In short, the Office of Strategy Management (OSM) is positioned as a new discipline for the knowledge era, through which strategic management becomes a core organizational function – on a par with HR and finance as examples. The OSM is headed by a Strategy Management Officer who is full-time and is either a permanent member of the executive committee (Norton and Kaplan’s preference) or reports directly to a senior executive (such as the CEO or CFO). The OSM basically has seven key responsibilities, which we explore more fully in the White Paper: The Balanced Scorecard Manager: An emerging profession for the knowledge-era.
• Create and Manage the Scorecard
• Develop Strategy
• Review Strategy
• Strategic Communication
• Strategic Initiative Management
• Integrate Strategic Priorities with Other Support Function
What is somewhat surprising about the OSM is that is has taken so long for the idea to emerge. For seasoned scorecard watchers it has been clear for a number of years that the primary reason why many scorecard efforts eventually fizzle out is that there is no natural home for the Balanced Scorecard.
So we can be hopeful that the creation of an OSM will help inculcate Balanced Scorecard skills and strategy management skills into the organization for the longer-term – not just as a short-term fix. Linked to this, the formulation of the new executive position of Strategy Management Officer will aid efforts to position the Balanced Scorecard Manager (however they are named) as a permanent, senior member of the organization - as opposed to being seen as a ‘project manager’, which is too often the case.
It is also to be applauded that as the OSM will take responsibility for facilitating the strategy process from formulation, to execution, to feedback, for the first time we will see strategy managed as a single end-to-end-process. This is a major step forward from the previous fractured approach to strategy management where there was typically no formal alignment between planning, execution, and strategic learning.
Therefore the OSM and the SMO are both welcome additions to the organizational structure.
What’s more, I personally believe this new discipline is potentially the most enduring legacy of Drs Norton and Kaplan.
Basically, inculcating strategy management as a core function has greater implications for organizational management in the 21st century than even the Balanced Scorecard.
Clearly, the scorecard will continue to evolve over time, and others will come with their own spins on the concept. Yet others will promulgate strategy management frameworks that bear little or any resemblance to the classic Balanced Scorecard. With an OSM in place to integrate and institutionalise the best of new ideas, we can hopefully avoid the haphazard pinging from one concept to another, and maintain a laser-like focus on the overarching strategy management process. Presently Kaplan and Norton have described seven key responsibilities of the OSM. We can reasonably expect this to be fleshed out into a larger framework, such as we have for the Strategy-Focused Organization. If forthcoming, this OSM framework may truly prove a new functional blueprint for the knowledge era.
Yet, there is a possible spanner in the good works. This new and pioneering approach may result in some early problems for the OSM/SMO. The key to success is the OSM and its leader’s ability to influence other functions (such as finance for ensuring the budgeting process is aligned to strategy and HR for the congruency of people management with strategic objectives). This poses a real potential for territorial collisions and in some companies the strangling at birth of the OSM.
How the early OSM adopters deal with resistance will provide invaluable lessons for others. Their learnings may also help us better understand how to move from a silo to a cross-functional approach to working.