Lorem Ipsn gravida nibh vel velit auctor aliquet.Aenean sollicitudin, lorem quis bibendum auci elit consequat ipsutis sem nibh id elit

FOLLOW ME

TWITTER GPLUS FACEBOOK BEHANCE PINTEREST

Blog

Home  /  DOCNDOC Blog   /  Creating Strategy Maps

Creating Strategy Maps

The term strategy map has its origin in the Balanced Scorecard (BSC) concept of the mid-1990s.  Since then, strategy map became a buzzword, a synonym of any visual representation of strategy. Below, we’ll discuss the most popular approach to strategy map design based on the original K&N Balanced Scorecard.

 

A strategy map is a simple graphic that shows a logical, cause-and-effect connection between strategic objectives (shown as ovals on the map). It is one of the most powerful elements in the balanced scorecard methodology, as it is used to quickly communicate how value is created by the organization.

 

Strategy mapping can vastly improve any strategic communication effort. Most people are visual learners and so a picture of your strategy will be understood by many more employees than a written narrative. Plus the process of developing a strategy map forces the team to agree on what they are trying to accomplish in simple, easy-to-understand terms. With a well-designed strategy map, every employee can see how they contribute to the achievement of the organization’s objectives.

 

The technique of strategy mapping is designed to help a management team explore and discuss the strategy in more detail than they normally would.

 

It helps develop highly effective strategies that can actually be implemented. In addition, strategy maps help those who are involved to develop the mission, vision and goals and action plans to address them, as well as understand the challenges they may face during the journey.

 

Strategy maps also help

  • Discover strategic issues that are not necessarily obvious
  • Be effective in evaluating organizational vision, mission, goals, strategies, and actions
  • Communicate strategies in an easy-to-understand manner making it easier to implement them
  • A way to properly guide, monitor, manage and review strategy implementation
  • Stimulate thinking and facilitate conversation and understanding about the strategy

 

A generic strategy map focuses on four strategic perspectives;

  • Financial perspective: outlines the tangible outcomes of the organizational strategy
  • Customer perspective: describes the value proposition for the customers
  • Internal process perspective: specifies the essential internal processes that will have the greatest impact on the strategy
  • Learning and growth perspective: identify the intangible assets important to the strategy

 

These elements are categorized as individual rows on the map, and each represents objectives pertaining to them. And the objectives are linked together to convey the cause and effect relationship between them.

 

The book “Strategy Maps” by veteran business consultants Robert Kaplan and David Norton popularized the idea of the technique, which emerged from years of research and client consultation conducted by them. The strategy map evolved from the four-perspective model of the balanced scorecard, which is another framework developed by the duo earlier.

 

Principles of Developing a Strategy Map

  • Strategy balances contradictory forces
  • Strategy is based on a differentiated value proposition
  • Strategy consisting of simultaneous, complementary themes
  • Strategic alignment determines the value of intangible assets

 

THE BASICS

 

The main idea of a strategy map is that each strategic objective in your balanced scorecard is represented by a shape, usually oval. Very rarely are there more than 20 objectives. Tracking too many will dilute your overall message, making your strategy difficult to communicate.

 

These objective ovals are then grouped into perspectives like “Financial” or “Learning and Growth.” Every organization is different, but most strategy maps have four perspectives.

 

Many strategy maps also have arrows between the objectives to show their cause and effect chain. By following the arrows’ paths, you can see how the objectives in the lower perspectives drive the success of the higher ones. These causal relationships are central to the idea of the balanced scorecard. If you train your employees and build a culture of information sharing (Learning and Growth), they’ll make your company run more smoothly (Internal Business Processes). A better running business takes better care of its customers (Customer), and happy customers buy more of what you’re selling (Financial). Strategy maps show how fuzzy intangible assets, like company culture and employee knowledge, are turned into concrete tangible results. The vast majority of the things that executives can change in an organization don’t contribute directly to the bottom line. We know that it’s important to have happy employees and updated infrastructure, but it’s hard to see how those objectives feed into the company’s end goals. Your strategy map shows these relationships and encourages strategic thinking that goes far beyond your balance sheet.

 

Some strategy maps have strategic themes. They represent the three or four big-picture strategic focuses in your organization. Themes vertically group together related objectives across your entire strategy map.

 

Unlike perspectives, themes are very specific to your organization. For example, themes maybe things like:

  • Operational Excellence
  • Culture of Safety
  • Sustainability
  • Clinical Leadership

 

Some organizations find it helpful to show themes on their strategy map. Others think that themes add unnecessary complexity. Ultimately, it’s up to you to decide if themes are right for your strategy map.

 

Every organization is different, and there’s no single way to make a great strategy map.

 

For example, most companies put the financial perspective on top because their end goal is to make more money. Public utilities and nonprofits, however, have different motivations. Their finances are just a means to an end.

 

A nonprofit’s final goal is to provide the best services it can. For these organizations, it’s common to switch the Customer and Financial perspectives so that the Customer is on top. Their funding (Financial) allows them to help people (Customer).