Definition

What is a Strategy Map?

In 2001 Kaplan and Norton published “The Strategy Focused Organisation” which introduced the Strategy Map as an integral part of the Balanced Scorecard thus transforming it into a strategic management and performance system.

A Strategy Map is a diagram that describes how a company or an organisation can create strategic value. It does this by linking strategic objectives based on the four Balanced Scorecard perspectives: Financial, Customer, Internal Processes and Organisational Capacity. A Strategy Map is usually linked to a ‘scorecard’ that monitors progress towards Strategic Objectives. The scorecard includes metrics, targets and strategic initiatives to drive performance towards achieving a strategic vision.

* Click on the image to reveal the complete strategy map

For 2023 we have updated our PowerPoint templates:

The Reason

How to build a strategy map

A Strategy Map cannot be created without a Vision and Purpose statement. Traditionally, this used to be a Vision and Mission statement. However, in recent years, the use of Vision and Purpose has become an imperative. 

Vision describes what a company or organisation aims to do over the next three, five or ten years. Purpose describes the reason for an organisation’s existence, and the journey it is taking

For Vision think: Transforming people’s lives positively through an interconnected information society

For Purpose think: We will build a connected society that enhances socio-economic progress, embraces everyone and does not come at the cost of our planet.

So, the first part of a strategy map might look like this:

Set Priorities

Strategic Priorities

Vision and purpose define a strategy at the uppermost level. To implement a strategy, the vision and purpose should be broken down into strategic priorities. An assessment phase needs to be entered into. We recommend looking at three aspects of your business or organisation:

1. Current Situation

There are several ways to look at your current situation, but generally speaking, it will result in looking at your strengths, weaknesses, opportunities and threats. What are you doing well? What are you doing badly? Where could you do more? What’s holding you back?

2. Future View

Your vision and purpose should force you to look at the future. Unfortunately, predicting the future can be very difficult. However, techniques such as asking your team to “place themselves in the future looking back” and imagining where – and how – the business has been immensely successful, can help.

 3. Value Proposition

A value proposition is a collection of the most persuasive reasons why your customers, and potential customers, should be interested in your offerings. Examples of the language used in your value proposition might include; use of ethical products, responsive, premium pricing or error-free services.

Finally – Define your Priorities based on the above

Software

What software is available?

The production and management of a Strategy (and a Strategy Map) can be undertaken through the normal management process of reviews and aided by documents, presentations and spreadsheets.

However, over the past few years, several software packages have emerged that not only remove the burden of creating templates but provide the means to create Strategy Maps, collect and track metrics, collate strategic objectives, manage strategic initiatives and generate reports. Most systems also include alerting mechanisms and ensure ownership is assigned.

Some interesting things to note about Strategy Maps generated by software:

• The objectives are colour (R/A/G) coded; this status indicator will change automatically when the metrics associated with the initiatives are updated.
• There are ‘trend’ arrows indicating the status of the objective during the previous reporting period; the software will retain a useful history.
• Each item in the Strategy Map can be ‘clicked’ to take the viewer to the next level of information and usually all the way through to associated metrics, initiatives and reports.

This automated strategic management process can be easily integrated into existing management processes therefore keeping the ‘strategy’ alive and on the executive agenda throughout the business year.