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.
of Strategy Maps
All of the information is contained on one page; this enables relatively
easy strategic communication.
There are four perspectives: Financial; Customer; Internal; Learning
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
These last four elements of strategic improvement are supported by price,
quality, availability, selection, functionality, service, partnerships and
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
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.
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
Book: Robert Kaplan
and David Norton - Strategy Maps -
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