Strategy map

The Balanced Scorecard is a framework that is used to help in the design and implementation of strategic performance management tools within organizations. One of the big challenges faced in the design of Balanced Scorecard-based performance management systems is deciding what activities and outcomes to monitor. By providing a simple visual representation of the strategic objectives to be focused on, along with additional visual cues in the form of the perspectives and causal arrows, the strategy map has been found useful in enabling discussion within a management team about what objectives to choose, and subsequently to support discussion of the actual performance achieved. ==Perspectives==

Very early Balanced Scorecard articles by Robert S. Kaplan and David P. Norton proposed a simple design method for choosing the content of the Balanced Scorecard based on answers to four generic questions about the strategy to be pursued by the organization. These four questions, one about finances, one about marketing, one about processes, and one about organizational development evolved quickly into a standard set of "perspectives" ("Financial", "Customer", "Internal Business Processes", "Learning & Growth"). Design of a Balanced Scorecard became a process of selecting a small number of objectives in each perspective, and then choosing measures and targets to inform on progress against this objective. But very quickly it was realized that the perspective headings chosen only worked for specific organisations (small to medium-sized firms in North America - the target market of the Harvard Business Review), and during the mid to late 1990s papers began to be published arguing that other sets of headings would make more sense for specific organization types, and that some organisations would benefit from using more or less than four headings. Despite these concerns, the 'standard' set of perspectives remains the most common, and traditionally is arrayed on the strategy map in the sequence (from bottom to top) "Learning & Growth", "Internal Business Processes", "Customer", "Financial" with causal arrows tending to flow "up" the page. The 'standard' set of perspectives is arranged in the sequence (bottom to top) to allow a sequential linkage from the investment perspective of Learning and Growth to the outcome perspectives of Customer and Financial. A well-designed strategy map will allow the author to 'tell a story' from the bottom to the top along the lines of "If we invest in (training, education etc) it will allow us to improve our Internal Processes which will impact our Customers (in a positive way) and improve our Financial results. In other words, Learning and Growth drive Internal Process change which impacts Customer Satisfaction which in turn improves Profitability. In the early part of the century, it was recognized that the perspective Learning and Growth was lacking significant investment areas, that of infrastructure and IT. Today, the lower-most perspective has been renamed to Organisational Capacity. == Links between the strategy map and strategy development ==

The strategy map is a device that promotes three stages of conversation during the strategy development, implementation and learning process • First to capture a strategy from a management team. To promote discussion amongst that team on the strategy, so they all leave the room telling the same story of their strategy. • Secondly to communicate the strategy, focus organization efforts, and choose appropriate measures to report on an organisation's progress in implementing a strategy. • Finally to provide a basis to review and potentially revise the strategy, (not simply the measures or targets) and support conversations and decision making, as the team learn from the strategy's implementation. Over the years many have suggested that it can be used as, in part, a strategy development tool. Kaplan & Norton in their book The Strategy Focused Organisation argue that organisations could adopt 'industry standard' templates (basically a set of pre-determined strategic objectives). ==See also==