Does your organization underpin the balanced scorecard on a strategy map as a foundation!

Organizations tend to set strategic plans for their desired future vision. During the execution of the strategy plan, it is essential to pre-set performance goals linked to comprehensive measures that are easy to communicate to all employees.?Otherwise, organizations might be?exposed to the risk of missing deviations and variances along the way. It is thought that most organizations use the well-known strategy performance management tool, Balanced Scorecard (BSC), to keep tracking the strategy execution. One of the most significant benefits of using the BSC is that it helps organizations avoid the limitations of using only financial variables to gauge performance and ensure that it reflects their strategy. The BSC measures performance from four perspectives:

? Financial perspective

? Customer perspective

? Internal business process perspective

? Learning and growth perspective

It can be noticed that the four perspectives on the balanced scorecard always appear in the same order. It is no coincidence that the order can be read from the bottom up; it illustrates that perspectives are typically built on each other to create value for a business. All perspectives can be measured by setting Key Performance Indicators (KPIs) that monitor the performance. However, using KPIs makes it easy to end up with a missy map of performance measures, even after adding them to the multiple perspectives from the BSC. It would end up with a very long list of performance variables. Here is the tricky part, unless a strategy map is established as a foundation for any scorecard, it is undoubtedly a sentence to failure. The strategy map illustrates the cause and effect relationships that underpin the organization's strategy; it outlines how the business creates value and serves. In addition, the strategy map enables organizations to explore the problems that can be faced as they measure to hold KPIs owners accountable for any variables on that map.

In conclusion, allowing the strategy map to transform the organization's scorecard from a list of measures to a theory of value creation would enable the business to monitor the impact of interrelation between the strategic pillars. That leads us to the question; does your organization underpin the balanced scorecard on a strategy map as a foundation!.

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