strategy-map

What Is A Strategy Map? The Strategy Map In A Nutshell

Strategy maps are single-page, visual representations of organizational strategy. Their simplicity makes them ideal for communicating big-picture objectives to every employee in an organization – regardless of seniority or project involvement level. A strategy map is a visual representation of organizational objectives and how they relate to one another.

Understanding strategy maps

Well-designed strategy maps articulate the role every employee will play in achieving the organizational strategy. They also produce clearly defined objectives with measurable results. Importantly, strategy maps are built from the top down. The organization must first define an overarching strategic objective before identifying the strategy and key performance indicators that will play a role in its achievement.

Most strategy maps are based on the four balanced scorecard perspectives of financial, customer, internal processes, and learning and growth

We will take a look at these perspectives in more detail in the next section.

Using the four perspectives to construct a strategy map

On a strategy map, each strategic objective is represented by an oval or circle. The number of strategic objectives must be kept under twenty since tracking too many objectives risks diluting the message or making the strategy difficult to communicate.

Each of the objectives is then grouped according to the four perspectives of the balanced scorecard. This helps the business develop predictive, forward-looking strategies that are not solely based on financial performance.

The four perspectives are:

  1. Finances – encompassing strategies designed to increase shareholder value. Revenue growth and productivity are the two primary objectives measured under this perspective for most companies. For non-profits, the customer or company mission is most important – financial performance is simply a means to an end.
  2. Customers – directly under the finances or mission is the customer value proposition. For-profit companies tend to focus on either product leadership, operational excellence, or customer intimacy.
  3. Processes – which describe how financial and customer goals will be achieved. Examples include innovation, market expansion, working toward operational excellence, improving customer relationships, and productive stakeholder relationships.
  4. Learning and growth – the part of a strategy map detailing the employee skills and experience necessary to ensure processes run efficiently. Company culture and intellectual capital are also important.

Arrows can then be used to illustrate the cause-and-effect relationship between strategic objectives. Consider the example of an airline company strategy map. With a properly trained ground crew (learning and growth), each flight has a faster turnaround time (processes). Faster turnaround times then result in lower prices and fewer delayed passengers (customers), which increases profitability and lowers operating costs (financial).

When completing the strategy map, teams may find that some objectives do not fit neatly into a single perspective. In this case, it may make sense to have them straddling two perspectives. Teams should also realize that it is perfectly acceptable to deviate from the traditional strategy map framework to accommodate unique or particular goals.

Key takeaways:

  • A strategy map is a visual representation of organizational objectives and how they relate to one another.
  • A strategy map defines strategic objectives according to the four perspectives of the balanced scorecard: finances, customers, processes, and learning and growth. By analyzing the cause and effect relationships between different objectives, teams can develop forward-looking strategies free from a myopic focus on financial performance.
  • A strategy map must be built from the top down. With a primary goal or outcome identified, the business must work backward to identify how it will be achieved.

Connected Strategy Frameworks

Porter’s Five Forces

porter-five-forces
Porter’s Five Forces is a model that helps organizations to gain a better understanding of their industries and competition. Published for the first time by Professor Michael Porter in his book “Competitive Strategy” in the 1980s. The model breaks down industries and markets by analyzing them through five forces

Ansoff Matrix

ansoff-matrix
You can use the Ansoff Matrix as a strategic framework to understand what growth strategy is more suited based on the market context. Developed by mathematician and business manager Igor Ansoff, it assumes a growth strategy can be derived by whether the market is new or existing, and the product is new or existing.

Blitzscaling Canvas

blitzscaling-business-model-innovation-canvas
The Blitzscaling business model canvas is a model based on the concept of Blitzscaling, which is a particular process of massive growth under uncertainty, and that prioritizes speed over efficiency and focuses on market domination to create a first-scaler advantage in a scenario of uncertainty.

Business Analysis Framework

business-analysis
Business analysis is a research discipline that helps driving change within an organization by identifying the key elements and processes that drive value. Business analysis can also be used in Identifying new business opportunities or how to take advantage of existing business opportunities to grow your business in the marketplace.

Gap Analysis

gap-analysis
A gap analysis helps an organization assess its alignment with strategic objectives to determine whether the current execution is in line with the company’s mission and long-term vision. Gap analyses then help reach a target performance by assisting organizations to use their resources better. A good gap analysis is a powerful tool to improve execution.

Business Model Canvas

business-model-canvas
The business model canvas is a framework proposed by Alexander Osterwalder and Yves Pigneur in Busines Model Generation enabling the design of business models through nine building blocks comprising: key partners, key activities, value propositions, customer relationships, customer segments, critical resources, channels, cost structure, and revenue streams.

Lean Startup Canvas

lean-startup-canvas
The lean startup canvas is an adaptation by Ash Maurya of the business model canvas by Alexander Osterwalder, which adds a layer that focuses on problems, solutions, key metrics, unfair advantage based, and a unique value proposition. Thus, starting from mastering the problem rather than the solution.

Digital Marketing Circle

digital-marketing-channels
A digital channel is a marketing channel, part of a distribution strategy, helping an organization to reach its potential customers via electronic means. There are several digital marketing channels, usually divided into organic and paid channels. Some organic channels are SEO, SMO, email marketing. And some paid channels comprise SEM, SMM, and display advertising.

Blue Ocean Strategy

blue-ocean-strategy
A blue ocean is a strategy where the boundaries of existing markets are redefined, and new uncontested markets are created. At its core, there is value innovation, for which uncontested markets are created, where competition is made irrelevant. And the cost-value trade-off is broken. Thus, companies following a blue ocean strategy offer much more value at a lower cost for the end customers.

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Published by

Gennaro Cuofano

Gennaro is the creator of FourWeekMBA which reached over a million business students, executives, and aspiring entrepreneurs in 2020 alone | He is also Head of Business Development for a high-tech startup, which he helped grow at double-digit rate | Gennaro earned an International MBA with emphasis on Corporate Finance and Business Strategy | Visit The FourWeekMBA BizSchool | Or Get The FourWeekMBA Flagship Book "100+ Business Models"