Balanced Scorecard & Strategy Execution:
Applications in China

Preface
by Dr. Irv Beiman & Dr. Yong-Ling Sun

As China continues to grow economically, strategic management is becoming increasingly important for organizations in China. Chinese executives and managers are thirsty for learning about how to compete successfully in both domestic and global markets. Increasing competition is stimulating their thirst for learning how to develop strategically effective organizations. These conditions have created a clear need for a systematic approach to formulating, executing and adjusting organizational strategy in China.

The Balanced Scorecard
During the prior decade a systematic methodology for strategic management has emerged within global organizations. It makes use of a new and innovative approach, called the Balanced Scorecard. By the end of the previous century more than half of the largest organizations in the world were using this approach to improve the definition and execution of their strategies.

The Balanced Scorecard was originally developed by Harvard University Professor Robert Kaplan and consultant David Norton, with 1992 marking the date of their first publication on the subject. Kaplan and Norton's use of the Balanced Scorecard has continued to evolve as they contribute to their client organizations, and continue to learn from those same clients. Their published books and articles are extensively referenced in the first half of this book. They have made a breakthrough contribution to the field of management in general, and specifically to the field of strategic management. We have the utmost respect and appreciation for their work, which has taken place primarily within fully developed western economies.

The Balanced Scorecard Methodology
Our own work with the Balanced Scorecard has taken place in China since 1996, after first establishing East Gate Consulting in Shanghai in 1993. East Gate brought business process improvement to China as a supplier, working with more than 100 China organizations helping them execute their business strategies. After East Gate was acquired by Hewitt Associates and we served for two years as country managers for Hewitt in China, we formed our second China enterprise, e-Gate Consulting. Our focus at e-Gate is on consulting, training and software that enable Chinese organizations to better formulate, execute and adjust their business strategies. This extends to the realm of process improvement, competency development , variable pay, leadership and culture - all components of what we call the Balanced Scorecard Methodology.

We believe the publication of this book marks a milestone for strategic management in China. The reason is that this book describes a methodology for strategic management that can be systematically applied in virtually any organization in China. This methodology has been adapted from Kaplan and Norton's work for specific application in China. Our experience clearly indicates that BSC implementation success in China requires a more comprehensive approach than what is typically the case in western countries. Because of this, in addition to referring to the "Balanced Scorecard", we also refer to the "Balanced Scorecard Methodology".

Target Audience
Our target audience for this book is executives, managers and entrepreneurs in China, as well as government officials who are looking for a systematic way to improve the quality and efficiency of their organizational units. We believe the book is highly suitable as a text for MBA courses in strategic management, leadership, human resources, organizational behavior and change management. Each of these content areas is an appropriate arena for the Balanced Scorecard Methodology. Examination of the chapter topics below reveals why this is the case.

Organization of the Book
This book delivers a comprehensive overview of the evolving BSC Methodology that we have been applying in China since 1996. The primary focus of each chapter is summarized below:
     · Chapter 1 addresses the multiple challenges that can arise when attempting to set and reach challenging          organizational goals in China
     · Chapter 2 provides an introduction to the BSC Methodology and the elements of a single Balanced          Scorecard
     · Chapter 3 describes the historical development of the BSC approach
     · Chapter 4 summarizes published international BSC cases, including analysis of the implications of each
         case for application in China
     · Chapter 5 offers a detailed explanation of the concepts, principles and tools that can be systematically          applied to strategy formulation
     · Chapter 6 focuses on setting BSC objectives, including a discussion of measurement issues
     · Chapter 7 addresses a critically important issue for strategic management in China: using the BSC          Methodology to design organizational alignment and overcome functional silos
     · Chapter 8 extends the explanation of BSC Methodology alignment to Human Resource systems, with a
         focus on competency development, variable pay and composition of the work force
     · Chapter 9 addresses the more conceptual issue of organizational culture from a practical perspective -          organizational readiness for the BSC Methodology
     · Chapter 10 is devoted to identification of the typical business process problems in China and how the BSC          Methodology can be used to achieve process improvement and more effective strategy execution
     · Chapter 11 offers a comprehensive three tier model of leadership and explains how the BSC Methodology          can be used to lead change and provide a structure for organizational learning at multiple
     · Chapter 12 describes the stages of implementing the BSC Methodology in China and identifies important          success factors for implementation
     · Chapter 13 describes the current status the BSC Methodology in China and offers predictions for future          directions in how it will evolve.
Balanced Scorecard & Strategy Execution: Applications in China has given us an opportunity to apply the concept of "balance" in writing the book:
     · We include both context and detail, to explain a more complete picture of how strategic management can
         be successfully implemented in China.
     ·  We include both international and Chinese cases to illustrate the practical application of concepts, issues          and tools.
     · We present both models and methods, to help managers understand a useful conceptual framework for          strategic management within which they can take practical and effective action.

Clarity, Focus & Alignment
Writing this book has given us an opportunity to translate our experience, learning and intuitions into words, thereby subjecting them to logical analysis. In a related fashion, the BSC Methodology enables the development of three critical characteristics of successful organizational strategy: clarity, focus, and alignment. We have experienced more than a few moments, when we found ourselves staring at a blank computer screen, trying to figure out how to express what we have learned and explain how we do what we do. These moments of focused reflection eventually led to clarity and a worthwhile learning process. In sharing our experience of this learning with a colleague, we described it in the following manner: "Writing this book has been a truly interesting experience. It has given us an opportunity to translate moments of clarity into words."
We hope that you, the reader, will find these words as worthwhile as we have found the experience of writing them. In this manner we will experience with you the longstanding Chinese principle of mutual benefit. As we express at the end of the book, we do so at the beginning as well: May your journey be a rewarding one!