Strategic Maps: Balanced Scorecard Best Practice

The growing use of balanced scorecards across the enterprise would not have been possible without a design for the workflows of the entire company. Strategic maps are the blueprints that help companies to align their strategy with their work flows as one seamlessly integrated system. In the past, systems were optimized for specific departments or worse they centered on specific resources such as computer hardware, networks or databases. Similarly, the planning in manufacturing industries revolved around processes such as production, logistics, supply chain management or marketing. Balanced scorecards would not serve their purpose of diagnosing problem areas in a company unless they have a way of tracing it to a specific element in the chain of processes that lead up to the outcomes that the company wants to achieve.

A case of the use of strategic maps is Nexstar Financial Corp., a mortgage services provider for banks and financial-services firms, already had management-software platforms in place to deliver online services and monitor performance. It lacked a system to track the implementation of procedures. Using a blueprint, the company designed systems to track the flow of activity from one end to another. A typical application would be tracking of the sequence of events from purchase of equipment to its installation.

Strategic maps mark a departure from the past when balanced scorecards were used for either performance management or for comparing the expected performance with the actual. This began to change when it became increasingly clear that companies needed to look at the working of all their departments in order to influence the relevant variables affecting their outcomes. Strategic maps are a means to tie the operational plans of a company with the goals it sets out to achieve. These maps are also a means to check the validity of the assumptions a company makes and reevaluate based on the information that is received.

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