Strategy Maps (Kaplan Norton)

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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

1. All of the information is contained on one page; this enables relatively easy strategic communication.

2. There are four perspectives: Financial; Customer; Internal; Learning and Growth.

3. 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.

4. These last four elements of strategic improvement are supported by price, quality, availability, selection, functionality, service, partnerships and brand.

5. 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.

6. 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.

7. Connecting arrows are describing cause and effect relationships.

What are the main principles behind Strategy Maps?

1. Strategy balances contradictory forces.
2. Strategy is based on a differentiating customer value proposition.
3. Value is added through internal business processes.
4. Strategy consists of simultaneous, complementary themes.
5. 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

Forum Forum discussions about Strategy Maps. Below you can ask a question about this topic, share your experiences, report a new development, or explain something. 🔥 How to Use a Strategy Map to Perform a Quick Strategy Check During a recent consulting assignment to investigate a range of growth options for a small non-profit, I was handed a five-page document which the client called "their five-year strategic plan". This... 14   10 comments Strategy Maps for Customer Service Organizations Hi, can someone comment on how SMs for Customer Service Organizations/Units are different from default ones? Any ideas or pointers are appreciated! Thanks & Regards.... 9   2 comments Successful Cases of Strategy Maps How many companies have applied a strategy map into their business so far? Is there any successful case study that can be shared to discuss? What were the advantages of using it in practice?... 9   3 comments BSC or OKR? In recent time there is the Objectives and Key Results (OKR) usage to steer the management team towards the strategic targets. I think that OKR are short term targets, since BSC are long term and vis... 4   1 comments 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 ans... 3   2 comments 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, issues, cons or disadvantages associated with strategy map implementation? Many than... 3   5 comments Start a new topic about Strategy Maps Ask a question or explain something

Best Practices The best, top-rated topics about Strategy Maps. Here you will find the most valuable ideas and practical suggestions. 🥇 Should the Strategy be Communicated? How Much? To Whom? Communicating strategy involves much more than talk. There are numerous pitfalls or issues which must be resolved for the strategy to be effectively communicated. For example, in some instances execut... 41   45 comments 🥈 Managing Cross-Divisional Collaboration and Strategy Maps Often, achievement of a Critical Success Factor requires collaboration of two or more divisions across organizational boundaries. For example, to increase sales of new products in overseas markets, co... 22   20 comments 🥉 Selection in Customer Perspective of Strategy Maps Good morning, In the Customer Perspective of the Strategy Map there is a product/service attribute called "Selection". What does it mean? Examples?... 12   5 comments Strategy Maps for Public Sector Organizations / Government How do strategy maps work for public sector organizations (i.e. government agencies) that don't have sales nor shareholders?... 8   4 comments Are Balanced Scorecard and Strategy Map the Same? Does the strategy map tell the same story of Balanced Scorecard? Both of them are talking about these four perspectives.... 8   3 comments Synergy in Strategy Maps? Is it possible to include corporate level (strategic) synergy effects into a Strategy Map? How? (Strategy maps seem to be directed primarily at the business strategy level)... 6   8 comments

Expert Tips Advanced insights about Strategy Maps. Here you will find professional advices by experts. Linking Strategy with Execution Linking Strategy to Implementation One of the world's most popular business tools for translating strategy into operational activities is the Balanced Scor... How to Incorporate Sustainability into your Strategy Map (BSC) ? Sustainability Balanced Scorecard, SBSC, Triple Bottom Line Due to the fact that corporate sustainability issues have become more and more important, organizations are now forced t... Six Crucial Mind Shifts for Strategy Execution / Implementation Change Management, Strategic Change, Resistance to CHange, Strategy Implementation Speculand (2009) suggests six mind shifts that people should consider when they're implementing new strategies in organi... Why is it Important for a Balanced Scorecard to Communicate the Strategy? Balanced Scorecard & Strategy Why is it important for a Balanced Scorecard to communicate the strategy? 1. It describes the corporate vision to the ...

Information Sources Various sources of information regarding Strategy Maps. Here you will find powerpoints, videos, news, etc. to use in your own lectures and workshops. Strategy Map Diagram Communicating a Strategy Download and edit the 12manage PowerPoint model for limited personal, educational and business use. Republishing in int... How to Communicate Organizational Change to Affected Audiences Organizational Change, Change Management, Change Communications This presentation elaborates on the process of communicating change towards those affected by the change. The presentati... The Strategic Role of Public Relations and Communication in Business Public Relations, Strategic Management, Corporate Responsibility, Stakeholder Management, Stakeholder Analysis Presentation about the role public relations and communications in business strategy implementation and execution. The p... Brett Knowles: Pitfalls in Designing Strategy Maps Creating and Implementing Strategy Maps. Consultancy, Experts, Advanced Education Brett Knowles explains the frequent characteristics of bad strategy maps: - No Clear Cause-and-Effect Explanation (lack... Summary of Strategy Maps: Part 3 Initial Understanding of Strategy Maps and History Brett Knowles explains in three videos the history of Strategy Mapping, its benefits and some interesting features. Par... Summary of Strategy Maps. Part 2 Initial Understanding of Strategy Maps Brett Knowles explains in three videos the history of Strategy Mapping, its benefits and some interesting features. Par... Introduction to Strategy Maps. Part 1 Initial Understanding of Strategy Maps Brett Knowles explains in three videos the history of Strategy Mapping, its benefits and some interesting features. Par... Strategy Review (Strategic Review). Types and Tips Strategy Review, Strategic Management, Strategy Process Erica Olsen explains how to run a strategy review, she considers to be the heartbeat of any strategic management process...

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