Balanced Scorecard & Strategy Mapping

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Balanced Scorecard & Strategy MappingStrategie

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„Strategy is the creation of a unique and valuable position, involving a different set of

[combined] activities“ - Michael E. Porter -

Source: Porter, M. E. (1996). What is Strategy? Harvard Business Review, November-December, p. 3-22 ; Picture: forbes.com



http://forbes.com



balanced scorecard

Der Balanced-Scorecard-Ansatz stellt den Vorschlag eines umsetzungsorientierten Managementsystems dar, mit dem eine an der Unternehmensstrategie ausgerichtete

Steuerung ermöglicht werden soll.

Quelle: Horvath, P. & Kaufmann, L. (1998). Balanced Scorecard - ein Werkzeug zur Umsetzung von Strategie. Harvard Business Manager (5).



balanced scorecard

Balanced Scorecards dienen der Implementierung von Unternehmensstrategien.

Besonderheiten:

Drastische Komplexitätsreduktion. ︎Übersetzung der individuellen Geschäftsstrategie in operationale Meßgrößen.

Aufdecken der Wirkungszusammenhänge zwischen den Meßgrößen.




balanced scorecard

Finanziellen Zielsetzungen werden mit den Leistungsperspektiven hinsichtlich

der (2) Kunden, der (3) internen Prozesse sowie des (4) Lernens

strategie- und visionsfokussiert verbunden.

Die Leistung einer Organisation im ganzen wird damit als Gleichgewicht („Balance“) zwischen den vier Perspektiven auf einer übersichtlichen

Anzeigetafel („Scorecard“) abgebildet – daher der Name „Balanced Scorecard“




Using the Balanced Scorecard as a Strategic Management System

harvard business review • january–february 1996 page 39

mission statement, got a phone call from aproject manager in the field. “I want you toknow,” the distraught manager said, “that Ibelieve in the mission statement. I want to actin accordance with the mission statement. I’mhere with my customer. What am I supposedto do?”

The mission statement, like those of manyother organizations, had declared an intentionto “use high-quality employees to provide ser-vices that surpass customers’ needs.” But theproject manager in the field with his employ-ees and his customer did not know how totranslate those words into the appropriate ac-tions. The phone call convinced the CEO that alarge gap existed between the mission state-ment and employees’ knowledge of how theirday-to-day actions could contribute to realiz-ing the company’s vision.

Metro Bank (not its real name), the result ofa merger of two competitors, encountered asimilar gap while building its balanced score-card. The senior executive group thought it

had reached agreement on the new organiza-tion’s overall strategy: “to provide superior ser-vice to targeted customers.” Research had re-vealed five basic market segments amongexisting and potential customers, each withdifferent needs. While formulating the mea-sures for the customer-perspective portion oftheir balanced scorecard, however, it becameapparent that although the 25 senior execu-tives agreed on the words of the strategy, eachone had a different definition of superior ser-vice and a different image of the targeted cus-tomers.

The exercise of developing operationalmeasures for the four perspectives on thebank’s scorecard forced the 25 executives toclarify the meaning of the strategy statement.Ultimately, they agreed to stimulate revenuegrowth through new products and services andalso agreed on the three most desirable cus-tomer segments. They developed scorecardmeasures for the specific products and servicesthat should be delivered to customers in the

Quelle: Kaplan, R. S. & Norton, D. P. (1996). Using the Balanced Scorecard as a Strategic Management System . Harvard Business Review, Jan.-Feb.

balanced scorecard



Quelle: Kaplan, R. S. & Norton, D. P. (1993). Putting the Balanced Scorecard to Work. Harvard Business Review, September-October.

Putting the Balanced Scorecard to Work

harvard business review • september–october 1993 page 7

classify all undesired events with the potentialfor harm to people, property, or process.

The Rockwater team deliberated about thechoice of metric for the identification stage. Itrecognized that hours spent with key prospectsdiscussing new work was an input or processmeasure rather than an output measure. Themanagement team wanted a metric thatwould clearly communicate to all members ofthe organization the importance of buildingrelationships with and satisfying customers.The team believed that spending quality timewith key customers was a prerequisite for in-fluencing results. This input measure was de-liberately chosen to educate employees aboutthe importance of working closely to identifyand satisfy customer needs.

Innovation and Improvement:

The inno-vation and learning objectives are intended todrive improvement in financial, customer,and internal process performance. At Rockwa-ter, such improvements came from productand service innovation that would create newsources of revenue and market expansion, aswell as from continuous improvement in in-

ternal work processes. The first objective wasmeasured by percent revenue from new ser-vices and the second objective by a continuousimprovement index that represented the rateof improvement of several key operationalmeasures, such as safety and rework. But inorder to drive both product/service innovationand operational improvements, a supportiveclimate of empowered, motivated employeeswas believed necessary. A staff attitude surveyand a metric for the number of employee sug-gestions measured whether or not such a cli-mate was being created. Finally, revenue peremployee measured the outcomes of em-ployee commitment and training programs.

The balanced scorecard has helped Rockwa-ter’s management emphasize a process view ofoperations, motivate its employees, and incor-porate client feedback into its operations. Itdeveloped a consensus on the necessity of cre-ating partnerships with key customers, the im-portance of order-of-magnitude reductions insafety-related incidents, and the need for im-proved management at every phase of multi-year projects. Chambers sees the scorecard as

Rockwater’s Balanced Scorecard

Customer Perspective

Financial Perspective

Internal Business Perspective

Innovation and LearningPerspective

Pricing Index Tier II CustomersCustomer Ranking SurveyCustomer Satisfaction IndexMarket Share

Business Segment, Tier I Customers, Key Accounts

Return-on-Capital-EmployedCash FlowProject ProfitabilityProfit Forecast ReliabilitySales Backlog

Hours with Customers on New WorkTender Success RateReworkSafety Incident IndexProject Performance IndexProject Closeout Cycle

% Revenue from New ServicesRate of Improvement IndexStaff Attitude Survey# of Employee SuggestionsRevenue per Employee

balanced scorecard





price index, incorporating the best availableintelligence on competitive position, was in-cluded to ensure that Rockwater could still re-tain Tier II customers’ business when requiredby competitive conditions.

The company’s strategy, however, was toemphasize value-based business. An indepen-dent organization conducted an annual surveyto rank customers’ perceptions of Rockwater’sservices compared to those of its competitors.In addition, Tier I customers were asked tosupply monthly satisfaction and performanceratings. Rockwater executives felt that imple-menting these ratings gave them a direct tie totheir customers and a level of market feedbackunsurpassed in most industries. Finally, mar-ket share by key accounts provided objectiveevidence that improvements in customer satis-faction were being translated into tangiblebenefits.

Internal Processes:

To develop measures ofinternal processes, Rockwater executives de-fined the life cycle of a project from launch(when a customer need was recognized) tocompletion (when the customer need had

been satisfied). Measures were formulated foreach of the five business-process phases in thisproject cycle (see the chart “How RockwaterFulfills Customer Needs”):

•

Identify:

number of hours spent with pros-pects discussing new work;

•

Win:

tender success rate;•

Prepare and Deliver:

project performanceeffectiveness index, safety/loss control, rework;

•

Closeout

: length of project closeout cycle.The internal business measures emphasized

a major shift in Rockwater’s thinking. For-merly, the company stressed performance foreach functional department. The new focusemphasized measures that integrated key busi-ness processes. The development of a compre-hensive and timely index of project perfor-mance effectiveness was viewed as a key corecompetency for the company. Rockwater feltthat safety was also a major competitive factor.Internal studies had revealed that the indirectcosts from an accident could be 5 to 50 timesthe direct costs. The scorecard included a safetyindex, derived from a comprehensive safetymeasurement system, that could identify and

Rockwater’s Strategic Objectives

The Vision

“As our customers’preferred provider,we shall be theindustry leader.This is our mission.”

Strategy

Services that Surpass Needs

Customer Satisfaction

Continuous Improvement

Quality of Employees

Shareholder Expectations

Fina

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Return on Capital

Cash Flow

Project Profitability

Reliability of Performance

Value for Money Tier ICompetitive Price Tier IIHassle-Free RelationshipHigh-Performance ProfessionalsInnovation

Shape Customer RequirementTender EffectivenessQuality ServiceSafety/Loss ControlSuperior Project Management

Continuous Improvement

Product and Service Innovation

Empowered Work Force

balanced scorecard






an invaluable tool to help his company ulti-mately achieve its mission: to be number onein the industry.

Apple Computer: Adjusting Long-Term Performance

Apple Computer developed a balanced score-card to focus senior management on a strat-egy that would expand discussions beyondgross margin, return on equity, and marketshare. A small steering committee, intimatelyfamiliar with the deliberations and strategicthinking of Apple’s Executive ManagementTeam, chose to concentrate on measurementcategories within each of the four perspectivesand to select multiple measurements withineach category. For the financial perspective,Apple emphasized shareholder value; for thecustomer perspective, market share and cus-tomer satisfaction; for the internal processperspective, core competencies; and, finally,for the innovation and improvement perspec-tive, employee attitudes. Apple’s manage-ment stressed these categories in the follow-ing order:

Customer Satisfaction:

Historically, Applehad been a technology- and product-focusedcompany that competed by designing bettercomputers. Customer satisfaction metrics arejust being introduced to orient employees to-ward becoming a customer-driven company.J.D. Power & Associates, a customer-surveycompany, now works for the computer indus-try. However, because it recognized that itscustomer base was not homogeneous, Applefelt that it had to go beyond J.D. Power & As-sociates and develop its own independent sur-veys in order to track its key market segmentsaround the world.

Core Competencies:

Company executiveswanted employees to be highly focused on a

few key competencies: for example, user-friendly interfaces, powerful software archi-tectures, and effective distribution systems.However, senior executives recognized thatmeasuring performance along these compe-tency dimensions could be difficult. As a re-sult, the company is currently experimentingwith obtaining quantitative measures of thesehard-to-measure competencies.

Employee Commitment and Alignment:

Apple conducts a comprehensive employeesurvey in each of its organizations every twoyears; surveys of randomly selected employeesare performed more frequently. The surveyquestions are concerned with how well em-ployees understand the company’s strategy aswell as whether or not they are asked to de-liver results that are consistent with that strat-egy. The results of the survey are displayed interms of both the actual level of employee re-sponses and the overall trend of responses.

Market Share:

Achieving a critical thresh-old of market share was important to seniormanagement not only for the obvious salesgrowth benefits but also to attract and retainsoftware developers to Apple platforms.

Shareholder Value:

Shareholder value is in-cluded as a performance indicator, eventhough this measure is a result—not adriver—of performance. The measure is in-cluded to offset the previous emphasis ongross margin and sales growth, measures thatignored the investments required today togenerate growth for tomorrow. In contrast,the shareholder value metric quantifies theimpact of proposed investments for businesscreation and development. The majority ofApple’s business is organized on a functionalbasis—sales, product design, and worldwidemanufacturing and operations—so share-holder value can be calculated only for the en-tire company instead of at a decentralizedlevel. The measure, however, helps seniormanagers in each major organizational unitassess the impact of their activities on the en-tire company’s valuation and evaluate newbusiness ventures.

While these five performance indicatorshave only recently been developed, they havehelped Apple’s senior managers focus theirstrategy in a number of ways. First of all, thebalanced scorecard at Apple serves primarilyas a planning device, instead of as a control de-vice. To put it another way, Apple uses the

How Rockwater Fulfills Customer Needs

CustomerNeed

Recognized

CustomerNeedMet

Identify Win Prepare Perform Closeout

#1 #2 #3 #4 #5

DevelopmentCycle

Supply Cycle

balanced scorecard






7. Implementation

A newly formed team develops an implementation plan for the score-card, including linking the measures to databases and information sys-tems, communicating the balanced scorecard throughout the organiza-tion, and encouraging and facilitat-ing the development of second-level metrics for decentralized units. As a

result of this process, for instance, an entirely new executive information system that links top-level business unit metrics down through shop floor and site-specific operational measures could be developed.

8. Periodic Reviews

Each quarter or month, a blue book of information on the balanced

scorecard measures is prepared for both top management review and discussion with managers of decen-tralized divisions and departments. The balanced scorecard metrics are revisited annually as part of the stra-tegic planning, goal setting, and re-source allocation processes.

With My Ability toInnovate and Grow

Innovationand Learning

To My Shareholders

FinancialPerspective

With My InternalManagement

Processes

Internal Perspective

To My Customers

CustomerPerspective

Begin by Linking Measurements to Strategy

T H E BA L A N C E D S C O R E C A R D

If My VisionSucceeds, HowWill I Differ?

What is MyVision ofthe Future?

What Arethe CriticalSuccess Factors?

What Arethe CriticalMeasurements?

Statement of Vision

1. Definition of SBU2. Mission Statement3. Vision Statement

balanced scorecard




Quelle: Gorenje (2011). http://ar2011.gorenjegroup.com/new-strategy-2012-2015/

balanced scorecard: Vision


http://ar2011.gorenjegroup.com/new-strategy-2012-2015/


Quelle: Audi (2012): http://www.audi.com/corporate/de/unternehmen/unternehmensstrategie.html

balanced scorecard: Vision


http://www.audi.com/corporate/de/unternehmen/unternehmensstrategie.html


Using the Balanced Scorecard as a Strategic Management System

harvard business review • january–february 1996 page 46

First, it articulates the company’s shared vi-sion, defining in clear and operational termsthe results that the company, as a team, is try-ing to achieve. The scorecard communicates aholistic model that links individual efforts andaccomplishments to business unit objectives.

Second, the scorecard supplies the essentialstrategic feedback system. A business strategycan be viewed as a set of hypotheses aboutcause-and-effect relationships. A strategic feed-back system should be able to test, validate,and modify the hypotheses embedded in abusiness unit’s strategy. By establishing short-term goals, or milestones, within the business

planning process, executives are forecastingthe relationship between changes in perfor-mance drivers and the associated changes inone or more specified goals. For example, exec-utives at Metro Bank estimated the amount oftime it would take for improvements in train-ing and in the availability of information sys-tems before employees could sell multiple fi-nancial products effectively to existing andnew customers. They also estimated how greatthe effect of that selling capability would be.

Another organization attempted to validateits hypothesized cause-and-effect relationshipsin the balanced scorecard by measuring thestrength of the linkages among measures inthe different perspectives. (See the chart “HowOne Company Linked Measures from the FourPerspectives.”) The company found significantcorrelations between employees’ morale, ameasure in the learning-and-growth perspec-tive, and customer satisfaction, an importantcustomer perspective measure. Customer satis-faction, in turn, was correlated with faster pay-ment of invoices—a relationship that led to asubstantial reduction in accounts receivableand hence a higher return on capital em-ployed. The company also found correlationsbetween employees’ morale and the numberof suggestions made by employees (twolearning-and-growth measures) as well as be-tween an increased number of suggestions andlower rework (an internal-business-processmeasure). Evidence of such strong correlationshelp to confirm the organization’s businessstrategy. If, however, the expected correlationsare not found over time, it should be an indica-tion to executives that the theory underlyingthe unit’s strategy may not be working as theyhad anticipated.

Especially in large organizations, accumulat-ing sufficient data to document significant cor-relations and causation among balanced score-card measures can take a long time—months oryears. Over the short term, managers’ assess-ment of strategic impact may have to rest onsubjective and qualitative judgments. Eventu-ally, however, as more evidence accumulates,organizations may be able to provide more ob-jectively grounded estimates of cause-and-effectrelationships. But just getting managers tothink systematically about the assumptions un-derlying their strategy is an improvement overthe current practice of making decisions basedon short-term operational results.

Quelle: Kaplan, R. S. & Norton, D. P. (1996). Using the Balanced Scorecard as a Strategic Management System . Harvard Business Review, January-February.

balanced scorecardÜber die Aufdeckung der Wirkungszusammenhänge zwischen den Meßgrößen gelangt man von der Balanced Scorecard zur Strategy Map.



Strategy MapPING

Die Strategy Map verbindet intangible Werte und wichtige Prozesse mit der Erzeugung von Nutzen für den Kunden und darüber zu finanzielle Ergebnisgrößen

22

SupplyProduceDistributeManage Risk

OperationsManagement Processes

Process Perspective

EnvironmentSafety & HealthEmploymentCommunity

Regulatory & Social Processes

Select CustomersAcquire New CustomersRetain Existing CustomersGrow Business with

Customers

Customer ManagementProcesses

Information Capital

Organization CapitalCulture Leadership TeamworkAlignment

Identify New OpportunitiesSelect the R&D PortfolioDesign and DevelopLaunch

InnovationProcesses

Learning & Growth Perspective

Human Capital

Relationship Image

Customer Perspective

Customer Value Proposition

Price Quality Availability Selection Functionality Service Partnership Brand

Product / Service Attributes


Long-Term Shareholder Value

Productivity Strategy Growth Strategy

Enhance Customer Value

Improve Cost Structure

Increase Asset Utilization

Expand Revenue Opportunities

Figure 2: The strategy map links intangible assets and critical processes to the value proposition and customer and financial outcomes

We recognized that the weakest link in a strategy map and Balanced Scorecard was the

learning and growth perspective. For many years, as one executive described it, the learning and

growth perspective was “the black hole of the Balanced Scorecard.” While companies had some

generic measures for employees, such as employee satisfaction and morale, turnover, absenteeism

and lateness (probably growing out of the stakeholder movement of the previous decade), none

had metrics that linked their employee capabilities to the strategy. A few scholars had

investigated the connection between improvements in human resources and improved financial

performance (e.g. Huselid, 1995; Becker et al., 1998)

Dave Norton led a research project in 2002 and 2003 with senior HR professionals to

explore how to better link the measurement of human resources to strategic objectives. From this

work came the concepts of strategic human capital readiness and strategic job families and, by

extension, the linkages to information capital and organizational capital. These important

extensions to embed the capabilities of a company’s most important intangible assets were

described in an HBR article and a book (Kaplan & Norton, 2004a&b)



Measuring the Strategic Readiness of Intangible Assets

harvard business review • february 2004 page 23

The Strategy MapThe strategy map provides a frame-work for linking intangible assets to shareholder value creation through four interrelated perspectives. The fi-nancial perspective describes the tangi-ble outcomes of the strategy in tradi-tional financial terms, such as ROI, shareholder value, profitability, reve-nue growth, and lower unit costs. The customer perspective defines the value proposition the organization intends

to use to generate sales and loyalty from targeted customers. This value proposition forms the context in which the intangible assets create value. The internal process perspective identifies the critical few processes that create and deliver the differentiating cus-tomer value proposition. At the foun-dation of the map, we have the learn-ing and growth perspective, which identifies the intangible assets that are

most important to the strategy. The objectives in this perspective identify which jobs (the human capital), which systems (the information capital), and what kind of climate (the organization capital) are required to support the value-creating internal processes. These intangible assets must be inte-grated and aligned with the critical in-ternal processes.

Learning and GrowthPerspective

Productivity Strategy Revenue Growth Strategy

Sustained Shareholder Value

Operations Management Produce and deliver products and services

Customer Management Enhance customer value

InnovationCreate new products and services

Regulatory and SocialImprove communities and the environment

Customer Value Proposition

Human Capital• Skills• Training• Knowledge

Information Capital• Systems• Databases• Networks

Organization Capital• Culture• Leadership• Alignment• Teamwork


CustomerPerspective

Internal ProcessPerspective

Improve cost structure

BrandPrice Quality Availability Selection Functionality Service Partnership

Relationship ImageProduct/Service Attributes

Increase assetutilization

Enhance customer value

Expand revenueopportunities

Strategic JobFamilies

Strategic ITPortfolio

CreatingAlignment and Readiness

OrganizationChange Agenda

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Quelle: Kaplan, R. S. & Norton, D. P. (2004). Measuring the Strategic Readiness of Intangible Assets. Harvard Business Review, February.

Strategy MappingBeispielhafte Bestandteile einer Strategy Map



Measuring the Strategic Readiness of Intangible Assets

harvard business review • february 2004 page 31

and empowering individual initiative in anunaligned organization leads to chaos, as theinnovative risk takers pull the organization incontradictory directions.

Achieving alignment is a two-step process.First, managers communicate the high-levelstrategic objectives in ways that all employeescan understand. This involves using a widerange of communication mechanisms: bro-chures, newsletters, town meetings, orienta-tion and training programs, executive talks,company intranets, and bulletin boards. Thegoal of this step is to create intrinsic motiva-tion, to inspire employees to internalize the or-ganization’s values and objectives so that theywant to help the organization succeed. Thenext step uses extrinsic motivation. The orga-nization has employees set explicit personaland team objectives aligned to the strategy

and establishes incentives that reward employ-ees when they meet personal, departmental,business unit, and corporate targets.

Measuring alignment readiness is relativelystraightforward. Many survey instruments arealready available for assessing how much em-ployees know about and how well they under-stand high-level strategic objectives. It is alsofairly easy to see whether or not individuals’personal objectives and the company’s existingincentive schemes are consistent with thehigh-level strategy.

For example, a large property and casualtyinsurance company adopted a new strategy in-tended to reduce its underwriting losses by cre-ating a tighter link between the underwriters,who decide whether to accept a new piece ofbusiness, and the claims agents, who deal withthe consequences from poor underwriting de-

The various measures for organization capital readiness should be put together in a readiness

report, which shows, for all the components of organization capital, where the company needs to

introduce changes to its behaviors and policies. The report shown here is a simplified version of

one prepared by a company in our Balanced Scorecard database.

Teamwork

Develop leaders at all levelswho can mobilize the organi-zation toward its strategy

Alignment

Attribute

Leadership

Culture

x

Strategic Objective Strategic Measure Target Actual

Foster awareness and internalization of the mission, vision, and corevalues needed to executethe strategy

Align goals and incentiveswith the strategy at all levelsof the organization

Ensure that knowledge andstaff assets that have strate-gic potential are shared

Leadership gap (percentage of key attributes in competencymodel rated above threshold)

Customer-focused (customer survey; percentage who understandthe organization’s mission)

Strategic awareness (percentage ofstaff who can identify organization’sstrategic priorities)

Sharing best practices (numberof knowledge management system hits per employee)

80%

80%

68%

52%

90% 92%

80% 75%

100% 60%

5.0 6.1

Other core values (employee changereadiness survey)

Strategic alignment (percentage ofstaff whose objectives and incentiveslink to Balanced Scorecard)

Organization Capital Readiness Report

x

xx

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Strategy MappingDefinition der Kenngrößen

Quelle: Kaplan, R. S. & Norton, D. P. (2004). Measuring the Strategic Readiness of Intangible Assets. Harvard Business Review, February.



Having Trouble with Your Strategy? Then Map It • TOOL KIT


larger profit share of its sales of gasoline todealers.

For its customer intimacy strategy, Mobilhad to excel at understanding its consumersegments. And because Mobil doesn’t sell di-rectly to consumers, the company also had toconcentrate on building best-in-class franchiseteams.

Interestingly, Mobil placed a heavy empha-sis on objectives to improve its basic refiningand distribution operations, such as loweringoperating costs, reducing the downtime ofequipment, and improving product qualityand the number of on-time deliveries.

When a company such as Mobil adopts acustomer intimacy strategy, it usually focuseson its customer management processes. ButMobil’s differentiation occurred at the dealerlocations, not at its own facilities, which basi-cally produced commodity products (gasoline,heating oil, and jet fuel). So Mobil could notcharge its dealers higher prices to make up for

any higher costs incurred in its basic manufac-turing and distribution operations. Conse-quently, the company had to focus heavily onachieving operational excellence throughoutits value chain of operations.

Finally, as part of both its operational-excel-lence and corporate-citizen themes, Mobilwanted to eliminate environmental and safetyaccidents. Executives believed that if therewere injuries and other problems at work,then employees were probably not paying suf-ficient attention to their jobs.

Learning and Growth Perspective. Thefoundation of any strategy map is the learningand growth perspective, which defines thecore competencies and skills, the technolo-gies, and the corporate culture needed to sup-port an organization’s strategy. These objec-tives enable a company to align its humanresources and information technology with itsstrategy. Specifically, the organization mustdetermine how it will satisfy the requirements

Quelle: Kaplan, R. S. & Norton, D. P. (2000). Having Trouble with Your Strategy? Then Map It . Harvard Business Review, September-October.

Strategy MappingBeispiel



ties for various business processes, creating cus-tomer and shareholder satisfaction.

4. Learning and growth — the priorities to create aclimate that supports organizational change, inno-vation and growth.

The arrows in the strategy map show the cause-and-effect relationships between elements in each perspec-tive, clearly displaying how such intangible assets asstrategic awareness feed into themes that eventuallyyield tangible results.

Within each of the strategic themes, a second strategymap and Balanced Scorecard [on the right] breaks downinto detail how the theme affects the customer objec-tives that result from the theme. In this example, we seehow sourcing and distribution affect customer objec-tives of product quality and product availability that, in

turn, drive customer retention and revenue growth, aswell as the internal processes (factory management andline programming) that contribute to those objectives.

In Balanced Scorecards, value-creating processes andcritical roles for intangible assets are clearly portrayed,in the correct context of how those intangibles createvalue, providing the measurement and managementframework for knowledge-based strategies. ■

Principle 2: Align theOrganization to the Strategy

The Balanced Scorecard provides a powerful frame-work for business units to describe and implement theirstrategies. A Strategy-Focused Organization, however,requires more than just having each business unit use itsown Balanced Scorecard to manage a great strategy; thestrategies and scorecards for all such units should bealigned and linked with one another. Synergies can then

3

The Strategy-Focused Organization — SUMMARY

Soundview Executive Book Summaries®

Principle 1: Translate Strategy intoOperational Terms(continued from page 2)

(continued on page 4)

A Fashion Retailer’s Strategy Map

The Revenue Growth Strategy“Achieve aggressive, profitablegrowth by increasing our shareof the customer’s closet.”

Financial

The Productivity Strategy“Improve operating efficiencythrough real estate productivity andimproved inventory management.”

Customer

Internal

Learning andGrowth

ShoppingExperience

Right ProductBuildingImage

ProfitableGrowth

Growth Productivity

ShoppingExperienceAvailability

CompleteOffering

Price/Benefit

ConsistentQuality/Fit

FashionDesign

BrandImage

StrategicAwareness

GoalAlignment

StaffCompetencies

TechnologyInfrastructure

“Sourcing andDistribution”

Theme

“ShoppingExperience”

Theme

“FashionExcellence”

Theme

“AchievingBrand

Dominance”Theme

Build theFranchise

OperationalExcellence

IncreaseCustomer Value

➞➞

Financial

Customer

Internal

Learning

Profitability

RevenueGrowth

■ Operating income

Sourcing andDistribution Theme Measurement Target Initiative

■ 20% increase

■ Same store growth

■ 12% increase

■ Likes Program

ProductQuality

ShoppingExperience

“A” ClassFactories

Line PlanManagement

FactoryRelationship

Skills

MerchandiseBuying/PlanningSystems

■ Return rate - Quality - Other

■ Customer loyalty - Ever active - # units

■ Reduce by 50% each year

■ Quality Management

■ 60%■ 2.4 units

■ Customer Loyalty

■ Merchandise from “A” factories

■ Items in stock

■ 70% by year 3

■ 85%

■ Corporate Factory Development Program

■ % of strategic skills available

■ Strategic systems vs. plan

■ Year 1 (50%) Year 3 (75%) Year 5 (90%)

■ Strategic Skills Plan

■ Merchants’ Desktop

Quelle: Kaplan, R. S. & Norton, D. P. (2001). The Strategy Focused Organisation. Harvard Business School Publishing Corporation.

Strategy MappingBeispiel


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