Three Ways to Link Execution to Strategy

Performance management guru David Norton tackles the challenge of aligning day-to-day decisions with big-picture strategy.
feature: Performance Management Links Strategy And Operations

One of the biggest challenges in tackling operational performance management is linking day-to-day decisions with high-level corporate strategy. David Norton, co-developer of the balanced scorecard and a director at consulting firm the Palladium Group, has this advice:

Align operational goals with a differentiating strategy: If your company has a strategy of being an innovator, like Intel, then certain kinds of operational processes will be important, such as rapid design and partnering with other organizations to be first to market with new products. Alignment requires an approach and framework that let the organization define what's important and communicate it to lower levels "so everybody understands what the strategy is and how they fit in," Norton says.

Address process, then technology: "Performance management introduces a new way of managing, so you have to cope with that change first," Norton says. That approach paid off at Johnson Controls, where a project team developed the Global Performance Scorecarding System; then the technology deployment took only 90 days.

Make it a team effort: If a bank is trying to implement a strategy around customer cross-selling, it will require a major training program, new incentive compensation programs, and technology to support both. Three parts of the organization must work together to develop this new approach, Norton says. "If you just come up with a training program and don't add technology to support it, it will fail. If you just make it a technology project with no training and no compensation program, it will fail. You've got to do it all."

Photo illustration by Sek Leung