Strategy Maps - Research Proposal Example

Strategy Maps Affiliation Executive Summary Strategy mapping has transformed the means by which strategy has planned and implemented. Strategy mapping is a natural evolution of Balanced Scorecard that has been the subject of recent discussions, articles, and books. Strategy maps extensively increased practitioner interest and awareness in the value of incorporated strategic scorecards systems by concentrating on what these tools are, why organizations use them and by offering high-level execution frameworks and examples from practice. Strategy mapping is a straightforward and an easy to understand format. It fills the gap by giving a set of frameworks that outlines how to execute strategy mapping in a systematic and practical format. Strategy maps serve as a reference to the four primary interest groups. Many companies are searching for directions and guidance that will allow them implements their own scorecards and maps (Armitage & Scholey, 2003, p. 76). Introduction The business world is faced with calamities in strategy from but not because the managers cannot come up with useful strategies but because there is a deficiency in the execution of this strategy. Research shows that seventy percent of the strategy failures arise due to poor performance but not because of poor vision or lack of smarts. Strategy maps refer to diagrams that are used to document the primary strategic goals followed by a management team or organization. Strategy maps are essential elements of the documentation related to the balanced scorecard. Additionally it is a feature of the second generation of balanced scorecard models that initially started in the mid-1990s (Armitage, 2004, p. 104). The initial diagrams were used early 1990s, and Drs discussed the concept of using this map in Balanced Scorecard. Robert Kaplan with David Norton. Strategy map gives out the visual guidelines for integrating a company’s objectives in the four perceptions of a Balanced Scorecard. It represents the cause and effect relationships that connect specific abilities in human, organization capital and information with desired outcomes in financial and customer perspective (Scholey & Arnitage, 2004, p. 569). It is worth mentioning that Norton and Kaplan based their work on Michael Porter’s expression of strategy. They chose a set of activities that a company would prosper to create a sustainable difference in the market, and therefore creating a lasting value for the shareholders. Arrows on strategy map indicate cause and effect of a period, and each of this perspective is scrutinized in more detail giving up a normative checklist of strategy elements and interrelationships. Kaplan and Norton pointed out that if a strategy fails to address a component in the standard strategy map, then it more likely to be flawed. Therefore, strategy mapping is often demanding in a beneficial way, that it provides an immediate review of the strategy definition stage (Huselid & Becker, 2005, p. 456). Strategy maps enable the organization to outline and communicate their plans. This guideline describes a mold for strategy mapping that is utilized by managers to create efficiently and execute strategy maps gradually. Strategy maps have been confirmed functional in public, NGOs, and private organizations. Indeed, a lot of principles underlying communication, construction and roll out of strategy maps are similar in many organizations. Strategy maps are above the Balance Scorecard as to provide a well-formulated description of the strategy and what force performance. It contains objectives that are created before measures are selected. Using the goals in a strategy map shows that you will select the best targets and actions in the scorecard (Ittner & Larker, 2003, p. 200). Advantage of strategy maps Strategy maps help organizations to ensure that their policies become more successful as they help companies to communicate, capture and manage their plans better. Strategy maps capture the management team way of thinking in a richer manner that makes communication easier. Strategy maps describe how a strategy will bring about transformation. If staffs in an organization do not get the strategy, this could make a big difference. Strategy maps are a concise and vibrant image of an organization’s strategy that indicates that they have a powerful tool for communication (Kaplan & Norton, 1992). Additionally, strategy maps help a company to manage the strategy and concentrate on change while the scorecards have the operational information that supports it. Strategy maps increase the quality and level of conversation amongst the management team. These maps can be used to dampen silo thinking and encourage teamwork thinking and working. Strategy maps are such a brief tool for confining strategy on a single page; additionally they are easily refined and adapted compared to the traditional thick plans (Butler & Letza, 1997, p. 702). Strategy maps confine essential components of strategy such as choice, focus and drivers of change. Strategy maps are developed by asking questions regarding the strategy. The often-asked questions include: what are the few issues that will create a difference? What will cause change? What abilities do we need to know and grow to advance processes and make improvements for finances and customers? The strength of the strategy maps lie in the connection between goals and how they bring out the logic and story of the strategy (Kennerley & Neely, 2000, p. 300). Strategic maps are a management tool that help in creating a Tactical Balanced Scorecard. If a Balance Scorecard does not incorporate strategy map, then the organization does not have a proper Kaplan and Norton Balanced Scorecard. Strategy maps are crucial to the Kaplan and Norton model (Norton & Kaplan, 2000, p. 34). Disadvantages of strategic maps Strategy maps and Balanced Scorecards do not deal with uncertainty and risks that are the primary cause of the current financial risks. Organizations should consider incorporating other integrated tools such as Risk Management, Scenario Analysis, and Wargaming among others to make-to-make the strategies time, competitor, and future proof. Another distinct and crucial disadvantage of strategy maps is that they do not assist in devising and developing the right strategy. The tool communicate a designed and formulated plan. Strategy maps do not outline the real customer perspectives. Customer’s perspective in strategy maps should be clearly described before they are indicated in the strategy map. Customer satisfaction has always being a significant challenge to many companies (Lawrie & Cobbold, 2004, p. 620). Strategy maps are discarded as they merely describe how perspectives connect to strategy. It does not describe the overall model of the strategies. The arrows on the strategy maps have no meaning; it has no cause and effect form that forces performance. It promotes collecting measures in perspective, it is hard to flow and leads to step obsession where lots of measures are gathered and categorized without any actual purpose or structure. It results to operational Balanced Scorecard that has hundreds of measures. Ultimately, this approach makes a culture of measurement instead of performance. References Armitage, H. M., 2004. “Hands-on scorecard: How strategy mapping has helped one organization see better its successes and future. CMA Management, 70(4), pp. 100-120. Armitage, H. M. & Scholey, C., 2003. Mapping mavens: how private and public companies gain from strategy mapping. (Business Strategies).. CMA Management, 77(3), pp. 70-77. Butler, A. & Letizia, S. R., 1997. Linking the Balanced Scorecard to Strategy". International Journal of Strategic Management, 30(2), pp. 700-711. Huselid, M. & Becker, B., 2005. The Workforce Scorecard: Managing Human Capital to Execute Strategy. 1 ed. Havard: Harvard Business School Press. Ittner, M. & Larker, D., 2003. “Coming Up Short on Non-financial Performance Measurement. 4 ed. Harvard: Harvard Business Review. Kaplan, S. R. & Norton, D. P., 1992. The Balanced Scorecard-Measures that Drive Performance. 1 ed. London: Harvard Business Review. Kennerley, M. & Neely, A. D., 2000. Performance Measurement Frameworks – A Review"International Conference on Performance Measurement. 1 ed. London: Cambridge University Press. Lawrie, G. & Cobbold, J. G., 2004. Third-generation Balanced Scorecard: the evolution of an effective strategic control tool". International Journal of Productivity and Performance Management, 53(7), pp. 611-623. Norton, D. P. & Kaplan, R. S., 2000. The Balanced Scorecard: Translating Strategy into Action. 2 ed. London: Harvard Business Review. Scholey, C. & Armitage, H. M., 2004. Strategy Mapping: Avoiding Costly (and Unnecessary) Strategic Failures.. 2 ed. London: Gorham & Lamont. Read More