Strategy Mapping and the Learning and Growth Perspective

Strategic Mapping & the Learning and Growth Perspective

The execution of a strategy in an effective manner is a crucial factor to success and survival of organization and businesses. Despite of the significance of effective implementation of strategy, very few companies and businesses are actually successful in executing their own strategies. Generally, many companies continue to fall short of their own expectations and those of others when executing their strategies. One of the major reasons for the relative poor execution of strategies is the seeming inability by organizational leaders to communicate their vision in a manner that others can participate and contribute to its achievement. Even though many companies have clearly defined procedures for developing strategic plans, there is usually a major disconnect between formulation and implementation stages of strategy. This paper will mainly focus on explaining the strategy mapping process and its link to performance management and the development of value propositions. This discussion will present a comparison between BAA's approach to the Balanced Scorecard and conventional approaches.

Analysis:

Strategic mapping is basically a process that involves developing and communicating strategies that serve as actionable behaviors that help in the realization of critical business objectives. Consequently, strategy maps enable organizations to develop, describe, and communicate their strategies in light of the company's mission, vision, and core objectives. These important aspects in the achievement of organizational goals have emerged as breakthrough in second-generation Balanced Scorecard (Armitage & Scholey, 2006, p.7). These maps provide a means of visualizing an organization's strategies to enable individual employees and stakeholders to determine their respective positions in the bigger picture and assume their role in day-to-day activities of the company.

The creation and execution of a strategic map that help in the achievement of organizational objectives and mission requires a systematic approach that consist of series of steps. First, organizational leaders should determine the overriding objective, which incorporates customer satisfaction, delivery of quality products and/or services, and effective and efficient financial targets. This should be followed by identifying the dominant value proposition since the organization cannot be all things to all people. The leaders should determine the most significant value proposition and offer high quality customer value in the selected proposition (Armitage & Scholey, 2006, p.11). The determination of the dominant value proposition is the basis for choosing the major financial strategies, which is the third step in the process. Fourth, the leaders should identify the main customer related strategies with regards to adding and retaining customers. The fifth step is to determine the key internal business process strategies, which helps in determining suitable metrics for providing focus and prioritizing efforts given to other internal operations and management processes. The final step that culminates in the creation of an effective strategy map is choosing the key learning and growth strategies. Learning and growth strategies in information, human, and organization capital help in dealing with inevitable gaps in knowledge, skills, and abilities (Armitage & Scholey, 2006, p.20).

The link between strategic mapping and performance management and value propositions is that this process provides the basis for creation of value through developing strategic themes like growth and productivity. The themes in turn determine the specific initiatives the organization will adapt in relation to the levels of customer, process, and learning and growth. Furthermore, strategy maps provide the abstract framework that organizational manager and employees can use to enhance their understanding and implementation of strategy in order to achieve specific business goals.

As previously mentioned, strategic mapping has evolved as second-generation Balanced Scorecard. The Balanced Scorecard is a concept that was introduced in 1992 by Robert Kaplan and David Norton as a tool for performance management. The initial concept of the Balanced Scorecard was based on five guiding principles that helped in its development. These principles include translating strategy into functional terms, aligning the organization to the strategy, making the strategy a job for everyone, ensuring it is an ongoing process, and marshalling change through executive leadership (Murby & Gould, 2005, p.8). However, strategic mapping, which is an evolution of the Balanced Scorecard, is based on different principles i.e. The value creation map and the value dynamics framework. The value creation map is an approach that builds on the strategy map as an instrument to reflect visually how intangible assets drive tangible value. The value dynamics framework is an instrument that helps organizations to close the gap between strategy statements and the implementation of Balanced Scorecard.

The Balanced Scorecard was adopted by the British Aviation Authority to manage expansion in one of the company's terminals at Heathrow Airport in London. The organization did not only adopt the four basic segments of this concept i.e. internal business process, customer, financial, and learning and growth but they also customized the structure to meet their needs. As a result of the customization of the framework, the British Aviation Authority adopted an approach that was slightly similar but also different to more conventional framework.

The similarity between BAA's approach to the Balanced Scorecard and more traditional approaches is that the organization's framework was still based on the inter-relation of four specific perspectives of its business. Under the financial perspective, BAA described conventional business objectives in monetary terms like revenue, cost, profitability, and return on investment. The customer perspective focused on value proposition that BAA seeks to use to increase customer loyalty and generate sales while internal business process involved identifying major initiatives that develop and provide customer value proposition. Through learning and growth perspective, BAA identified the necessary organizational climate and human capital to support its internal functions (DiCenso, 2004).

The customization of BAA's approach to the Balanced Scorecard contributed to differences with more traditional approaches. First, the organization mandated the treatment of its contractors and other hires despite the fact that it had directly employed very few individuals. These contractors and hires were required to participate in teams with some partnership values, which was very different from conventional contracting. In addition, BAA's Balanced Scorecard framework allowed some performance measures like performance indicators to be included in interactions with contractors and other hires. The second major difference in BAA's approach to the Balanced Scorecard is that project managers were permitted to retain project focus despite the fact that the project was very large. Third, the organization's managers and participants were provided with a clear picture of the necessary elements throughout project development.