Strategy

THE

STRATEGY

EXECUTION

SOURCE

Article Reprint No. B0801A

Developing the Strategy:

Vision, Value Gaps, and Analysis

By Robert S. Kaplan and David P. Norton, with Edward A. Barrows Jr.

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Developing the Strategy:

Vision, Value Gaps, and Analysis

By Robert S. Kaplan and David P. Norton, with Edward A. Barrows Jr.

During the past 30 years, much attention has been focused

on how companies can formulate new strategies for

sustainable advantage. In this first of two articles on

strategy development, adapted from Kaplan and Norton’s

forthcoming book, The Execution Premium, the authors

explore the key steps that establish a foundation for

formulating strategy, from defining mission, vision, and

values to strategic analysis.

Our work on strategy execution

over the past 15 years has generally assumed the organization had

a strategy in place. We’ve viewed

the strategy development process

as a “black box” that produced

a strategy to be implemented

using strategy maps and Balanced

Scorecards. After much additional

experience, we have now observed

the strategy development practices

followed by the most successful

organizations. While the actual

selection of a strategy remains an

art, it is an art that should nonetheless be governed by a systematic

process—one that defines the organization’s purpose and goals and

carefully examines the external

and internal environment to identify...