Strategy maps emerged as part of robert kaplans and david nortons seminal work with the balanced scorecard. However, in our experience strategy maps are often extrapolations of past performance and are seldom sufficiently linked to possible future states. Click on the graph to download a big strategy map template in. In the years that followed, michael porters explication of the five forces that determine the longrun profitability of any industry has shaped a generation of academic research and business practice. From the originators of the balanced scorecard system, strategy maps. Commentary transforming the balanced scorecard from. Balanced scorecard strategy maps are a powerful tool for describing and ultimately implementing a business strategy. Strategy pyramid strategy maps can be, and often are, used as standalone tools that organisations employ to develop, understand and convey their strategic story. Strategy maps are essential in the information age, when intangible assetscustomer relationships, employee skills, the ability to innovateare competitive advantages. Kaplan is a professor at harvard university and david p. Necessary but not sufficient operational effectiveness and strategy are both essential to superior performance, which, after all, is the primary goal of any enterprise. A complete strategy map template including examples. Mapping your corporate strategy, hbr working knowledge interview with robert kaplan strategy map offers a framework for articulating strategy in a variety of contexts strategy maps, in some cases, try to frame implied solutions by introducing processes into the framework e.
Academy of management executive are you sure you have a. Strategy maps can provide significant value to companies using other quality programs in these four ways. Strategy maps are designed to help execute strategy and bring predictive qualities to key performance indicators by linking them according to perceived causeandeffect relationships. Although the previous book of kaplan and norton already spent 64 pages on strategy maps, you can find the best and most. Kaplan and norton are gungho about the power of strategy maps to provide a conceptual framework for understanding any corporation, public institution or nonprofit organization, but general readers are likely to shake their head at jargonheavy reformulations of the obvious like the ideal customer experience is a product that meets customer. Focusing your organization on strategywith the balanced. They provide explicit and testable causal linkages between strategy and reality.
Figure 1 on the following page provides an overview of a strategy map. The strategy map is a visual framework of the cause andeffect relationships among the components of an organizations strategy, and it is used to integrate the four perspectives of a bsc financial, customer, inter nal, and learning and growth. Mapping your corporate strategy harvard business school. Converting intangible assets into tangible outcomes kindle edition by kaplan, robert s. Management white paper how to design a strategy map. Companies must be flexible to respond rapidly to compet itive and market changes. Kaplan and norton claim that this generic map reflects a generalization of their work with a large number of companies for whom they have developed specific strategy maps. How to develop a balanced scorecard into a strategy map. Its great for quickly communicating bigpicture objectives to everyone in the company. The strategic perspective that kaplan and norton have developed is very valuable.
As a result, japanese manufacturers enjoyed substantial cost and quality advantages for many years. By translating their strategy into the logical architecture of a strategy map and balanced scorecard, organizations create a common understandable point of reference for all their units and employees. Organisations need to find a way to express their strategy simply and understandably but that way also needs to reflect the complexity of their relationships and activities. However, the study also finds that those organizations which used strategy maps had a 2. Organization, which, in turn, results from strategy maps and balanced scorecards. While the bsc is best known for enhancing an organizations performance measurement system, strategy maps are the instruments that tie bsc measures directly to strategic objectives and outcomes and,in the process,improve strategy implementation and corporate operating and financial results. Focusing your organization your strategys on strategywith the brilliantbut can you execute it. Strategy maps provide a disciplined way of linking hypotheses about your. Creating value through hr hr strategy deloitte united states.
Those especially interested in strategy maps, or those who want to read a lot of specific case studies, may find this book a useful adjunct. Commentary transforming the balanced scorecard from performance measurement to strategic management. Strategy maps let an organization describe and illustratein clear and general languageits objectives, initiatives, targets markets. Operational effectiveness is not strategy for almost two dec des, managers have been learning to play by a new set of rules. Objectives keep one ear open in almost any business environment and the term strategy is sure to crop up on a regular basis. Converting intangible assets into tangible outcomes robert s. Professor sheila corrall information school, university of sheffield. Norton introduced the balanced scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer. Measuring the strategic readiness of intangible assets hbr onpoint enhanced. Delivering actionable strategy through business architecture. This diagram describes how to forge tight links between them in a. A strategy map is a simple and effective way to communicate with employees about. Use features like bookmarks, note taking and highlighting while reading strategy maps.
They must benchmark continuously to achieve best prac tice. Before kaplan and norton, most academic strategy courses were dominated by. But these assets have value only within the context of a strategy. Use strategy maps to communicate your strategy hbr store. Converting intangible assets into tangible outcomes. They establish targets beyond existing best practices.
Otherwise, wed suggest that kaplan and nortons two earlier books have more meat. The balanced scorecard strategy map provides a framework to illustrate how strategy links intangible assets to valuecreating processes. The idea in brief the core idea the idea in practice putting the idea to work 1 article summary 2 the customercentered innovation map. Norton introduced the balanced scorecard, a revolutionary performa. It maps each companies activities into a visible frame, links the process from employee performance to customer satisfaction and then to the shareholder value achievement. Strategy as the basis for competition brings us to another harvard business school professor, michael porter, the undisputed guru of competitive strategy. Balanced scorecard hbr bestseller the balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and global scale.
With a welldesigned strategy map, every employee can know your overall strategy and where they fit in. T ool k it the customercentered innovation map by lance a. In 1979, a young associate professor at harvard business school published his first article for hbr, how competitive forces shape strategy. Strategy maps we can see that they have kept the number of objectives low. To maximise their value, however, they need to be seen and used as core building blocks in an aligned strategy initiative.
It maintains a solid structure while allowing for a great deal of flexibility, so it can represent virtually any segment you operate in and your unique strategy if youre just getting started with your strategy mapping initiative and are looking for some templates and examples, youre in the right spot. Missing, however, has been any guidance as to what the product of these tools should beor. They identify entirely new processes that are critical for achieving strategic objectives. Strategy maps and balanced scorecards using business tools to align strategies and communicate value. How to design a strategy map api white paper research with 157 companies conducted by the usbased wharton school found that only 23% of companies consistently built, analyzed, and tested causal models. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Strategy maps harvard business publishing education. Read strategy maps converting intangible assets into tangible outcomes by robert s. For example, one of the uks largest retailers has 20 objectives, a uk high street bank has 12 and a global advertising agency has 12 as well. This article explains how to move from a broad corporate vision to an outline of a strategy. A strategy map is a diagram that shows your organizations strategy on a single page.
One increasingly popular framework to combine these qualities is the balanced scorecard. T ool k it by thoroughly mapping the the customer done, a. Norton introduced the balanced scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer relationships. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. This paper examines three forms of strategy based on the different ways in which that term is used in the business world. Your strategy map tells employees throughout your organization exactly how to turn re sources. Pdf having trouble with your strategy then map it kate.
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