How to implement complex strategies in holding companies or business groups with multiple subsidiaries through corporate and business-level scorecards.
The challenges of strategic planning grow exponentially with the complexity of an organizational structure, especially in business groups composed of multiple companies.
With the M&A trend growing in 2025, we expect to see more corporate acquisitions and, consequently, more groups of companies automating their strategy with our platform. The multi-entity model is also becoming more popular among SMBs, offering flexibility in risk mitigation, tax optimization, innovation, and market expansion.
Strategy Function in the Case of a Corporate Group
In the case of a group of companies, the strategy function is typically controlled by the parent company overseeing subsidiaries. This involves suggesting overall strategic priorities such as sustainability, innovation, and standardization in strategy implementation and performance measurement.
At the same time, subsidiaries maintain some freedom to formulate and execute their product strategies while adhering to overarching sustainability and financial goals.
Practical Implementation
In our strategy implementation system, we discuss a general approach to implementing strategies in complex business environments. This approach is agnostic to organizational structure and is scalable from SMBs to Fortune 1000 companies.
When mapping strategies for multiple entities, the following principles apply:
- Corporate strategy scorecard, which focuses on defining overarching goals and managing strategic functions.
- Scorecards for subsidiaries. The strategy of subsidiaries can be described with a single scorecard or further cascaded into multiple levels of scorecards.
For functional scorecards, corporate groups often utilize economies of scale and share certain elements. For example, shared scorecards may include:
- Stakeholder analysis
- Corporate governance
- Centralized risk register
- Analysis of external factors and competitive analysis
Spanning Strategy Across Multiple Sectors
What if we are talking about strategy implementation in more complex cases, for example, when an organization operates across multiple sectors and involves numerous subsidiaries?
In this case, the core logic of cascading remains the same. Most likely, we follow the organizational structure, cascading first into the business sectors and then, within each business sector, into specific subsidiaries.
The complexity of the strategic plan will also affect the functional scorecards. We are likely to see new shared scorecards for functions such as digital transformation, procurement, and sustainability.
Aligning Scorecards
Alignment between the scorecards of a corporate group occurs at both technical and business levels.
On the technical level, alignment can be achieved:
- Automatically, by placing one scorecard inside another, provided all scorecards share the same names for the perspectives
- Manually, by connecting specific goals through data or context
On the business level, the strategies of subsidiaries must align to form a cohesive overall strategy. Ideally, this should be achieved “by design” when cascading the corporate-level strategy, starting from shared stakeholder analysis and moving to lower levels of the strategy scorecards for business units.
Use of AI for a Corporate Group
With advances in AI technologies, more strategists will use AI for strategy definition, trend analysis, anomaly detection, and more. One of the benefits of managing the strategies of all subsidiaries within one platform is the ability to automate the sharing of context with AI.
For example, in BSC Designer, the structure of the corporate and business-level scorecards can be provided to AI when working on specific business-level strategies. This context ensures that AI considers the overall corporate strategy.
An Example of Corporate Strategy Map
A typical strategy map for a group of companies features group-level goals supported by overarching initiatives and KPIs. These examples can be further refined by aligning corporate objectives with the strategic scorecards of individual subsidiaries, ensuring cohesive execution and measurable outcomes across the entire organization.
Group Strategy Management. Example of Strategy Implementation
To illustrate how the strategy of companies under an umbrella organization can be implemented, consider the example of XYZ Eco Group, discussed in a series of other articles.
As a result of its initial formation and subsequent M&As, the group includes various subsidiaries. Each subsidiary has its own strategy scorecard aligned with others through the corporate strategy. This example also highlights the use of shared functional scorecards, such as a risk register, shared innovation portfolio, external factor analysis, and stakeholder analysis.
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If you have any questions about automating strategy implementation with a software platform, feel free to contact our team or sign up for a free plan to start building a prototype.
Alexis Savkin is a Senior Strategy Consultant and the CEO of BSC Designer, a Balanced Scorecard platform. He has more than 20 years of experience in the field, with a background in applied mathematics and information technology. Alexis is the author of the “Strategy Implementation System”. He has published over 100 articles on strategy and performance measurement, regularly speaks at industry events, and his work is frequently cited in academic research.
“Thank you for sharing. I would appreciate it if the topic could be aligned with the context of my company, which has over forty subsidiaries operating across multiple sectors. Could you please share an example benchmark along with a more in-depth and detailed analysis?”
Thank you for your questions, Candra. In general, we follow the same cascading approach, but in this case, there are additional levels—for example, a middle level where scorecards are grouped by sector. We’ve shared some telecom-specific details with you by email.