They found that if they displayed the diagrams in a prominent location during the consultancy process, they attracted considerable attention from executives, thus ensuring their engagement. These diagrams became known as strategy maps.

• View example of a strategy map

As the title of the book states, the idea is to create value from intangible assets. They point out early on that intangible assets cannot exist in a vacuum. They need to be part of a value-creating process and Kaplan and Norton argue that the balanced scorecard - with its emphasis on combining focuses on shareholders, customers, internal processes and learning and development - is the best way to guarantee tangible outcomes.

The original balanced scorecard concept was developed for the operational level of an organisation. However as it began to be applied in practice, it was noticed that increasingly, it was used as a strategic tool. It was able to verbalise the strategy, communicating it to the organisation and enabling better measurement of strategy execution. Its emphasis on performance measurement ensured that individuals throughout the organisation knew how they should contribute towards the overall strategic goals.

Strategy maps are a natural and very powerful extension. They clearly lay out the route for putting the strategic plan into action. Importantly, they highlight dead ends.

By way of explanation, a key concept of the balanced scorecard has been the need to interlink performance indicators to gain a cause and effect synergy. A well-drawn strategy map helps to decipher these links and also shows up initiatives that are not linked through to the overall strategic objectives.

The book recommends organising maps into strategic themes helping to break down an overall plan into its individual and more manageable components. By doing this, both dead ends and, more importantly, unsupported/unconnected initiatives can be thrown up. Examples are provided, demonstrating that a map can combine local, national and global strategic objectives.

Overall, strategy maps are a powerful development as part of the evolution of the balanced scorecard concept. The tool should be used to build, communicate and monitor the organisation's scorecard.

This is the third of four books written by Kaplan and Norton about the balanced scorecard. Strategy maps can be found in their second book but the idea certainly gains considerably by having a book fully devoted to the topic.

It is very detailed and rewards rereading. For example, early on they state that they use Porter's approach to strategy to provide generic themes and templates that can be adopted for faster implementation. However, you might not notice this the first time round if you are not looking for it.

Numerous case studies are used to illustrate the concepts. Examples are given for non profit as well as commercial organisations. The level of detail makes this a very useful book for anyone creating maps for their organisation.

Strategy maps: converting intangible assets into tangible outcomes by Robert Kaplan and David Norton

Harvard Business School Press (2004)
ISBN: 978-1591391340

Dr Robert Kaplan is the Marvin Bower professor of leadership development at Harvard Business School and is a co-founder and chairman of the Balanced Scorecard Collaborative (BSCol).

Dr David Norton is a co-founder, president, and CEO of BSCol. Together with his co-author, Robert Kaplan, he has written four books about the balanced scorecard, and articles in the Harvard Business Review.

• SR8 Evaluating performance in IT special report (2005)
• GR34 The balanced scorecard special report (2011)