What Is a Shareholder Map?
A shareholder map, shareholder value map or strategy map charts how a corporation is going to earn value for its owners. By presenting the strategy in a visual format, a good shareholder map makes it easy to comprehend the organization's goals and the steps by which the company plans to achieve them.
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Four Perspectives
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A strategy map presents four perspectives on boosting shareholder value. The top of the map comes the financial perspective, spelling out how the company will increase value. Below this comes the customer perspective -- how the company will meet its financial goals by satisfying customer needs, for example, by improving pricing, availability or service. The internal perspective considers how customer management, operations management and other business processes serve the customers. At the bottom, the learning and growth perspective covers how the company will use its people and skills to carry out the internal processes.
Development
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To develop a shareholder value map, start with a financial goal, for example, increasing net profits by a stated amount. Then develop financial strategies -- cutting the cost of goods sold or boosting brand recognition -- that support the goal. Next, ask what you can offer customers to induce them to buy into the strategy. Below that on the map, you identify the internal processes and staff it will take to deliver what customers want.
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Uses
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Each strategy in a shareholder map influences another strategy in the next level up. By illustrating the connections with arrows, the map makes it clear how having a highly skilled workforce or empowering front-line employees benefits internal processes, and how those processes meet the customers' needs. Because all the arrows funnel into the financial perspective and the company's goals there, they remind everyone that the ultimate purpose of their efforts is to boost the value that shareholders derive from the company.
Choosing
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It's possible do devise several strategies that might offer the shareholders greater value. If you have a broad selection of strategies, take the time to sketch each of them on a shareholder map. It may turn out that operating from a particular learning and growth perspective and employing a certain set of internal processes will enable you to implement more than one strategy. If not, determine which strategy will boost value the most, and set the others aside for now.
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