Balanced scorecard, strategy mapping has been the subject of recent books, articles and discussions. Jan 03, 2012 this diagram is representative of kpis that a typical organization would use in a strategy map as part of a balanced scorecard. This diagram is representative of kpis that a typical organization would use in a strategy map as part of a balanced scorecard. Strategic management, balanced scorecard, strategy maps, innovation. From planning to performance and founder of analyticsbased performance management, an advisory firm in cary, north carolina. Norton s everal years ago, we introduced the concept of a balanced scorecard for motivating and measuring business unit performance. Visual tools for assisting people with building a balanced scorecard, typically used for capturing and comparing data within the four components of the balanced scorecard. Strategy map based on 4 balanced scorecard perspectives source. In addition, it can help provide information on the chosen strategy more. The impact of the strategy maps on balanced scorecard. The impact of strategy maps on balanced scorecard performance. A balanced scorecard shows a series of causeandeffect relationships that show how a. How to develop strategy maps and initiatives for improving organization strategy and performance how to develop more meaningful performance measures the best sequence of steps to build a strategy focused organization how to use small group simulations to understand decision choices bsp certification part 2 advanced balanced scorecard. This discourse has greatly raised practitioner awareness.
A balanced scorecard approach to strategic planning. One increasingly popular framework to combine these qualities is the balanced scorecard. Anytown hospital has just finished a twoday retreat where they revised and updated their mission and vision statements and drafted a strategic plan. Integration of balanced scorecard bsc, strategy map, and fuzzy. Strategy maps support this by showing causeandeffect chains. According to kaplan and norton, a strategy map is a logical comprehensive architecture for describing strategy.
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. The balanced scorecard bsc is a strategic planning and management system that organizations use to. A strategy map is typically constructed with a set of 15 to 25 causally linked strategic objectives. To clearly achieve your objectives, a unified strategy is a mustand strategy mapping is one of the best ways to achieve that goal. The balanced scorecard in a strtegyfocused organization. An example of a generic strategy map can be seen below. Strategy maps and balanced scorecards are a craft, not a science. This video provides an example of a balanced scorecard with strategy maps. Measures livability score program satisfaction score per service utilization business and licenses per income tourism revenue controllable asset value strategic projects. Strategic management converting intangible assets into. Using survey data from managers of 91 italian organisations the paper seeks to verify whether. Pdf the impact of strategy maps on balanced scorecard.
How to develop a balanced scorecard into a strategy map. Kaplan and nortons strategy map is a tool to illustrate how organisations intend to convert intangible initiatives and resources into tangible outcomes to achieve organisational purpose. Now that you know how to interpret a strategy map, lets take a look at a few examples. To make the most of a strategy map we would suggest one or two additions to the basic template. The balanced scorecard tracks all the important elements of a companys strategy from continuous improvement and partnerships to teamwork and.
The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. 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. These practical tips, gleaned from the authors experience with hundreds of these presentations, can help even the most hesitant bsc leader become an expert in. Their combination is a navigational tool to guide the organisation to execute the strategy formulated by the executive team. An overall statement of how the organization wants to be perceived over the longterm 3 to 5 years. In 2001 kaplan and norton1 published the strategy focused organisation which introduced the strategy map as an integral part of the balanced. Measure and monitor progress towards strategic targets. The balanced scorecard as a performance management tool for. Strategic management, balanced scorecard, strategy maps, innovation 3.
Niven, balanced scorecard stepbystep for government and nonprofit agencies, 2nd ed. Norton, strategy maps boston, harvard business school press, 2004 robert s. It has the ability to show the connections between all four perspectives in a onepage picture. Understanding balanced scorecards and strategy maps. By translating their strategy into the logical architecture of a strategy map and. The balanced scorecard strategy map is an unparalleled tool for communicating strategy. The term strategy map has its origin in the balanced scorecard bsc concept of the mid1990s.
The balanced scorecard, strategy maps and dashboards. Strategy maps are the cornerstones of the framework of the balanced scorecard project. 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. Of course, you might want to present it in a different way, share some additional insights, but the core ideas are already there. If the inline pdf is not rendering correctly, you can download the pdf file here.
A balanced scorecard with strategy map is an effective tool that demonstrates connection between the organizational mission and the outcomes of a nurse sabbatical program. The impact of the strategy maps on balanced scorecard performance, int. Example balanced scorecard excel format strategy map template in order to create a good and effective strategy map, you can take the help of this template. A strategy map is a logical architecture that defines a strategy by specifying the relations between shareholders, customers, business processes, and competencies.
A balanced scorecard strategy map is a onepage visual depiction of an organizations scorecard. Strategy maps are part of the overall balanced scorecard management approach. International journal of business performance management, vol. Charles jones will present a case study on moving from a companys discussion on strategy to leveraging the balanced scorecard to effectively map how the elements of your strategy work together to achieve strategic goals. The purpose of this paper is to show how the use of strategy maps substantially improves the implementation success of balanced scorecards bsc. A strategy describes how an organization can create sustained value for its shareholders, customers and communities. A practitioners guide to the balanced scorecard pdf 268kb.
Using the balanced scorecard as a strategic management. The balanced scorecard and strategy maps provide a framework for assessing strategy s value creation potential from four different perspectives. The paper uses the following structure for organizing the origin and subsequent development of the balanced scorecard. By using a strategy mapa powerful new tool built on the balanced scorecard. Your static strategy map becomes a live performance dashboard. The information included is fictional and is provided to simply demonstrate the process. A strategy map defines corporate direction and aligns internal processes, strategic objectives, initiatives, key performance indicator kpi.
The balanced scorecard bsc is the most widely applied. Definition and concept an approach to the provision of information to the management to assist with. Oct 23, 2018 this video provides an example of a balanced scorecard with strategy maps. That is where the strategy map and its derived balanced scorecard fit in. The purpose of out study is about how to develop a model from balanced scorecard to strategy map. A full balanced scorecard example including 6 templates. Pdf the impact of the strategy maps on balanced scorecard. Linking the balanced scorecard to strategy robert s. And orally presenting the map is one of the best ways to communicate an organizations strategy. Upward airlines in this example, the fictitious upward airlines is a traditional forprofit organization, so the financial perspective is placed at the top. Conceptual foundations of the balanced scorecard 3.
Introduction to the balanced scorecard and performance measurement systems 1 chapter 1 introduction to the balanced scorecard. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. The balanced scorecard measures your companys performance from four perspectives financial, customer, internal. Balanced scorecard basics balanced scorecard institute. The concept of balanced scorecard has evolved beyond the simple use of perspectives and it is now a holistic system for managing strategy. In this ebook, youll find five balanced scorecard strategy maps for these forprofit organizations. 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. The basic balanced scorecard template focuses on four areas of business referred to as perspectives. Strategy maps combine with balanced scorecards to provide a new framework for describing and implementing strategy. Strategy maps describe how organisations create value by building on strategic. Reviewing strategy maps from both inside and outside your sector is critical, as it will give you a good idea of what other organizations are doing to ensure their success. But what does this mean for strategy execution in practice. The strategy map and balanced scorecard public service. Its objective is to translate an organizations mission and vision into actual operational actions strategic planning.
To achieve better bsc implementations, the author uncovers. Balanced scorecard, organizations create a common understandable point of. It might also be useful for a management team which is seeking to complement drawbacks of their balanced scorecard. The purpose of this paper is to examine the balanced scorecard bsc adoption experience amongst organisations in connection with the strategy map design. 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. Since then, strategy map became a buzzword, a synonym of any visual representation of strategy.
Some balanced scorecard software packages allow you to build your strategy map directly in the software. Building strategy maps and scorecard in utilities euci. A complete strategy map template including examples. If you want some examples in your industry, download one of our free ebooks. A proper balanced scorecard can predict the effectiveness of an organisations strategy through a series of linked performance measures based on four perspectives including finance, customers, internal processes, employee learning and growth.
Balanced scorecard example the following is an example of how one might develop a balanced scorecard. The bsc is supposed to translate strategy into action. With the balanced scorecard framework implemented, the strategy map with its supporting documentation is already a strategic report that is updated regularly. This initial paper suggests a strategic management framework based on the balanced scorecard bsc 6,7 and the strategy map 8,9 to. Strategic grids, measurements, targets, and programs.
Strategy execution library s of best practice articles and white papers. Despite the best intentions of those at the top, lofty. An introduction to strategy maps and the bsc in charities. It allows you to organize your details with the help of two distinct columns. At mc were the leading european experts in developing strategy maps with charities and public bodies. We will choose ericsson as our case study, so the situation of. Traditional strategy maps, which were developed as part of the balanced scorecard bsc strategy execution model, solve this problem by identifying the key objectives for each bsc perspective that if achieved, will result in the successful implementation of the strategy. Strategic performance measurement using balanced scorecard. A balanced scorecard shows a series of cause and effect relationships that show how a companys focus on learning and. By translating their strategy into the logical architecture of a strategy map and balanced scorecard, organizations create a common understandable point of reference for all their units and employees.
A strategy map is a diagram showing the causal relationships between strategic objectives according to the four perspectives financial and customer perspectives, internal process, learning and growth. Cascading the balanced scorecard to build organizational alignment. Norton, alignment boston, harvard business school press, 2006 paul r. Uses strategic performance measures and targets to measure progress. 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. A strategy map sits in front of its scorecard the balanced scorecard. Align the daytoday work that everyone is doing with strategy. The balanced scorecard provides a new framework to describe a strategy by linking intangible and tangible assets in valuecreating activities. Strategy map therefore facilitates the definition and communication of the. Addressing both strategy and service delivery models this paper describes the overall approach to using strategy maps in the public sector, based upon 4th generation balanced scorecard thinking. Strategy maps intrafocus balanced scorecard software. Download sample strategy maps for a balanced 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.
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