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Design of a strategy map is a very complex process. It is not just a scheme of company goals, but a comprehensive map with cause and effect ties between goals and measures of various BSC perspectives. Read more on BSC strategy maps in this article. Check additional information about Strategy Maps articles.

Strategy maps are not just schemes that outline company short-term goals. These documents contain the most complete information on company strategy and the way this strategy should be implemented. A strategy map must always contain cause and effect ties between measures and indicators of different Balanced Scorecard categories. In order to better understand strategy map concept let's make a shot overview of Balanced Scorecard its perspectives.

Balanced Scorecard is so far the most popular strategic management tool. It generally consists of four perspectives: financial, customer, internal business processes, learning and growth. The four categories contain most important critical success factors both in the internal and external environment the company operates in. Each category includes a set of key performance indicators, which are measures that demonstrate progress or regress on the way to implement strategic goals. Depending on company goals and structure, some KPIs and categories are given more weight than the others.

A strategy map is visualization of Balanced Scorecard which makes it easy to read and comprehensive for ordinary employees. As known, Balanced Scorecard works at its best only when the entire personnel is involved in actually understands that BSC concept. As already said above, a strategy map shows cause and effect ties between measures and goals. In simple words, a strategy maps demonstrates how strategic goals will be implement.

Let's take a simple hypothetical example. As a rule, financial goals are the first to be set. Then company top management it thinking on the ways how to achieve them. This is where the other three (sometimes more) come into play. For instance, the company set the goal of gaining 20% of market share and increasing sales by 10%. These are very ambitious goals which require commitment and dedication of the entire personnel.

In order to gain a larger market share the company should offer customers high quality products at competitive prices. Moreover, to retain customers such KPI as customer satisfaction needs to be improved. How to achieve it? We then come down to internal business processes category. The company is thinking of the way to release high quality products at reasonable prices in order to withstand competition. The last category is learning and growth. It is only through innovation and improvement of personnel skills that efficient production is possible.

As already mentioned, each category has own set of key performance indicators which are also in interrelated. For instance, high customer satisfaction is directly dependent on customer retention rate, while sales growth may be related to number of sale offers per customer contact.

Strategy maps should be not only used by top management, otherwise they will remain a top secret document. Every employee in the company should understand his place and roll in the strategy map. Besides, involvement of personnel in strategy maps design will generate new ideas and suggestions.

If the company has no experience in BSC development and strategy maps design, it is highly recommended to study this issue or look for professional assistance from companies with a hands-on BSC experience.

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Balanced Scorecard Toolkit includes step-by-step manuals, documents, presentations, check lists designed to help business professionals with successful development and implementation of Balanced Scorecard. Learn more about BSC Toolkit.