Strategy is, of course, determined by working with the strengths of a company and working around it present weaknesses.  An organization that has a high level of cultural capabilities will be able to deploy a wider range of strategies to maintain a competitive advantage in the marketplace

An appropriate vehicle for an organization to develop cultural capabilities is through the Kaplan & Norton Balanced Scorecard System.  Since the 1990s, the Balanced Scorecard System has provided a rigorous way to measure performance by quantifying so-called intangible assets, which would include notions of social capital and the subset of cultural capabilities.

The Balanced Scorecard draws its strengths from four perspectives:  1) financial measures; 2) customers; 3) internal processes; and 4) learning and growth.  Kaplan and Norton used this four perspective model and link it with the time-based dynamics of strategy to create strategy maps.  

A strategy map provides a visual representation of the organization’s strategy.  A strategy map creates a powerful communication tool that enables employees to understand a strategy and translate it into actions to allow the organization to succeed.

The key benefit of a strategy, as articulated by Michael Porter, is when the integrated and aligned activities enable the company to offer a value proposition better than competitors.  While Porter’s work helps managers formulate strategy, the Balanced Scorecard provides the discipline to ensure that the formulated strategy has specific objectives for shareholders and customers, an explicit value proposition and organizational culture.

Porter argues that strategy is determined by a unique combination of activities that deliver a different value proposition than competitors or the same value proposition better.  The strategy map framework allows companies to identify and link together the critical internal processes and human, information and organizational capital that deliver the value proposition differently or better.  

The process of creating a strategy map and Balanced Scorecard translates the formulated strategy into specific objectives, measures and targets and initiatives in the four inter-related perspectives.  The strategy map helps organizations translate, communicate, implement and review the strategy they have formulated following Porter’s principles.

The methodology is general as whichever strategic framework the organization is using still needs to translate and communicate across all business units and to all employees if the strategy is to be implemented effectively.

---

The contents of this series are adapted from Dr. Rick Goossen’s paper on “Strengthening Competitive Advantage through Enhanced Cultural Engagement Capabilities”. For more information or for a complimentary copy of this paper, please contact Rick.Goossen@Avantage.com.

The "Strengthening Competitive Advantage through Enhanced Cultural Engagement Capabilities" by Dr. Rick Goossen series:

1. Cultural Capabilities
2. Building Cultural Engagement Capabilities - An Internal Assessment
3. Building Cultural Engagement Capabilities - An External Assessment
4. Building Cultural Engagement Capabilities - Balanced Scorecard
5. Strengthening Competitive Advantage through Enhanced Cultural Engagement Capabilities