They provide a language that executive teams can use to discuss the direction and priorities of their enterprises. An integrated balanced scorecard strategic planning model for. Strategy maps describe how organisations create value by building on strategic. After reading you will understand the basics of this powerful strategy and performance management tool. Strategic management converting intangible assets into. In this first of two articles on strategy development, adapted from kaplan and nortons.
Norton 35 using the balanced scorecard as a strategic management system by robert s. This book will help you to stay out ofthe failed troops. Strategy maps and balanced scorecards constitute the. Create local versions of the strategy maps with more specific goals and indicators. A strategy map shows how the organization creates value after strategy maps by robert s. Introduction to strategy maps a book by robert s kaplan. Converting intangible assets into tangible outcomes kindle edition by kaplan, robert s.
Oct 25, 2012 introduction to strategy maps a book by robert s kaplan and david p norton 1. Commentary transforming the balanced scorecard from performance measurement to strategic management. Foreshadowing the subsequent development of strategy maps, anthony claimed that. 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. 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. 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. Otherwise, wed suggest that kaplan and norton s two earlier books have more meat. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. A strategy map is a diagram that is used to document the primary strategic goals. Norton, have created a powerful new tool based on their ongoing research. In the final sections, conclusions are drawn regarding the benefits of developing scenariobased strategy maps.
Using the strategy map as a strategic communication tool in. It is a great read after you have read balanced scorecard and strategy focused organization. Procedia social and behavioral sciences 24 2011 754a768 7 th international strategic management conference balanced scorecard perspective on change and performance. But often the efforts of individual units are not coordinated, resulting in conflicts, lost opportunities, and diminished performance. Norton introduced a revolutionary performance measurement system called the balanced scorecard to enable companies to quantify critical intangibles such as people. This article also contains a downloadable and editable balanced scorecard template. 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. During the past 30 years, much attention has been focused on how. Using strategy maps to support strategic planning and decision making in higher education. 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. The strategic thinking that kaplan and norton have done is very valuable. A strategy map is a diagram that is used to document the primary strategic goals being pursued by an organization or management team. So, before moving to strategy maps, it is essential to understand the balanced scorecard. Other types of diagrams are inherently less permissive regarding ambiguity in the expression of the semantic content of strategy.
How to understand a strategy map and the causeandeffect relation. Most organizations consist of multiple business and support units, each populated by highly trained, experienced executives. How to develop a balanced scorecard into a strategy map. Norton focusing your organization on strategy with the balanced scorecard, 2nd edition your strategy s brilliant. Converting intangible assets into tangible outcomes 1 september 2004 strategy maps. The strategy map was developed by kaplan and norton in 2004 based on the bsc, to help firms. Strategy maps and balanced scorecards using business tools to align strategies and communicate value professor sheila corrall information school, university of sheffield. Measuring the strategic readiness of intangible assets. 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. Norton s everal years ago, we introduced the concept of a balanced scorecard for motivating and measuring business unit performance. Linking the balanced scorecard to strategy robert s. 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. Abstract in this paper the authors propose a link between the. Kaplan and norton developed the balanced scorecard and the strategy map kaplan and norton, 2004.
An example of a generic strategy map can be seen below. 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. 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. Kaplan is a professor at harvard university and david p. 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.
Integration of balanced scorecard bsc, strategy map, and fuzzy. 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. These and other research findings help to explain why kaplan and norton believe so strongly in the power of the balanced scorecard. Convert ing intangible assets into tangible outcomes.
During the past 30 years, much attention has been focused on how companies can formulate new strategies for sustainable advantage. In a previous paper kaplan and norton 2001b, we described the role for strategy maps and balanced scorecards to develop performance. If you do your first strategy map, these steps might sound like too much to assimilate. 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. Kaplan and norton claim that this generic map reflects a generalization of.
Norton argue that the responsibility for this critical alignment lies with corporate headquarters. Focusing your organization on strategywith the brilliant. 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. Norton introduced the balanced scorecard, a revolutionary performa. Kaplan and norton 2004 formally named this approach as strategy map, and have proposed it as a strategic management tool. Using strategy maps to support strategic planning and. Click on the graph to download a big strategy map template in. 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. Norton introduced the balanced scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer relationships. Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Introduction to strategy maps a book by robert s kaplan and.
Building a strategy map forces an organization to clarify the logic of how it. The sustainability balanced scorecard as a framework for. The strategy map allows managers to align investments in people, tech nology and. 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. Finally the book from norton kaplan that links scorecarding to intangible assets management and. Use features like bookmarks, note taking and highlighting while reading strategy maps. 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 maps a brief guide for mapping your goals. 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. 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. Commentary transforming the balanced scorecard from. More recently, kn have suggested that strategy should be a separate function in the organization. The objectives on the strategy map are arrayed across two or more horizontal bands, and each band is known as a perspective.
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. Organization, which, in turn, results from strategy maps and balanced scorecards. Soon, norton adapted golds idea and went into print in cio insight 2004. Then, in the strategy focused organization, kaplan and norton showed how organizations achieved breakthrough performance with.
Without theoretical support, the strategy map approach is weak in theorising the phenomena and outcomes. Since this first incarnation kaplan and nortons thinking has moved on, and the perspectives are now organised in a sequence hence the map idea. Kaplan and norton identify four themes, which they go on to describe as valuecreating processes. In this first of two articles on strategy development, adapted from kaplan and norton s. Strategic management, balanced scorecard, strategy maps, innovation. Strategy map kaplan norton pdf this article is excerpted from chapters 1 and 2 of r.
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. Abstract click on the graph to download a big strategy map template in. Browse the definition and meaning of more terms similar to strategy map kaplan norton. The strategy map idea featured in several books and articles during the late 1990s by robert s. Kaplan and norton argue that the most critical aspect of strategy implementing it in. 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. The strategic perspective that kaplan and norton have developed is very valuable. 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. The balanced scorecard strategy map provides a framework to illustrate how strategy links intangible assets to. 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. 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. Norton is a founder and director of the palladium group and is. The strategy map simplifies the complexity of strategy by illustrating how few strategic objectives link intangible assets to value creating processes. The connecting arrows in the map shows cause and effect relationship of the goals. 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. Figure 1 on the following page provides an overview of a strategy map. Strategy maps can help chart this difficult terrain. This is absolutely chock full of example and sample strategy maps. Strategic management what youll learn in this summary which organizational processes are most critical for enhancing productivity.
The strategy map extends the balanced scorecard approach in order to clarify corporate strategy, using four perspectives and their cause and effect relationship. Strategy maps, converting intangible assets into tangible outcomes. Read strategy maps converting intangible assets into tangible outcomes by robert s. In the 2001 book the strategy focused organization, kaplan and norton transform their balanced scorecard. Strategy maps pages 7, 8 ibms complete customer solution page 8 by robert s.
Learning and growth perspective management theories. 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. However, strategic management is a mature and wellresearched discipline. Balanced scorecard perspective on change and performance. This work in turn was again mentioned again by symons 2005 of forrester research. In fact, kaplan and norton 2004 admit that the introduction of the strategy map is just as revolutionary as the balanced scorecard itself. Converting intangible assets into tangible outcomes. Using survey data from managers of 91 italian organisations the paper seeks to verify whether. Introduction to strategy maps a book by robert s kaplan and david p norton 1. A n effective business strategy is a complex series of interconnections a set of causeandeffect relationships. Below it is presented an example of such a concept map. The kaplan norton kn strategy maps are perhaps the most popular, featuring some exibility in the representation of strategy kaplan and norton,2000, 2004. Conceptual foundations of the balanced scorecard 3.
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