The balanced scorecard is an organizational performance management methodology used to to translate an organizations mission and vision into actual operational actions strategic planning. Value is created through internal business processes. The information included is fictional and is provided to simply demonstrate the process. Balanced scorecard strategy maps should be tailored not only by industry, but by company. In particular it explains how public sector bodies can model their strategy and their service delivery models in their strategy map, so that the resulting balanced scorecard better communicates their overall approach.
Will you develop a strategy map before the balanced scorecard or vice versa. Conceptual foundations of the balanced scorecard 3. Norton also the founders of the balanced scorecard movement,strategy mapping is a cuttingedge approach to the art of strategy execution. Building strategy maps and scorecard in utilities course. There are several techniques available to realize the strategic vision or plan, but balanced scorecard makes the process much simpler and quicker. Define balanced scorecard concepts and processes within the strategy execution program. And orally presenting the map is one of the best ways to communicate an organizations strategy. Strategy maps combine with balanced scorecards to provide a new framework for describing and implementing strategy. These examples show how the balanced scorecard can be used to make explicit the financial strategy of a business unit, and how to customize financial objectives and measures to business unit strategy. Figure 1 highlights where the strategy map and balanced scorecard fit in the. Tracking too many will dilute your overall message, making your strategy difficult to communicate. The idea of the map is to show the causeandeffect logic. A balanced scorecard strategy map is a onepage visual depiction of an organizations scorecard.
Upward airlines reading a balanced scorecard strategy map. Balanced scorecard example the following is an example of how one might develop a balanced scorecard. Strategy maps and balanced scorecards constitute the measurement technology for managing in a knowledgebased economy. Kaplan and norton transformed their balanced scorecard. Throughout the entire process of building and implementing a balanced. Do not copy without permission government onepage balanced strategic plan. Translate your strategy map into a prototype balanced scorecard comprised of measures, targets and initiatives. The balanced scorecard has emerged as a proven and effective tool in our quest to capture, describe, and translate intangible assets into real value for all of an organizations stakeholders and, in the process, to allow. At its simplest the strategy map describes how an organisation plans to deliver its strategic goals expressed as a onepage systems diagram. This discourse has greatly raised practitioner awareness. Like a laser beam, strategy now has a clear path to everyone in the organization. Balanced scorecard, organizations create a common understandable point of. Findings bsc implementations that use a sophisticated strategy map appear to be successful.
These are important since these help to capture, communicate and better manage a specific. Despite the best intentions of those at the top, lofty statements about becoming best in class, the. The balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and. This article also contains a downloadable and editable balanced scorecard template. Oct 23, 2018 this video provides an example of a balanced scorecard with strategy maps. This article also contains a downloadable and editable balanced scorecard template what is a balanced scorecard. Since then, strategy map became a buzzword, a synonym of any visual representation of strategy. There are some management tools that seem to have enduring appeal and the balanced scorecard, or bsc for short, is one of those. A strategy map is typically constructed with a set of 15 to 25 causally linked strategic objectives. Strategy maps can be, and often are, used as standalone tools that organisations employ to develop, understand and convey their strategic story.
In 2001 kaplan and norton1 published the strategy focused organisation which introduced the strategy map as an integral part of the balanced. If you want some examples in your industry, download one of our free ebooks. A balanced scorecard approach to strategic planning national benchmarking conference overland park, ks may 24, 2017. Measures livability score program satisfaction score per service utilization business and licenses per income tourism revenue controllable asset value strategic projects on thne and budget index of program results shared systems time changes audit score of communication recruitment effectveness. Integration of balanced scorecard bsc, strategy map, and fuzzy. A balanced scorecard with strategy map is an effective tool that demonstrates connection between the organizational mission and the outcomes of a nurse sabbatical program. As you can probably guess, this is a strategy map for a lowcost airlinethe map for an international airline catering to business travelers would look very different. 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. Now the people who first developed the balanced scorecard, robert s. Using the balanced scorecard as a strategic management. Start with the strategy map, then kpis and balanced scorecard. The strategy map allows companies to describe the links between intangible assets and value creation so all aspects of strategy can be implemented in a manner that ensures sus. Using the balanced scorecard as a strategic management system. 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.
Customer in the customer perspective of the balanced scorecard, managers identify. This initial paper suggests a strategic management framework based on the balanced scorecard bsc 6,7 and the strategy map 8,9 to. Four perspectives of the balanced scorecard strategy customer financial internal business processes employee learning and growth. Establishing kpis how to develop a dashboard and tracking system. 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. Effectively developing and communicating highlevel business strategy is essential for organizations looking to achieve market leadership. This video provides an example of a balanced scorecard with strategy maps. With that in mind, lets dive right in to an example of what a balanced scorecard looks like in practice. For the sustainability strategy map, we use the same four perspectives from the balanced scorecard for the company goals and add in the two additional perspectives society and environment. How to develop a balanced scorecard into a strategy map. Using survey data from managers of 91 italian organisations the paper seeks to verify whether. An integrated strategic planning and performance management system that. It has the ability to show the connections between all four perspectives in a onepage picture. In this paper the authors propose a link between the benefits dependency network, from a benefits management approach, and a strategy map, from balanced scorecard, to improve the management of business benefits and to ensure that actions taken along.
To maximise their value, however, they need to be seen and used as core building blocks in an aligned strategy initiative. Balanced scorecard basics balanced scorecard institute. 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. The main idea of a strategy map is that each strategic objective in your balanced scorecard is represented by a shape, usually oval. That is where the strategy map and its derived balanced scorecard fit in. It links a vision to strategic objectives, measures, targets, and initiatives. Using a balanced scorecard for project portfolio management. The purpose of this paper is to examine the balanced scorecard bsc adoption experience amongst organisations in connection with the strategy map design. Create a strategy map that clarifies and communicates your utilitys strategic destination, strategic themes, and linked objectives. The balanced scorecard, strategy maps and dashboards.
Balanced scorecard university of california, san diego. What are objectives, measures, targets, and initiatives. A strategy map is a diagram that is basically used for the documentation of the primary strategic goals that might be being pursued by a particular organization or a management team. The bsc approach has achieved excellent results in complex organizations like utilities. It provides the foundation for designing a balanced scorecard that is the cornerstone of a strategic management system. One increasingly popular framework to combine these qualities is the balanced scorecard bsc, and specifically the more recent incarnation, the strategy map.
The balanced scorecard has emerged as a proven and effective tool in our quest to capture, describe, and translate intangible assets into real. They exist as columns down the right and left side as the company interacts with them across all four balanced. This article explains the balanced scorecard, developed by robert kaplan and david norton, in a practical way. It balances financial measures with performance measures and objectives related to all other parts of the organisation. Pmos can use bsc to align their portfolios to the company strategy. These practical tips, gleaned from the authors experience with hundreds of these presentations, can help even the most hesitant bsc leader become an expert in. What is strategy and how are effective strategic priorities developed. The balanced scorecard is the closest management tool to a crystal ball as you will find. Strategy maps and balanced scorecard fatima gundran ma. You can use this balanced scorecard strategy map tool as a basis for implementing a proven business performance management methodology. A balanced scorecard bsc is a strategic planning and management tool to align business activities to the company vision. Pdf linking benefits to balanced scorecard strategy map. A full balanced scorecard example including 6 templates. Measure of performance targets initiatives customer deliver superior customer experiences process flow chart map, pareto charts, fishbone diagram you want to map and translate what.
The balanced scorecard, referred to as the bsc, is a framework to implement and manage strategy. Balanced scorecard toolkit includes stepbystep manuals, documents, presentations, check lists designed to help business professionals with successful development and implementation of balanced scorecard. One increasingly popular framework to combine these qualities is the balanced scorecard. The balanced scorecard system connects the dots between big picture strategy elements and more operational elements.
A balanced scorecard shows a series of causeandeffect relationships that show how a. My experiences as a balanced scorecard practitioner with a large canadian company taught me that tremendous results are possible with the tool, but to attain. Despite the best intentions of those at the top, lofty. Article pdf available in journal of business strategy. We will choose ericsson as our case study, so the situation of. Additionally, creating a resultsoriented culture requires a comprehensive management system. Norton, have created a powerful new tool based on their ongoing research. Strategic management converting intangible assets into. Your static strategy map becomes a live performance dashboard. Conceptual foundations of the balanced scorecard robert s. The purpose of out study is about how to develop a model from balanced scorecard to strategy map. The development of the balanced scorecard ukessays.
Some balanced scorecard software packages allow you to build your strategy map directly in the software. Anytown hospital has just finished a twoday retreat where they revised and updated their mission and vision statements and drafted a strategic plan. 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. A balanced scorecard approach to strategic planning. The balanced scorecard strategy map is an unparalleled tool for communicating strategy. Before placing an order check out the content of the toolkit. Get ideas from these examples, but copying and pasting wont work. Moreover, the balanced scorecard pdf aids you in developing your business to the next level and increases your customer base. Click on the graph to download a big strategy map template in. The term strategy map has its origin in the balanced scorecard bsc concept of the mid1990s. Over time, the concept of a strategy map was created.
As part of our strategy execution training, we work with business professionals to create a prototype of their balanced scorecard strategy maps. Explore and explain how the balanced scorecard is implemented into a strategy map. Their combination is a navigational tool to guide the organisation to execute the strategy formulated by the executive team. Its this focus on both highlevel strategy and lowlevel measures that sets the balanced scorecard apart from other performance management methodologies. Strategic management, balanced scorecard, strategy maps, innovation. Balanced scorecard, strategy mapping has been the subject of recent books, articles and discussions. By translating their strategy into the logical architecture of a strategy map and. A complete strategy map template including examples.
Throughout the entire process of building and implementing a balanced scorecard, we all need to speak the same language. It provides a roadmap on where to focus energies, priorities, and resources. The balanced scorecard tracks all the important elements of a companys strategyfrom continuous improvement and partnerships to teamwork and global scale. The impact of the strategy maps on balanced scorecard performance article pdf available in international journal of business performance management 121. Positive results of using the balanced scorecard template. Strategy is based on a differentiated customer value proposition. An example of a generic strategy map can be seen below. After reading you will understand the basics of this powerful strategy and performance management tool. Building strategy maps and scorecards in utilities september 2526, 2017 baltimore, md. Balanced scorecard implementation and monitoring d. A balanced scorecard shows a series of cause and effect relationships that show how a companys focus on learning and. Understanding balanced scorecards and strategy maps. 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. A balanced scorecard is a strategic planning and management system that is used to align business activities to the vision and strategy of the organisation, improve internal and external communications, and monitor organisation performance against strategic goalsbalanced scorecard institute, unknown.
1000 423 132 1050 1455 781 1083 496 1078 455 814 412 15 1284 667 1032 1149 1529 710 647 1376 304 91 754 1550 1510 894 273 6 1456 708 430 275 636 947 845 622 939