“My company has spent a lot of time developing a strategy and we need to execute it, but I’m lost. What do I do?”

“I have a good grasp of what our organization’s strategy is, and I know what I need to do to help us achieve it, but I’m not sure how to convey this to my employees. What’s the best way?”

If these questions sound familiar to you, you’re not alone. Most of us understand the importance of developing strategy, and many of us have participated in strategy-planning sessions. We also hear a lot of talk about execution and the need to carry out the strategic plans we create.

The problem, however, is that many of us don’t always know where to go after that. We can identify strategies for achieving success, and we know that we have to act upon them—but we’re not sure how to go about doing it. That’s where strategy maps come in.

The idea of a strategy map is relatively new. The creators, Robert Kaplan and David Norton, first presented it about a decade ago. Kaplan and Norton had earlier developed the concept of the Balanced Scorecard approach to measuring business success, and the strategy map builds off that.

The premise behind the Balanced Scorecard—and an essential component of a strategy map—is that organizations should measure performance in multiple ways. Specifically, they must consider success from four different perspectives:

• Financial perspective (financial results such as profit, return on capital, cash flow, and margins)
• Customer perspective (customer concerns such as timeliness, quality, performance and service, and price)
• Internal (business) process perspective (operations management processes, customer management processes, innovation processes, and social and regulatory processes)
• Learning and growth perspective (human, informational, and organizational capital or capacities)

The strategy map incorporates and links these four perspectives into a visual framework. At the highest level, the map presents the organization’s mission, values, and vision—why it exists, what success looks like, and what its future looks like. Then it presents the strategy (how the organization is going to achieve its vision) by defining objectives and performance measures for each of the four perspectives. The map presents the four perspectives as separate levels, in the order outlined above. So on the top level the map shows the objectives and performance measures from the financial perspective (“our organization will grow revenue to $5 million by FY 2011–12”); then one level below it shows the objectives and performance measures from the customer perspective (“in our annual survey, customers will rate satisfaction at 90% or greater"); and so on. (See the sample strategy map below.)

One important thing to keep in mind is that the strategy map is hierarchical and the levels are tied together. For example, the lowest level of the map presents the objectives and measures for the learning and growth perspective; the organization must achieve these before it can successfully meet the objectives and measures for the internal process perspective on the next level up. As the organization masters each level, it moves upward on the map, making progress toward the strategies outlined in its vision.

Developing a strategy map takes considerable effort; it usually entails calling together the organization’s key stakeholders for several hours of brainstorming, and it requires much review and revision. Many organizations appoint an individual to serve as the steward and to regularly update the map with current data. But this investment usually leads to positive results. In the end, the organization clarifies what is most important—what will drive it toward achieving its vision. All decisions can be viewed through the lens of strategy, and the map makes the decision-making process easier. As added benefit, the organization:

• Understands what each team member’s role is and what he or she has to do to perform successfully
• Builds an excellent strategy communication tool—which creates meaning in team members’ work
• Can focus on what matters and drill down into the detail if needed
• Ends up measuring what matters, not managing what it can measure
• Develops a tool that helps it manage strategically and operationally
• Instills more confidence in the strategy and its execution
• Can more easily refine the strategy without revising the whole planning document
• Is more likely to execute the strategy

The information we present here offers only a high-level view of strategy maps. For more details, including how FlashPoint can help you develop a map, e-mail us or call us at 317.229.3035—or visit our website to learn more about our strategic-planning services. Another good source for learning more about strategy maps is an online article by strategy map creators Robert Kaplan and David Norton, “Strategy Maps: Converting Intangible Assets into Tangible Outcomes.”