1. “...most companies
don’t succeed in
implementing their
strategies.”
Robert S. Kaplan & David P. Norton

2. Your company:
one of those
failed companies?

3. This
book will
help you
to stay
out of
the failed
troops.

4. Introduction
Outline : Presenter
About the book : Marvin Mahadharma
Why strategy important : Marlisa Kurniaty
Value creation & strategy : Mudzamil M Fickry Suadu
Case studies & Next? : Endro Catur Nugroho

5. About the Book
What
Discusses strategy as a non-universal concept
and attempts to describe it using a causal
relationship called the strategy map

6. Executive Summary
The strategy map – at least described in the Introduction
section of the book – is a powerful tool to
capture, develop and communicate organization strategy
internally.
There are little risk of failure in creating the strategy
map so long as managers are equipped with accurate
data and information, analytical skills and appropriate
method to maintain the map to reflect organizational
dynamics, as briefly described in less-successful of BSC
implementation – the tool used throughout the book.

7. About the Book
Why
•Shifting trend from product-driven
economy to knowledge economy puts
intangible assets at the heart of
organization performance
•No literature at the time offered a holistic
view of the strategy (skews to certain
perspectives of the Balanced Scorecard)

8. About the Book
Who
•For managers who will be leading
Balanced Scorecard projects
•For companies with strategy and
management system but no clear links
between them
•For companies tired of vague success of
strategy implementation

9. About the Book
How
Creating the strategy that will map illustrate
linkages between intangible assets to
organizational growth, built on the base of
Balanced Scorecard.

10. About the Book
Output
Comprehensive, integrated visual
representation of organization’s strategy
that serves as the first step to becoming
strategy-focused organization.

11. Oh by the way...

12. Happy reading from
Mr Kaplan and Mr Norton 

13. Why strategy important?
Study: Only 8.33% companies - which
enjoyed at least 5.5% annual growth - had
strategic plans. (Bain & Company, 1988-1998, page 6)

14. Why strategy important?
Problem: No two organizations thought
about strategy in the same way, it’s either:
o financial plans for revenue and profit growth,
o products or services,
o targeted customers,
o quality and process, or
o human resources or learning perspective.”
(page 5)

15. Why strategy important?
Problem: No general way available to
describe strategy. Even experts have
inconsistent way of representing strategy.
(page 5)

16. Why strategy important?
Problem: “Few [executives – those with
strategy execution roles] had a holistic view
of their organization.” (page 5)

17. Why strategy important?
Effect: executives found it difficult to
communicate strategy to their teams, and to
themselves. (page 5)

18. Why strategy important?
Effect: Executives, then, make the situation
worst by interpreting strategy in their
narrow, operational approach (page 5)

19. [and it doesn’t help the
company’s shareholders, either]

20. “An organization’s
strategy [must]
describes how it intends
to create value for its
shareholders, customers
, and citizens”(page 4)

21. Even when you have good strategy ...

22. “in the majority of cases
– we
estimate
- [of] the
real problem isn’t [bad
strategy] ... it’s bad
executions” (page 6)

23. Balanced Scorecard
Solutions?
... able to describe and link
strategy to the management
system (page 6)

24. “If you can measure it,
you can manage it”(page 6)

25. BSC Framework
Cause-effect perspectives:
1.Financial
2.Customer value proposition
3.Internal process
4.Learning and growth

26. BSC Framework
Profit Organizations
Learning & Internal Customer Financial
Growth The
How our organization Which process must How must we look How we look to our Strategy
learn and improve? be excelled? to our customers shareholders?
Non-Profit Organizations
Customer
How must we look
Learning & to our customers
Internal
Growth
The
How our organization Which process must
learn and improve? be excelled? Mission
Fiduciary
How will we look to
our donosr?

27. BSC Framework
...has proven to “provides a language that
executives team can use to discuss the
direction and priorities of their enterprises”
(page 9)

28. From BSC Framework to
Strategy Map
1. Draw four perspectives (BSC Framework)
of strategic measures as a series of cause-
and-effect linkages;
2. Add second-layer of detailed information
that describes the perspectives;
3. Your strategy map is done.
(page 9)

30. Strategy Map
Provides uniform and consistent way to
describe strategy, and serve as the bridge to
link between strategy formulation and
execution. (page 10)

31. Strategy Map
Be careful: any missing elements
(component or relationships) in a strategy
map may lead to flawed strategy execution.
(page 10)

32. Strategy Map: Principles
1. It balances (what seemed like) contradictory forces
2. It is based on differentiated customer value
proposition
3. Value (to customer) is created through internal
business process
4. It consists of simultaneous, complimentary themes
5. It needs to be aligned with management system to
leverage intangible assets

33. Intangible Assets
1. Human Capital: employee's skills, talent,
knowledge
2. Information Capital: databases,
information systems, networks,
technology infrastructure
3. Organization Capital: culture, leadership,
employee alignment, teamwork, KM

34. Align Intangible Assets to
Strategy
Approach:
1. Strategic job families: aligning human capital to
strategic themes
2. The strategic IT portfolio: aligning information capital
to strategic themes
3. An organization change agenda: integrating and aligning
organization capital for learning & improvement in
strategic themes

35. Case Studies

36. Case Studies
American Diabetes Association (ADA)
The Mission: The Goal:
“prevent and cure diabetes “by 2007 to be the leading
and to improve the lives of diabetes organization by
all people affected by increasing income to
diabetes” $300million to better
support its efforts and
programs of research,
information and advocacy”

37. Case Studies
Situation: Solution:
1.Merged 57 corporate in Used BSC: Balancing growth
1998; no single defined with operational efficiency
organizational culture.
2.Vision and strategy exist; Impact:
little consensus on how 1.Greater value for
to execute. stakeholders &
3.Needed better way to constituents
measure organizational 2.More targeted audience
success.

38. Case Studies
The Strategy Map: Actions (intangible assets):
To meet stakeholders’ and 1.Recruit qualified talent
constituents’ as well as 2.Train worksforce
financial objective through: 3.Retain best people
1.Constituent relationship 4.Cross functionality
management 5.Integrate data
2.Standardized execution 6.Align with priorities
7.Appropriate fund balance

39. Case Studies
The Situation:
1. The Retail Division of Arran Ltd required performance
measurement system that would deliver an ability to
control the business at an operational level.
2. Few years afterward, the Division’s changed their
strategies.
3. The Company also wanted to apply the Division’s
strategy map to the company level, because “the
Division is part of the business”.

40. Case Studies
Solutions:
1. BSC to monitor operation the Division only: divisional
level to operators within each branch.
2. Controlled by computer software.
3. Each employee individual BSC linked to branch and,
subsequently, Retail Division BSC.

41. Case Studies
The Effect:
1. The measurement function by BSC served well for two
years.
2. When the Retail Division had to change their non-
anticipated strategies, the system reject this change
and measurement result no longer reflected the reality.
3. When the Company used the Retail Division’s strategy
map to their corporate strategy map using the computer
system, it reflected results that are different than the
reality.

42. Case Studies
Lessons Learned:
1. Company’s managers clearly did not understand the
concept of strategy map; it had to be re-created if
the scope of the new strategy is different.
2. Two years is too short for the strategy to change;
Retail Division should anticipate strategy for longer
years unless there’s force majeur.
3. Nothing wrong in BSC as a tool; there’s something
wrong with the computer application that use BSC
methodology. Careful in choosing supporting system.

43. Other cases?
Contribute, please.

44. Summary
A strategy map template
“describes how intangible assets Intangible Asset:
1. Human Capital
drive performance enhancements 2. Information Capital:
3. Organization Capital
to the organizational’s internal
processes that have the maximum Strategy Map:
leverage for delivering value to 1. Financial
2. Customer value
customers, shareholders, and proposition
3. Internal process
4. Learning and
communities.” growth

45. Next?
Detailed explanations of Strategy Map.