The first step is to agree on the vision, mission and strategic intent of the enterprise. How to develop a balanced scorecard into a strategy map. 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. The main purpose of this book strategy maps is to provide a more visual description of the balanced scorecard, which is achieved through literally mapping the strategy. Commentary transforming the balanced scorecard from performance measurement to strategic management. Read strategy maps converting intangible assets into tangible outcomes by robert s. In 2001 kaplan and norton1 published the strategy focused organisation which introduced the strategy map as an integral part of the balanced scorecard performance management system thus transforming it into a strategic management system. The initial steps for building the strategy map are primarily performed by the executive team. Converting intangible assets into tangible outcomes 1 september 2004 strategy maps. Abstract click on the graph to download a big strategy map template in. The connecting arrows in the map shows cause and effect relationship of the goals. A strategy map is a visual tool that helps with the organizations strategy on different stages. The purpose of this paper is to examine the balanced scorecard bsc adoption experience amongst organisations in connection with the strategy map design. It provides clear line of sight to employees about the overall objectives in the organization and connected their jobs in a visible way to the companys desired goals.
The strategy map simplifies the complexity of strategy by illustrating how few strategic objectives link intangible assets to value creating processes. Using survey data from managers of 91 italian organisations the paper seeks to verify whether. Strategy map strategy map examples, how to, and more. Kaplan and norton claim that this generic map reflects a generalization of their work with a large. Delivering actionable strategy through business architecture. Strategy maps help managers understand unit strategies and synergies between units. A good strategy map should communicate everything a company is striving to achieve on a single page. It provides tons of ideas on how to assemble the various components of the strategy map, as well as revisits the selection of overall strategy themes. A wellthoughtout strategy map is a beautiful thing. Despite the best intentions of those at the top, lofty statements about becoming best in class, the.
Norton, have created a powerful new tool based on their ongoing research. There are little risk of failure in creating the strategymap so long as managers are equipped with accuratedata and information, analytical skills and. Since this first incarnation kaplan and nortons thinking has moved on, and the perspectives are now organised in a sequence hence the map idea. Norton introduced the balanced scorecard, a revolutionary performance. Kaplan and norton identify four themes, which they go on to describe as valuecreating. Commentary transforming the balanced scorecard from. 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. A strategy map is a visual summary of what a company plans to do in order to improve its business, gain more customers and improve its financial outlook.
Strategy maps emerged as part of robert kaplans and david nortons seminal work with the balanced scorecard. Additionally, many companies find strategy maps valuable because they include intangible factors like. Converting intangible assets into tangible outcomes. Strategy map page 5 building strategies and strategy maps pages 7, 8 ibms complete customer solution page 8 by robert s. A complete strategy map template including examples. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. A strategy map is a diagram that is used to document the primary strategic goals being pursued by an organization or management team. 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. A strategy map is a diagram that shows your organizations strategy on a single page. Information school the university of sheffield 2010. Figure 1 highlights where the strategy map and balanced scorecard fit in the.
In addition, it can help provide information on the chosen strategy more. The objectives on the strategy map are arrayed across two or more horizontal bands, and each band is known as a perspective. Our findings indicate that only 15 studies have dealt with the topic of strategy maps over the past 22 years. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Strategy maps pages 2, 3 valuecreating processes pages 3, 4, 5 manage risk page 3 innovation through operations page 4 intangible assets pages 5, 6, 7 triple bottomline strategy map page 5 building strategies and strategy maps pages 7, 8 ibms complete customer solution page 8 by robert s. Strategy maps describe how organisations create value by building on strategic. Browse the definition and meaning of more terms similar to strategy map kaplan norton. Strategy maps can be, and often are, used as standalone tools that organisations employ to develop, understand and convey their strategic story. With strategy maps, kaplan and norton expand the balanced scorecard concept they presented in their first book, called the balanced scorecard. Yet, bsc implementations that actually use a sophisticated strategy map appear to be rather successful. It provides the foundation for designing a balanced scorecard that is the cornerstone of a strategic management system. Developing a strategy map the process below illustrates the four stages in which a contemporary strategy map plus the scorecard and implementation plan are developed. They provide a language that executive teams can use to discuss the direction and priorities of their enterprises. My experiences as a balanced scorecard practitioner with a large canadian company taught me that tremendous results are possible with the tool, but to attain.
The balanced scorecard tool and strategy map offer a framework to measure intangible assets and to describe strategies as a series of cause. Strategic management what youll learn in this summary which organizational processes are most critical for enhancing productivity. Strategy maps, pioneered by balanced scorecard founders robert kaplan and david norton, allow organisations to describe and communicate their strategies concisely and succinctly and close the gap between formulation and successful implementation of strategy. Figure 1 on the following page provides an overview of a strategy map. Strategic management, balanced scorecard, strategy maps, innovation. If your company is made up of only five people or is an enterprise of 5,000 people, first and foremost you want them to know exactly what the company is about and what it.
Converting intangible assets into tangible outcomes book is not really ordinary book, you have it then the world is in. A strategy map is a diagram that describes how a company or organisation can. According to kaplan and norton, a strategy map is a logical comprehensive architecture for describing strategy. The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. With a welldesigned strategy map, every employee can know your overall strategy and where they fit in. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy.
Using the balanced scorecard as a strategic management. Addressing both strategy and service delivery models this paper describes the overall approach to using strategy maps in the public sector, based upon 4th generation balanced scorecard thinking. Convert ing intangible assets into tangible outcomes. Norton introduced the balanced scorecard, a revolutionary performa. Executive summarythe strategy map at least described in the introductionsection of the book is a powerful tool tocapture, develop and communicate organization strategyinternally. Introduction to strategy maps a book by robert s kaplan. The strategy map was developed by kaplan and norton in 2004 based on the bsc, to help firms. They argue that success results from a strategyfocused organization, which, in turn, results from strategy maps and balanced scorecards. We will use the many articles and books written by kaplan and norton on the bsc as frame of reference. During the past 30 years, much attention has been focused on how companies can formulate new strategies for sustainable advantage.
Kaplan is a professor at harvard university and david p. The strategy map was developed by kaplan and norton in 2004 based on the bsc, to help firms develop a strategy. In 2001 kaplan and norton1 published the strategy focused organisation which introduced the strategy map as an integral part of the balanced. Foreshadowing the subsequent development of strategy maps, anthony. Kaplan and norton claim that this generic map reflects a generalization of their work with. To maximise their value, however, they need to be seen and used as core building blocks in an aligned strategy initiative. Strategy maps combine with balanced scorecards to provide a new framework for describing and implementing strategy. 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. Use features like bookmarks, note taking and highlighting while reading strategy maps. Its great for quickly communicating bigpicture objectives to everyone in the company. It is an element of the documentation associated with the balanced scorecard, and in particular is characteristic of the second generation of balanced scorecard designs that first appeared during the mid1990s. Balanced scorecard stepbystep volta river authority. Converting intangible assets into tangible outcomes kindle edition by kaplan, robert s. In this first of two articles on strategy development, adapted from kaplan and nortons.
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