Creating strategy maps: Examples and tips

As a product manager, you have to navigate increasingly complex environments and planning for your organization’s future can be chaotic. Without a clear strategy for the future, you’ll struggle to meet your goals. This is where strategy maps come in handy for planning, performance monitoring, and fostering a shared understanding of goals.

The idea behind strategy maps originated in the 1990s from Robert S. Kaplan and David P. Norton’s “The Balanced Scorecard.” They wanted to create a way for people to translate their vision and strategy into action objectives and performance measures by demonstrating cause-and-effect relationships between objectives.

This article provides an overview of strategy maps, including what they are, how to create them, and real-world examples.

What is a strategy map?

A strategy map is a tool that illustrates an organization’s strategic objectives and the relationship between them using a visual diagram. It provides clarity to stakeholders on how various goals contribute towards achieving the overall strategic objective. Strategy maps are powerful tools that help you communicate your vision, align your efforts, track performance and achieve your goals effectively.

4 categories of strategy maps

Strategy maps can be organized into four categories. These include:

• Financial — Focus on financial outcomes with objectives related to revenue growth, profitability, return-on-investment and cost management. This is typically the most important category in strategy maps as every business considers financial objectives on top most priority
• Customer — Understand and meet the needs of the customer to achieve customer satisfaction, retention, and long-term relationships. For service based or non-profit organizations, beneficiaries or clients are considered as customers
• Internal processes — Identify internal processes or operations that need improvement or innovation
• Learning and growth — Learning and growth involves identifying the unique skill set required by the workforce to achieve overall strategic objectives

How to create a strategy map?

The following steps outline how you can go about successfully creating a strategy map:

1. Define the mission, vision, and core values of the organization — Vision defines the organization’s long term aspirations and mission outlines organization’s business. Without defining these two fundamentals of the business, it’s not possible to create a strategy map
2. Set objectives aligned with business goals — Collaborate with key stakeholders to brainstorm and identify key strategic objectives. These objectives must be aligned with the organization’s mission and vision
3. Establish cause and effect relationships — Understand the relationship between different objectives outlined and map out the connections between them. Identify which objectives support others or lead to other objectives and create cause and effect flow. This helps in clarifying priorities and dependencies
4. Create the strategy map — Using the information gathered above, start creating a visual representation. Start with the vision statement at the top. Write down four perspectives vertically on the left side with corresponding defined objectives
5. Incorporate KPIs — Objectives defined must be measurable. Identify the key process indicators that can help measure the objectives with time. The performance measurement component makes the strategy map actionable
6. Validate and refine the strategy map — Share the draft of the strategy map with key stakeholders and gather their feedback to make further adjustments. This is an important step to ensure alignment and buy-in. Once the adjustments are made, present the strategy map across the stakeholders and use it as a reference for discussion in meetings, workshops and training sessions
7. Review and update regularly — Set regular meetings with key stakeholders to review the strategy map and assess the progress of the objectives defined. At these meetings, any further adjustments can be made based on the recent cause and effect

Real-world example of an effective strategy map

Below you can see an example of a strategy map from a healthcare insurance organization. The healthcare insurance organization provides coverage to those who have bought health insurance plans either directly or through their employees:

At the top is its mission statement, which is to provide healthcare coverage to everyone affordably, equitably and seamlessly. Customers need to receive the coverage they need when they visit a doctor and have claims processed seamlessly. Also, if they have questions, they should be able to easily get hold of customer service who can answer their queries.

From a financial perspective, the organization has to increase memberships to get more revenue and manage costs of operation on the other hand to maximize its profit.

The organization needs to have a long term partnership with facilities and providers to provide a good coverage network for its members. It’s also crucial for this organization to update its health insurance plans with appropriate network coverage and benefits to remain attractive to members.

From a learning and growth perspective, this organization needs to train its customer service associates so they can provide information to members for any queries, as well as invest in newer technology to ensure the security of the application is robust enough to avoid hacking of personal and healthcare information of its members.

The customer, financial, internal processes, learning and growth goals differ but depend upon each other. Unless you identify the area where improvement is needed, and plan to improve it, it’s not possible to achieve the overall objective of the organization.

What are the benefits of using strategy maps?

As you learned from the example, strategy maps provide a lot of benefits for a PM. At a high-level, the biggest ones include:

1. Performance measuring — By setting objectives in your strategy map with identified KPIs you can keep track of progress and measure performance. This enables you to make adjustments based on what you see
2. Clarity — Visualizing the objectives and the connection between different perspectives enables the key stakeholders to understand the cause and effect of the activities or the initiatives proposed. This leads to a deeper understanding of the priorities
3. Aligned teams — Strategy maps go out across different departments, which helps in fostering collaboration and coordination. When you clearly outline initiatives it becomes much easier to align teams
4. Enhanced communication — Strategy maps act as a communication tool that conveys strategic objectives to stakeholders, making it easier to discuss and share the vision. Use your map as a single source of truth

Key takeaways

Strategy maps are a powerful tool to help you align your strategic objectives and communicate your vision effectively within your organization. They help facilitate a deeper understanding of various initiatives by illustrating the cause-and-effect relationships between different goals.

To take full advantage of strategy maps, it’s important to define objectives clearly, involve key stakeholders in the strategy map creation process, and regularly review the strategy map to reflect the dynamic circumstances. A well constructed strategy map can provide clarity on priorities and foster collaboration across departments leading to improved performance and strategic alignment.

---

Over 200k developers and product managers use LogRocket to create better digital experiences

Learn more →

---

Featured image source: IconScout

LogRocket generates product insights that lead to meaningful action

LogRocket identifies friction points in the user experience so you can make informed decisions about product and design changes that must happen to hit your goals.

With LogRocket, you can understand the scope of the issues affecting your product and prioritize the changes that need to be made. LogRocket simplifies workflows by allowing Engineering, Product, UX, and Design teams to work from the same data as you, eliminating any confusion about what needs to be done.

Get your teams on the same page — try LogRocket today.