What are Strategy Maps? Description
In the 2001 book "The Strategy-Focused Organization", Kaplan and Norton
transform their Balanced Scorecard.
In 1992 they introduced the Balanced Scorecard in the Harvard Business Review
as system to measure performance; now they change it to a strategic management
system. A lot of this transformation was done by further emphasizing the so
called Strategy Map.
Strategy Maps are diagrams that describes how an organization can create
value: by connecting strategic objectives in explicit cause and effect relationship
with each other. Via the four Balanced Scorecard perspectives: financial,
customer, processes, learning and growth. See the figure below (You can click
on the graph to download a bigger one in pdf-format). Strategy Maps are a
strategic part of the Balanced Scorecard framework to describe strategies
for value creation.
 Characteristics
of Strategy Maps
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All of the information is contained on one page; this enables relatively
easy strategic communication.
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There are four perspectives: Financial; Customer; Internal; Learning
and Growth.
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The financial perspective looks at creating long-term shareholder value,
and uses a productivity strategy of improving cost structure and asset utilization
and a growth strategy of expanding opportunities and enhancing customer
value.
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These last four elements of strategic improvement are supported by price,
quality, availability, selection, functionality, service, partnerships and
brand.
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From an internal perspective, the operations processes and the customer
management processes help to make the product and service attributes. While
the innovation, regulatory and social processes help with relationships
and image.
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All of these processes are supported by the allocation of human capital,
information capital and organizational capital. Organizational capital is
comprised of company culture, leadership, alignment and teamwork.
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Connecting arrows are describing cause and effect relationships.
What are the main principles behind Strategy Maps?
- Strategy balances contradictory forces.
- Strategy is based on a differentiating customer value proposition.
- Value is added through internal business processes.
- Strategy consists of simultaneous, complementary themes.
- Strategic alignment determines the value of intangible assets.
Usage of Strategy Maps? Benefits
By connecting such things as shareholder value creation, customer management,
process management, quality management, core capabilities, innovation, human
resources, information technology, organizational design and learning with
one another in one graphical representation, Strategy Maps can help greatly
in describing the strategy and to communicate the strategy among executives
and to their employees. In this way an alignment can be created around the
strategy, which makes a successful implementation of the strategy more easy.
No small thing, bearing in mind that often, the implementation of a constructed
strategy is the biggest challenge.
Although the previous book of Kaplan and Norton already spent 64 pages on
Strategy Maps, you can find the latest, best and most comprehensive treatment
of Strategy Maps including lots of examples in the book that is mentioned
below.
Book: Robert Kaplan
and David Norton - Strategy Maps -
Strategy Maps Special Interest Group
 Visit the Special Interest Group
Recent User Comments
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Benjamine VO VINH - France
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Have you heard about OVAR ? |
"OVAR is a second - similar - strategic approach that allows confontation of departments' choices. O for Objectives, VA for Value of Actions, R for Responsibilities. Every department implements the company's objectives into actions and decides whom may be responsible or partner for what. After that, all departments meet and cross the needs, the do's and the dont's. Accountabiliy, alignment and transversality are the benefits of this tested and proven approach..." |
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- Malaysia
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Strengths of Strategy Maps |
"Strategy Maps are an excellent extension to the basic framework of the Balanced Scorecard (BSC) approach.
- Business strategy statements can be catchy, but line management are often searching for answers and appropriate data on the implementation and the translation to results of the strategy - this is where Strategy Maps (SMs) come into play.
- They facilitate further the value adding process of senior and line management.
- They provide direction and show the way for successful implementation of agreed Business strategy." |
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Abdul Babar - Australia
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Disadvantages / Problems with Strategy Maps |
"Hi everyone, I find business literature mainly talks in favor of Strategy Maps.. can you help me to find problems or disadvantages in strategy map implementation?" |
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Luis Villegas - Mexico
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Customer Perspective |
"Good morning, In the Customer Perspective of the Strategy Map there is a product/service attribute called "Selection". What does it mean? Examples?
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Sam - Australia
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BSC |
"Does the strategy map tell the same story of Balanced Scorecard? Both of them are talking about these four perspectives." |
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Best User Comments
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William - USA
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Synergy in Strategy Maps? |
"Is it possible to include corporate level synergy effects into a Strategy Map? How? (Strategy maps seem to be directed primarily at the business strategy level)" |
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 Comment on this Page
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