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 last one, strategy execution, relies on strategy maps, strategic scorecards with kpis, and operational dashboards with pis. Conceptual foundations of the balanced scorecard 3. Strategic management, balanced scorecard, strategy maps, innovation. At mc were the leading european experts in developing strategy maps with charities and public bodies. Integration of balanced scorecard bsc, strategy map, and fuzzy. To clearly achieve your objectives, a unified strategy is a mustand strategy mapping is one of the best ways to achieve that goal. David norton and i introduced the balanced scorecard in a 1992 harvard. The book provides an excellent complement to the two kaplan. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. For best results, please print this case in color a new management team at vw do brazil develops and deploys a strategy map and balanced scorecard to accomplish a turnaround and cultural change after eight consecutive years of financial losses and market share declines.
The first is the idea that the map helps articulate strategy. With this paper, we show how organizations use their scorecards to align. Anytown hospital has just finished a twoday retreat where they revised and updated their mission and vision statements and drafted a strategic plan. The creators of the strategy map and balanced scorecard concept, professors robert s. Strategy maps foster a better understanding of the bsc among employees. Although the previous book of kaplan and norton already spent 64 pages on strategy maps, you can find the best and most comprehensive treatment of them including lots of examples in the book. Strategy maps and balanced scorecards are a craft, not a science. Your static strategy map becomes a live performance dashboard. This article was originally published in june 2015. If you want some examples in your industry, download one of our free ebooks. Some balanced scorecard software packages allow you to build your strategy map directly in the software. The balanced scorecard focuses on factors that create longterm value traditional financial reports look backward reflect only the past.
Definition and concept an approach to the provision of information to the management to assist with. A balanced scorecard strategy map is a onepage visual depiction of an organizations scorecard. The name balanced scorecard comes from the idea of looking at strategic measures in addition to traditional financial measures to get a more balanced view of performance. This offering is the 3rd and one of the most valuable, perhaps the key to kaplan and nortons five book series on how the balanced scorecard can be used to develop a strategy focused organization through strategy maps to achieve alignment and the execution premium. In addition, he shows how to become a strategyfocused organization by imbedding the balanced scorecard into critical organizational processes. Download sample strategy maps for a balanced scorecard.
Strategy maps on apple books apple books apple apple. The bsc is supposed to translate strategy into action. This book covers timeproven stepbystep processes on how to guide executive teams and managers in creating scorecards and dashboards. Balanced scorecard step by step guides readers through the processes required for a successful balanced scorecard project. 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. Scorecard kpis ideally should be derived from a strategy map rather than being just a list of importa nt measures that the execut ives ha ve requested to be reported. Foreshadowing the subsequent development of strategy maps, anthony claimed. 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. Cascading the balanced scorecard to build organizational alignment. An example of a generic strategy map can be seen below.
The information included is fictional and is provided to simply demonstrate the process. Norton introduced the balanced scorecard, a revolutionary performa. Commentary transforming the balanced scorecard from. This diagram is representative of kpis that a typical organization would use in a strategy map as part of a balanced scorecard. The strategy must be covered by a welldefined and clear longterm vision that would represent one common organizational goal. The balanced scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals. From planning to performance and founder of analyticsbased performance management, an advisory firm in cary, north carolina. There are many benefits to automating your balanced scorecard, but the ability see your strategy map light up with real performance colors may be the biggest. An introduction to strategy maps and the bsc in charities. Kaplan and nortons books, which relative with the balanced scorecard and strategy map, since they. In a previous paper kaplan and norton 2001b, we described the role for strategy maps and balanced scorecards to develop performance objectives and measures linked to strategy.
The subtitle of kaplan and nortons first balanced scorecard book is. Read strategy maps converting intangible assets into tangible outcomes by robert s. The strategy map is generally complemented by a balanced scorecard to track how effectively the plan is being delivered and an implementation plan to show how the activities to deliver the plan will be sequenced and rolled out. Per magnus andersson and rolf larsson seminar date.
Peter drucker introduced management by objectives in his classic 1954 book, the. The balanced scorecard as a performance management tool. Sms are a strategic part of the balanced scorecard framework to describe strategies for value creation. Kaplan and norton recently published strategy maps, the third book. Converting intangible assets into tangible outcomes kaplan, robert. His book incorporates the latest strategic thinking and models. The balanced scorecard perspectives are insisting on examining different strategies and choosing the most appropriate one. The balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and. Balanced scorecard, organizations create a common understandable point of. In this ebook, youll find five balanced scorecard strategy maps for these forprofit organizations. One misconception about the balanced scorecard is that its primary purpose is. A strategy describes how an organization can create sustained value for its shareholders, customers and communities.
As part of our strategy execution training, we work with business professionals to create a prototype of their balanced scorecard strategy maps. Strategy maps combine with balanced scorecards to provide a new framework for describing and implementing strategy. But what does this mean for strategy execution in practice. How to develop a balanced scorecard into a strategy map. A strategy map is a diagram that is used to document the primary strategic goals being pursued by an organization or management team. Strategy maps describe how organisations create value by building on strategic. Balanced scorecards and operational dashboards measure organizational performance and microsoft excel is the tool used worldwide to create these scorecards and dashboards. Converting intangible assets into tangible outcomes 1 september 2004 strategy maps. Fully illustrated with examples from many different organizations, this book will help you deliver your strategy better. Kaplan and norton claim that this generic map reflects a generalization of their work with. To achieve better bsc implementations, the author uncovers.
It provides the foundation for designing a balanced scorecard that is the cornerstone of a strategic management system. It has the ability to show the connections between all four perspectives in a onepage picture. The first diagrams of this type appeared in the early. The strategy map allows managers to align investments in people, tech. Wirtzs book makes a systematic overview of business model management, and identifies three perspectives related to this model focused on. By translating their strategy into the logical architecture of a strategy map and. This chapter elaborates the definition, development, and utilization of the strategy maps. Its this focus on both highlevel strategy and lowlevel measures that sets the balanced scorecard apart from other performance management methodologies.
Published by soundview executive book summaries, p. The four perspectives of the scorecardfinancial measures, customer knowledge, internal business processes, and learning and growthoffer a balance between shortterm and longterm objectives, between outcomes desired and performance drivers of those outcomes, and between hard. How to develop a balanced scorecard into a strategy map a case study of ericsson level. According to kaplan and norton, a strategy map is a logical comprehensive architecture for describing strategy. Figure 1 on the following page provides an overview of a strategy map. Master thesis in accounting and management program of business administration department authors. Balanced scorecard bsc is an effective way for non. Then, in the strategyfocused organization, kaplan and norton showed how organizations achieved breakthrough performance with.
Most organizations have different methods of communication, alignment and implementation, but the balanced scorecard bsc is an effective way for nonprofits and publicsector organizations to describe. The purpose of this paper is to show how the use of strategy maps substantially improves the implementation success of balanced scorecards bsc. Strategy maps necessary in communicating a strategy the strategy maps give employees a clear line of sight into how their jobs are linked to the overall objectives of the organization, enabling them to work in a coordinated, collaborative fashion toward the companys desired goals. Due to popular demand, the article has been updated to include six sample balanced scorecard strategy maps the balanced scorecard bsc, in my humble opinion, is one of the best management reporting frameworks available. Kaplan and nortons future vision of the balanced scorecard. Balanced scorecard example the following is an example of how one might develop a balanced scorecard. The balanced scorecard, strategy maps and dashboards. The balanced scorecard translates a companys vision and strategy into a coherent set of performance measures. One increasingly popular framework to combine these qualities is the balanced scorecard. It places the balanced scorecard in a wider governance context that includes the management of risk and environmental and social responsibility.