2. What is It?
An approach that involves a comprehensive
and integrated management system that
links strategy formulation and planning
with operational execution.
Adapted from Robert KAPLAN & David NORTON
Pioneers - Strategic Management Accounting
Introduced - Activity Based Accounting (1960)
3. Step 2
Plan the strategy
Step 3
Align organisation
with strategy.
Step 4
Plan operations.
Step 5
Monitor &
learn.
Step 1
Develop the strategy
Step 6
Test & Adapt
Strategy
4. Using Mission, Vision and Value statements, analysis
tools including SWOT or PESTE analysis and Porter’s
five forces, Blue Ocean Canvass, scenario planning,
dynamic simulations and war-gaming,
Address 3 questions:
i) What business are we in and why?
ii) What are the key issues we face?
iii) How can we best compete?
Step 1 - Develop the strategy
5. Using tools as Balanced Scorecards and Strategy
Maps,
Address 5 questions:
i) How do we describe our strategy?
ii) How do we measure our plan?
iii) What action programs does our strategy need?
iv) How do we finance our initiatives?
v) Who will lead strategy execution?
Step 2 - Plan the Strategy
6. Step 3 - Align organisation with strategy.
Using formal communication processes, link employees’
personal objectives and incentives to strategic objectives.
This is facilitated by “cascading down” BSC, strategy
maps, KPIs to all organisational units.
Address 3 critical questions:
i) How do we ensure that all business units are aligned?
ii) How do we align support units with business unit and
corporate strategies?
iii) How do we motivate employees to help us execute the
strategy?
7. Step 4 – Plan Operations
Using tools as rolling forecasts and budgets, process
mapping, performance management, dashboards, activity-
based costing, and resource capacity planning,
Address 2 questions:
i) Which business process improvements are most critical
for executing the strategy?
ii) How do we link strategy with operating plans and
budgets?
8. Step 5 – Monitor & Learn
Monitor and learn about challenges and barriers. This
requires carefully designed structure of management
review meetings that are short, highly focused, data-
driven and action-oriented,
Address 2 key questions.
i) Are our operations under control?
ii) Are we executing our strategy well?
9. Step 6 – Test & Adapt
Using internal data on operations and external data on
the economic and competitive environment, improve
incrementally and continuously. This conscious habit
generates a new and improved cycle of integrated
strategy planning and operational execution.
10. Conclusion
It is not rocket science or something radically
new. It’s purely common sense logic.
It provides a cohesive structure for aligning
strategy planning and operational execution. The
biggest difficulty lies in connecting the dots and
getting the people to commit and support it.