Guide with a plant example
Strategy map: examples, the four perspectives and how to build one
Short answer
A strategy map is a one-page diagram of a company's objectives in four layers, with arrows that say which objective is expected to cause which. Kaplan and Norton's version reads from the bottom up: skills and routines improve the processes, the processes serve the customer, and the customer pays the bills.
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Lower the cost of each unit
Keep and grow volume with current customers
Deliver on time and in full
Ship product that passes the first time
Make the schedule every day
Shorten changeovers
Keep the lines running
Make it right the first time
Cross-train operators on changeovers
Run the daily leader routine
The idea
What is a strategy map?
A strategy map is a one-page picture of a strategy: the objectives, grouped into layers, with arrows showing which objective is expected to cause which. Robert Kaplan and David Norton described it in the Harvard Business Review in 2000, as an extension of their balanced scorecard. Each objective gets a measure, a target and an owner.
A plant can have good objectives and still lack the page that says why they should add up to a result. The financial target is set by one group, the delivery target by another, and the training plan by a third. Each may be sensible alone.
A strategy map puts the reasoning on one page. If we cross-train operators on changeovers, changeovers get shorter. If changeovers are shorter, the schedule is made. If the schedule is made, orders ship on time. If they ship on time, customers keep their volume. When one of those links is wrong, the map shows where to look, and the numbers beside each box show whether it is.
The four layers
What are the four perspectives of a balanced scorecard strategy map?
The balanced scorecard groups objectives into financial, customer, internal process, and learning and growth. Financial and customer objectives describe the results wanted. Internal process and learning and growth objectives describe how to get them. On a map the financial layer sits on top and learning and growth at the bottom, and the arrows run upward.
| Perspective | Role on the map | The question it asks | In a plant |
|---|---|---|---|
| Financial | A result wanted | What must the business see for the strategy to have worked? | Cost per unit, volume, margin, cash tied up in stock |
| Customer | A result wanted | What must the customer get from us, so that they stay and buy? | On-time and in-full delivery, product that passes the first time, lead time |
| Internal process | How it is reached | Which of our processes must be excellent to give them that? | Scheduling, changeovers, equipment reliability, first-pass yield |
| Learning and growth | How it is reached | What skills, tools and routines do those processes depend on? | Cross-training, standard work, leader routines, stop reasons recorded |
A worked example
What is a strategy map example for a manufacturing plant?
In a plant the same four layers hold plant objectives. Cost per unit and volume sit on top. Delivery and quality as the customer sees them come next. Under those are the processes, scheduling, changeovers, reliability and first-pass yield. At the bottom are the skills and routines those depend on. The sample below carries a measure and a target on every objective.
Lower the cost of each unit
Conversion cost per unit (index)
100 to 94 (index)
The top of the map
Keep and grow volume with current customers
Volume shipped (index)
100 to 106 (index)
The top of the map
Deliver on time and in full
OTIF, by order
91 to 95%
Leads to: Keep and grow volume with current customers
Ship product that passes the first time
Customer complaints a month
12 to 6 complaints
Leads to: Lower the cost of each unit; Keep and grow volume with current customers
Make the schedule every day
Schedule attainment
86 to 95%
Leads to: Deliver on time and in full
Shorten changeovers
Average changeover
40 to 25 minutes
Leads to: Make the schedule every day
Keep the lines running
Unplanned downtime
14 to 8 hours a week
Leads to: Make the schedule every day; Lower the cost of each unit
Make it right the first time
First-pass yield
96 to 98%
Leads to: Ship product that passes the first time; Lower the cost of each unit
Cross-train operators on changeovers
Operators who can run a changeover (of 24)
6 to 18 operators
Leads to: Shorten changeovers
Run the daily leader routine
Tier meetings held as planned
70 to 95%
Leads to: Make the schedule every day; Keep the lines running; Make it right the first time
- 1
Every box has a number
An objective with no measure is a wish. Each box carries one measure with where it starts and where it must get to. Where a measure already exists on a KPI board, use that one, so the map and the board show the same figure.
- 2
Every arrow is a sentence you can say
If operators can run a changeover, changeovers get shorter. If changeovers get shorter, the schedule is made. If the schedule is made, orders ship on time. Read each arrow out loud with the people who run the line. A link that makes them laugh is a link to cut.
- 3
The top is reached from the bottom
Nobody can move cost per unit directly. They can shorten changeovers, and the map says why that is expected to matter. This is the difference from a list of goals: the map shows how a team's work reaches the result.
- 4
A map can use fewer than four layers
If your plant has no learning and growth objective this year, leave the layer thin. Do not invent a box to fill it. A box that exists only because the template has a row is how maps fill up with objectives nobody owns.
Three vocabularies
How is a strategy map different from an X-matrix, a balanced scorecard and OKRs?
A balanced scorecard is the list of objectives and measures in four perspectives. The strategy map adds the arrows that say why they should work. An X-matrix is the hoshin kanri plan: four lists with grids that mark which item supports which, plus owners. OKRs are a quarter's objective with key results. The map explains, the X-matrix assigns, the OKRs time-box.
| Aspect | Strategy map | X-matrix (hoshin kanri) | OKRs |
|---|---|---|---|
| The question | Why should these objectives produce the result? | Which few things do we work on this year, who owns each, and which measure proves it? | What must change this quarter? |
| The shape | Objectives in four layers joined by arrows | Four lists around a grid: long-term objectives, annual objectives, improvement priorities, targets | One objective in words with two to four key results |
| How links are shown | Arrows read as if-then | Dots in the corner grids mark which item supports which | Key results sit under their objective |
| Time frame | Redrawn when the strategy changes | A plan for the year on a longer direction, reviewed monthly | One quarter, then scored |
| What it leaves open | Who owns each objective and when it is reviewed | Why the objectives should cause each other | How the quarters add up to the longer result |
- 1
Use the map for the reasoning, the X-matrix for the plan
Draw the map once to agree why the objectives belong together. Then put the chosen objectives on the X-matrix, where each gets an owner and a target and the corner grids show the links, and review them every month on a bowling chart. The hoshin kanri guide has a filled example.
- 2
Write the quarter's OKRs from the map
An OKR objective is usually one box on the process layer, and its key results are that box's measure plus the measure of the box below it that will move it. The OKR vs KPI guide shows the quarter inside the year.
- 3
The scorecard is the map without the arrows
Kaplan and Norton published the balanced scorecard in 1992 and the strategy map in 2000. A scorecard is close to a map without the arrows, and a map is a scorecard with the reasoning drawn in.
Bottom of the page to the top
How do you build a strategy map?
Write the strategy in two sentences. List the financial and customer results it must produce, then the processes that must be excellent to produce them, then the skills and routines those processes need. Draw the arrows as if-then sentences. Give each objective one measure with a baseline and a target, then an owner and the project that will move it.
- 1
Write the strategy in two sentences
Who are we trying to serve better than the alternatives, and what has to be true for them to choose us? If it takes a page, it is not a strategy yet. Many templates add vision, mission and values beside the four layers. That is optional.
- 2
Write the results first: financial and customer
Two or three objectives in each. Start with the customer, since in a plant the customer layer is usually delivery and quality, and work up to the money. Put a measure on each as you go.
- 3
Then the processes that produce them
Ask what has to be excellent inside the plant for the customer objectives to be met. Four or five is plenty: the schedule, the changeovers, the equipment, first-pass yield. Choose the ones that are weak now, not the ones that are fine.
- 4
Then the skills and routines under the processes
What do those processes depend on that the plant can build? Cross-training, standard work, a leader routine, a clean stop-reason record. Keep it to one or two objectives. Most of the arrows start here.
- 5
Draw the arrows as if-then sentences
For every arrow, say it as a sentence. If it cannot be said, there is no arrow. Cut the arrows that connect everything to everything. Each box should lead to one to three others.
- 6
Give every box a measure, a baseline, a target and an owner
One measure each. Write where it starts today and where it must be at the end of the year. Name one owner. Check that targets agree across layers: if the schedule gets to the target but the OTIF target needs more than that, the map does not add up.
- 7
Attach the project that will move it, then test with the people
Each box needs the project, kaizen or action that is meant to move it. Walk the map with the supervisors and ask where they disagree. Keep the page up, and redraw it when the results contradict a link.
More than one plant
How do you use a strategy map across several plants?
Draw one map for the company and let each plant draw its own from it. A plant keeps the objectives it can move, adds the ones only it can see, and writes its own measures and targets. The two sides agree the result in a catchball round, so the plant maps add up to the company map instead of repeating it.
- 1
Draw the company map first
Leadership agrees the financial and customer objectives for the company, and the few process objectives that every plant shares, such as delivery and first-pass yield.
- 2
Each plant takes what it can move
The plant keeps the objectives it can change, adds the ones only it can see, such as a local changeover problem, and writes its own measures and targets. Plants will not have the same bottom layer, and that is correct.
- 3
Agree the result in a catchball round
The plant replies to the company map with its version. Leadership checks the plant targets add up to the company targets. The cascading goals guide covers the round, and strategy deployment the whole year.
Fill it in
What goes in a strategy map template?
A strategy map template is a table, not a drawing. One row per objective, with its perspective, the measure, the baseline and target, the project that will move it, one owner, and the objectives it leads to. The leads-to column is the arrows. Fill the table first and the picture draws itself.
| Objective | Perspective | Measure | Baseline to target | Project | Owner | Leads to |
|---|---|---|---|---|---|---|
| Cross-train operators on changeovers | Learning and growth | Operators who can run a changeover (of 24) | 6 to 18 operators | Changeover skills matrix and coaching | Production manager | Shorten changeovers |
| Shorten changeovers | Internal process | Average changeover | 40 to 25 minutes | SMED workshops on Lines 1 to 3 | Continuous improvement lead | Make the schedule every day |
| Make the schedule every day | Internal process | Schedule attainment | 86 to 95% | Daily attainment review on every line | Production manager | Deliver on time and in full |
| Deliver on time and in full | Customer | OTIF, by order | 91 to 95% | Daily schedule attainment review | Operations director | Keep and grow volume with current customers |
One chain is filled in, from the skill at the bottom to the customer result at the top. Add a row for every objective on your map. The leads-to column is where the arrows live.
What goes wrong
Common mistakes when drawing a strategy map
Thirty objectives on the page
A map that needs a wall is not a map. Aim for about ten. If you cannot choose, you have not chosen a strategy.
Arrows from everything to everything
When every box leads to every other box, no arrow means anything. Each objective should lead to one to three others, and each arrow should survive being said out loud.
Forcing four layers on a plant that thinks in three
The four perspectives are a starting point. A plant may call them cost, customer, process and people. Keep the order, results at the top and capability at the bottom, and rename what does not fit.
Measures that count activity
Training sessions held is an activity. Operators who can run a changeover is a result. Pick the number that shows the objective was achieved.
A poster with no owners
A map that hangs on the wall with no owner, target or project beside each box is decoration. Every box needs a name and a review date.
A map and an X-matrix that disagree
If the map says cut changeovers and the X-matrix lists a different priority, the plant has two plans. Use the same objective names and the same numbers in both.
Sources
- Kaplan and Norton, Having Trouble with Your Strategy? Then Map It, Harvard Business Review, September 2000 (opens in a new tab)The article that introduced strategy maps, adapted from the balanced scorecard, with the marketing and refining division of an oil company as the worked example.
- Kaplan and Norton, The Balanced Scorecard: Measures That Drive Performance, Harvard Business Review, 1992 (opens in a new tab)The balanced scorecard: measures beyond the financial ones.
- Harvard Business School Working Knowledge: Mapping Your Corporate Strategy (opens in a new tab)The four perspectives, and the split between the outcomes wanted (financial, customer) and how to reach them (internal process, learning and growth).
- Intrafocus: Strategy Map on a Single Page (opens in a new tab)A map should communicate what the company is striving for on one page; vision, mission and values are often added beside the four perspectives.
- Lean Enterprise Institute: hoshin kanri (opens in a new tab)Hoshin kanri as a method for setting strategic priorities and carrying them out across the organization with plan-do-check-act.
- What Matters: OKR meaning, definition and examples (opens in a new tab)Objectives, key results and quarterly grading.
In LeanSuite
Where the objectives live in LeanSuite
Once the objectives are agreed, LeanSuite is where they live and get judged.
Goals for the year, measured by a KPI
Goals are set per year at company and facility level. Each goal is Measured by a KPI with a target and a frequency, and shows Met or Missed for each month.
The cascade and the reply
A company goal is cascaded to the facilities you choose. Each facility replies through catchball: Adopt as written, Write own version, or Not applicable.
Goal health by facility
The Goal health grid shows the goals by facility, so leadership can see where a goal is being met and where it is not.
The X-matrix view
The goals have an X-matrix view for each year, which is where the objectives you chose from the map get their owners and their links.
Projects tagged to a goal, and the KPIs behind it
Kaizen projects are tagged to a goal. The KPIs behind the goals have multi-level KPI trees with roll-up, KPI boards and a bowling chart, and a red KPI opens an action, an A3 or a project.
Where to look next
See it on your own goals
Try the interactive demo in your browser with sample data, or pilot LeanSuite on your own lines for 90 days, with the setup done by our team.
Read more on strategy, KPIs and goals
- KPI tree: what it is, how to build one, and a manufacturing exampleHow to build the measures that sit in each box of the map.
- Hoshin kanri: meaning, the 7 steps and a filled X-matrix exampleWhere the agreed objectives go next: the X-matrix, catchball and the monthly review.
- OKR vs KPI, and where hoshin kanri fitsThe quarter inside the year, and how the three share the same numbers.
- Cascading goals and goal alignmentHow a goal reaches each facility and how to see work that serves no goal.
- Strategy deployment softwareThe Strategy module: goals, the X-matrix view, catchball and Goal health.
- OKR meaning and OKR examples for manufacturingHow to write and score a quarter's objectives from the map.
FAQ
Questions about strategy maps
A strategy map is a one-page diagram of a strategy. The objectives sit in layers, and the arrows say which objective is expected to move which. Kaplan and Norton introduced it in the Harvard Business Review in 2000 as a development of the balanced scorecard. Each objective carries a measure, a target and an owner, so the map doubles as the plan to check.
Financial, customer, internal process, and learning and growth. Financial and customer objectives describe the results wanted. Internal process and learning and growth objectives describe how to reach them. The financial layer is drawn at the top and learning and growth at the bottom, and the arrows run upward.
The balanced scorecard, published by Kaplan and Norton in 1992, lists objectives and measures in the four perspectives. The strategy map, from 2000, adds the cause-and-effect arrows between the objectives. A scorecard tells you what is measured. A map also tells you why those objectives should produce the result.
On this page the example has ten objectives. Cost per unit and volume sit at the top. Delivery on time and in full, and product that passes the first time, come next. Under them are scheduling, changeovers, reliability and first-pass yield. At the bottom are cross-training on changeovers and a daily leader routine. Each has a measure, a baseline and a target, and the numbers are sample data.
Yes, and the useful one is a table. One row per objective, with the perspective, the measure, the baseline and target, the project, one owner, and the objectives it leads to. The leads-to column carries the arrows. This page has one chain filled in. Draw the picture from the table, not the other way round.
About ten is a good size for a plant, with two or three in each of the top layers and fewer at the bottom. There is no rule, but a map that needs a wall to read is no longer showing the strategy. If you cannot choose, the discussion you are avoiding is the strategy itself.
A strategy map shows why objectives should cause each other. Hoshin kanri is the yearly method for choosing a few objectives, agreeing them level by level and reviewing them monthly, and the X-matrix is its one-page plan, with owners and grids that mark which item supports which. Use the map to agree the reasoning, then put the chosen objectives on the X-matrix.
A strategy map is a picture of the whole strategy and changes when the strategy does. OKRs are one quarter's objective with two to four key results, scored when the quarter ends. An OKR objective is usually one box on the process layer of the map, and its key results are that box's measure plus the measure below it that will move it.
Once the objectives are agreed, LeanSuite is where they live. Goals are set per year at company and facility level and are measured by a KPI with a target and a frequency, with Met or Missed each month. A company goal cascades to facilities, which reply with Adopt as written, Write own version or Not applicable. The Goal health grid shows goals by facility, the goals have an X-matrix view for each year, and kaizen projects are tagged to a goal.
Got a strategy on one page?
Bring your map, your X-matrix or your list of goals, and we will show you on a call how the objectives, their KPIs and the monthly review sit together in LeanSuite.