Strategy Mapping and the Learning & Growth Perspective

Introduction

Strategy mapping has recently emerged as an important component in strategic planning, especially in relation to the learning and growth perspective. In most cases, the strategic planning process involves developing a strategy map that is aligned with the Balanced Scorecard as the outline for strategy development. Generally, strategy mapping is part of the process geared towards exceeding customer expectations and ultimately creating value for an organization's financial stakeholders. The significance of strategy mapping as a foundation for organizational success is mainly attributed to its link to performance management and the establishment of value propositions. This paper explains the process of strategy mapping and demonstrates how it relates to performance management and establishing value propositions.

The modern business world is characterized by a crisis in strategy execution despite managers' ability to develop good strategies. This crisis is attributed to the lack of — or poor — execution of well-formulated strategies. While creating a robust and meaningful strategy is vital to business success, the implementation and execution of that strategy is what drives desired outcomes (Armitage & Scholey, 2007). Business managers have continued to be effective in developing good strategies but have considerably failed in ensuring their successful implementation.

Strategy Mapping and the Balanced Scorecard

Strategy mapping has emerged as an approach to enhancing strategy implementation and execution. The founders of this approach, who also developed the Balanced Scorecard, consider it the cutting-edge framework for the process and art of strategy execution. The approach has also been used as the framework for strategy development in line with the Balanced Scorecard when carrying out strategic planning ("Baldrige Program Strategy Map," 2014). Since it evolved from the experiences of early Balanced Scorecard adopters, strategy mapping is closely linked to the Balanced Scorecard. However, strategy maps are regarded as more innovative than the Balanced Scorecard in several ways.

For instance, the Balanced Scorecard is renowned for improving an organization's performance measurement system. In contrast, strategy maps are tools that combine Balanced Scorecard measures directly with strategic objectives and outcomes. As a result, these maps enhance strategy implementation and execution, organizational operations, and financial results. In addition, strategy mapping builds upon the Balanced Scorecard by providing much of its content. Strategy maps enable organizations to develop, describe, and communicate their strategies effectively.

Although strategy maps are not a complete solution to the challenges of strategy implementation and execution, they are promising tools that demonstrate the need for better strategy execution. Strategy mapping is a process comprising six guiding steps that managers can use to enhance strategy implementation in their organizations. These steps are based on the example used by The Glacier Inn in developing its maps: (1) specifying the overriding objective, (2) selecting the value proposition, (3) choosing financial initiatives, (4) choosing customer strategies, (5) executing through internal perspective measures, and (6) planning the learning and growth strategies.

The Six-Step Strategy Mapping Process

The specification of the overriding objective involves clarifying what the organization understands as its primary goal and the strategies it plans to implement. As the first component of the strategy map, the overriding objective should include a financial target and a time dimension. Selecting the value proposition involves market segmentation in new, nontraditional ways so that the organization can win its target market. Choosing financial strategies involves classifying measures into revenue growth, productivity, and asset utilization, and using the value proposition to determine the dominant strategy.

Following the determination of financial strategies, customer initiatives can be classified into maintaining and adding customers, enhancing revenue per customer, and reducing cost per customer. The internal perspective is centered on selecting and implementing the right business processes to accomplish the desired customer and financial initiatives that will enable the organization to achieve its overriding objective. The learning and growth perspective focuses on recognizing and bridging gaps that could restrict the organization's capability to implement the key processes identified in the internal perspective.

Strategy mapping relates to performance management through its link to the Balanced Scorecard, which is a performance measurement tool. The Balanced Scorecard enhances performance management through strategy mapping by linking performance measures to an organization's strategy (Mackay, 2004). Strategy mapping further enhances performance management by moving beyond measurement and acting as a vehicle for an organization's strategic development. Moreover, it addresses the crisis of strategy implementation and execution directly.

Conclusion

Strategy mapping is an important component in the modern business world because it helps address the persistent problem of strategy implementation and execution. The process can also be used during strategic planning to serve as the framework for strategic development while aligned with the Balanced Scorecard. The process of strategy mapping consists of six guiding steps: specifying the overriding objective, selecting the value proposition, choosing financial initiatives, choosing customer strategies, executing through internal perspective measures, and planning the learning and growth strategies. This process is linked to performance management and the establishment of value propositions through the Balanced Scorecard and the learning and growth perspective.