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Strategy Maps Converting Intangible Assets into Tangible Outcomes [HC,2004]
Using dozens of vivid company examples, Kaplan and Norton show how to create customized strategy maps that allow organizations clarify their strategies and communicate them to all employees; identify the key internal processes that drive strategic success; align investments in people, technologies and organizational capital for the greatest impact; and expose gaps in the strategies and take early corrective action.
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First published December 16, 2003
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Displaying 1 - 30 of 33 reviews
May 9, 2012
You either understand strategy and have one or you are eternally doomed to be a pawn in a game controlled by a strategy devised by someone else. Strategy Maps are a way to discover "the business of business", how it works and how to win. This book in its way is as revolutionary as The Origin of Species. Use it wisely, since strategy is power.
July 2, 2021
Perhaps the Key Illustration of the Kaplan and Norton Series - This offering is the 3rd and one of the most valuable, perhaps the key to Kaplan and Norton’s five book series on how the “Balanced Scorecard” can be used to develop a “Strategy Focused Organization” through “Strategy Maps” to achieve “Alignment” and the “Execution Premium.”
The reason this reviewer considers Strategy Maps so valuable is that it so fully exposes this truly dynamic visual tool for describing and communicating an organization’s strategy. While all the books in the series have charts and figures this one has the most by far, 120 within its 438 pages.
The book’s part 1 indicates different ways an organization can create value addressing customer, financial, internal along with learning and growth perspectives. Chapters show customer intimacy, product innovation, operational excellence, and standard platform pathways can be pursued. True to its subtitle, part 2 depicts the manner in which intangible assets including human capital, information technology, and organizational capabilities can be defined, described, measured and linked to value creation. Part 3 and 4 are devoted to giving instances and cases relating the building of strategies and strategy maps just as throughout the previous two sections (both business and non-profit/public examples are provided).
This book clearly depicts the idea of strategy as hypothesis (e.g. the importance of choosing a particular set of capabilities in which to excel as proposed by Michael Porter). One can see the way these “strategy trees” lay out the logic of a business like a McKinsey “decision tree” presents determinations to be made or a Minto Pyramid arranges the supporting elements of an argument. For example, a strategy map on page 314 conveys the case of Ingersoll-Rand (with whom this writer has had some involvement) pictorially representing the then new “customer intimacy” strategy (e.g. like those described by Wiersma and Treacy). That map indicates important areas of financial performance (e.g. accelerate organic growth) and the customer experiences to be emphasized (e.g. provide the best solutions) as well as process excellence (e.g. drive growth through innovation) and people expertise (e.g. leverage cross-business synergies) that will be required to support that achievement.
If the reader needs an explanation of the origins and fundamentals select Kaplan and Norton’s first book, “The Balanced Scorecard.” As one is seeking an overall approach description, choose their second book, “The Strategy Focused Organization.” When looking for a way to devise an enterprise strategy map and cascade that through the portfolio of business units and functions consider the fourth book, “Alignment.” For those at the point of bringing strategy and operations together in a continuous process for strategy management go with the fifth book, “The Execution Premium.”
But if you are concerned with illustrating an organization’s strategy as well as the links and interactions necessary to “bring it to life” pick up “Strategy Maps.”
The reason this reviewer considers Strategy Maps so valuable is that it so fully exposes this truly dynamic visual tool for describing and communicating an organization’s strategy. While all the books in the series have charts and figures this one has the most by far, 120 within its 438 pages.
The book’s part 1 indicates different ways an organization can create value addressing customer, financial, internal along with learning and growth perspectives. Chapters show customer intimacy, product innovation, operational excellence, and standard platform pathways can be pursued. True to its subtitle, part 2 depicts the manner in which intangible assets including human capital, information technology, and organizational capabilities can be defined, described, measured and linked to value creation. Part 3 and 4 are devoted to giving instances and cases relating the building of strategies and strategy maps just as throughout the previous two sections (both business and non-profit/public examples are provided).
This book clearly depicts the idea of strategy as hypothesis (e.g. the importance of choosing a particular set of capabilities in which to excel as proposed by Michael Porter). One can see the way these “strategy trees” lay out the logic of a business like a McKinsey “decision tree” presents determinations to be made or a Minto Pyramid arranges the supporting elements of an argument. For example, a strategy map on page 314 conveys the case of Ingersoll-Rand (with whom this writer has had some involvement) pictorially representing the then new “customer intimacy” strategy (e.g. like those described by Wiersma and Treacy). That map indicates important areas of financial performance (e.g. accelerate organic growth) and the customer experiences to be emphasized (e.g. provide the best solutions) as well as process excellence (e.g. drive growth through innovation) and people expertise (e.g. leverage cross-business synergies) that will be required to support that achievement.
If the reader needs an explanation of the origins and fundamentals select Kaplan and Norton’s first book, “The Balanced Scorecard.” As one is seeking an overall approach description, choose their second book, “The Strategy Focused Organization.” When looking for a way to devise an enterprise strategy map and cascade that through the portfolio of business units and functions consider the fourth book, “Alignment.” For those at the point of bringing strategy and operations together in a continuous process for strategy management go with the fifth book, “The Execution Premium.”
But if you are concerned with illustrating an organization’s strategy as well as the links and interactions necessary to “bring it to life” pick up “Strategy Maps.”
December 20, 2017
Uma contribuição muito importante para quem está diretamente ligado com a área de pensamento estratégico empresarial. O livro tem sistemática muito relevante que organiza de forma simples e com muitos exemplos e cases interessantes a forma de pensar a estratégia das empresas de uma maneira integrada.
Mostra ainda que objetivos financeiros e de maximização de valor aos acionistas não são alcançáveis sem que haja plena integração com os demais processos e áreas da empresa.
Em suma um bom ponto de partida é um livro que certamente merece estar na biblioteca de todos aqueles ligados direta ou indiretamente à definição e monitoramento das estratégias empresariais.
Mostra ainda que objetivos financeiros e de maximização de valor aos acionistas não são alcançáveis sem que haja plena integração com os demais processos e áreas da empresa.
Em suma um bom ponto de partida é um livro que certamente merece estar na biblioteca de todos aqueles ligados direta ou indiretamente à definição e monitoramento das estratégias empresariais.
February 27, 2018
Coverting intangible assets into outcomes reflected in financial perspective is what strategy map does. It also provide holistic view for corporation that enable integration to achieve setted objectives.
August 23, 2016
Allthough I read this book for work, I thoroughly enjoyed it. Great addition to the first and second book by Kaplan/ Norton.
June 6, 2015
With ''Strategy Maps'', Kaplan and Norton expand the Balanced Scorecard concept they presented in their first book, called ''The Balanced Scorecard''. The main purpose of this book ''Strategy Maps'' is to provide a more visual description of the Balanced Scorecard, which is achieved through literally mapping the strategy. Basically, this comes down to explicitly drawing all the objectives of the 4 perspectives of the Balances Scorecard (Financial, Customer, Internal and Learning & Growth) so that the cause and effect relationships between the objectives of different perspectives become visually clear.
At the same time, Kaplan and Norton use this book to go into much more detail with each perspective, especially the Internal (previously known as Internal Business Process) and Learning & Growth perspectives.
In the FINANCIAL PERSPECTIVE, the focus is again on long-term shareholder value. Kaplan and Norton mention 2 ways of increasing shareholder value: Growth strategies and Productivity strategies. To make a connection to the income statement: You can increase net income by either increasing revenue (growth strategy) or decreasing expenses (productivity strategy).
In the CUSTOMER PERSPECTIVE, Kaplan and Norton dedicate again much time to the customer value proposition, and use the same subdivision as in ''The Balanced Scorecard'': The value proposition is made up of product attributes, customer relationships and image.
In the INTERNAL PERSPECTIVE, 4 different categories of processes are identified:
1. Operation Management processes
2. Customer Management processes
3. Innovation processes
4. Regulatory and Social processes
A separate chapter is dedicated to each of these 4 types of processes. In each case, subcategories of de 4 different categories are analysed and for each subcategory several examples of objectives and indicators (which K&N insist on calling measures) are given.
1. The Operation Management process can be divided in 4 different groups of processes:
- Supply: Develop supplier relations
- Production: Produce products and services
- Distribution: Distribute to customers
- Risk Management.
2. The Customer Management process has the following sub-processes:
- Selection: Decide which customers you want to target
- Acquisition: Acquire the customer
- Retention: Make sure the customer stays a customer
- Growth: Enhance customer value, i.e. get more revenue from each individual customer.
3. The Innovation process category consists of:
- Opportunity ID: Identify the opportunities
- R&D portfolio: Manage the portfolio
- Design and develop.
- Launch
4. Regulatory and Social process category focuses on:
- Environment
- Safety and Health
- Employment
- Community.
As I mentioned, in each case a comprehensive set of objectives and indicators is presented, which makes it easy to see how this part of the book can be implemented in real life. However, despite the fact that so many examples of objectives and indicators were given, this part is also the most academic. Kaplan and Norton seem to rely less on their own experiences as Balances Scorecard consultants and more inclined to take on the role of academic researchers. One indication of this: This part of the book has the most references to business literature.
In the LEARING & GROWTH PERSPECTIVE, Kaplan and Norton return to their experiences in the field, and contribute many new things and truly expand the concepts of the Balanced Scorecard beyond those presented in their first book.
First, they give the principal categories for the learning & growth perspective:
- Human Capital
- Information Capital
- Organization Capital
This is very similar to the classification they made in ''The Balanced Scorecard''. What is really new are the links they provide between the learning & growth and internal perspectives. In ''The Balanced Scorecard'' Kaplan and Norton remarked that they didn't have many examples of good indicators for the learning and growth perspective. In ''Strategy Maps'' they make up for that.
Most useful are the concepts of Strategic Job Families, Strategic IT Portfolio and Organization Change agenda.
They advise to ask for each internal process objective which jobs are most crucial, which IT application and infrastructure are most important, and which change in skills and behaviour are most urgent. Use the answers to these 3 questions to determine indicators for the learning and growth objectives.
For example, the jobs that are most important for a particular internal process objective form the Strategic Job Families. After establishing what those jobs are, define which competencies and qualifications are most relevant for those jobs. Then, establish how many people with those competencies and qualifications your company needs. Next, evaluate how many people with those competencies and qualifications are currently employed by the company. And finally, determine the Human Capital Readiness (or Strategic Job Family Readiness) by dividing what you have by what you need.
This is a summary of the bulk of the book, of the first 10 chapters. For me, the last 2 chapters were the most interesting: Chapter 11, Customizing your strategy map to your strategy and 12, Planning the campaign.
In chapter 11, Kaplan and Norton expand Michael Porter's well known division of strategies: Cost leadership and Differentiation. K&N give 3 different generic types of differentiation strategies, which, together with cost leadership, results in the following overview of strategies:
1. Best Total Cost: ''Offer products and Services that are consistent, timely and low-cost''. Objectives include being a low-cost supplier and offer consistent high (or at least acceptable) quality.
2. Product Leader: ''Products and services that expand existing performance boundaries into the highly desirable''. Objectives include providing high-performance products and being first to market.
3. Complete Customer Solutions: ''Provide the best total solution for the customers''. Examples of objectives are quality of solutions provided and customer retention.
4. System Lock-in: ''High switching costs for end users + add value to complementors''. Here, often network effects come into play, so having a large customer base is an important objective.
For each of these 4 types of strategies they provide a Strategy Map template. Very useful.
In chapter 12, Kaplan and Norton show, using a detailed example, how to construct a Strategy Map and how to build a Balanced Scorecard using a 7 step methodology. You end up believing that you could do it all yourself.
This book is a very useful addition to ''The Balanced Scorecard'', both from a theoretical and from a practical point of view. The many success stories and case examples make the story lively and practical. Some criticism: I thought that there were too many cases and that many of the cases where a bit superficial. For me, it probably would have worked better to go into decent detail with a more limited amount of cases. Also, it would have been nice to contrast all the success stories with one or two examples of failed Balanced Scorecard implementation. This could result in a useful ''pitfalls to avoid while designing your strategy map and constructing your balanced scorecard''. Well recommended (but probably best to read ''The Balanced Scorecard'' first before you dive into ''Strategy Maps'').
At the same time, Kaplan and Norton use this book to go into much more detail with each perspective, especially the Internal (previously known as Internal Business Process) and Learning & Growth perspectives.
In the FINANCIAL PERSPECTIVE, the focus is again on long-term shareholder value. Kaplan and Norton mention 2 ways of increasing shareholder value: Growth strategies and Productivity strategies. To make a connection to the income statement: You can increase net income by either increasing revenue (growth strategy) or decreasing expenses (productivity strategy).
In the CUSTOMER PERSPECTIVE, Kaplan and Norton dedicate again much time to the customer value proposition, and use the same subdivision as in ''The Balanced Scorecard'': The value proposition is made up of product attributes, customer relationships and image.
In the INTERNAL PERSPECTIVE, 4 different categories of processes are identified:
1. Operation Management processes
2. Customer Management processes
3. Innovation processes
4. Regulatory and Social processes
A separate chapter is dedicated to each of these 4 types of processes. In each case, subcategories of de 4 different categories are analysed and for each subcategory several examples of objectives and indicators (which K&N insist on calling measures) are given.
1. The Operation Management process can be divided in 4 different groups of processes:
- Supply: Develop supplier relations
- Production: Produce products and services
- Distribution: Distribute to customers
- Risk Management.
2. The Customer Management process has the following sub-processes:
- Selection: Decide which customers you want to target
- Acquisition: Acquire the customer
- Retention: Make sure the customer stays a customer
- Growth: Enhance customer value, i.e. get more revenue from each individual customer.
3. The Innovation process category consists of:
- Opportunity ID: Identify the opportunities
- R&D portfolio: Manage the portfolio
- Design and develop.
- Launch
4. Regulatory and Social process category focuses on:
- Environment
- Safety and Health
- Employment
- Community.
As I mentioned, in each case a comprehensive set of objectives and indicators is presented, which makes it easy to see how this part of the book can be implemented in real life. However, despite the fact that so many examples of objectives and indicators were given, this part is also the most academic. Kaplan and Norton seem to rely less on their own experiences as Balances Scorecard consultants and more inclined to take on the role of academic researchers. One indication of this: This part of the book has the most references to business literature.
In the LEARING & GROWTH PERSPECTIVE, Kaplan and Norton return to their experiences in the field, and contribute many new things and truly expand the concepts of the Balanced Scorecard beyond those presented in their first book.
First, they give the principal categories for the learning & growth perspective:
- Human Capital
- Information Capital
- Organization Capital
This is very similar to the classification they made in ''The Balanced Scorecard''. What is really new are the links they provide between the learning & growth and internal perspectives. In ''The Balanced Scorecard'' Kaplan and Norton remarked that they didn't have many examples of good indicators for the learning and growth perspective. In ''Strategy Maps'' they make up for that.
Most useful are the concepts of Strategic Job Families, Strategic IT Portfolio and Organization Change agenda.
They advise to ask for each internal process objective which jobs are most crucial, which IT application and infrastructure are most important, and which change in skills and behaviour are most urgent. Use the answers to these 3 questions to determine indicators for the learning and growth objectives.
For example, the jobs that are most important for a particular internal process objective form the Strategic Job Families. After establishing what those jobs are, define which competencies and qualifications are most relevant for those jobs. Then, establish how many people with those competencies and qualifications your company needs. Next, evaluate how many people with those competencies and qualifications are currently employed by the company. And finally, determine the Human Capital Readiness (or Strategic Job Family Readiness) by dividing what you have by what you need.
This is a summary of the bulk of the book, of the first 10 chapters. For me, the last 2 chapters were the most interesting: Chapter 11, Customizing your strategy map to your strategy and 12, Planning the campaign.
In chapter 11, Kaplan and Norton expand Michael Porter's well known division of strategies: Cost leadership and Differentiation. K&N give 3 different generic types of differentiation strategies, which, together with cost leadership, results in the following overview of strategies:
1. Best Total Cost: ''Offer products and Services that are consistent, timely and low-cost''. Objectives include being a low-cost supplier and offer consistent high (or at least acceptable) quality.
2. Product Leader: ''Products and services that expand existing performance boundaries into the highly desirable''. Objectives include providing high-performance products and being first to market.
3. Complete Customer Solutions: ''Provide the best total solution for the customers''. Examples of objectives are quality of solutions provided and customer retention.
4. System Lock-in: ''High switching costs for end users + add value to complementors''. Here, often network effects come into play, so having a large customer base is an important objective.
For each of these 4 types of strategies they provide a Strategy Map template. Very useful.
In chapter 12, Kaplan and Norton show, using a detailed example, how to construct a Strategy Map and how to build a Balanced Scorecard using a 7 step methodology. You end up believing that you could do it all yourself.
This book is a very useful addition to ''The Balanced Scorecard'', both from a theoretical and from a practical point of view. The many success stories and case examples make the story lively and practical. Some criticism: I thought that there were too many cases and that many of the cases where a bit superficial. For me, it probably would have worked better to go into decent detail with a more limited amount of cases. Also, it would have been nice to contrast all the success stories with one or two examples of failed Balanced Scorecard implementation. This could result in a useful ''pitfalls to avoid while designing your strategy map and constructing your balanced scorecard''. Well recommended (but probably best to read ''The Balanced Scorecard'' first before you dive into ''Strategy Maps'').
November 13, 2019
More than a decade ago, Robert S. Kaplan and David P. Norton introduced the Balanced Scorecard, a revolutionary performance measurement system that allowed organizations to quantify intangible assets such as people, information, and customer relationships. Then, in The Strategy-Focused Organization, Kaplan and Norton showed how organizations achieved breakthrough performance with a management system that put the Balanced Scorecard into action. Now, using their ongoing research with hundreds of Balanced Scorecard adopters across the globe, the authors have created a powerful new tool--the "strategy map"--that enables companies to describe the links between intangible assets and value creation with a clarity and precision never before possible. Kaplan and Norton argue that the most critical aspect of strategy--implementing it in a way that ensures sustained value creation--depends on managing four key internal processes: operations, customer relationships, innovation, and regulatory and social processes.
https://www.fahasa.com/
https://www.fahasa.com/
August 19, 2019
Útil, pero leerlo solo no es suficiente para poder implementar correctamente todas las herramientas que plantea. En mi caso estaba cursando una asignatura de planificación estratégica empresarial, y sin eso la verdad no se que tan útil podría haber encontrado esta información.
November 12, 2019
Đọc rồi và quan trọng là áp dụng thế nào!
November 4, 2021
This book is really great.
April 12, 2023
Boring but useful. Very comprehensive and easily adjustable to one’s (also boring) endeavors
May 12, 2023
I rated this a 5 because of the potential, though this may be a 4. I need to buy and study this book.
This entire review has been hidden because of spoilers.
April 9, 2024
Recommended by a boss. Not my style, but it has some good stuff in it. I kind of skimmed it, it's very dense for a less targeted read.
July 24, 2024
Great book on business strategy. But you should be careful using its advises. You may drop into planning and forget execution.
May 29, 2017
A must for any manager and strategist.
January 16, 2016
What came across is that this would/could really help to translate strategy into something tangible and able to be communicated in a clear and consistent manner throughout the organisation. This could be an entire company or even I could envisage on a departmental/team level recognising that the smaller approach would yield less change and could well be thwarted due to actions for unaligned teams/departments. I'm a big believer in having a combination of financial and non-financial goals and form what I've read in the world of business literature believe Kaplan & Norton do a good job of articulating the benefits and an implementable approach to getting non financial measures established.Can be read on it's own however makes more sense if you're familiar with their seminal Balance Scorecard work.
March 28, 2018
I really enjoy reading this book. It provided clear concept of architecting you strategy using four different perspective such as finance, customer, internal processes, and innovation ( also called learning and growth). This book provided many techniques and ideas about utilizing your intangible assets such as knowledge, skills, systems, leadership, etc. to generate value for customers and contribute to overall strategy. There are number of case studies and sample strategy maps that will help you to understand overall concept of mapping strategy and capturing required objects in all four areas such as Finance, Customer, Processes, and Innovation. I initially read online version of this book but later realized its importance and purchased hard copy from amazon.com. I think reading and understanding one good book from Harvard’s author is take ample time
July 24, 2011
READ MAR 2011
Nice follow-up to the classic "The Balanced Scorecard" ... the practical application of converting intangible assets into tangible outcomes will be useful to any organizational leader, especially learning and organizational development leaders. The plentiful case examples in the work were relevant.
Best quote: "Intangible assets should not be measured by how much money was spent to develop them, nor should their value be determined by independent appraisals of the capabilities and value of HR and IT assets. The value of intangible assets comes from how well they align the strategic priorities of the enterprise, not by how much it costs to create them or how much they are worth on a freestanding basis" (p. 211).
Nice follow-up to the classic "The Balanced Scorecard" ... the practical application of converting intangible assets into tangible outcomes will be useful to any organizational leader, especially learning and organizational development leaders. The plentiful case examples in the work were relevant.
Best quote: "Intangible assets should not be measured by how much money was spent to develop them, nor should their value be determined by independent appraisals of the capabilities and value of HR and IT assets. The value of intangible assets comes from how well they align the strategic priorities of the enterprise, not by how much it costs to create them or how much they are worth on a freestanding basis" (p. 211).
August 19, 2013
This is perhaps the better book about the Balanced Scorecard theory by professors Kaplan & Norton. The authors have refined their work, previously published in "The Balanced Scorecard" and "The Strategy Focused Organization" based on the implementation of the Balanced Scorecard (BSC) in several companies all over the world.
Kaplan and Norton dedicate a chapter to each of the processes of the internal perspective (Operations, Customer and Innovation) and each of the ones of the learn and growth perspective (Human, Information and Organizational Capital). In each one, they propose different options based on what is your main strategy, that is, is it of Operational Excelence, Product Leadership or Focus on Customer.
A must-have for anyone interested in business strategy.
Kaplan and Norton dedicate a chapter to each of the processes of the internal perspective (Operations, Customer and Innovation) and each of the ones of the learn and growth perspective (Human, Information and Organizational Capital). In each one, they propose different options based on what is your main strategy, that is, is it of Operational Excelence, Product Leadership or Focus on Customer.
A must-have for anyone interested in business strategy.
July 8, 2013
Un intento de fortalecer una metodologia que se basa en casos de exito pero que carece de mediciones puntuales, los autores parecen en gran medida tratar de reinventar el hilo negro y gran parte del libro son solo ejemplos y casos.
El libro tiene utilidad para el proceso de reingenieria de una organización sin embargo no es un sustituto al sentido comun y a otras metodologias más utiles como la matriz de orden lógico
El libro tiene utilidad para el proceso de reingenieria de una organización sin embargo no es un sustituto al sentido comun y a otras metodologias más utiles como la matriz de orden lógico
September 3, 2007
Mapping straegy is as easy as Kaplan-Norton explain in this book. The 3rd series of balanced scorecard explain the importance of intangible asset performance to boost successful tangible performance, whether it will be financial performance improvement or asset utilization. A must read for Balanced Scorecard initiatives.
October 22, 2007
sebenernya blon sepenuhnya dibaca tapi keren konsepnya...dan emang gak lengkap kalo tidak menuntaskan ke 4 buku BSC....
January 8, 2008
A perspective to make all business process aligns with its strategy..
October 6, 2008
A simple but powerfull concept.
It just a way of doing things right from very beginning, and the continuing awareness of the result (measures - leading or lagging indicators)
It just a way of doing things right from very beginning, and the continuing awareness of the result (measures - leading or lagging indicators)
January 26, 2011
Practical guide to learning how to follow one of the best strategic planning processes out there.
January 18, 2013
This is the second book in the series of Balanced Scorecards. Book is very rich of case studies, is easy to read and follow. I will even recommend to start exploring BSC with this one.
March 30, 2013
A must-read book on execution for knowledge workers, managers, executives, and entrepreneurs.
May 18, 2013
too theoretical; not enough practical
August 19, 2013
Any consultant or business officer must read.
September 9, 2016
Great source book for understanding and implement a balanced scorecard strategy.
Displaying 1 - 30 of 33 reviews