Strategy maps strategy maps converting intangible assets. The authors created strategy map templates for various industries, including retail, telecommunications. Converting intangible assets into tangible outcomes kaplan, robert s. As a current student on this bumpy collegiate pathway, i stumbled upon course hero, where i can find study resources for nearly all my courses, get. Converting intangible assets into tangible outcomes kindle edition by kaplan, robert s. Kaplan and norton claim that this generic map reflects a generalization of their work with a large. Norton introduced the balanced scorecard, a revolutionary performa. Developing a strategy map the process below illustrates the four stages in which a contemporary strategy map plus the scorecard and implementation plan are developed. Use features like bookmarks, note taking and highlighting while reading strategy maps. Norton harvard business school press the third volume of the balanced scorecard methodology. Convert ing intangible assets into tangible outcomes. Norton introduced the balanced scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer relationships. It combines education, real world experience and certification to enable professionals in both public and private sectors to make strategy happen.
Before kaplan and norton, most academic strategy courses were dominated by the thinking of michael porter, who began by emphasizing the five forces model that suggested what external, environmental factors would change an organizations. Sms are a strategic part of the balanced scorecard framework to describe strategies for value. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. In a previous paper kaplan and norton 2001b, we described the role for strategy maps and balanced scorecards to develop performance objectives and. Instead of strategy buried in thick documents, it is on a single, illustrated page. Norton s everal years ago, we introduced the concept of a balanced scorecard for motivating and measuring business unit performance. The balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and global scale. Converting intangible assets into tangible outcomes book is not really ordinary book, you have it then the world is in. Even if the strategy map is a tool for expressing concrete strategy, it is also an instrument of information within the organization. It provides the foundation for designing a balanced scorecard that is the cornerstone of a strategic management system. You can click on the graph to download a bigger one in pdf format. Strategy maps can help chart this difficult terrain. Translating strategy into action, robert s kaplan and david p norton, boston. The balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and.
Read strategy maps converting intangible assets into tangible outcomes by robert s. Kaplan and norton did not intend the process of designing a strategy map to be linear. Palladium strategy management training is built on the foundations of our thought leadership dr kaplan and dr norton and the management frameworks developed by them balanced scorecard, strategy maps and the xpp. Then, in the strategyfocused organization, kaplan and norton showed how organizations achieved breakthrough performance with. The strategy focused organization the summary in brief in 1996, robert kaplan and david norton introduced the balanced scorecard performance measurement method, which included not only traditional financial measures but also such qualitative measures as employee satisfaction, corporate mission and customer loyalty. The measures from an organisations balanced scorecard are based upon the strategy map, which connects the desired outcomes of the strategy with the measures which will drive those outcomes. Kaplan and norton claim that this generic map reflects a generalization of their work with a large number of companies for whom they have developed specific strategy. 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. A strategy map is a visual framework for the corporate objectives within those four areas. Strategy mapping tool strategy maps allow organisations to describe and communicate their strategies succinctly to close the gap between creation and successful implementation of strategy. Robert kaplan and david norton strategy maps page 3 financial perspective customer. Strategy map example citizens financial internal processes a stronger economy and an enhanced quality of life, while living within our.
Converting intangible assets into tangible outcomes. A n effective business strategy is a complex series of interconnections a set of causeandeffect relationships. There are little risk of failure in creating the strategymap so long as managers are equipped with accuratedata and information, analytical skills and. According to kaplan and norton, a strategy map is a logical comprehensive architecture for describing strategy. Now, using their ongoing research with hundreds of balanced scorecard adopters across the globe, the authors have created a powerful new toolthe strategy. A strategy map also helps to create conversations about the strategy. A strategy map is a diagram that describes how a company or organisation can create value by linking strategic objectives in a cause and effect relationship. Strategy maps introduces a new tool that has evolved from robert kaplan and david nortons ongoing research with hundreds of balanced scorecard adopters across the globe, and its premise is simple.
Strategy maps converting intangible assets into trangible outcomes by robert s. Strategy map page 5 building strategies and strategy maps pages 7, 8 ibms complete customer solution page 8 by robert s. Executive summarythe strategy map at least described in the introductionsection of the book is a powerful tool tocapture, develop and communicate organization strategyinternally. The strategyfocused organization servicing companies. Oct 25, 2012 executive summarythe strategy map at least described in the introductionsection of the book is a powerful tool tocapture, develop and communicate organization strategyinternally. Strategic management converting intangible assets into. In this first of two articles on strategy development, adapted from kaplan and nortons. Strategy maps combine with balanced scorecards to provide a new framework for describing and implementing strategy. Norton, have created a powerful new tool based on their ongoing research.
Introduction to strategy maps a book by robert s kaplan and. Kaplan and norton claim that this generic map reflects a generalization of their work with. Kaplan and norton identify four themes, which they go on to describe as valuecreating. Then each department can develop and provide a servicelevel agreement or contract that outlines the services it. The strategy map is adequate to represent entrepreneurial contexts. Strategic management what youll learn in this summary which organizational processes are most critical for enhancing productivity. Introduction to strategy maps a book by robert s kaplan. Dec 16, 2003 then, in the strategy focused organization, kaplan and norton showed how organizations achieved breakthrough performance with a management system that put the balanced scorecard into action. The map shows you an exact schedule, to which the company objectives should be implemented accordingly. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve. In the 2001 book the strategy focused organization, kaplan and norton transform their balanced scorecard. Modeling strategy maps and balanced scorecards using istar constantinos giannoulis, jelena zdravkovic. They argue that success results from a strategyfocused organization, which, in turn, results from strategy maps and balanced scorecards. 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.
Its objective is to translate an organizations mission and vision into actual operational actions strategic planning. Strategy maps book strategy maps converting intangible assets into tangible outcomes robert s. The balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton. Strategy maps describe how organisations create value by building on strategic. Rather, they argue it should come as an iterative interaction between the four perspectives kaplan and. During the past 30 years, much attention has been focused on how companies can formulate new strategies for sustainable advantage. Since this first incarnation kaplan and nortons thinking has moved on, and the perspectives are now organised in a sequence hence the map idea. The strategyfocused organization the summary in brief in 1996, robert kaplan and david norton introduced the balanced scorecard performance measurement method, which included not only traditional financial measures but also such qualitative measures as employee satisfaction, corporate mission and customer loyalty. The strategyfocused organization, kaplan and norton note that, according to an abundance of research data, only 5% of the workforce understand their companys strategy, that only 25% of managers have incentives linked to strategy, that 60% of organizations dont link budgets to. They argue that success results from a strategy focused organization, which, in turn, results from strategy maps and balanced scorecards. Strategy maps introduces a new tool that has evolved from robert kaplan and david norton s ongoing research with hundreds of balanced scorecard adopters across the globe, and its premise is simple.
By decomposing a strategy map into a collection of strategic themes, executives can plan and manage each of. Kaplan and norton argue that the most critical aspect of strategy implementing it in a way that ensures sustained value creationdepends on managing four key internal processes. Strategy maps takes readers to the next level of precision in strategy implementation. Abstract click on the graph to download a big strategy map template in. The strategy focused organization, kaplan and norton note that, according to an abundance of research data, only 5% of the workforce understand their companys strategy, that only 25% of managers have incentives linked to strategy, that 60% of organizations dont link budgets to. Using the strategy map as a strategic communication tool. Strategy map financial perspective customer perspective internal perspective learning and growth perspective human capital information capital organization capital operations management processes. Foreshadowing the subsequent development of strategy maps, anthony. The strategy map a strategy map is a diagram that describes how a company or organisation can create value by linking strategic objectives in a cause and effect relationship. Pioneered by balanced scorecard founders robert kaplan and david norton, strategy mapping is an effective and powerful initiative that can help keep a.
In this first of two articles on strategy development, adapted from. It is based on the four balanced scorecard perspectives. Strategy map financial perspective customer perspective internal perspective learning and growth perspective human capital information capital organization capital operations management processes customer management processes innovation processes regulatory and social processessupply production distribution risk management. A welldesigned strategy map tells the story of the strategy so that people can understand it quickly and easily. Managing by strategic themes strategy management partners. 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. This is a problem because for many enterprises, more than 75percent of their market value is generated by intangible assets which traditional financial and accounting metrics simply dont capture at all. The aim of the balanced scorecard was to align business activities to the vision and strategy of the business, improve internal and external communications, and. Figure 1 on the following page provides an overview of a strategy map. May 03, 2014 the balanced scorecard or balance score card is a strategic performance measurement model which is developed by robert kaplan and david norton.
Converting intangible assets into tangible outcomes 1 september 2004 strategy maps. Modeling strategy maps and balanced scorecards using istar. The strategy map facilitates performance breakthroughs by allowing them to link their management processes to a clearly defined strategy. Linking the balanced scorecard to strategy robert s. Since this first incarnation kaplan and norton s thinking has moved on, and the perspectives are now organised in a sequence hence the map idea. The strategy map allows compa nies to describe the links. In addition, it can help provide information on the chosen strategy more.