The Office of Strategy Management
by Robert S. Kaplan and David P. Norton
MOST COMPANIES HAVE AMBITIOUS PLANS for growth. Few ever realize them. In their book Profit from the Core, Chris Zook and James Allen report that between 1988 and 1998, seven out of eight companies in a global sample of 1,854 large corporations failed to achieve profitable growth. That is, these companies were unable to deliver 5.5% annual real growth in revenues and earnings while earning their cost of capital (a rather modest hurdle). Yet 90% of the companies in the study had developed detailed strategic plans with much higher targets.
Why is there such a persistent gap between ambition and performance? The gap arises, we believe, from a disconnect in most companies ...