Improving Business Performance
In today’s business arena, there is a variety of data available internally (Key Performance Indicators for example) and externally (Industry Reports) that companies can collect that informs and helps them to report on and understand business performance. In turn this helps them to monitor the delivery of strategic priorities and goals. At the same time, business aspiration to grow, to increase profits and market share and to be better than the competition calls for a focused strategy.
Typical areas of focus for improvement include strategy alignment, marketing practices, organization and operations, but deficiencies that require attention can often be well hidden in the companies and within their policies and procedures.Against this background, business performance has to be seen holistically looking at a
variety of facets.
Write an executive brief explaining how strategy maps could be a useful management tool and system to monitor and control the performance of organisational or business units.
Include a short analysis of both the advantages and disadvantages of this approach.
In completing the assessments, you need to demonstrate all of the following skills:
Application of academic concepts
Critical awareness and analysis
Synthesis and presentation of key ideas
Evaluation of complex matters
Integration of ideas and practice in a cross disciplinary manner
Presentation (Written) of key concepts / ideas
Improving Business Performance
A strategy map refers to a business management tool that whose aim is to forge a strong connection between the short-term activities of an organization and its long-term strategies. The rationale behind the application of strategy maps in business management is helping in assessing the extent of success regarding the materialization of the core goals of a business organization. The principle of strategy mapping involving the coordination of both short-term activities and long-term strategies of a business entity suffice as the primary reason why a strategy map stands out as an ideal business performance management tool (Jones, 2011).
Relevance of Strategy Maps
A strategy map illustrates the links between a company’s most important macro strategic objectives with its daily operational elements spanning across the four major perspectives of business operations – customers, learning, and growth, finance, as well as internal processes (Jones, 2011). From the financial viewpoint, strategy maps help to cost structure enhancement and increasing productivity through the proper utilization of assets. From the customer perspective, a strategy map is useful in emphasizing what the business organization should understand regarding the key elements that set it apart from its competitors. Notably, all the elements in the general framework of a strategy map aim at fostering improvement along quality business attitudes, customer service, brand image, and business partnerships, among others. From the perspective of internal processes, strategy maps help in developing better characteristics for its products and services.
Practical application of strategy maps is overly paramount in the facilitation of successful business operations – and overall business survival. Strategy maps provide the management executives in business entities with the necessary ability to describe and communicate their operation strategies to all stakeholders of the business organization. Owing to the distinct visual nature of a strategy map, every stakeholder as well as the individual employee gets the possibility to figure out and locate themselves in the bigger picture and consequently assume their core roles in facilitating the accomplishment of the core objective of their organization (Witt, 2016).
Notably, strategy maps have the ability to describe the way through which business organizations build value through the creation of strategic themes that focus on both productivity and growth of the organization. With such themes, it becomes easy to determine what specific strategies are most suitable for organizations to use in the pursuit of engaging their customers in more productive ways. Where strategy maps are properly constructed, they provide the optimal means through which a business entity can increase customer satisfaction by combining the aspects of technology, employee motivation, and business processes.
In short, strategy maps enhance ultimate business performance through the provision of ideal conceptual frameworks that allows all the leaders and stakeholders in a specific business entity to have a better understanding of a particular business performance strategy – so that they can execute it in the best way possible (Armitage & Scholey, 2006). Strategy maps help in determining the primary objectives of organizations alongside eh dominant value propositions. They enable executives in business organizations to make the most ideal financial and customer-related strategies. Last, but not least, they foster the establishment and implementation of the most suitable internal process, learning, and growth strategies – that are overly crucial in promoting continuous positive business performance.
Analysis of Advantages and Disadvantages
Much like any other business performance tools, strategy maps feature some advantages and drawbacks – depending on the predisposition of different business environments. The first advantage is regarding the ability of strategy mapping to demonstrate to the employees how all kinds of improvements – event those that seem so small – cumulatively contribute towards the achievement of primary business objectives in the most efficient way possible. Secondly, strategy mapping paves the way for the exhibition of a clear demonstration regarding how best the management body of a business organization can align both the short, medium, as well as the long-term objectives towards achieving the core business goal (Wynter-Palmer, 2013). Thirdly, strategy maps provide a clear demonstration of how the management of a company can efficiently improve the stakeholder value through the use of the business’ intangible assets. Last, but not least, strategy maps stand out as an ideal solution to apply in the case where managers face the challenge of failing to identify the reason behind the failure of various strategies implemented in the pursuit of delivering tangible improvements in their business organizations.
There are only two significant disadvantages of strategy maps. First, strategy mapping requires proper coordination and acceptance by all individuals across every management level of a business entity. Notably, it is highly possible for employees to feel disenfranchised from all the benefits of positive performance in the cases where the management of a business entity fails to convince every member of its workforce on the benefits of sticking to the provisions of the strategy map. Secondly, even with its emphasis on the macro focus, strategy mapping features very high chances of unlikeliness to deliver massive progress in a single aspect of a business entity (Jones, 2011). That is, the tangible benefits resulting from the use of strategy maps often comprise of numerous minor elements.
Armitage, H. & Scholey, C. (2006). Using Strategy Maps to Drive Performance. Mississauga, Ont.: CMA Canada.
Jones, P. (2011). Strategy Mapping & Strategy Maps. Excitant. Retrieved 11 October 2016, from http://www.excitant.co.uk/resources/white-papers/strategy-maps-and-strategy-mapping/
Jones, P. (2011). Strategy Mapping for Learning Organizations. Farnham, Surrey: Gower Pub.
Witt, K. (2016). Using Strategy Maps to Drive Performance. American Institute of CPAs. Retrieved 11 October 2016, from https://www.aicpa.org/InterestAreas/BusinessIndustryAndGovernment/Resources/OperationalFinanceAccounting/StrategicPerformanceManagement/Pages/Executive%20Summary%E2%80%94Using%20Strategy%20Maps%20to%20Drive%20Performance.aspx
Wynter-Palmer, J. (2013). Is the Use of Short-Term Incentives Good Organization Strategy? Compensation & Benefits Review. http://dx.doi.org/10.1177/0886368712471591