Executive Summary

Map Strategy with Balanced Scorecard

Effectively developing and communicating high-level business strategy is essential

for organizations looking to achieve market leadership. Additionally, creating a
results-oriented culture requires a comprehensive management system. Use Demand
Metric's downloadable Balanced Scorecard Strategy Map tool as a basis for
implementing a proven business performance management methodology.

What is the Balanced Scorecard Approach?

Developed in 1992 by Kaplan & Norton, the balanced scorecard provides: a method
for aligning business strategy with vision & mission; a system for developing key
performance indicators that drive success; and the ability to measure performance
across the four key perspectives:

• Financial
• Customer
• Business Process
• Learning & Growth

A visual strategy map is created where strategic objectives, measures, targets, and
initiatives are developed for each perspective.

Strategy Map Components:

• Mission - this is the purpose of the business used to guide internal staff.

• Vision - includes long-term goals that are external and market focused.

• Financial Perspective - measures that reflect financial performance such as

return on assets, liquidity ratios, or return on investment/payback period
hurdle rates.

• Customer Perspective - measures that have a direct impact on customers

such as segment growth, acquisition & retention rates, satisfaction, or
competitive rankings.

• Business Process Perspective - these metrics are key performance

indicators of key business processes related to sustaining supplier
relationships, producing products/services, distribution to customers, and
other business operations.

• Learning & Growth Perspective - measurements associated with the ability

to develop human, information, and organization capital.

© 2009 Demand Metric Research Corporation

 Executive Summary

Action Plan:

1. Discuss Strategy Mapping with Senior Management - communicate the

value of strategy mapping with the Balanced Scorecard approach. Get
commitment for formal business planning & performance measurement.

2. Document Vision & Mission - if not done already, update your corporate
vision and mission statements. It is critical that your internal staff understand
their purpose and stakeholders have an accurate perception.

3. Build a Balanced Scorecard - use Demand Metric's downloadable Balanced

Scorecard Strategy Map tool to build a customized scorecard for your
organization to work from.

4. Develop Strategic Objectives - analyze each perspective to identify high-

level strategic objectives. Determine which departments or cross-functional
teams will be responsible for each objective.

5. Establish Measures & KPIs - for each objective, identify key performance
indicators (KPI) and establish metrics to gauge business performance.

6. Create Attainable Targets - set attainable goals for metric improvement

across each KPI. For example, 'improve client retention from 65% to 70%'.

7. Conduct Business Planning - work with senior management to plan key

initiatives for each perspective. Be sure not to take on too much at once.

8. Adjust Strategy with Results - as results from measured activities come in,
adjust your strategic objectives, metrics, targets, and initiatives accordingly.
The balanced scorecard was designed to incorporate feedback.

Bottom-Line:

Using Strategy Maps such as a Balanced Scorecard facilitates business planning &
prioritization, setting goals and objectives, establishing KPIs & metrics, and selecting
initiatives that deliver the most value. A holistic approach to strategy and
performance measurement makes it much easier to translate vision into individual
tasks and activities.

© 2009 Demand Metric Research Corporation