One of the participants in a recent Balanced Scorecard Professional Certification workshop was struggling with the difference between Strategic Themes and Balanced Scorecard Perspectives. In fact, he fundamentally questioned the need for both. His argument was that Themes and Perspectives are essentially both focus areas of some sort. Finally, he asked that I show him how different restaurants would use the terms if they were to create a balanced scorecard.
His request actually proved to be a great teaching example. Different restaurants, because they are in roughly the same business, will use roughly the same four Perspective names. All restaurants have to hire and train cooks and other personnel, build or rent physical facilities and use technology of some sort (Organizational Capacity Perspective). All restaurants have to order, prepare, and serve food or otherwise provide a particular atmosphere / experience of some sort that depends heavily on efficient internal processes (Internal Process Perspective). All restaurants want to please customers of one segment or another (Customer Perspective) and they want to control costs and make money (Financial Perspective). Restaurants might tweak the names of these perspectives to match their specific culture, but the concepts will be the same.
It is in the Strategic Themes and the accompanying Strategic Results that the restaurants will likely be different. Strategic Themes are derived from each restaurant’s unique mission, vision, values and customer value proposition. One restaurant might specialize in Mexican cuisine and another Italian. One might deliver a low cost family experience while another might be focused on luxurious atmosphere and world class service. Maybe one is trying to grow into a worldwide franchise with thousands of stores that all look alike and another is trying to be the finest unique restaurant in New York City.
These differences in competitive positions will result in different strategies as represented by the Strategic Themes. For each Theme, there is a specific Strategic Result that the organization is trying to accomplish. Strategic Results define the desired outcome or goal of the Theme and indicate how we will know success within the Theme. Strategic Results are written in “end state” declarative language, like “we are number one or two in 20 geographic markets,” rather than describing future actions, e.g. “we will increase our marketing efforts”.
The point is that the organization’s business model determines what Perspective names you select and their sequencing for the strategy map. But the specific strategy that you want to implement to compete in your chosen marketplace determines which Themes you select. Together, Perspectives and Themes form the foundational framework for the resultant balanced scorecard.
For more on how to develop and manage strategy using Themes, Results, and Perspectives, please see The Institute Way – Simplify Strategic Planning and Management with the Balanced Scorecard.
David Wilsey is the Chief Executive Officer with the Balanced Scorecard Institute and co-author of The Institute Way: Simplify Strategic Planning and Management with the Balanced Scorecard.