Low Risk, High Reward: Starting and Growing Your Business with Minimal Risk, by Bob Reiss with Jeffrey L. Cruikshank, which was summarized in the October issue of the Bulletin, is published by The Free Press. Copies may be ordered from the Harvard Business School Coop: 617-499-3248 (phone), 617-547-5003 (fax).

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