How to build a strategy map and increase business performance
By identifying what differentiates it from its competitors, as well as by acknowledging its main capabilities, an organization can set the objectives that have to be attained in order to reach its vision. A performance-focused organization will formulate its objectives and map its strategy, in order to identify cause and effect links that turn assets into desired outcomes.
Objectives are clearly defined statements of what an organization sets out to achieve. They are important strategy components which reflect on strategic priorities and the overall strategic plan.
Objectives embody the link between the mission/vision of the organization and its related initiatives/activities. Clarifying objectives serves for performance monitoring and evaluation, while providing the necessary framework in aligning organizational priorities.
The Strategy Map is a visual representation of an organization’s strategy, highlighting the strategic objectives of the organization and the cause and effect relationships, linked within the four perspectives of the Balanced Scorecard.
The Strategy Map components are:
- The strategic objectives, structured within graphic representation models, such as ovals, which can be adequately colored, according to target thresholds:
- Red: Bellow targets (Unacceptable values)
- Yellow: Within target limits (Acceptable values)
- Green: On or above targets (Desired values)
- The Balanced Scorecard Perspectives, horizontally grouping strategic objectives within each perspective, as reflected by the Strategy Map;
- The cause and effect relationships visually represented by arrows linking strategic objectives both horizontally and vertically
- Strategic themes, which establish the required criteria used to group together strategic objectives within the Balanced Scorecard perspectives of the Strategy Map.
The organizational Strategy Map is a performance management tool that:
- Provides and architecture for describing the strategy;
- Maps the organization’s strategic objectives and uses a cause and effect logic to reflect their interdependencies;
- Helps executives turn strategy into outcomes by providing a framework for the process;
- Groups strategies into relevant themes for optimal segmentation and execution;
- Makes strategy operational at all levels of an organization by effectively communicating strategy and related objectives.
There are several best practices that need to be taken into consideration when designing a Strategy Map:
- Choose the right template
When building a Strategy Map, the template must provide a structure that clearly illustrates an organization’s strategic objectives, initiatives and targets, while emphasizing the connections between objectives and themes that aim for the same strategic direction.
Strategy Maps may all be based on the same guidelines, but choosing the right visual outline is a decision of how the Strategy Map template best suits the company’s vision on performance.
- Start from the top down
The optimal way to build a Strategy Map is starting with the vision of what an organizations wants to achieve, and then identifying the actions required to get there. A company must first envision its purpose and then develop a strategic vision.
- Identify what’s missing
Strategy Maps can help identify flaws in the way the strategy is implemented at different levels of the organization. It is important for business units to be aligned with company strategy. Performance measurement should not be eluded at lower levels of the organizations, and strategy maps are a good tracker of such omissions.
- Adjust to best reflect the strategy
When missing pieces in strategy execution are identified by the use of a Strategy Map, adjustments are needed, in order to fill in the gaps and coherently reformulate the strategy, for a successful implementation.
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Tags: Ask the Experts, Performance Management, Strategy Map
Reem Alqnayah
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A performance-focused organization will formulate its objectives and map its strategy, in order to identify cause and effect links that turn assets into desired outcomes.
The Strategy Map is a visual representation of an organization’s strategy, highlighting the strategic objectives of the organization and the cause and effect relationships, linked within the four perspectives of the Balanced Scorecard.
The Strategy Map components are:
The strategic objectives, structured within graphic representation models, such as ovals, which can be adequately colored, according to target thresholds:
Red: Bellow targets (Unacceptable values)
Yellow: Within target limits (Acceptable values)
Green: On or above targets (Desired values)
The Balanced Scorecard Perspectives, horizontally grouping strategic objectives within each perspective, as reflected by the Strategy Map;
The cause and effect relationships visually represented by arrows linking strategic objectives both horizontally and vertically.
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Jamel Bousbih
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A thorough presentation of the strategy map method. Clear and concise.
May be some points here for further deepening: How the strategy is designed upon the goals/objectives?
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Jamel Bousbih
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How we can link the strategy canvas with the strategy map in a manner to visualise clearly the company positionning and manage accordingly the competitive levers.
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Jamel Bousbih
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I think as well that calling third party consultancy is useful to ensure proper design and delivers sound advise about the most recent practices
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Kristina Rama
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Strategy mapping is an effective and powerful initiative that can help keep a company at its competitive peak.The tools, techniques and steps used to achieve the goal enables organizations to effectively and efficiently conduct their own strategy mapping initiative and to successfully implement strategy where others have failed.
In addition, strategy maps form the appropriate basis for (a) balanced scorecard performance measures, (b) linkages to appropriate management and validation techniques, and (c) allocating resources to initiatives and strategies that support its value propositions and overriding objectives.
This has proven to lead to better performance for many organizations, including those in the “Hall of Fame”. Realizing the full power of a strategy mapping initiative calls on top managers to commit to describing and communicating strategy in a way that will guide decision making away from a short term focus on financial figures.
As employees at all levels learn to use the strategy map to guide their actions,they will align themselves, and their company, to execute strategy in a manner they have not experienced before. The end result will position the company to generate profitability and to demonstrate the accountability demanded by customers,shareholders, employees, and the communities around them.
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Essam
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One of the key element in the strategy execution is to have clear & realistic Objectives which is embody the corporate mission/vision , and the related initiatives/activities.
The understanding of these objectives in different employee levels are quite challenging for few employees level, where they don’t have exposure to the high level big picture an d How their activities impact the corporate image.
Clarifying such objectives shall enable good performance monitoring and evaluation, in addition, providing the necessary framework in aligning organizational priorities.
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Melbourne
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I found this article very helpful it taught me that a strategy map is very important as it its visual and lays out an organization’s’ strategy with the cause and effects showing the pour perspectives of its scorecard. These can be displayed visually to help show the process and helps all parties understand the direction they are working towards. There are four major items to consider when building such a map and they are choosing the right template, start from the top down, identify what’s missing and adjust to the best reflect the strategy.
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gate io twitter
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I am a student of BAK College. The recent paper competition gave me a lot of headaches, and I checked a lot of information. Finally, after reading your article, it suddenly dawned on me that I can still have such an idea. grateful. But I still have some questions, hope you can help me.
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