Strategy Map

Skill level: Advanced

Description

A strategy map is a graphical representation of a planned method for an organization to create value. It uses a cause and effect method of correlating the four business system perspectives: financial, internal, external, and educational.  The strategy map is often used with the balanced scorecard approach.

Benefits

  • Provides simple one-page representation of a strategy
  • Provides improved strategy deployment due to the simple structure
  • Clarifies scorecard
  • Provides guidance

How to Use

  • Step 1.  Create goals for the organization. This can be done at any level. Consideration, however, must be given to financial, internal, external, and educational perspectives.
  • Step 2.  Determine how to connect each objective and intermediate steps to objectives. These intermediate steps are critical to deciding on an approach for achieving your goals.
  • Step 3.  Divide a sheet of paper into four areas using horizontal lines. Label each of these areas with one of the following categories: financial, internal, external, and educational.
  • Step 4.  In each of the four sections, add goals by drawing in circle shapes. Then use smaller circles to draw intermediate objectives. Connect the goals to the intermediate steps using arrows. Note that each goal may have a single arrow or many arrows going to and from it.
  • Step 5.  Review the finalized strategy map with key personnel. All key personnel should be given a copy to use as a guide.

Relevant Definitions

External: Factors external to the organization, including customers, environment, resources, etc.

Educational: Factors that can lead to improvement to the value of human capital (often called “learning and growth perspective”).

Financial: Accounting and financial aspects of an organization.

Intermediate step: An objective that contributes to the main objective.

Internal: Factors inside the organization, such as human resources and infrastructure.

Example

The example below presents a strategy map for the Service Quality Body of Knowledge initiative.

Strategy_Map_Figure1

 

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