Management Thinker Robert Kaplan - Book Report/Review Example

Robert S. Kaplan There are only few people in the field of modern management have contributed so significantly as Mr. Robert S. Kaplan. When we talk about business strategy, no one can think of the subject without Robert S. Kaplan. His books on business strategies, especially on activity based costing, balance scorecards, intangible assets etc., have transform the complete picture of business strategy and leadership. He is one of the pioneer thinkers of business strategies in our time. Kaplan develops the ways to link costs and performance management systems to strategy implementation and operational excellence. Presently Robert S. Kaplan is Marvin Bower professor of leadership development at Harvard Business School (HBS). Before joining as HBS faculty in 1984, he was faculty for 16 years and Dean from 1977- 1983 in Graduate School of Industrial Administration (GSIA), Carnegie -Mellon University. Kaplan completed his B.S. and M.S. in electrical engineering from M.I.T. and Ph.D. in operation research from Cornell University. In 1994 he was conferred an honorary doctorate from the University of Stuttgart (Biography of Robert S. Kaplan from HBS faculty and research accessed from website on dated 20th October 2007 http://drfd.hbs.edu/fit/public/facultyInfo.dofacInfo=bio&facEmId=rkaplan). As an innovative researcher and prolific writer he has authored numerous books, Harvard Business review articles and academic papers published in various academic and professional journals. Recently Kaplan was lauded and recognized by the Accounting Hall of Fame as an "accounting scholar of international acclaim who has given new life to cost accounting and revitalized the role of accounting in business management and strategic planning". Kaplan has also received the lifetime contribution award from the management accounting section of American Accounting Association (AAA), is especially well known for co-developing Activity Based Costing and Balance Scorecard. The Financial Times named Kaplan as one of the top 25 management thinkers for his "Balance Scorecard" approach to improve corporate valuation and performance. His most celebrated work which has been co-authored with David Norton "The Balance Scorecard: Translating Strategy into Action", which won the 2001 Wildman Medal for its impact on accounting practices by the American Accounting Association. Another book "The Strategy Focused organization: How Balanced Scorecard Companies Thrive in the New Business Environment", awarded the best international book in 2000 by Cap Gemini Ernst & Young. Thomas Dyckman, the Ann Whitney Olin Professor of accounting at the Johnson School once said about Kaplan "he has made the balance scorecard (BS card) a premier activity to evaluate the firm more globally, measuring a firms performance continuously on multiple dimensions including customers satisfaction, innovation, learning of financial performance ". Mark Eisner the Associate Director of ORIE and a formal doctoral classmate of Kaplan at Cornell opined that "Kaplan has shown that measuring business in ways that were often omitted from conventional accounting can help guide employees towards creating value ". Kaplan was cited in the 25th October 2003 issue of The Economist as "the only man currently to be credited with developing two top management tools". As researcher, teacher and consultant he received various prestigious awards and acknowledged for his distinctive work. He received the outstanding Accounting Educator Award in 1988 from the American Accounting Association and in 1994 CIMA award from the Chartered Institute of Management Accountants (UK) for "Outstanding Contribution to the Accountancy Profession". A professor at the Harvard Business School and one of the top 15 business gurus of the world according to the Financial Times, Prof. Robert S. Kaplan also provides consultancies on the design of performance and cost management system with many leading companies in North America and Europe (accessed from the website www.bimsa.com.tr/bimsaeng/contents.aspxID=120&Ctype=Cnt-71k on dated 20th October 2007). As a good orator he offers regular seminars in almost allover the world. Currently he is the chairman of the Practice leadership committee of the Palladinn Group and presently serves on the boards of evergreen energy, accounts systems and the Technion Institute of Management. The different business strategies developed by Kaplan are the Time Driven Activity Based Costing (ABC), Strategy Maps and Balance Scorecard Systems, which are being used by Fortune 1000 companies, and the American Army. The systems developed by Kaplan are used by leading groups of many industries throughout the world, among them Deutsch Bank, City Group, AIG, Coca Cola Belgium, Johnson & Johnson Europe, Sysco Foods, Target & Lowe's are the few. Robert S. Kaplan is continuously exploring the ABC system and his most recent work focused on Time Driven Activity Based Costing (TDABC) through which costing becomes simpler, powerful and flexible. TDABC became a process that links strategic planning to operational budgeting. Kaplan has documented the ABC systems, which has been installed by most of the companies worldwide to measure more accurately the profitability of their product lines, customers, channels and facilities (Kaplan and Anderson, 2007). Kaplan's research on performance management systems includes further study of The Balance Scorecard, a strategic measurement and management system that links strategic objectives to: financial performance, customer performance -- including the value proposition to attract and retain targeted customers, innovation, internal business processes, and learning and improvement (Research summaries of Robert S. Kaplan, HBS publication, 2007 accessed from the website on dated 20th October 2007 http://www.hbs.edu/news/releases/021307_kaplan.html). While discussing the alignments and using the BS card to create corporate synergies Kaplan with Norton (2000) say that "most organizations consist of multiple business and support units, each populated by highly trained, experienced executives but often the effort of individual units are not coordinated, resulting in conflicting in lost opportunities and diminished performance ". Applying BS Card management system to corporate level strategy, revealing how highly successful enterprises achieve powerful synergies by explicitly defining corporate headquarters role in setting, coordinating and overseeing organizational strategies. Alignment shows how companies can build an enterprise level strategy map and BS Card that clearly articulate the "Enterprise Value Proposition", how the enterprise creates value above that achieved by individual business units operating alone. In his book "Managing Alignment as a Process" Kaplan and Norton (2006) says that "most organizations attempt to create synergy but in a fragmented, uncoordinated way ". So for creating synergy we need a strategy and Kaplan enumerated eight checkpoints for corporate and other business organizations to follow as annual planning process. Now discussing the main management tools developed by Kaplan, we can easily establish a firm opinion that Kaplan is one of the best-known Management and business strategy thinkers of our times. All the management tools developed by Kaplan are the most relevant and are in practice in most of the fortune 1000 companies. So his theoretical developments of business strategies and its applicability to organizations make him so relevant and special. Kaplan told about his globally accepted management strategies that have completely transformed business structures as follows "You cannot measure your intangible assets the way you measure the financial and physical assets on your payroll. The value of these assets is directly related to the compliance with your strategy and other tangible and intangible assets. Success in an organization can only be achieved if all components are placed in a harmonious relation; if well-trained people with the right information, well chosen target customers and correct value suggestions created for these customers can be related to one another. If you cannot establish such congruity with your intangible assets, your strategy will not reach its target" (Kaplan and Norton, 2004). References: 1. Kaplan, R. S., and Steven R. Anderson. Time-Driven Activity-Based Costing: A Simpler and More Powerful Path to Higher Profits. Boston: Harvard Business School Press, 2007. 2. Kaplan, Robert S., and David P. Norton. Strategy Maps: Converting Intangible Assets into Tangible Outcomes. Boston: Harvard Business School Publishing, 2004. 3. Kaplan, Robert S., and D. P. Norton. The Strategy-Focused Organization: How Balanced Scorecard Companies Thrive in the New Business Environment. Boston, Mass.: Harvard Business School Press, 2000. 4. Kaplan, Robert S., and D. P. Norton. Managing Alignment as a Process. Harvard Business School Press, 2006. 5. Biography of Robert S. Kaplan from HBS faculty and research accessed from website on dated 20th October 2007 . 6. Accessed from the website on dated 20th October 2007 . 7. Research summaries of Robert S. Kaplan, HBS publication, 2007 accessed from the website on dated 20th October 2007 . Read More