Strategy Mapping Balanced Scorecard

Strategy Mapping Balanced Scorecard is very vital concept as Balanced Scorecard can be a valuable tool for developing and communicating objectives, strategies mapping, balancing trade-offs, and linking activities to the direction of the organization. They are widely used in higher education to measure performance and establish a clear direction for the organization.

Strategy Mapping Balanced Scorecard is a concept that has recently emerged in the business literature, and is being used in hundreds of corporations. Basically, this tool enables an organization to illustrate objectives, use appropriate measures to assess performance, and clarify the linkages between drivers and strategic outcomes. Strategy Mapping Balanced Scorecard is a way for an organization that has well-established planning routines to better link planning to the activities, responsibilities, and managerial systems of operational units.

Strategy Mapping Balanced Scorecard is the process of determining objectives and means of getting there. The balanced scorecard (Kaplan and Norton) is one framework that can be used for strategy mapping. The balanced scorecard has four common perspectives: financial, customer, internal business, and innovation and learning. Each perspective commonly has from four to seven goals and corresponding measures. The scorecard is balanced in that it contains elements that are short-term and long-term, financial and non-financial, and leading and lagging. A critical characteristic of a balance scorecard is that it should represent a translation of strategy.

Components of Strategy Mapping Balanced Scorecard include financial strategies, strategic themes, value propositions, and critical internal processes. For financial strategies, an example of an overriding strategy may be to maximize shareholder wealth, which may be attained by other financial strategies, such as maximizing revenues, productivity and asset utilization. In setting strategic themes, the overall strategy must be decomposed from an internal viewpoint. The focus is on determining what must be done to achieve desired strategic outcomes.

Strategy Mapping Balanced Scorecard three generic strategic themes are to increase customer value, achieve operational excellence, and exhibit good corporate citizenship. In setting value propositions, it is important to recognize that it is impossible to do it all. Instead, it is essential to focus on excelling in a few select areas. Three possible value propositions are product leadership, customer intimacy and operational excellence. Critical internal processes are those crucial operations that must be executed properly to achieve the value proposition chosen. They must be identified so that the organization can assess the current situation and develop any necessary skills. The process of determining critical internal processes assists in prioritizing spending in hiring and training.

Strategy Mapping Balanced Scorecard has many uses, for example: determining target market, communicating and understanding strategy, and detecting errors and improving strategic planning. When determining target market, the chosen value proposition dictates the focus of the organization while the related critical internal process chosen dictate which customers will come calling. Using strategy mapping to refine the customer base is an iterative process.

Using strategy maps to communicate to managers assists senior management with ‘thinking out’ the strategic plan, allows senior management to articulate the plan to lower-level managers, and allows managers to link their relevant map segments to operational objectives. Strategy maps for communicating allows non-manager employees to see where they fit into strategy (including high-level goals), avoid strategy distortions, and link their relevant map segments to operational objectives.

So, Strategy Mapping Balanced Scorecard can help in error detection by making inconsistencies and gaps in cause-and-effect linkages more visible. Periodic review of the strategy map will assist in error detection before related problems become an issue. The graphical depiction of strategy makes the entire strategy more understandable to all levels of employees and makes it much more likely to get valuable input from a variety of sources.