Proper execution of strategy seems to be an elusive goal. As Fortune Magazine noted in 1982, "Less than 10% of strategies effectively formulated are effectively executed." After two decades of the application of modern business principles, the problem remained. Fortune again noted in 1999, "In the majority of cases we estimate 70% the real problem isn't bad strategy ... it's bad execution."
In the 1990s, Drs. Robert Kaplan and David Norton led a study based on the hypothesis that reliance on strictly financial measures affected a company's ability to create long-term value. This research led to the introduction of the balanced scorecard, which functions as a measurement system, strategic management system and a communication tool. It is estimated that today more than 50 percent of the Fortune 1000 companies have adopted the balanced scorecard methodology, and the momentum continues to grow substantially. The balanced scorecard has been heralded as the most important business management tool of the 20th century because it provides a new framework for organizations to translate and communicate strategy through carefully selected and aligned objectives and measures. The ultimate goal of the balanced scorecard is to create a learning organization that focuses on strategic execution and differentiation that will lead to long-term value.
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