The strategy map allows managers to align investments in people, tech nology and. In this first of two articles on strategy development, adapted from kaplan and norton s. Foreshadowing the subsequent development of strategy maps, anthony claimed that. Based on extensive field research in organizations worldwide, alignment shows how companies can build an enterpriselevel strategy map and balanced scorecard that clearly articulate the enterprise value proposition. Since this first incarnation kaplan and nortons thinking has moved on, and the perspectives are now organised in a sequence hence the map idea. However, strategic management is a mature and wellresearched discipline. Kaplan and norton argue that the most critical aspect of strategy implementing it in a way that ensures sustained value creationdepends on managing four key internal processes. Norton s everal years ago, we introduced the concept of a balanced scorecard for motivating and measuring business unit performance. 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.
If you do your first strategy map, these steps might sound like too much to assimilate. Norton introduced the balanced scorecard, a revolutionary performa. Strategy maps and balanced scorecards constitute the. Kaplan and norton identify four themes, which they go on to describe as valuecreating processes. The strategy map allows companies to describe the links between intangible assets and value creation so all aspects of strategy can be implemented in a manner that ensures sustained value creation. An integrated balanced scorecard strategic planning model for. The strategy map simplifies the complexity of strategy by illustrating how few strategic objectives link intangible assets to value creating processes.
Linking the balanced scorecard to strategy robert s. Convert ing intangible assets into tangible outcomes. Procedia social and behavioral sciences 24 2011 754a768 7 th international strategic management conference balanced scorecard perspective on change and performance. Read strategy maps converting intangible assets into tangible outcomes by robert s. The kaplan norton kn strategy maps are perhaps the most popular, featuring some exibility in the representation of strategy kaplan and norton,2000, 2004. In the final sections, conclusions are drawn regarding the benefits of developing scenariobased strategy maps. Introduction to strategy maps a book by robert s kaplan and david p norton 1. The sustainability balanced scorecard as a framework for.
Strategy maps describe how organisations create value by building on strategic. Norton focusing your organization on strategy with the balanced scorecard, 2nd edition your strategy s brilliant. These and other research findings help to explain why kaplan and norton believe so strongly in the power of the balanced scorecard. Norton, have created a powerful new tool based on their ongoing research. Use features like bookmarks, note taking and highlighting while reading strategy maps.
Norton is a founder and director of the palladium group and is. 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. Browse the definition and meaning of more terms similar to strategy map kaplan norton. Commentary transforming the balanced scorecard from performance measurement to strategic management.
How to develop a balanced scorecard into a strategy map. The strategy map idea featured in several books and articles during the late 1990s by robert s. The bscs focus on intangible assets and the need for management strategies that depend on largescale change led to a third generation of the bsc where kaplan and norton 2004 explain how to use. A strategy map is a diagram that is used to document the primary strategic goals being pursued by an organization or management team. Introduction to strategy maps a book by robert s kaplan. In a previous paper kaplan and norton 2001b, we described the role for strategy maps and balanced scorecards to develop performance. Kaplan is a professor at harvard university and david p. Strategy maps, converting intangible assets into tangible outcomes. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Soon, norton adapted golds idea and went into print in cio insight 2004. A strategy map shows how the organization creates value given our focus on process, we looked rather carefully at the themes, which are, in essence, described as the internal perspective on the strategy map. Using strategy maps to support strategic planning and.
Rajiv banker merves chair in accounting and information technology and director of the center for accounting and information technology, fox school of business, temple university verified email at. The purpose of this paper is to examine the balanced scorecard bsc adoption experience amongst organisations in connection with the strategy map design. It is a great read after you have read balanced scorecard and strategy focused organization. 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. Strategic management converting intangible assets into. Strategic management what youll learn in this summary which organizational processes are most critical for enhancing productivity. But often the efforts of individual units are not coordinated, resulting in conflicts, lost opportunities, and diminished performance. In fact, kaplan and norton 2004 admit that the introduction of the strategy map is just as revolutionary as the balanced scorecard itself. Focusing your organization on strategywith the brilliant. This book will help you to stay out ofthe failed troops. Integration of balanced scorecard bsc, strategy map, and fuzzy. You can get started easier by using this free strategy wizard tool that will guide you through these steps and will create a strategy map for you. Oct 25, 2012 introduction to strategy maps a book by robert s kaplan and david p norton 1.
Conceptual foundations of the balanced scorecard 3. The balanced scorecard strategy map provides a framework to illustrate how strategy links intangible assets to. Palladium strategy management training is built on the foundations of our thought leadership dr kaplan and dr norton and the management frameworks developed by them balanced scorecard, strategy maps and the xpp. More recently, kn have suggested that strategy should be a separate function in the organization. Converting intangible assets into tangible outcomes 1 september 2004 strategy maps. Since this first incarnation kaplan and norton s thinking has moved on, and the perspectives are now organised in a sequence hence the map idea. Create local versions of the strategy maps with more specific goals and indicators. This article also contains a downloadable and editable balanced scorecard template. Organization, which, in turn, results from strategy maps and balanced scorecards. The strategic thinking that kaplan and norton have done is very valuable. An example of a generic strategy map can be seen below.
Most organizations consist of multiple business and support units, each populated by highly trained, experienced executives. Norton introduced the balanced scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer relationships. Commentary transforming the balanced scorecard from. A n effective business strategy is a complex series of interconnections a set of causeandeffect relationships. Finally the book from norton kaplan that links scorecarding to intangible assets management and. Kaplan and norton developed the balanced scorecard and the strategy map kaplan and norton, 2004. Learning and growth perspective management theories. Norton introduced a revolutionary performance measurement system called the balanced scorecard to enable companies to quantify critical intangibles such as people. Below it is presented an example of such a concept map. Introduction to strategy maps a book by robert s kaplan and. How to understand a strategy map and the causeandeffect relation.
Norton when they pioneered the idea of balanced scorecard in their book the balanced scorecard, translating strategy into action. An integrated balanced scorecard strategic planning model for nonprofit organizations jan l. Abstract click on the graph to download a big strategy map template in. 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. During the past 30 years, much attention has been focused on how.
The strategic perspective that kaplan and norton have developed is very valuable. In this first of two articles on strategy development, adapted from kaplan and nortons. Then, in the strategy focused organization, kaplan and norton showed how organizations achieved breakthrough performance with. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. Strategy maps pages 7, 8 ibms complete customer solution page 8 by robert s. To further the transformation of the balanced scorecard from a performance measurement system to a strategic performance management system, kaplan and norton 2000 developed the strategy map. This article explains the balanced scorecard, developed by robert kaplan and david norton, in a practical way. Ronchetti city of naperville, il over a decade after robert kaplan and david norton introduced the balanced scorecard as a strategic planning model in 1992, documented successes from the private sector can be found in much of todays business literature. Converting intangible assets into tangible outcomes kindle edition by kaplan, robert s. After reading you will understand the basics of this powerful strategy and performance management tool.
They provide a language that executive teams can use to discuss the direction and priorities of their enterprises. The strategy map was developed by kaplan and norton in 2004 based on the bsc, to help firms. Before kaplan and norton, most academic strategy courses were dominated by the thinking of michael porter, who began by emphasizing the five forces model that suggested what external, environmental factors would change an organizations. Kaplan and norton argue that the most critical aspect of strategy implementing it in. 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. Strategic management, balanced scorecard, strategy maps, innovation. Balanced scorecard is a strategy performance management tool a semistandard structured report, that can be used by managers to keep track of the execution of activities by the staff within their control and to monitor the consequences arising from these actions the phrase balanced scorecard primarily refers to a performance management report used by a management team, and typically. Building a strategy map forces an organization to clarify the logic of how it. Strategy maps and balanced scorecards using business tools to align strategies and communicate value professor sheila corrall information school, university of sheffield. This is absolutely chock full of example and sample strategy maps. Norton 35 using the balanced scorecard as a strategic management system by robert s. Click on the graph to download a big strategy map template in.
Norton argue that the responsibility for this critical alignment lies with corporate headquarters. Strategy map kaplan norton pdf this article is excerpted from chapters 1 and 2 of r. Balanced scorecard perspective on change and performance. The connecting arrows in the map shows cause and effect relationship of the goals. A strategy map shows how the organization creates value after strategy maps by robert s. Kaplan and norton 2004 formally named this approach as strategy map, and have proposed it as a strategic management tool. Strategy maps can help chart this difficult terrain. Converting intangible assets into tangible outcomes. Otherwise, wed suggest that kaplan and norton s two earlier books have more meat. 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. Using the strategy map as a strategic communication tool in. Figure 1 on the following page provides an overview of a strategy map. 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.
During the past 30 years, much attention has been focused on how companies can formulate new strategies for sustainable advantage. So, before moving to strategy maps, it is essential to understand the balanced scorecard. In the 2001 book the strategy focused organization, kaplan and norton transform their balanced scorecard. The strategy focused organization the summary in brief in 1996, robert kaplan and david norton introduced the balanced scorecard performance measurement method, which included not only traditional financial measures but also such qualitative measures as employee satisfaction, corporate mission and customer loyalty. The first diagrams of this type appeared in the early 1990s, and the idea of using this type of diagram to help document balanced scorecard was discussed in a paper by drs. Measuring the strategic readiness of intangible assets. Using survey data from managers of 91 italian organisations the paper seeks to verify whether. A strategy map is a diagram that is used to document the primary strategic goals. The suggested approach to designing scenariobased strategy maps is exemplified through the case of a large recruitment firm for people with technology skills, such as software developers, support specialists, and database administrators. Strategy map financial perspective customer perspective internal perspective learning and growth perspective human capital information capital organization capital operations management processes customer management processes innovation processes regulatory and social processessupply production distribution risk management. Without theoretical support, the strategy map approach is weak in theorising the phenomena and outcomes. 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. Other types of diagrams are inherently less permissive regarding ambiguity in the expression of the semantic content of strategy.
Using strategy maps to support strategic planning and decision making in higher education. The objectives on the strategy map are arrayed across two or more horizontal bands, and each band is known as a perspective. The balanced scorecard tool and strategy map offer a framework to measure intangible assets and to describe strategies as a series of cause. Strategy maps a brief guide for mapping your goals. Abstract in this paper the authors propose a link between the. This work in turn was again mentioned again by symons 2005 of forrester research. Rajiv banker merves chair in accounting and information technology and director of the center for accounting and information technology, fox school of business, temple university verified email at temple. The strategyfocused organization servicing companies. The strategy map was developed by kaplan and norton in 2004 based on the bsc, to help firms develop a strategy. Strategy maps converting intangible assets into trangible outcomes by robert s. The strategy map extends the balanced scorecard approach in order to clarify corporate strategy, using four perspectives and their cause and effect relationship.
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