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Strategy Maps and Balanced Scorecards 1
What is a Strategy Map and what are its benefits?

"I can carry the strategy around in my pocket.
If I want to discuss the strategy with another manager I simply say,
'Hey, let's have a look at your strategy map'."

On these pages we summarise what strategy maps are, explain how strategy maps improve the design and effectiveness of balanced scorecards, and provide some strategy map examples. We also explain how to avoid some common mistakes people make when designing strategy maps.

But first, let us tell you about Phil's latest book...

Strategy Mapping for Learning Organizations"
Forthcoming Book, with a Foreword by David Norton, Author Phil Jones

(To be published by Gower in December 2011).

David Norton, in the Foreword, says:

"This book is a 'drivers manual' for anyone who is implementing a Balanced Scorecard performance management system. [...] it is required reading."

"...the work of Phil Jones makes a unique contribution to the field of performance management."

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• Sign up here to get advance notice of publication and offers associated with the book.
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Why use a Strategy Map?

Strategy maps raise the discussion from operations, to strategy

You do not have a Balanced Scorecard if you do not have a Strategy map. Strategy Maps are fundamental to the Norton & Kaplan approach to managing strategy and its delivery. If you don't have one, you have a mere scorecard or collection of measures.

Strategy maps capture and communicate your strategy

Strategy maps help you ensure your strategy will be more successful, because they help you capture, communicate and manage your strategy better. Strategy maps capture your management team's thinking in a rich manner so it is easy to communicate. Strategy maps explain how the strategy will bring about change: they help you avoid "Strategy by Hope and Magic".

When a client used the phrase, ‘A piece of the strategy in everybody’s pocket’ I knew exactly what he meant.  Because Strategy maps are a rich and succinct picture of an organization’s strategy they are a powerful tool of communication.  I know many clients who have carried their strategy maps around to explain their strategy.  Others have kept a large version on their wall, or the office wall, so that the whole organization can see what needs to be achieved. They can also see where they fit in and contribute.

Strategy maps help you manage performance better.

They help you manage the strategy rather than the operational detail that scorecards contain. They raise the level and quality of conversation amongst a management team. They can be used to discourage silo thinking and encourage joined up thinking and working.

If you want a more responsive adaptable organisation that recognises that the strategy will evolve as you implement it then Strategy maps, used as a part of an overall Strategic Learning process will help you. Because Strategy Maps are such a succinct tool for capturing strategy on a single page they are also more easily adapted and refined than traditional thick plans. They help you become an organisation that learns as it executed its strategy .

What is a strategy map?

Strategy Maps are fundamental to the Balanced Scorecard as a tool of Strategic Management. They make the difference between an operational view and a strategic perspective. They raise the level of conversation from operational detail to strategy and change.

A Strategy Map is a pictorial representation of the strategy. It describes the strategy and tells the story of the strategy. It describes visually how value is to be created by the organisation and what will drive change. (Figure 1 shows the structure of a Strategy Map alongside a theme from a Strategy Map )

Strategy maps are part of the overall Balanced Scorecard Management Approach. A Strategy Map sits in front of its their balanced scorecard (the scorecard). Each Scorecard has a strategy map.

A Strategy Map contains the answer to the question, "What do you want to accomplish." A strategy map does not contain measures, it contains objectives. This simplifies the selection of measures in the balanced scorecard. Strategy maps instill the discipline of "Objectives before Measures".

A Strategy Map contains objectives that are linked in a cause and effect relationship. The cause and effect relationship is described between objectives in perspectives. Those perspectives are the four main perspectives of the balanced scorecard approach, which describe the cause and effect relationship. The scorecard components (Objectives, measures, targets, initiatives, assessments, responsibility, sit behind the objectives on the strategy map.

A Strategy Map is developed from the perspective of a single management team. Each management team will have their own strategy map which describes their part of the strategy. So each Strategy Map tells the story of the strategy from the perspective of that management team. If you create one for the organisation's Executive team, it will represent the overall organisation's strategy, from their perspective.

As each management team has their own Strategy Map, this creates a cascade of strategy maps as the strategy is cascaded through the organisation. Each strategy map representing that management team's contribution to the overall strategy and what they have to achieve.

A Strategy Map is unique for that organisation. It represents their strategy. For this reason they should not be copied, unless you intend to also copy that organisation's strategy.

A Strategy map is about focus and choice. A strategy map for a management team contains the few things that that team have to focus on to make the biggest difference. For this reason, Strategy maps are not operational maps: They do not contain everything. They contain the few objectives that are most important and that describe the cause and effect relationship. This means you have to ask the right questions about what drives performance, in the right order when developing a Strategy map.

A Strategy map is about change. If the objectives in the lower perspectives are achieved this should ripple through to improvements in the objectives in the higher perspectives. (See diagram). This is the cause and effect relationship working.

A strategy map is often be divided into strategic themes. These are vertical slices across the perspectives that describes value creating aspects of the strategy. A Strategy Map may contain multiple strategic themes.

A Strategy Map works alongside the Tangible Future. The Tangible Future describes how the management team see the future evolving over time, internally and externally, including uncertainties, risks and assumptions. It sets out their ambitions and the pace of change. The Strategy Map describes how the organisation's strategy will help them bring about the changes and achieve their ambitions over time.

A Strategy Map is used to review progress against the strategy. It supports the Strategic Management process. A Balanced Scorecard is used to review operational progress: the Operational Management process. In Fourth Generation Balanced Scorecards these are part of our Strategic Learning approach.

A Strategy map in a public sector or nor for profit organisation is exactly the same as one for a commercial organisation. The exception is that the outcome perspectives are arranged differently to reflect the three ball juggle of satisfying their community, economically, whilst serving regulators or politicians.

In the Fourth Generation Balanced Scorecard we add additional perspectives, whilst preserving the central cause and effect relationship. This includes the organisation's values, the demands of regulators, the need for objectives representing social and environmental impact and the need to monitor the external environment.

Finally, the creation of the strategy map is a process of conversation and exploration within a management team.

Four warnings

1. Always design your strategy map before you think about your scorecard. Do not worry about measures: concentrate on objectives in the Strategy Map.
2. Never use someone else's Strategy Map unless you are also using their strategy as well. Especially do not copy a Strategy Map from a book. Strategy maps need to be created by the management team that will use them so you have their ownership: So it reflects their thinking.
3. Never add additional perspectives if they destroy the cause and effect relationship. They are not categories of measures but part of a cause and effect relationship. Instead use a theme that crosses the existing perspectives.
4. Strategy maps are not operational maps. If you find yourself mapping the existing processes in detail you have probably gone down a rabbit hole.

Our view is that Norton & Kaplan's book Strategy Maps, was a plea by them for people to understand the importance of Strategy Maps in the whole Balanced Scorecard approach.

How are Strategy Maps used to review progress against the strategy

Strategy maps are not static tools. They are tools of management that get refined and developed as management learn from their strategy and the strategy evolves.

When management teams use strategy maps in their meetings the conversation rises to a highest level, there is less operational detail and more time spent reviewing whether the strategy is working or not, and why.

This also raises the heads of people in the organisation who are also then able to discuss, understand and contribute to the strategy so that it is more likely to be delivered.

Strategy maps stop you using the discarded model of balanced scorecards

Many of you will be familiar with this diagram. Unfortunately it is all over the internet. It is the balanced scorecard framework which dates back to 1992 when balanced scorecard perspectives were first developed. It is described on page 9 of Norton & Kaplan's first book as a framework that shows how the perspectives support the strategy and vision. However, If you read page 30 of the very first book "Balanced Scorecard" it explains that this diagram is merely a framework and what really matters is the cause and effect between perspectives. The relationship that forms the strategy map. This old cruciform framework was discarded as a model of balanced scorecards by Norton and Kaplan as early as 1995. The strategy map cause and effect framework, with the perspectives stacked on top of each other is the one you need.

Why was it discarded? It merely describes how the perspectives link to strategy. Nothing else. The arrows have no meaning, it has no cause and effect model that drives performance, it encourages collecting measures in perspectives, it is difficult to cascade and leads to measure mania where lots of measures are collected and categorised without any real structure or purpose. It leads to operational balanced scorecards that contain potentially hundreds of measures. Ultimately this approach creates a culture of measurement rather than performance.

This old framework was replaced by the strategy map model of perspectives, which solves all these problems. Using a strategy map, can dramatically improve the effect of your balanced scorecard and make it a much more useful as a tool of strategy, rather than a mechanism of operational detail.

Strategy maps sit above the scorecard and provide a structured description of the strategy and what drives performance. Strategy maps contain objectives, which are developed before measures are chosen. Using the objectives in a strategy map you can choose the most appropriate measures and targets.

Strategy Mapping for Learning Organizations:

• Strategy Mapping is due to be published in December 2011. Advance orders are possible on both Amazon and the Publisher's site.

• Remember - sign up below and we'll let you know when the book is published.

More articles about Strategy Maps in our Blog

To learn more go to:

Strategy mapping 2 - How do Strategy Maps work

Strategy mapping 3 - Mistakes to avoid

If you are interested in improving your organisation's performance, talk to us

We are real experts in strategy mapping. We have been using and developing the approach since 1996. We have some of the deepest and most varied experience available anywhere.

To get advice on how to develop your own strategy maps, talk to us.