Kaplan and nortons future vision of the balanced scorecard. The first is the idea that the map helps articulate strategy. Strategy maps on apple books apple books apple apple. This offering is the 3rd and one of the most valuable, perhaps the key to kaplan and nortons five book series on how the balanced scorecard can be used to develop a strategy focused organization through strategy maps to achieve alignment and the execution premium. Due to popular demand, the article has been updated to include six sample balanced scorecard strategy maps the balanced scorecard bsc, in my humble opinion, is one of the best management reporting frameworks available. Definition and concept an approach to the provision of information to the management to assist with. Balanced scorecards and operational dashboards measure organizational performance and microsoft excel is the tool used worldwide to create these scorecards and dashboards. David norton and i introduced the balanced scorecard in a 1992 harvard. The balanced scorecard is a strategic planning and management system used to align business activities to the vision and strategy of the organization by monitoring performance against strategic goals. This diagram is representative of kpis that a typical organization would use in a strategy map as part of a balanced scorecard. 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 book covers timeproven stepbystep processes on how to guide executive teams and managers in creating scorecards and dashboards.
Then, in the strategyfocused organization, kaplan and norton showed how organizations achieved breakthrough performance with. Kaplan and nortons books, which relative with the balanced scorecard and strategy map, since they. Your static strategy map becomes a live performance dashboard. One misconception about the balanced scorecard is that its primary purpose is. The balanced scorecard as a performance management tool. Peter drucker introduced management by objectives in his classic 1954 book, the. It has the ability to show the connections between all four perspectives in a onepage picture. With this paper, we show how organizations use their scorecards to align. Scorecard kpis ideally should be derived from a strategy map rather than being just a list of importa nt measures that the execut ives ha ve requested to be reported. Strategy maps and balanced scorecards are a craft, not a science. Published by soundview executive book summaries, p. Strategy maps describe how organisations create value by building on strategic.
The book provides an excellent complement to the two kaplan. Cascading the balanced scorecard to build organizational alignment. Norton introduced the balanced scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer relationships. The result of this research effort was the balanced scorecard approach. The last one, strategy execution, relies on strategy maps, strategic scorecards with kpis, and operational dashboards with pis. The strategy map allows managers to align investments in people, tech. Strategy maps combine with balanced scorecards to provide a new framework for describing and implementing strategy. A balanced scorecard strategy map is a onepage visual depiction of an organizations scorecard. A strategy map is a diagram that is used to document the primary strategic goals being pursued by an organization or management team. Kaplan and norton claim that this generic map reflects a generalization of their work with. It provides the foundation for designing a balanced scorecard that is the cornerstone of a strategic management system. Balanced scorecard example the following is an example of how one might develop a balanced scorecard. An example of a generic strategy map can be seen below. The balanced scorecard translates a companys vision and strategy into a coherent set of performance measures.
Norton is founder and president of the balanced scorecard collaborative in lincoln, massachusetts. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. 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. The information included is fictional and is provided to simply demonstrate the process. This article was originally published in june 2015. The purpose of this paper is to show how the use of strategy maps substantially improves the implementation success of balanced scorecards bsc. Figure 1 on the following page provides an overview of a strategy map. Conceptual foundations of the balanced scorecard 3. This chapter elaborates the definition, development, and utilization of the strategy maps. From planning to performance and founder of analyticsbased performance management, an advisory firm in cary, north carolina. A strategy map is a tool that enables an organization to articulate its strategy through a series of cross. Balanced scorecard bsc is an effective way for non. In a previous paper kaplan and norton 2001b, we described the role for strategy maps and balanced scorecards to develop performance objectives and measures linked to strategy.
The balanced scorecard focuses on factors that create longterm value traditional financial reports look backward reflect only the past. Per magnus andersson and rolf larsson seminar date. Balanced scorecard, organizations create a common understandable point of. The subtitle of kaplan and nortons first balanced scorecard book is.
The bsc is supposed to translate strategy into action. Balanced scorecard step by step guides readers through the processes required for a successful balanced scorecard project. The balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork 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. An introduction to strategy maps and the bsc in charities.
Anytown hospital has just finished a twoday retreat where they revised and updated their mission and vision statements and drafted a strategic plan. Strategic management, balanced scorecard, strategy maps, innovation. They argue that success results from a strategyfocused organization, which, in turn, results from strategy maps and balanced scorecards. The four perspectives of the scorecardfinancial measures, customer knowledge, internal business processes, and learning and growthoffer a balance between shortterm and longterm objectives, between outcomes desired and performance drivers of those outcomes, and between hard. For best results, please print this case in color a new management team at vw do brazil develops and deploys a strategy map and balanced scorecard to accomplish a turnaround and cultural change after eight consecutive years of financial losses and market share declines. Wirtzs book makes a systematic overview of business model management, and identifies three perspectives related to this model focused on. Integration of balanced scorecard bsc, strategy map, and fuzzy. 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. If you want some examples in your industry, download one of our free ebooks. It places the balanced scorecard in a wider governance context that includes the management of risk and environmental and social responsibility. As part of our strategy execution training, we work with business professionals to create a prototype of their balanced scorecard strategy maps. Kaplan and norton recently published strategy maps, the third book.
Some balanced scorecard software packages allow you to build your strategy map directly in the software. Strategy maps foster a better understanding of the bsc among employees. A strategy describes how an organization can create sustained value for its shareholders, customers and communities. To achieve better bsc implementations, the author uncovers.
Norton introduced the balanced scorecard, a revolutionary performa. In addition, he shows how to become a strategyfocused organization by imbedding the balanced scorecard into critical organizational processes. Fully illustrated with examples from many different organizations, this book will help you deliver your strategy better. A full balanced scorecard example including 6 templates. Read strategy maps converting intangible assets into tangible outcomes by robert s. Although the previous book of kaplan and norton already spent 64 pages on strategy maps, you can find the best and most comprehensive treatment of them including lots of examples in the book. In this ebook, youll find five balanced scorecard strategy maps for these forprofit organizations. Commentary transforming the balanced scorecard from. The creators of the strategy map and balanced scorecard concept, professors robert s. 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. Pdf the initial steps for building the strategy map are primarily. At mc were the leading european experts in developing strategy maps with charities and public bodies. How to develop a balanced scorecard into a strategy map. Its this focus on both highlevel strategy and lowlevel measures that sets the balanced scorecard apart from other performance management methodologies.
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. Converting intangible assets into tangible outcomes kaplan, robert. Balanced scorecard basics balanced scorecard institute. Download sample strategy maps for a balanced scorecard. One increasingly popular framework to combine these qualities is the balanced scorecard. The balanced scorecard, strategy maps and dashboards. Strategy maps support this by showing causeandeffect chains. Sms are a strategic part of the balanced scorecard framework to describe strategies for value creation. To clearly achieve your objectives, a unified strategy is a mustand strategy mapping is one of the best ways to achieve that goal. But what does this mean for strategy execution in practice. 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. The concept of balanced scorecard has evolved beyond the simple use of perspectives and it is now a holistic system for managing strategy.
According to kaplan and norton, a strategy map is a logical comprehensive architecture for describing strategy. The balanced scorecard perspectives are insisting on examining different strategies and choosing the most appropriate one. Next, we move on to the key lessons that the balanced scorecard offers. By translating their strategy into the logical architecture of a strategy map and.
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