Strategy Mapping & the Learning and Growth Perspective

Strategy Mapping & the Learning and Growth Perspective

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Strategy Mapping & the Learning and Growth Perspective

Most organizations create efficient comprehensive long-term plans based on their need to augment performance management and establish value propositions. However, such strategies prove futile due to certain reasons. One of the main reasons for this detriment comprises the lack of strategy mapping. Strategy maps offer the visual framework required for integration of the firm’s objectives within the four aspects of the Balanced Scorecard Approach. Accordingly, without an ample illustration of strategy, executives lack the capacity to communicate the formulated strategy among employees and themselves as well. Furthermore, through strategy mapping, the Balanced Scorecard method deviates towards a more adaptive approach. This explains the incentive behind its customized adoption in the British Airport Authority’s Heathrow Terminal 5 Project.

Comparison of BAA’s Balanced Scorecard Approach and Traditional Approaches

The British Airport Authority (BAA)’s approach to the Balanced Scorecard is different from the conventional approaches applied in other organizational structures. Typically, the Balanced Scorecard undergoes implementation based on four rigid factors. According to Martello, Watson and Fischer (2008), these aspects comprise the Financial Perspective, the Customer Perspective, the Internal Business Procedures Perspective and the Learning and Growth Perspective. The Financial Perspective constitutes strategies derived from the perspective of a shareholder. This view involves plans that concentrate on ascertaining growth, evaluation of comparability and risk mitigation. The Customer Perspective entails value creation and differentiation from the outlook of the client. The Internal Business Procedures Perspective focuses on placing emphasis on processes that add satisfaction among customers and shareholders. Lastly, the Learning and Growth Perspective creates the right organizational ambience for the support of development, change and growth within a firm (Martello, Watson & Fischer, 2008).

In contrast to the traditional Balanced Scorecard, the approach employed by BAA prioritizes over performance measurement. Accordingly, Basu, Little and Millard (2009, 23) assert that, “performance measures enable project managers to track whether the projects they are managing are moving in the right direction”. This explains the main incentive for BAA’s customized Balanced Scorecard. For this organization, the approach focuses on establishing a customized performance management system in the Heathrow Terminal 5 (T5) Project. In comparison to the traditional Scorecard, BAA’s approach entails the incorporation of the four tenets of the Scorecard within the Key Performance Indicators (KPIs) of the T5 Project (Basu, Little & Millard, 2009). Furthermore, T5’s Balanced Scorecard employs its own leading indicators. These enabling markers are different from those in the conventional approach, which involve aspects of the Learning and Growth Perspective.

The enabling indicators for T5’s Scorecard comprise ‘Benchmarks Agreed’ and ‘Verifications Planned & Work Supervised’. The former comprises a range of financial benchmarks while the latter involves supervisor training (Basu, Little & Millard, 2009). Furthermore, the indicators for lagging results constitute ‘Handover Agreed & Work Complete’, ‘Inspected & Protected’ and ‘Compliance Assured’ (Basu, Little & Millard, 2009). Regardless of their contrasts, these indicators relate to the original perspectives within the traditional Balanced Scorecard approach. For instance, the ‘Handover Agreed & Work Complete’ indicator connects to the original Scorecard’s Customer Perspective (Basu, Little & Millard, 2009). Consequently, the ‘Inspected & Protected’ and ‘Compliance Assured’ indicators of T5’s Balanced Scorecard connect to the Internal Business Procedures perspective within the traditional approach (Basu, Little & Millard, 2009). Further comparison illustrates a significant relation between T5’s Balanced Scorecard and the conventional Balanced Scorecard. However, such relations indicate that the measures within certain KPIs do not conform to one particular perspective within the original approach.

Strategy Mapping in Performance Management and Value Proposition

The process of strategy mapping, as noted, is significant in terms of performance management. Through the incorporation of a Balanced Scorecard approach, BAA was able to visualize the KPIs of the T5 scorecard and construct an efficient performance management system capable of measuring the project’s performance. This process provided an understanding on the relation between the T5’s KPIs and the four perspectives of the Balanced Scorecard. For instance, the four KPIs in T5’s strategy map illustrate the connection between the KPIs and the original Scorecard’s aspects (Basu, Little & Millard, 2009). Furthermore, the key measures of Terminal 5’s scorecard, via visualization, illustrate the relationship that exists amid them and the perspectives. Indeed, it is evident to assert that strategy mapping, with respect to BAA, enhances performance management through illustration and conveyance of the performance measures within the KPIs.

On a different note, strategy mapping is also effective in establishing value proposition. Usually, “value propositions offer direction on how the strategy should unfold” (Armitage & Scholey, 2006, 13). Accordingly, strategy mapping enables the organization to focus on creating value for the products or services it offers. Because of this, value proposition focuses mainly on the customer and the utility that he or she will receive from purchasing and utilizing the product or service. Consequently, developing a value proposition is important for the financial success of an organization. However, without strategy mapping, it is futile to create any considerable success for the respective firm. Interestingly, organizations developing their value proposition should do it in the form of an illustration. The illustration will comprise the main factors that are inherent in the achievement of value for products or services.  For instance, Armitage & Scholey (2006) illustrate an ideal value proposition by including priority alternatives such as product leadership, customer intimacy and operational excellence.

The mentioned factors relate specifically to the Balanced Scorecard’s Customer Perspective. Furthermore, a value proposition is also significant based on the implications it poses on other perspectives. Accordingly, comprehending a value proposition is essential to the structure of the Financial, Customer, Internal Business Process and Learning and Growth perspectives within the map (Armitage & Scholey, 2006). In order to necessitate the involvement of strategy mapping in establishing value proposition, it is important to understand the strategy employed by Glacier Inn. While attempting to create value for customers via services, Glacier Inn used a sequential and visualized process in order to create its value proposition. In this case, Glacier Inn selected a value proposition based on Product Leadership. Including a Product Leadership proposition enabled the hotel to focus its strategy on offering quality and satisfactory services to its customers. Glacier Inn surmised that the hotel is suitable for appealing to guests whose main objective is adventure rather than comfort or cost (Armitage & Scholey, 2006).

In conclusion, strategy mapping is necessary in ensuring performance management and the establishment of value proposition. In terms of performance management, strategy mapping delves on the creation and illustration of performance measures. In relation to BAA’s Balanced Scorecard approach, the performance measures within the KPIs provide for effective and strategic means of measuring the performance of Terminal 5. Furthermore, strategy mapping verifies the relationship between the measures and the four perspectives of the conventional Balanced Scorecard. In establishing value proposition, strategy mapping recognizes the significance of embedding a value scheme within an organization’s strategy. This is because value proposition is crucial towards the development of the Scorecard’s perspectives. Without strategy mapping, it is impossible to develop and implement an aligned strategy based on lack of understanding.

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

 

References

Armitage, H. M. & Scholey, C. (2006). Using strategy maps to drive performance. Mississauga, ON: CMA Canada.

Basu, R., Little, C., & Millard, C. (2009). Case study: A fresh approach of the Balanced Scorecard in the Heathrow Terminal 5 project. Measuring Business Excellence, 13(4), 22-33.

Martello, M., Watson, G. J., & Fischer, J. M. (2008). Implementing a Balanced Scorecard in a not-for-profit organization. Journal of Business & Economics Research, 6(9), 67-80.