Performance Management and Value

Strategy Mapping Performance Management and Establishing Value Propositions Successful performance management can create a competitive advantage in virtually any industry. Furthermore, the failure to manage performance can also make an organization vulnerable to external threats. As a result of the importance of implanting strategies and managing performance, many organizations have begun to understand the importance of using a wider array of metrics than just the traditional financial metrics to create value.

Models such as the balanced scorecard provide a comprehensive platform that can be customized to help an organization manage performance and create value in the market for both customers and investors. Still, even with a good strategy in hand, an organization must also have an execution strategy that can help them implement the strategy before it is of value and can create a competitive advantage.

This analysis will look at the ability for strategy mapping to serve as a supplement to the balanced scorecard to ensure that the organization executes the strategy successfully The Need for Execution Today's management teams have a plethora of different options and tools to help them create an effective strategy.

Beyond the balanced scorecard, strategic planning may include (but are not limited to) Porter's 5-Forces, STEEP (Social, Technological, Economic, Environmental and Political) analysis, SWOT (Strength, Weakness, Opportunity, Threat) analysis, PMI (Plus, Minus, Interesting), Red and Blue Ocean strategies, among many, many others (Armitage & Scholey, 2006). Most competent managers can devise a relatively well-crafted strategy that is ground in the organization's particular set of circumstances. However, no matter how good the strategy is, it will not do much good unless it is successfully implemented.

Some estimates have claimed that seventy percent of strategic failures are due to poor execution (Armitage & Scholey, 2006). Other estimates have put the figure closer to ninety percent however also noted that whether the actual figure is sixty or ninety, that it really would not matter and this issue should be on the forefront of every manager's consideration (Keyte, 2012 ). There is often a huge effort to determine what the best strategy should be in an organization. However, strategic execution is often an afterthought, if thought of at all.

This is despite the fact that the execution is often the critical success factor that can determine the success of the strategy to begin with. Strategy Mapping There are many essential benefits that a strategy map can offer an organization and be a complimentary exercise relative to the balanced scorecard. Management can use these maps to better develop their strategies and build these strategies in a more dynamic context.

One of the primary advantages of developing a strategy map is that is allows a complex strategy to be communicated through a relatively simple, rich, and succinct map, as opposed to trying to deliver a "strategy by hope and magic" (Jones, 2011). Not only does it allow individual employees to better understand their role in fulfilling their strategic expectations, but they can also better visual how their roles connect to the larger objectives.

Not only can a strategy map be a useful tool to communicate strategy, but it can also help management to fine tune their performance management initiatives. For example, when building a strategy map, the management team must drill down the strategy to a more detailed version of the broader strategy. Furthermore, it also helps a management team build a focused assessment of the factors that will be inherent in implementing a change plan.

Much of the power of the strategy maps can be illustrated through the links in the various objectives defined in the balance scorecard and can be further illustrated by asking questions such as (Jones, 2011): What are the few things that will make the biggest difference? What will drive change? What capabilities do we need to learn and grow to improve processes and bring about improvements for customers and finances? Furthermore, although the strategy map and the balanced scorecard have many similarities, there are also many subtle differences.

For example, the balanced scorecard summarizes the results of the strategy model in a picture format. By contrast, a well-developed strategy map can add another dimension to the portrayal of a strategy by being able to better illustrate the "strategy story" (Armitage & Scholey, 2006). Also, since the two models are closely related, it is perfectly acceptable to use both models. The focus of the strategy map is to assist in execution by being able to describe and communicate more information about the overall strategy (Armitage & Scholey, 2006).

Therefore, the strategy that was developed through the balanced scorecard, or virtually and another strategic management tool, could be translated into a strategy map so that it can be better illustrated and communicated to the rest of the organization so that execution can be facilitated. The communication aspect of the organizations strategy can be one of the most important aspects of execution and implementation in many organizational strategic changes.

Thus the strategy map allows the organization to tell a more comprehensive "strategy story" than what is allowed for by other models and thus can reduce the impediments to successful integration. Furthermore, by mapping the linkages between the various objective that are included in a strategy map, the managers are not only forced to fine tune the strategy, but it also works as a check to ensure the strategy is cohesive among all departments in the organization.

For example, to achieve customer satisfaction, the strategy map will show all the linkages throughout the organization and the specific objectives that have been designed to meet the overall objective. Employees at various levels in the organization can.