The strategy diagram contains all the essential ingredients that will help you realize the corporate goals. It is of course your mission to achieve the objectives of your business so that you will be recognized in the industry. When you draw the strategy map, you will have to consider the goals that you have defined and align them with the strategies that you will implement for your company. There are many ways on how you can generate the map and one of them is through the cascading strategy diagram.
Before you learn how you can create the cascading strategy diagram, you will first have to know what the diagram is about. So what is this so called strategy map? It is a visual presentation that centers on the critical success factors of the CSFs of an organization and the cause and effect relationship between these factors. With the map, you can have a consistent way to symbolize the corporate strategy. This way, it will be easier to manage and measure the strategic objectives.
There have been different names of the map. Some call it the success map while others stick to strategy diagram. However, regardless of the name, the definitions are quite congruent with one another. The maps are utilized in order to represent the BSC or the balanced scorecard so that the one who is looking at it will be able to completely understand what your organization is all about. In designing the map, you will choose how it should appear. You can have a snowflake diagram, a strategic, tree, cyclical, horizontal tree, table, classical and of course the cascading strategy diagram.
As the name suggests, the cascading strategy map cascades or flows. Since there are four perspectives that you will normally include in your balanced scorecard and these are the financial, the people or the customers, the internal business processes and the learning and development, you will have to them all in a cascading form. As you may know, you can make use of shapes like circles, triangles and squares in your map as well as the arrows and lines. When you use the cascading form, it is standard that you will only utilize squares and arrows. As mentioned, you have four perspectives and thus, you also have four boxes in which the perspectives are contained. In each box, there are indicators for the perspectives along with the performance target and the weight of the perspective. The target pertains to the preset goal or percentage that you would like the indicator to achieve. On the other hand, the weight is about the importance of the KPI in that area.
In general, you will start with the learning and growth perspective as the highest part of the cascading strategy diagram at the right side of the map. Then, you can proceed with the internal processes, the customers and the financial. You can include two up to three indicators for each of them. You can of course choose to have your own sequence of the perspectives depending on which among them is the most important for your company.