With the strategy map to corporate success
8 min read

With the strategy map to corporate success

Marc Bachofner By Marc Bachofner
Communication

Strategy Map als Management Tool für Unternehmenserfolg

Communicating a strategy is an art in itself – this is where the Strategy Map helps.

Most people have been through a meeting on a new corporate strategy in the course of their career. The success of this meeting has usually been reflected in the behavior of the employees. If their day-to-day was the same as before, then either the message didn’t get through or the strategy itself wasn’t fully thought out. We cover the first possibility in our blog post on strategy communication – now let’s focus on the second case. To find and clearly capture cross-departmental aspects of your strategy, you need the right management tool. Fortunately, Robert S. Kaplan and David P. Norton have a solution ready in this area as well: The Balanced Scorecard and the resulting Strategy Map.

Table of content

What is a Strategy Map?

A strategy map helps employees to understand the connection between different corporate levels in the implementation of a strategy, mission or vision. The word “map” is very appropriate in this case, because on the strategy map you can imagine company levels and their individual goals as places – and the route from A to B is also marked. Employees can look at how, for example, the route from “sharing know-how” to “becoming a market leader” looks.

The goal of a strategy map is to create a clear picture. It must be easy to read and show exact paths.

Strategy Map and Balanced Scorecard

If you look at the definition of the Strategy Map and the Balanced Scorecard (BSC), you immediately notice that there is potential for synergy here. No wonder Norton and Kaplan saw it too. While the BSC quantifies the strategy, vision or mission, i.e. defines measurable goals, the strategy map takes care of the visualization of exactly these.

The combination creates a picture that contains concrete metrics and shows understandable connections between the metrics. This is why the product of these two concepts is a popular tool in strategy communication, because employees are shown exactly how they are all involved, from managers to workers, and what impact their work has on others.

The structure of a strategy map

The presentation of a strategy map is very different from that of a balanced scorecard. But this is not surprising, since they have completely different tasks. What they do not differ in, however, is in their focus. The focus is on the company as a whole. That is why both concepts work with the same four perspectives: The financial, customer, process and development perspectives. The financial and customer perspectives describe what a company wants to achieve, while the process and development perspectives focus on the implementation of the strategy.

Financial perspective

The classic among finance-specific questions: What should sales look like next year? How should profit and return be prioritized over investments and provisions?

In the financial perspective, one records the financial goals of one’s own entrepreneurial activities. Understandably, this perspective is very high on the list of priorities for profit-oriented companies.

Customer perspective

Even if finances are in first place, customers are clearly in second place. The customer perspective covers the question of how you as a company want to deal with your customers and what value you give them. Customer loyalty or customer relationship management in general, CRM for short, could be addressed here.

Process perspective

The first implementation perspective comes into play with the process perspective. The task of the processes and workflows is to achieve the set goals from the financial and customer perspective. You cannot expect the same processes and procedures to generate more output next year without adjustments. The process perspective combines all resources such as time, quality and budget to find appropriate measures.

Development perspective

More efficient processes are a great start for increasing sales or customer satisfaction. However, you benefit most when you add expert employees and innovations to the mix.

The development perspective, also known as the innovation perspective, is there precisely to prepare employees optimally for the fulfillment of goals.

Implementation of a strategy map

The Strategy Map is, as already mentioned, strongly linked to the BSC. This connection is a bit one-sided, because for a Strategy Map you necessarily need a Balanced Scorecard. Conversely, you can create a BSC without giving a thought to a Strategy Map.

With the Strategy Map you show what a BSC cannot. Namely, the connections and dependencies between goals. How do you get from “increase customer acquisition” to “become market leader”? And what impact does “sharing know-how” have for me in customer support?

On the strategy map, clear sequences, cycles and loops must be apparent – in other words, many directed arrows. It is also not surprising that the Strategy Map and Balanced Scorecard are usually visualized together and form one picture.

Strategy Map example

All the explanations get dry quickly, so let’s look at a fictional example.

The Swiss family business FlickForm has been producing uniforms with iron-on patches or patches to sew on for three generations. Its customers are mainly companies with factory facilities or many outside teams. Until now, FlickForm’s strategy has been based on the needs of companies. Tear resistance and waterproofing are always an issue there.

In recent years, however, FlickForm has also noticed that there is interest from private individuals. Here, however, it’s not about the uniforms, but the iron-on patches themselves. Swiss quality seems to be desired. Therefore, FlickForm has decided to include the B2C market in their strategy.

In the following, we take possible goals from the Balanced Scorecard and show how they connect the four perspectives.

Financial perspective:

  • Break-even on B2C Market

 

Cutsomer perspective:

  • Customer appreciation by means of feedback
  • Increase Social Media Leads

 

Process perspective:

  • Expand Social Media Präsenz

 

Development perspective:

  • Optimize iron-on patches for B2C market
  • Train employees for B2C marketing

 

We have copied the goals from the BSC. And now we can create our strategy map.

Break-even on B2C Market

A clear and very common goal. Here there is the specification “break-even”, break-even, and “B2C market”. So the goal says what exactly we want to achieve and where. Making a connection here is difficult, because a goal like this in the finance perspective is often the simple conclusion from the goals of the other perspectives.

Customer appreciation by means of feedback

Customer appreciation is very important in B2B and also in B2C. No surprise then that FlickForm has created a goal for just that. This is specifically about valuing customer feedback. If a customer gives feedback, FlickForm wants to thank them and maybe even work with coupons or special info. The customer should realize that their feedback is important and so is they.

In this case, the connection is simple. One can argue that increased customer appreciation leads to more customer demand. That’s true as far as it goes, but this goal is geared towards B2B and B2C as addressed. This means that FlickForm may or may not make a direct connection to the “break-even in the B2C market” goal. It is entirely up to their ideas.

A clear connection is made with the “Optimize iron-on patches for B2C market” goal. So from customer to development perspective. The idea here is that customer feedback is used right away in the production and optimization of the product, the iron-on patches. Perhaps many customers want removable iron-on patches so they can stick them from pants to jacket to sweater.

Increase Social Media Leads

Social media is inevitable for B2C. FlickForm has recognized the potential there is. Social media leads are potential customers that you can bring from social media to your own website or even directly to the first contact. For FlickForm, that means getting more engagement and generating higher recognition. Of course, paid ads also fall into this category, that is, picking up potential customers with well-placed ads.

Here we can again discuss the connection into the financial perspective. Directly, the leads bring exactly nothing. But they do bring potential customers, so an indirect impact. We can also get very specific here and say that the “break-even in the B2C market” goal probably has other sub-goals. If for FlickForm leads and social media presence are so prominently present in the goals, then there will certainly be a specific sub-goal on lead conversion. There is a clear link to this goal.

Expand Social Media Präsenz

At the latest with the move into the B2C market, FlickForm must expand their social media presence. In concrete terms, this means that they have to create the digital FlickForm on the basis of their CI/CD. Promoting a company event once every five months is no longer enough here. A content calendar with short- and long-term campaigns is needed.

With the expansion of the social media presence, FlickForm gets more reach and thus more potential customers. A clear link to the “increase social media leads” goal. The same social media strategy and presence will not suddenly generate more leads. It needs optimization and maybe even reorientation if the B2B strategy is not compatible with the customers in the B2C market or vice versa.

Optimize iron-on patches for B2C market

FlickForm production for several generation consists of the same principle: make uniform and iron-on patches, then sew or iron on. For the B2C market, according to analyses, the uniform and the combination of iron-on patches and uniform are not interesting. For the iron-on patches alone, there is a demand. Means: First analyze the production. B2C customers always need new motifs, always new symbols and shapes. Can the production of FlickForm produce high quantities of different variants?

But feasibility is only one aspect, because customers are not won with feasibility, but with innovation and consistency. So FlickForm needs to analyze the B2C market and find out what the trends are for iron-on patches and respond to them.

The connection to the financial perspective is pretty clear. Among other things, sales are stimulated with optimized products.

Train employees for B2C marketing

Opening up a new market is know-how-heavy. This also applies to the change from B2B to B2C. FlickForm has to either retrain the existing sales or marketing team to B2C or find new people. There is clear overlap in marketing strategies, but the effective content is very different for B2B and B2C.

The strongest connection relates to the “expand social media presence” goal. The social media presence needs to be targeted and expanded according to the marketing strategy. This requires know-how in the creation of the same and the implementation.

Create a Strategy Map

With the Strategy Map you can do your employees a huge favor. If you create a good map, you will automatically convince more employees of your strategy.

We said that the strategy map shows the connections and dependencies between the goals. This makes it easier for employees to see the value of your work.

Not surprisingly, the most important point in creating the strategy map is the external view. Most employees see the strategy map for the first time without any prior knowledge. No matter how beautiful the text, graphics and illustrations tend to be looked at first. That’s why the strategy map has to score right off the bat. Put yourself in the shoes of your employees and ask yourself if the connections are clear and if you can see what your work really does. This outside view can also help you find gaps or ambiguities in your strategy implementation.

Design of a Strategy Map

Cleverclip is a design agency, so it’s not surprising that we care about the design of a strategy map or balanced scorecard. By design, we don’t just mean looking good. By design, we mean picking up a broad audience with the right images and presenting complex topics to them in a way they can understand. Only with a strong design can you achieve a high level of commitment from your employees.

First of all, it strongly depends on who you want to convince. Board members or management may be more interested in the metrics and goals they constantly monitor. Here, a plain strategy map or balanced scorecard in the form of an Excel spreadsheet or PowerPoint presentation may suffice.

If you want a design for all employees, then you have to put more thought into it. A customized solution that works more or less with metrics and is more about connection might be appropriate here. An interactive infographic, landing page or even microsite would be appropriate for this. Static media can mean extra work as you have to repackage the same information over and over again in different words, with interactive solutions you have the advantage of having everything in one place and can show exactly the information that interests the reader.

Summary

With the Strategy Map and Balanced Scorecard, you ensure that you understand your strategy and can measure its implementation. And properly communicated, you show that you really want all employees to understand that they are not just stakeholders, but also participants. You make your strategy understandable and present the connections and dependencies in such a way that every department and every employee can see exactly that it is not a few who shape the future of the company, but everyone together. Important: Without a balanced scorecard, there is no strategy map.

For convenience purposes this post has been translated automatically.

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