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Building Balanced Scorecard Strategy Maps

A Strategic Communication Tool

Memphis Area Engineering and Sciences Conference May 11, 2001 Paul Babin & Doug Geyer

BSC - Management Trend

Popular (Bestselling) book by Norton &

Kaplan published by Harvard Business Organization on the must read list

Latest book The Strategy Focused

Useful tool for Strategy Deployment Useful also for the rest of us to understand

the strategy and where we fit in.

What is the BSC ?

The Balanced Scorecard

A strategic management tool Enhances traditional company performance system with four perspectives:
Financial Customer Internal Business Process Learning & Growth

II. Strategy
Hypothesis of cause and effect

If we improve our on time delivery - then the customer will come to depend on us - and become a loyal customer. Customer loyalty will help improve our profitability.

The Strategy Map

BSC Perspectives

Improve Improve Profitability Profitability Customer Customer Loyalty Loyalty On OnTime Time Delivery Delivery


Internal Business Process

Learning & Growth

BSC Strategy Map

Strategy Measurements Targets Initiatives

Interactive Illustration
Strategy Maps look complicated - unless

you created them - then they look clear!

Lets create one together: Company : A growing publicly held

overnight package delivery service - with big plans

Financial Perspective
Brainstorm : 1 minute What are the important Financial

Perspective Objectives for this service company ?

Customer Perspective
Brainstorm - 1 minute What are the important strategies we need

in place to achieve our financial goal of profitability growth ?

Internal Business Process Perspective

Brainstorm - 2 minutes What are the Internal Business Processes

at which we need to excel to be able to build Customer Loyalty through On-time Delivery ?

Learning & Growth Perspective

Brainstorm - 2 minutes What are the Learning and Growth

objectives we need to be able to improve process quality and process cycle time (to allow on-time delivery to build customer loyalty and profitable growth) ?

Finished Strategy Map

simplified Profitable Growth Customer Loyalty On-time Delivery Process Cycle Time Process Quality

Employee Skills

Completing the BSC Strategy Map

Take the strategy Identify Measures & Targets Organize Improvement Initiatives to drive

improvements that will be visible in the measures.

Developing Measures
For each important strategic piece Identify measures

Lead & Lag

This will require analysis Cycle Time Queue Speed Interferences VA/NVA Study

Developing Initiatives
Pick projects with high leverage - high

impact to the strategic initiative

Cycle Time

Operator Training

Interference Study

Capital Equipment

BSC Strategy Map

Strategy Measurements Targets Initiatives

Cycle Cycle Time Time

Queue Size (Lag) Speed (Lag) Interferences (Lead)

Interference Study Operator Training

What have we got with the completed Strategy Map ?

A way to tie initiatives to whats important

to the company. strategy.

A clear way to understand the context of the

A clear way to communicate the impact of

this initiative.

BSC Strategy Map Conclusion

A simple graphical tool Appeal to engineers Cause and effect Understand and communicate the strategy Show how what were doing fits in Fun and easy!