Questions & Answers with Dr David Norton -Part II

Friday, November 20, 2009 7:03 PM

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Co-Author of the Execution Premium

Friday, January 23, 2009

"In times of economic crisis, strategy is needed more than ever as the pressure and stakes are much higher and there is not much slack, if any at all."
- Dr David Norton

Following a highly successful conference in 2003 with Professor Robert Kaplan, Growth Facilitators is presenting Dr David Norton, his co-author and co-architect of The Balanced Scorecard, in an exclusive one-day corporate conference - "The New Science of Strategy Execution" in Jamaica on Tuesday April 7, 2009 at the Jamaica Pegasus.

In part two of this series, Dr Norton will continue to: explore key elements of successful strategy execution, discuss developing strategies that can be executed, describe how to create value through alignment and how to make strategy management a sustainable competitive advantage

Dr David P Norton is founder and director of several organisations specialising in systems and processes to improve the execution of business strategy. Dr Norton has founded and built a series of professional service firms during the course of his career, each focused on leading edge issues of management, from information technology and knowledge management to the discipline of strategy management. Dr Norton, who serves as an author and a frequent lecturer, is best known for his work with the Balanced Scorecard, which has been the subject of many conferences and articles and now for his work in the Execution Premium (co-written with Professor Kaplan).

1. Why do you think most organizations have difficulty executing their strategies?

Most organisations are complex. The minute you have an organisation with more than one employee, communication issues arise. As organisations get larger, issues as it relates to miscommunication or lack of communication arises.

Complexity is the enemy and alignment is the friend. Focus creates alignment and this leads to getting the top team focusing in the same direction and then you move down the line-move down to the lower levels and work your way through, and get all employees to focus on the objectives set out.

2. What can individuals expect to gain from participating in the upcoming Growth Facilitators executive seminar scheduled for Tuesday April 7, '09 for which you are the featured Presenter?

From this conference participants will know:
. How to you get alignment in organisations. Management needs tools such as the SM which acts as a kind of DNA for an organisation. When a SM is implemented then information can be passed throughout an organisation and then strategies can be written down. When this happens everyone can add their own unique twist(s) to it and make their own adjustments to contribute to better strategic development.

. Participants will be assumed to have some prior knowledge of the BSC approach. Therefore this conference will be a step in changing their organisation. For some it will be the first step and for many others it will be another step in the journey.

. Participants will learn how to:

. Frame the problem.

. They will be introduced to the BSC Hall of Fame which consisted of some 120 organisations worldwide.

. They will be introduced to how to become a strategy focused organisation.

. They will be introduced to how they can build the capabilities to do this with the help of some case studies of firms that have achieved an execution premium.

. They will learn how to build a sound system in order to survive and be successful in the future.

. They will hear success stories that will motivate them to follow the same path as companies before them did, and these stories will help them to apply methods to their own firms.
By the end of the conference I hope that every organisation and individual that attends will be that much closer to a successful strategic focused organisation.

3. The Execution Premium seeks to explain that by linking strategy to operations competitive advantage will be attained. How is this possible?

Research shows that 9/10 organisations fail to execute their strategies. This means that the remaining 1/10 are the ones that succeed. It is not easy to be the 1/10 organisations that does succeed and if you do that mean that you have gained a certain level of competitive advantage. By utilising the BSC approach to management along with the simple steps, tools methodologies and techniques, companies will succeed.

In 2006 Kaplan & I did a research study to see how companies that used formal approaches (eg BSC) performed compared to those that used informal approaches of strategic management. Amongst 150 companies, out of the half that used formal approaches, 70 per cent out performed other companies and out of the other half that used informal approaches, only 24 per cent out performed other companies.

By using a formal approach it has shown to improve and increase the odds of success by almost three times.

4. What are typical challenges and pitfalls when linking strategy with operations?

Strategy by nature is top down and is driven by focus whilst an operation is a bottom up phenomenon and is driven by participation.

Strategy needs focus and there are a few measures available when addressing this. Operation deals with trying to improve the way things are done and how things work and it has a broad scope and therefore there are many measures that can be used when addressing operations.

The key is to be able to tie the bottom up insight tied to the top down priority.

A man once said that management is like going fishing. The Six Sigma approach is the best way to catch the fish but the BSC is the best way to find where the fish are.

5. What are the vital ingredients to the sound execution of a strategy?

This is addressed in the second book, The Strategy Focused Organisation.

There are five principles successful organizations follow:
. Execution Leadership: Managing strategy and managing change.

. Translate the strategy into the BSC.

. Alignment: align strategies throughout the organisation and link it.

. Make strategy everyone's job, let them know what they can do, and how they can help.

. Link it: immigrate into management system.

6. Can flawless strategy implementation have any bearing on successful macroeconomic policies of a country?

Absolutely. Take Japan for example. In 1960 they embraced quality and quality management. Quality is a trait that creates value and competitive advantage. Integrating quality into their management processes and products had much to do with the success of Japanese companies. Strategy execution creates an opportunity for a country to do the same thing that Japan did with quality. Many governments of small or emerging countries are beginning to commit to the philosophy and approach to BSC such as Botswana, Dubai and Brazil. Brazil has in fact used BSC to help guide economic strategy. So the same logic that is used for companies can be applied to a nation.

Brazil has an objective to increase exports of value added products. Therefore they realise that to do so they will have to provide more opportunities for citizens to go to university to learn the skills and knowledge that will be needed and also to make it easier for entrepreneurs in the market place. As a result of this, the country will eventually have an increase in their GNP per capita.

7. Given that for each individual territory there are different business practices and different business environments, is it smart to use generalised strategies and methods to execute plans?

It is not so much generalised strategies. Rather it is generalised techniques to execute these strategies.
Take for example accounting. Each country uses the same principles to perform their accounts but it is up to them to decide how much they should put in each account and how much they should budget. Accounting principles are just methods/tools that are used to get an end result.

By using the right tools you will be able to clarify and comprehend the entire process better. Some countries that have successfully used generalised tools to execute their own unique strategy are: Thailand, China, Korea, Brazil and Mexico.
It is up to you (the organisation) to impose your own culture and customise the way you use these tools. For example, Japan tends to start describing strategy from the middle, work their way to the top and then down the organisation ladder whilst America uses a top down approach.

8. Are you familiar with the Jamaican market place or that of any Caribbean country? If so, are there any major differences that would prevent a Jamaican business enterprise from using the same methods as an American business enterprise?

I have a consumer's perspective of Jamaica's market place. I have been to similar places and have realized that once the tools are used.

These approaches are used everywhere. The trend is that complexities are similar in like countries. So you start with an idea and then customize it. The principles have to be tailored to your organisation, that way you are able to adapt principle to your organisation.

What's your position on mandatory HIV testing for employees in Jamaica?
	I support it
	I don't support it

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