Strategy Map For Your Business
“Strategy mapping” is the process of determining true strategic objectives and the means of obtaining them. Strategy maps go hand-in-hand with balanced scorecard initiatives.
The balance d scorecard approach of ensuring company strategic planning success states that strategic plans sometimes are not followed because they are not understood, are forgotten, or its goals are unclear as to the applicability to day-to-day activities.
The problem is that following the strategic plan is equal to success, and this cannot occur if it is not understood. It is up to the organization’s key players to provide clarity about the strategic plan to its employees.
A strategy map is a one-page visual representation of the organization’s strategy showing connections between objectives and daily operations. It illustrates how the organization plans to achieve its mission and vision within a chain of continuous improvements.
The strategy map tool is used to demonstrate how value is created. It indicates step-by-step connections between strategic objectives and daily functions. Once created, the strategy map is a powerful tool enabling all employees to understand the strategy and to glean from it steps they themselves can undertake to create organizational success.
A strategy map also provides structure for meetings, as it shows managers which aspects of their strategy are successful, and where help is required. Strategy maps demonstrate for managers the causal relationships between actions and goals. The map should serve as a communication tool within and without the organization, for use in presentations, candidate selection, investor and financing, and client relations. A strategy map is useful to large or small businesses.
They visually illustrate the implementation of the four basic principles of the balanced scorecard system: Learning and growth; business process; customer service/satisfaction; financial aspect. Strategy maps include linkages to intangible assets.
It allows management to align investments in people, technology and organizational capital for the finest impact and highest level of success. Developing a strategy map begins with developing a scorecard system and gathering as much data about the organization as possible, via files, research, interviews, surveys, reports, press, and of course, the strategic plan and its addendum (any marketing, sales, or production plans).
Your strategy map should include basic information, be understandable on all levels within the organization, and be succinct and short enough to fit on one page. It serves as a “snapshot” of the organization’s strategy in language everyone can understand, with information all employees can feel comfortable utilizing.
How to develop a strategy map:
1. Review the existing strategy for completeness and focus
2. Identify different perspectives and interpretations of the business strategy
3. Identify different ideas of the causal links among different strategic components
4. Review existing data or information pertinent to resolving the differences identified in numbers 2 and 3
5. Work with the organizational leaders to resolve the differences
6. Validate the map with key stakeholders and develop ways to roll out and evaluate its implementation successfully
7. Establish guidelines and mechanisms for using the strategy map to guide strategy execution Using the balanced scorecard and strategy map techniques yields many positive results. Utilization of the strategy map provides:
Implementation of one strategy among the organization’s key personnel Communication of the strategy to employees Identification of major indicators of strategic success Validation and test assumptions about what core capabilities drive bottom-line performance. Structure and a core set of strategic performance metrics. The process of setting organization wide objectives, targets, and continuously tracking organizational performances has been a big challenge for many organizations.
Financial reporting alone is a complex issue. The real challenge with developing organizational strategy and balanced scorecard methodology begins when you add the non-financial measures and you start working between departments. How do you incorporate all these metrics? What kind of reports you need? How many?
The overall goal of our approach to Balanced Scorecard reporting is to develop simple and effective reporting system and help clients focus on their business. We have succeeded to develop a reporting system which integrates different perspectives, incorporates the metrics, and gives a powerful insight to overall organizational performances.