Monday, January 5, 2009

Strategy Mapping is Becoming A Mandatory Business Tool for Today's Corporate Sustanabilty.

Strategy Mapping Is an Extension Of Balance Score Card Systems, it was Kaplan and Norton of the Famous BCS propounded this particular theory. In Other words it is a destination statement and the proper implementation of Business Strategy.

It is very much a process driven system in order to achieve the goal of the organization by the management who has drawn the strategy.

“Strategy Mapping” is the process of determining objectives and means of getting there. The balanced scorecard (Kaplan and Norton) is one framework that can be used for strategy mapping. The balanced scorecard has four common perspectives: financial, customer, internal business, and innovation and learning.

Each perspective commonly has from four to seven goals and corresponding measures. The scorecard is balanced in that it contains elements that are short-term and long-term, financial and non-financial, and leading factors and the  lagging factors . An impotrance  characteristic of a balance scorecard is that it should represent a translation  and perfect implimentation of strategy.

In the Balance Score Card model we have seen that the ultimate goal is the profitability .But the profitability can come only by a systematic process which the business has to identify. Kaplan and Norton identified the components of strategy mapping which includes

(1) financial strategies,

(2) strategic themes,

(3) value propositions, and last but not the least

(4) critical internal processes.

For financial strategies, an example of an overriding strategy may be to maximize 

shareholder wealth, then the market capitalization of the firm in the stock exchange 

increases which may be attained by other financial strategies, such as maximizing 

revenues, productivity and asset utilization. In setting strategic themes, the overall

 strategy must be decomposed from an internal viewpoint. The focus is on 

determining what prudent business must be done to achieve desired strategic 


Three generic strategic themes are to increase customer value, achieve operational 

excellence, and exhibit good corporate citizenship. In setting value propositions, 

it is important to recognize that it is impossible to do it all. 

Instead, it is essential to focus on excelling in a few select areas. 

Three possible value propositions are product leadership, customer intimacy 

and operational excellence.

Critical analyses of internal processes are those crucial  functional operations 

that must be executed properly to achieve the value proposition and the value 

addition chosen. They must be identified so that the organization can assess 

the short comings of the current situation and rectify and develop any new skills 

sets and technological or process enhancement. The process of determining 

critical internal processes assists in prioritizing spending in hiring and training 

of human capital in order to increase productivity along with profitability.

Strategy mapping are used in for example for the following issues.

1.    Determining target market, focusing on target audience.

2.    communicating and understanding strategy and transparency in communication which makes the understanding easy.

3.    Detecting errors and continuous improving strategic planning.

4.    When determining target market, the chosen value proposition dictates the focus of the organization while the related critical internal processes chosen dictate which customers will come calling.

5.    Using strategy mapping to refine the customer base is an iterative process.

Using strategy maps to communicate to managers assists senior management with ‘thinking out’ the strategic plan, allows senior management to articulate the plan to lower-level managers, and allows managers to link their relevant map segments to operational objectives.

Strategy maps for communicating allows non-manager employees to see where they fit into strategy (including high-level goals), avoid strategy distortions, and link their relevant map segments to operational objectives.

Strategy mapping can help in error detection by making inconsistencies and gaps in cause-and-effect linkages more visible. Periodic review of the strategy map will assist in error detection before related problems become an issue.The management level introspection is required at all levels and at frequent intervals of time. 

The graphical depiction of strategy make the entire strategy more understandable to all levels of employees and make it much more likely to get valuable input from a variety of sources.

Two common resistance to strategy execution are as follows strategy and people. 

Strategy barriers include 

(1) Problems and errors not being identified soon enough. 

(2) Ineffective coordination of activities amongst the management people. 

(3) Goals that are not very specific. 

People resistance  includes the following points: 

(1) Insufficient employee capabilities, the knowledge base is to be enhanced 

and a proper communication is required. 

(2) Insufficient Training and Development, 

(3) Inadequate leadership and very often direction less.

(4) Very poor line managers capabilities. 

Strategy mapping is part of the solution to these barriers to strategy execution.

Conclusion: All major organisation in order to avoid the the direction less attitude must adopt the Strategy Mapping process. The masterminds of Kaplan and Norten has made an excellent models which can really streamline the proper strategic function in order to achieve the business goals.  




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