In 2001, Robert S. Kaplan and David P. Norton, business strategy experts and creators of the balanced scorecard performance-measurement system, introduced strategy maps in a book entitled “The Strategy-Focused Organization.” Each strategy map a business creates is a one-page diagram used to describe and communicate a strategy for achieving a single long-term goal. In a human resources department, a strategy map describes and shows how an HR strategy links and adds value to a strategic business goal.
A blank strategy map is a simple box divided into four horizontal sections, with Financial, Customer, Internal, and Learning and Growth section labels running down the left side of the box. The first two sections establish outputs -- financial and customer-focused expectations -- that align with company goals. The second two sections describe internal and learning and growth inputs, or how HR plans to meet input expectations. The map uses text boxes and connecting lines to create and identify relationships between input and output sections and goals.
Using the chart, state the financial outputs required to achieve a long-term objective identified in the company’s strategic plan. For an objective such as maximizing organizational value, company-stated output requirements might include increasing gross revenues, increasing productivity and decreasing expenses. Decide what part and how much of each outcome HR can affect. Enter these expectations and dollar amounts underneath the appropriate output requirement. For example, HR might commit to reducing turnover rates by 10 percent, which according to current cost estimates will reduce recruiting and hiring expenses by $25,000 per year.
For each financial expectation, define who the HR customer is and describe what the customer will do to make sure HR achieves its financial commitments. As author and co-founder of JungleRedCommunication.com Jeremy Hunter notes, the HR customer most often isn’t a person, but instead is a “thing” that relates to employees, such as employee engagement, wellness or diversity. For example, you might say that increased employee engagement will reduce turnover rates or that a healthier workforce will improve productivity.
Describe the steps HR will take to achieve customer-focused outputs. According to Hunter, internal inputs are high-level steps, not the technology or training required to implement a system. For example, HR might decide that leadership development, an employee-recognition program and improved performance appraisals are appropriate steps for increasing employee engagement, which in turn reduces turnover rates. In the same way, a wellness program, an annual health and safety fair, and employee-staffed safety teams create a healthier workforce.
Complete the strategy map by identifying what HR must do to transform internal inputs from a goal to reality. Keep in mind that learning and growth initiatives are the specific knowledge, skills and abilities required to meet these goals, not a how-to list. The how-to list comes later as you use the strategy map as an implementation tool. For example, a leadership development goal might require mentoring, an online management-training program and competency-based performance appraisals to develop management expertise, communications and people skills, and the business-process knowledge that leadership roles require.