BSC

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Strategy Map Design A Step-By-Step Guide

• Dr. Nihal M. Nounou
• VP for RD and Chief Scientist

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Contents

• Strategy Map Design
• Strategy Map Alignment
• What is a GOOD Strategy Map?
• Strategy Maps Benefits

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Strategy Maps describe how organization create
value
Strategy Map Design The Basic Building Blocks of
Strategy Maps
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Strategy Map Design Step-By-Step

• Start with strategic destination and strategic
  themes

• Choose perspectives and decide on perspective
  order and perspective themes

• Start formulating priority objectives in each
  perspective top-down that would result in major
  operational improvements

• Discover cause and effect relationships for each
  perspective before moving down to the next
  perspective

• Use effect measure targets in setting targets for
  cause objectives

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Strategy Map Design City of Charlotte Example
Smart Growth
City Council Focus Areas
Community Safety
City Within a City
Restructuring Government
Transportation
Economic Development
Customer
Reduce Crime
Strengthen Neighborhoods
Increase perception of safety
Enhance Service Delivery
Maintain competitive tax rate
Provide safe, convenient transportation
Promote economic opportunity
Financial
Maximize benefit/cost
Secure funding/service partners
Grow the tax base
Maintain AAA rating
Internal
Promote community based problem solving
Enhance customer service
Improve productivity
Increase infrastructure capacity
L G
Achieve positive employee climate
Enhance information management
Close skills gap
Corporate Scorecard
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Strategy Map Design City of Charlotte Example
Smart Growth
City Council Focus Areas
Community Safety
City Within a City
Restructuring Government
Transportation
Economic Development
Customer
Reduce Crime
Strengthen Neighborhoods
Increase perception of safety
Enhance Service Delivery
Maintain competitive tax rate
Provide safe, convenient transportation
Promote economic opportunity
Financial
Maximize benefit/cost
Secure funding/service partners
Grow the tax base
Maintain AAA rating
Internal
Promote community based problem solving
Enhance customer service
Improve productivity
Increase infrastructure capacity
L G
Achieve positive employee climate
Enhance information management
Close skills gap
Corporate Scorecard
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Strategy Map Closes the Financial Performance Gap
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Strategy Map Design Egypt Post Example
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Strategy Map Design Dubai Land Example
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Strategy Map Alignment

• Intangible assets must be aligned with strategy
  to create value
• Alignment of cause measure targets with effect
  measure targets in the same strategy map
• Alignment between objectives in cascaded strategy
  maps

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What is a Good Strategy Map - Criteria 1 Right
Set of Objectives

• For selected strategy time frame
• For approved budget
• For assigned set of measures
• For organization at focus level
• Right set of priority objectives (lt25)

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What is a Good Strategy Map - Criteria 2
Primary Cause and Effect Relationships

• Choose only primary cause and effect
  relationships
• Strength of chosen relationships can then be
  validated later during performance monitoring to
  prove greater than 75
• Filter out second degree relationships

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What is a Good Strategy Map - Criteria 3 Keep
evolving

• Keep track of cause and effect relationship
  strengths and possible additions/deletions
• Make strategy maps dynamic by continuous
  validation and refinement
• Maintain versioning system for strategic
  management and learning

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Benefit 1 Discovering Objectives
Increase Profitability
Financial
Customer
Internal Processes
E.L. G
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Benefit 2 Setting Targets

• Use cause and effect relationships in setting
  targets of cause objectives such that they are
  aligned with targets of effect objectives

Increase Profitability
Measure Profit Target 20
Financial
Serve customers on their terms
Deliver Customer Value Through Integrated
Offerings
Customer
Measure Increase in customer satisfaction Target
30
Measure Number of new yearly integrated
offerings Target 5
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Benefit 3 Communicate Strategy

• Internally with SBUs, branches and employees
• Externally with shareholders, analysts, partners,
  customers and suppliers

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Benefit 4 Visual Monitoring of Strategic
Performance
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Live Strategy Maps Using Strategy Architect
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Benefit 5 Strategic Learning

• Strength of cause and effect relationships
• Refining targets
• Modifying/adding/deleting objectives

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Strategic Performance Management Cycle