A new approach to linking strategy formulation and strategy implementation: an example from the UK banking sector

This paper uses the experience of one of the major UK banks to illustrate how the BSC might be used as part of a strategy process which can capture bottom-up information and concludes that the implementation role of BSCs needs to be supported by a defined strategy formulation process.

Abstract

Broady-Preston and Hayward (1998) make the point that 'the attempt by organisations to move away from purely top-down strategic formulation is in its infancy and different organisations favour different structures and models to ease the bottom-up flow of information' (p. 285). They further suggested that the balanced scorecard (BSC) model might be one tool to help the bottom-up flow of information. This paper uses the experience of one of the major UK banks to illustrate how the BSC might be used as part of a strategy process which can capture bottom-up information. The conclusion to be derived from this experience is that the implementation role of BSCs needs to be supported by a defined strategy formulation process. The solution which has emerged is the linking, for the first time, of the strategic architecture formulation process of Hamel and Prahalad (1996a) with the BSC strategy implementation tool of Kaplan and Norton (1996a), the balance scorecard. Boston MA: Harvard Business School Press).