Acorn Industries Essay
It is the rare corporation that can recognizes the need to integrate its resources, policies, people, assets and procedures with changing business strategies. Rarer still is the organization that acts on this need. Yet, in today’s competitive global market, an integrated strategy is increasingly necessary. Given the speed with which change occurs in the global business environment, standard planning techniques and asset allocation methods have become woefully outdated.
Indeed, achieving new levels of business sophistication is a never-ending process, requiring Acorn to rapidly a strategic organizational transformation to meet changing conditions. To effectively accomplish this transformation the company needs a system that provides continuous evaluation and improvement, ensuring effective use of both business (hard) and organizational (soft) assets. In particular, what is required is a balance and alignment between customer, organizational and business investment. In today’s market, organizations not taking such an approach run the serious risk of failing to meet the expectations of shareholders.
The case of Acorn Industries highlights the lack of strong leadership, the need for a transformation in its organizational structure, the need for a balance scorecard system, the need for a programme manager and the effective operation and utilization of such a structure.
Among the distinguishing characteristics of companies achieving sustainable shareholder value is that the management in these organizations constantly evaluates the key operational drivers of the business and, in response to changes in the business environment, strategically transforms the company’s resources among those drivers, whether they are in marketing and sales or in some area of production. This process must occur every time the business changes marketing strategies, experiences a merger, acquisition or spin off, or moves to a new level of sophistication and globalization maturity. The result is a company experiencing an ongoing process of active, bottom line-oriented self-assessment and growth. When a company’s organizational and business assets are in alignment, adjustments occur naturally. For this alignment to occur, however, the business must measure its organizational and business assets differently than it did at previous levels of maturity. It also must be able to transform organizational assets rapidly to meet changing conditions.
PROBLEMS AND CAUSES
Many new projects implemented within organizations either partially or fully fail because the intervention does not adequately address the enabling environment within which the organization operates (UNDP, 1993). For example, Acorn tried to keep the commercial and government contracts separate. They were also managed as separate entities based on marketing and the resources from the functional departments.
Any effort to diagnose and improve the performance of this organization requires an understanding of the forces inside and outside the organization that can facilitate or inhibit that performance (Savedoff, 1998). Enabling environments support effective and efficient organizations and individuals, and creating such environments is becoming an increasingly important aspect of developing this organization towards one that can operate on a programme organizational structure.
The organizations natural resources, human resources, financial resources, infrastructure and technology together form what is call “capabilities.” They combine with rules and institutional ethos to create an enabling or inhibiting environment for organization’s growth and development. This point illustrates the overriding influence of rules and, as noted earlier, the interdependence of the various components of an enabling environment. Acorn embarked on launching ambitious programs to develop capabilities but neglected the importance of conducting a thorough institutional analysis. It involves mapping the institutional environment in terms of politics, administrative capacity, culture, leadership, organizational structures, etc. in a manner that includes all stakeholders and measures their level of ownership and commitment to reform.
Acorn had numerous projects underway with no formal project management process in place to effectively manage successful outcomes. They have not embraced programme management as the discipline to hold people accountable and execute the implementation of strategic change initiatives. Acorn had failed at the process to effectively manage all their projects. Projects emanate from the strategic plan, therefore to increase project success at the strategic level a process must be established to select and monitor projects and ensure projects and resources are in alignment with the strategic plan. For success to occur, synergy is required from all project participants at all levels.
Strategic leadership is associated with the organization’s vision, as well as with the ideas and actions that make the organization unique. It is the process of setting clear organizational goals and directing the efforts of staff and other stakeholders toward fulfilling organizational objectives (Mintzberg and Quinn, 1995). In essence, therefore, strategic leadership has to do with the organization’s ability to influence its internal and external stakeholders so that they will support organizational directions. Strategic leadership needs to empower its members to create the changes that are necessary for an organization to perform and survive (Byrd, 1987). It goes beyond simple planning, in that it creates ways of clarifying and obtaining organizational goals by looking within and outside the organization. It sets the stage for organizational action and the methodologies the organization will use to produce the results required. Thus, an organization’s strategic leadership involves developing ways of inspiring organizational members and stakeholders to perform in ways that attain the mission, while adapting to or buffering external forces.
Strategic leadership consists of three main dimensions: leadership, strategic planning and niche management:
_Leadership is basically the process through which leaders influence the attitudes, behaviors and values of others towards organizational goals_ (Vecchio, 1995). Indeed, no one can deny its critical importance to the success of any organization, no matter where the organization is located or what it does. Salopek (1998) outlines four fundamental qualities of leadership, each of which has several specialized and associated competencies. These qualities relate to the ability to become and act as the following:
Collaborators skilled at facilitating, coaching and fostering dialogue;
Innovators skilled at visioning, championing and diffusing;
Integrators skilled at organizing, improving and bridging;
Producers skilled at targeting, improving and measuring.
The need for leadership qualities is not restricted to executive senior managers, but extends to workers at all levels of the organization. Leadership exists at many places inside the organization, both formally and informally. Formal leadership, exercised by those appointed or elected to positions of authority, entails activities such as setting direction, providing symbols of the mission, ensuring that tasks are done, supporting resource development, and modeling the importance of clients.
Strategic planning entails formulating and implementing activities that lead to long-term organizational success. It is essentially a decision-making process that involves a search for answers to simple but critical and fundamental questions: What is the organization doing? How is it doing what it does? Where should it be going in the future? What should it be doing now to get there?
Strategic planning encompasses issues spanning the entire spectrum of the organization, from introspective questions of what the organization’s personality is or ought to be, to strategic operational issues connecting the focus on the future with work to do to move the organization forward. The strategic plan itself is a written document; setting out the specific goals, priorities and tactics the organization intends to employ to ensure good performance (Kaplan and Norton, 1996).
Thus, strategic planning must typically include a scan of opportunities, threats and constraints presented by the environment. This means that the organization must repeatedly ask itself what potential or pending actions are likely to influence (positively or negatively) what it does and plans to do? How can the organization forestall or mitigate the negative influences, as well as take advantage of the potential opportunities?
Another strategic issue for the survival of an organization is the acquisition of resources in the vital areas of funding, technology, infrastructure and personnel. Strategic planning must adequately pursue these resources by anticipating and capitalizing on opportunities in the external environment that might yield or support them. It also means predicting threats to organizational resources and intervening (politically, in general) to ensure that organizational performance and survival are safeguarded (Korey, 1995).
This level of leadership and intervention generally transpires between the senior executive of the organization and the organization’s directors. Resource acquisition entails constantly being on the lookout to create opportunities that will augment the organization’s resources. For strategies to become operational, they need to be communicated, processed and revised according to feedback from stakeholders, both internal and external. All members of the organization need to work toward making the strategic plan a reality, from senior management down to the most junior worker (Mintzberg and Quinn, 1995).
The ability of an organization to structure and restructure itself to adapt to changing internal and external conditions is important for maximizing organizational performance. Unlike other capacities, the structuring and transformation of an organization does not formally occur on a constant basis; however, adaptations of structure are always occurring. Organizational structure is defined as the ability of an organization to divide labor and assign roles and responsibilities to individuals and groups in the organization, as well as the process by which the organization attempts to coordinate its labor and groups. It is also concerned with the relative relationships between the divisions of labor:
Who has authority over whom?
How and why should an organization divide labour individually and by grouping people?
How should organizations coordinate their work to maximize the benefits of the divisions of labour?
What do people look for to indicate that problems are structural in nature rather than some other type of problem, such as one of leadership?
The operating structure of an organization is the system of working relationships arrived at to divide and coordinate the tasks of people and groups working toward a common purpose. Most people visualize an organization’s structure in terms of the familiar organizational chart. The task of creating appropriate and manageable work units or departments has challenged managers and students of organizational development for decades. In looking at structure, we are interested in the extent to which individuals, departments or other groupings understand their roles in the organization; whether they have the authority to carry out their roles; and whether they are accountable for their work.
Structure also includes coordination issues (Mintzberg and Quinn, 1995). Coordination is the process of linking specialized activities of individuals or groups so they can and will work toward common ends. The coordination process helps people to work in harmony by providing systems and mechanisms for understanding and communicating about their activities.
In organizations where innovation and productivity is key, interdisciplinary project teams are a competitive advantage. Entire networks are formed where the best minds collectively tackle difficult projects, with each contributor bringing his or her special perspective and expertise. The ease with which the programme office facilitates interdisciplinary approaches to projects is an indicator of organizational health. Many variables influence organizational structure, including history, size, technology, organizational goals, strategy, governance, funding and other pressures from the external environment, the specific fields of research, and technology.
The human resources of any organization are its most valuable assets. In the view of many top-level executives, employees are the key source of an organization’s competitive advantage (Brown and Kraft, 1998; Chilton, 1994). Critically important to effective human resource management is to develop and instill core values throughout the organization (Down, Mardis, Connolly and Johnson, 1997). These values include integrity and honesty, commitment to the organizational mission, accountability for and pride in one’s work, commitment to excellence, and building trust. They form the basis for developing cohesiveness and teamwork, as well as for developing policies, procedures and programs that focus on meeting the needs of customers or clients.
In the case of Acorn Industries, human resources management functions is charged with planning and controlling human resources to make sure that people’s needs are met so they can work to achieve organizational goals. Commitment to meeting employees’ needs is not merely an altruistic function-it is highly likely that staff who are reasonably comfortable with working conditions, and stimulated by the environment, will be productive (Miron, Leichtman and Atkins, 1993). From an organizational perspective, control over human resources is critical to hold managers accountable for organizational performance. Nevertheless, progress in this area has been slow.
HUMAN RESOURCES PLANNING
Human resources planning involve forecasting the human resources needs of the organization, and planning the steps necessary to meet these needs. This planning is the first step in any effective human resources management function. Human resources planning should be closely linked to the organization’s strategic objectives and mission. Even in regions of the world with a plentiful, well-educated workforce, such planning is a challenge because the needs of the organization are constantly changing and sometimes do not converge (Cockerill, Hunt and Schroder, 1995). The challenge is even greater if the pool of people from which the organization recruits is limited by such factors as brain drain, or because labor market wages in the private sector are more attractive (Colvard, 1994). Forecasting in these environments is quite difficult.
According to Booth (1998), the term “programme management” is used mainly by two groups of professionals in ways that are consistent. The first group, those involved with information systems, employs the term to describe the management of _big projects, especially system implementations._ The second group, corporate strategists, uses it to mean the _practical task of translating grand strategies into operational reality._
In many organizations, individual managers typically pursue their own projects and cite their own successes. In fact, the link between their efforts and organizational performance is generally quite obscure. By coordinating and linking the cascade of corporate goals reflected in diverse projects into specific sets of common-goal actions, program management helps to avoid this problem. Programme management is regarded as “an additional layer of management sitting above the projects and ensuring that they remain pertinent to the wider organization” (Booth, 1998). In the context of funded organizations in developing countries, organizations often receive financing from different donors or funding agencies for different projects that are not necessarily congruent with organizational goals. In such a situation, there is a clear need for programme management to align different projects with wider organizational goals and coordinate them into common-goal actions.
Programme planning ranges from working out what to do on a day-by-day basis to long-term strategic planning. It should be happening constantly within a project and program. Programme planning must take into account what an organization has to do to create its goods and services, as well as the resources it needs to do so. Program planning requires thinking ahead and, as such, involves several concurrent questions. Whom are we serving? What demand are we supplying and at what cost? What are our objectives? What must be done to meet these objectives? Who will do this? How will they do it? How long will it take? How much will it cost? How will we know whether we have met our objectives?
Programme planning has many levels and is time bound, so it can be short, medium or long term. However, when conducting an assessment, the extent to which the organization’s plans are well communicated and used as management tools must be determined. This will require written plans.
The major task of the leaders of an organization is to put the organization’s program into practice. It is all well and good to have a great plan-making it work is the hard part. Programme implementation requires organization and having staff that can put their skills to work. It requires integration of the management skills needed to allocate resources and the technical skills needed to do what has to be done (for example, to do several projects con-currently and with the sharing of resources). Programme implementation is the stage at which an organization integrates all its resources to concretely achieve its goals.
PROGRAMME MONITORING AND EVALUATION
Sound project monitoring and evaluation need to be built into projects during their planning stage and carried out throughout the project (IDB, 1997). For example, an assessment of the volubility of a programme or project ensures that it contains the basic elements required to monitor results and ultimately determine whether development objectives are being met. The planning section should have an increasing array of tools that help project planners develop quality projects. The logical framework can be incorporated into a project both for use as a planning tool but also to provide indicators for monitoring and evaluation (IDB, 1997). Similarly, outcome mapping (Earl, Carden and Smutylo, 2001) is used as a tool to support better planning, monitoring and evaluation.
Functional managers with many organizations today view their business as a series of functional silos concerned with their own requirements (Dent and Hughes, 1998). This perspective is particularly pervasive among managers accustomed to being rewarded for optimizing the performance of their functions relative to the rest of the organization. Although managers talk about “big picture” processes, their efforts are often focused inwardly on their own requirements and are measured accordingly. In such situations, there is an obvious need for common systems and operations that apply uniformly throughout the organization and, like a thread, sew the various functional parts together into a common purpose. There is also a need for compatible strategies to optimize organizational performance.
In other words, process management is required.
Taking a vision and making it a reality through smooth-flowing daily work in an organization is largely dependent on ongoing “processes.” These are the internal value-adding management systems and operations that cut across functional and departmental boundaries. They are the mechanisms that guide interactions among all groups of people in an organization to ensure that ongoing work is accomplished rather than hindered or blocked.
Thus, _process management is the task of aligning and integrating the various practices and cultures of different segments of an organization through the introduction of common systems and operations that apply uniformly to all segments of the organization_. These common operations or processes include problem-solving, planning, decision-making, communication, and monitoring and evaluation.
If the processes are all working, the outcome is that the organization is learning and accomplishing a great deal. Process management takes place at every level of an organization, from the board of directors to the line worker. The board and senior managers must know how to problem-solve, plan and make timely decisions. If they are deficient in these areas, organizational direction is often hampered. As with the case of Acorn Industries, programme units, departments and other functional segments of the organization must plan and set short- and medium-term goals, as well as solve problems, make decisions and generate strategies to carry out appropriate activities to achieve results.
VISION AND MISSION
The vision and the mission of an organization emerge from important social, economic, spiritual and political values. They are meant to inspire and promote organizational loyalty. Vision and mission are those parts of an organization that appeal to the heart; that is, they represent the organization’s emotional appeal. They motivate people and draw upon staff and stakeholders’ hopes and aspirations. In this sense, the vision and mission of an organization provide inspirational motivation.
Clarifying the vision and mission are important in private organizations. Private sector organizations often identify the importance of serving their customers, and have created visions and missions to support this theme.
At issue for many organizations is not only to write but to then live the statements. When vision and mission statements are not lived up to, the result is not to enhance motivation but to foster cynicism. Assessing an organization’s motivation primarily involves looking at its mission, since this is more closely linked to what the organization wants to do. However, in examining the mission, the link to the larger vision, as well as more operational components, must also be assessed.
_An organization’s vision defines the kind of a world to which it wants to contribute._ Visions lie beyond the scope of any one organization. They represent the hopes and dreams of organizational members. The vision describes the changes in the prevailing economic, political, social or environmental situation that the programme hopes to bring about.
Missions, on the other hand, are a step in bringing about the operational aspects into the vision, an organization’s raison d’être. _The mission is an expression of how people see the organization operating._ In this context, the mission lays a foundation for future action (Bart, 1997) and guides the organization’s choice of strategies and activities. Some of the main reasons for an organization to have a vision and mission expressed in clear statements are to:
Promote clarity of purpose
Function as a foundation for making decisions
Gain commitment for goals
Foster understanding and support for its goals.
Whereas the vision locates the organization within a cluster of organizations, it is the mission that answers the questions: Why does this organization exist? Whom does it serve? By what means does it serve them? Those responsible for the performance of an organization increasingly recognize the benefits of clearly and simply communicating the direction in which their organization is going. Such descriptions of the organization’s future, whom it serves, what it values, and how it defines success can have a powerful impact on the organization’s personality.
ASSESSING THE MISSION
Those seeking to diagnose and analyze the mission of an organization often find themselves dealing with multiple realities-those that are written down, and those that are perceived by organization members. One task in an organizational assessment is to determine the degree to which the formal mission statement is understood and internalized by members and stakeholders of the organization; that is, measure the congruence of the perceived and stated missions.
While the mission statement formally articulates organizational purpose, it is the organization’s culture that gives life to the organization and helps make the realization of its mission possible. The concept of organizational culture has been the focus of much attention, with analysts associating it with superior corporate performance (Peters and Waterman, 1988), increased productivity (Ouchi, 1981), improved morale, and high rates of return on investment.
_Organizational culture is the collectively accepted meaning that manifests itself in the formal and informal rules of an organization or a sub-group._
The culture embodies the collective symbols, myths, visions and heroes of the organization’s past and present. For instance, culture finds expression in the collective pride (and even embellishment) of the accomplishments of individuals. Values important to the organization are illustrated through stories about past successes and failures; these form a living history that guides managers and drives members’ behavior.
Diagnosing organizational culture helps you understand the relative levels of consistency or inconsistency of “meaning” that exist in an organization. In some ways, culture is like an iceberg; it has both seen and unseen aspects. From an anthropological perspective, culture has material and non-material dimensions. Culture has both physical artifacts-mission statements, policy guides-as well as basic beliefs that direct the thinking, feelings, perceptions and behaviors of the people in the culture. To know why some people are in trouble, are rejected or punished, or are not appreciated by an organization, you need to know the belief system and norms that underlie the organization’s behavior. In this context, four dimensions of organizational culture can be identified: artifacts, perspectives, values, and assumptions (Bloor and Dawson, 1994).
_Artifacts_ are the most tangible aspects of an organization’s culture. These are the physical aspects of an organization: the type of office, the logo, dress, rituals (Christmas parties), stories, language and so forth. Artifacts are the physical manifestations of the organization’s culture.
_Perspectives_ are the ideas that people hold and use to act appropriately. For example, a perspective includes how the organization handles customer complaints or, for that matter, employee complaints. In some organizations, people go to great lengths to help customers obtain the products and services they say they need. In other organizations, customers are ignored.
_Values_ relate to the ideals held by the organization, including concepts of standards, honesty, quality and integrity.
Underlying or basic _assumptions_ are “the taken for granted” beliefs of an organization. This refers to what members of the organization feel is appropriate behavior for themselves and others. Since assumptions are considered a given, they are rarely if ever questioned. The set of tacit assumptions helps form the uniqueness of the organizational culture (Denison, 1996).
Balanced Scorecard is a popular tool for implementation of strategy (Kaplan and Norton 1996a). As the founders of the concept, they promote the concept primarily as a tool that can provide aid in the implementation of strategy. They argue that the main causes of poor strategy implementation are:
Visions and strategies are not actionable
Strategies are not linked to departmental team and individual goals
Strategy not linked to resource allocation
Feedback that is tactical and not strategic
The name BSC reflects the need for a balance between short and long time horizon for goals, between financial and non-financial measure parameter, between lag and lead indicators and between internal and external perspectives (Kaplan and Norton 1996a). The author argues that _”what you measure is what you get”_ The measurements have a running effect. In order to accomplish a strategic effect, the organization must measure what is strategically important. This can be achieved in the Balanced Scorecard concept. Hence, the concept is not a control tool, but rather a strategic tool to help managers look ahead. In addition, the BSC shows how the results are achieved not only that they are achieved. With the four dimensions; the financial perspective, the internal business perspective, the customer perspective and the innovation and learning perspective, BSC combines a number of flows that are going on in the organization. By understanding the organisation in this context, the manager can learn what connections exist between the different perspectives. The common picture of the four dimensions is one of the contributions of the BSC concept.
_ARCHITECTURE OF BSC_
Kaplan and Norton (2001a) describes the building of a BSC as a process to define a set of near term objectives and activities, the drivers that will differentiate a company from its competitors and create a long term customer and shareholder value, the outcomes. The process begins in a top down fashion, clearly defining strategy from the perspective of the shareholders and the customer. In other words, the scorecard is supposed to define the short term goals and activities. These are the strategic drivers that are supposed to differentiate the organization from the competitors and create long term value for the customers and the owners. The financial goals for growth and productivity are the most important. Causes of growth are to be defined. When the financial goals are defined, we must ask the question _”Who are the target customers that will generate revenue growth_ _and more profitable products and services?
What are their objectives and how_ _do we measure success with them?”_ The customer perspective should also include a value proposition that defines how the company differentiates itself to attract retain and deepen relationship with targeted customers. The defined measurements in the customer and financial perspectives should not describe explicit how this should be achieved internally. It is the internal processes, like product, design, marketing development, sale, service, production that are about to define the necessary activities to achieve the goals in the customer and financial perspectives. The fourth perspective, learning and growth, should put pressure to execute internal business processes in new and differentiated way, based on the organizations infrastructure; the skills, capabilities and knowledge of employees; the technology they use and the climate in which they work, in other words what Kaplan and Norton (2001a) refers to as the learning and growth factors.
_IMPLEMENTATION OF BSC_
Kaplan and Norton suggest implementing the BSC to overcome the strategy implementation problems: Visions and strategies are not actionable, strategies are not linked to resource allocation, and feedback is tactical and not strategically. However, when studying Balanced Scorecard, there is no common theory or model for implementation. Some use more perspectives than Kaplan & Norton’s initial four, others not. For example, some have added a human focus or an environmental focus. Kaplan and Norton do not include the human focus as they believe the human is contained in all of their focus areas.
This might be a result from the stepwise development of the BSC. The first concrete model for building a BSC is presented by Kaplan and Norton (1993) where they use a system model in eight steps to create a BSC that should link the measurements to the strategy.
In the article _”Using the BSC as a strategic management system”_ by Kaplan and Norton (1996b), the development of BSC is extended from the eight step to a ten step model.
According to the authors, after the tenth step, BSC has been included in the routine part of the strategic management system. The communication within the organization follows the different units in the business plan and lies in line with BSC. Through follow up of BSC, learning in the organization is enabled through performance and deviation assessments. However, Kaplan & Norton (1996a) mean that this might not be as easy as it looks. This is probably an understatement. They show failures in several cases with structural and organizational problems.
The step wise development by Kaplan and Norton is also influenced by other research findings. This also applies to the implementation of BSC system. Kaplan and Norton start out with an implementing model in eight steps, while the Kaplan and Norton 1996b article present another 10 step model. For all models, a common theory for building and implementing BSC is missing. Despite this observation, Kaplan and Norton have developed principles for how to become a successful strategy focused organization. However, these principles do not tell _how_, but rather _what_ matters to implement strategy successfully. In the article by Kaplan and Norton (2001c) the authors show how organizations use their scorecard to align key management processes and systems to the strategy. Although each organization achieved strategic alignment and focus in different ways at different paces and in different sequences, each eventually use a common set of principles to become what Kaplan and Norton refer to as the principles of strategy focused organization.
The five principles are:
1. Translate the strategy to operational terms
2. Align the organization to the strategy
3. Make strategy everyone’s everyday job
4. Make strategy a continual process
5. Mobilize leadership for change
When Kaplan and Norton (2001c, 2001a) talks about the first principle _”TRANSLATE THE STRATEGY INTO OPERATIONAL TERMS”_ they mean that the scorecard creates a common and understandable frame of reference for all organization units and employees through the translation of strategy into a logical architecture of a strategy map and the Balanced Scorecard to specify the details of the critical elements for their growth strategies.
The second principle _”ALIGN THE ORGANISATION TO THE STRATEGY”_ (Kaplan and Norton, 2001c, 2001a) relates to the organizational performance to become more than the sum of its parts. It must be linked and integrated. The Balanced Scorecard defines what is expected to create synergy and ensure that linkage actually occurs. This will prevent the strategies of different units to go in opposite directions. As many organizations have difficulties communicating and coordinating across the different functions, suboptimal behaviours may become a major barrier in strategy implementation.
The third _principle_ _”MAKE STRATEGY EVERYONE’S EVERYDAY JOB”_ means that the BSC should be used to communicate and educate the organization about the strategy. Scepticism towards unlimited communication to the entire organization risking leakage of valuable information to competitors is answered: “_Knowing the strategy will do little good unless they execute it. On_ _the other hand we have no chance to execute it if people don’t know about it”._ This is also in line with Kotter (1996) who argues that real power first occur when those involved in the enterprise or activity have a common understanding of goals and directions. The author argues that it is not a top down direction, but rather a top down communication.
When Kaplan and Norton (2001a, 2001c) talks about “_MAKE STRATEGY A CONTINUAL PROCESS”_ they claim that the BSC introduce a new “double loop process” to manage strategy. The process integrates the management of tactics with the management of strategy using three important processes. First, organizations link strategy to the budget process where they use BSC as a screen to evaluate potential investments and initiatives. Just as the BSC attempts to protect long term objectives from short term sub optimization, the budget process must protect long term initiatives from the pressures to deliver short term financial performance. The second step is to make strategy a continual process by introducing a simple management meeting to review strategy. Information feedback systems are changed to support the new management meetings. Finally, a process for learning and the strategy evolves. The initial BSC represent a hypothesis about the strategy. At the time of formulation, it is the best estimate of the action expected to create long term financial success. The design process of the scorecard establishes the cause and effect linkages of the strategic hypothesis explicit. As the scorecard puts it to action and the feedback system start reporting actual results, an organization can test the hypothesis of its strategy.
In the fifth principle _”MOBILIZE LEADERSHIP FOR CHANGE”_ also named _”mobilize_ _change through leadership”_ (Kaplan and Norton 2001a); the authors claim that the first four principles focus on the BSC tool, the framework and the process to support it. They also argue that active involvement of the executive is the single most important condition. If the top management are not active leaders of the process – change will not occur, strategy is not implemented and the opportunity for breakthrough performance is lost.
Over time, a new management system will evolve; this is a strategic management system that institutionalizes the new cultural values and processes into a new system for management. This is also in line with Kotter (1996) where he describes how transformational change occurs. By linking traditional processes such as compensation and resource allocation to a BSC that describes the strategy, they create a _strategic management system_. Furthermore, the author claims that the strategy must be a continual process that reflects shifts in opportunities and threats. Here, it is important that the integration of the new strategy into the organization does not create a barrier to future progress.
The relationship between organization and innovation is complex, dynamic and multilevel.
The existing literature is voluminous and diverse. For Acorn to be a successful organization, I looked at the aspects of organizational structures, human resources, programme management, process management, their vision and mission, the organizational culture and balance scorecards. These are the potential different aspects of the relationships that form the coherent conceptual framework for understanding the phenomenon of ‘organizational innovation’.
Executive Management needs to engage organizational functions in programme execution to obtain information evaluate progress and learn from failures regarding strategic change initiatives. If they don’t, they, like most projects, will fail. Committed leadership is required to provide the right environment for people to succeed when implementing change initiatives. Projects are essential to the growth and survival of their entities because, when executed successfully, they help deal with changes in the environment, fiscal conditions and citizens’ needs. Directors must be held accountable for managing change and the best way to manage change is to employ a project management methodology that enables the Department to manage strategic project initiatives as a portfolio of budget investments and prioritize them in accordance with their importance to the Department strategy.
Acorn Industries needs to focus on making change happen to improve their organizations performance!! Programme management is their ticket to that success. It will enable them to get on the road to quicker implementation of strategic initiatives and keep Acorn Industries moving forward. Organizations that want to be successful need to establish an integrated programme management process in order to execute strategic initiatives and enhance the organizational and individual’s project management capability.
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