strategy mapping ppt

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STRATEGY MAPPING

-By

Dileep M (31)Disha Kashyap (32)Divya Susan (33)Kenric D’Souza (34)Renita Ferreira (35)Firdaus Iqbal (36)

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People can’t manage what they can’t measure, and they can’t measure what they can’t describe.

The strategy map solves this problem by providing a framework for a simple, one-page representation of the cause-and-effect linkages among the objectives for both the outcomes and the drivers of the strategy.

Robert Kaplan and David Norton

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Strategy maps and Balance Scorecard

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A strategy map provides a visual framework for an organization’s strategy – how it intends to create value. Specifically, a good strategy map will link together:

1. The desired productivity and growth outcomes.2. The customer value proposition which will be needed.3. Outstanding performance in internal processes.4. The capabilities required from intangible assets.In effect, a strategy map captures the organization’s

strategy in visual form so that managers can better execute their desired strategy.

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• Conceptually, a strategy map links the high-level goals of the organization – its mission, values and vision – with meaningful and actionable steps each employee can take.

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Strategy Maps Strategic Maps are the foundation of the Balanced Scorecard. You will need 1 strategic map for each strategic theme. Maps are constructed over 4 perspectives. Strategic objectives are mapped over the four perspectives, linked together.

• Linking Strategic objectives need to be placed in the Strategic Map according to which

perspective fits with the objective. Objectives may cross over more than one perspective. We usually start at the top with outcomes and work our way down, looking at

what enables (drives) the outcome.• Approval

From executive management. Does this map accurately tell the “story” of our strategy?

If disagrees, go back and redo the maps. We need to get this step right since it represents the foundation for the entire scorecard.

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• Measurements For each strategic objective, you need one measurement. Provides us with feedback on meeting the strategic objective. Most organizations will use many of their existing measurements. Organizations requiring major change should include driver type measurements

• Targets Set a target for each measurement. Push the organization to a required level of performance. Put focus on the strategy, expressing the specifics of the strategy. When targets are hit, then has successfully implemented its strategy.

• Initiatives In order for things to happen in an organization, you must initiate major projects

or programs. For example, improving customer service may require a new customer management system.

Once you launch appropriate initiatives, you should be able to meet your strategic objectives. This closes the loop, everything is now linked and away we go!

Linking Strategy Maps with Balance Scorecard

Step 1: Establish and define what the current value gap is for shareholders

Step 2: Reconcile your current value propositionStep 3: Establish your projected time lineStep 4: Identify your key strategic themesStep 5: Identify and align your intangible assetsStep 6: Specify and fund the strategic initiatives

required to execute the strategy

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Principles behind Strategy Maps

MAIN PRINCIPLES

1. Strategy balances contradictory forces

2. Strategy is based on a differentiated customer value proposition

3. Value is created through internal business processes

4. Strategy consists of simultaneous, complementary themes

5. Strategic alignment determines the value of intangible assets

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Strategy Map Creation

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• It is still the ultimate objective for profit maximizing companies

• Shareholders value can be increased by 2 ways– Selling more– Spending less

Financial Perspective

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Revenue growth strategies

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ProductivityImprovements

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Customer Perspective

Customer Satisfaction

Customer Retention

Customer as sales person

Acquisition of new customers

Increase In Business

Increase in market share

Increase in Shareholder

value

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Value proposition for customers (1/4)

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Internal Perspective

Operations Management

Processes ◆Acquire raw materials from

suppliers, ◆Convert raw materials to

finished goods, ◆Distribute finished goods to

customers, and ◆Manage risk.

Operating processes for service companies produceand deliver the services customers use.

Customer Management Processes

Customer management processes expand and deepenrelationships with targeted customers.

◆ Select targeted customers, ◆ Acquire the targeted customers, ◆ Retain customers, and ◆ Grow business with customers.

Innovation Processes ◆ Identify opportunities for new products and

services, ◆ Manage the research and development

portfolio, ◆ Design and develop the new products and

services, Regulatory and Social Process

◆Environment, ◆Health and safety, ◆Employment practices,

and ◆Community

investment.


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Learning and Growth

• The fourth perspective, learning and growth, describes the organization’s intangible assets and their role in strategy.

• Divided into 3 categories– Human capital: The availability of skills, talent, and know-

how required to support the strategy.– Information capital: The availability of information systems,

networks, and infrastructure required to support the strategy.– Organization capital: The ability of the organization to

mobilize and sustain the process of change required to execute the strategy.

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Examples

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Increase ROCE to 12%

Revenue Growth Strategy Productivity Strategy

New Sources of Non-Gasoline Revenue

Increase Customer Profitability Through

Premium Brands

Become Industry Cost Leader

Maximize Use of Existing Assets

ROCENet Margin (vs. industry)

Non-Gasoline Revenue & Margin

Volume vs. Industry Premium Ratio

Cash Expense (cpg) vs. Industry

Cash Flow

Speedy Purchase

Clean Safe Quality Product Trusted Brand

Friendly Helpful Employees

Financial Perspective

Customer Perspective

Help Develop Business

Skills

More Consumer Products

Recognize Loyalty

Share of Targeted Segment

Mystery Shopper Score

Dealer Profit Growth

Dealer Satisfaction

Differentiators

“Delight the Consumer” “Win-Win Dealer Relations”

Basic

Create Non-Gasoline

Products & Services

“Build the Franchise” “Increase Customer Value” “Achieve Operational Excellence” “Be a Good Neighbor”

Improve Environmental,

Health and Safety

Understand Consumer

Segments

Best-In-Class Franchise

Teams

Improve Hardware

Performance

Improve Inventory

Management

On-SpecOn-Time

Industry Cost Leader

New Product Acceptance Rate Environment

Incidents Safety Incidents Dealer Quality

Rating

Yield Gap Unplanned

Downtime

Inventory Levels

Run-Out Rate

Activity Cost vs. Competition


A Motivated and Prepared Workforce

• Aligned• Personal Growth

Climate for Action

• Functional Excellence• Leadership Skills• Integrated View

Competencies

• Process Improvement

Technology

Personal BSC Employee Feedback

Strategic Skill Coverage Ratio

Systems Milestones

Learning & Growth Perspective

Mobil NAM&R Strategy Map

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The Datex-Ohmeda Strategy Map

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strategy mapping ppt

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