All companies today create sustainable value by empowering their intangible resources to create differentiated and sustainable value. This creation of sustainable value by enhancing its intangible assets can focus on: Human capital, databases and information systems, high-quality processes, relationships with customers and brands, capacity for innovation, culture.
Intangible assets (those that the financial system of a company does not measure) represent 75% of the value of a company. The tangible assets of an average company (net book value in assets minus liabilities) represent less than 25% of market value. What is true for companies is even more so for countries.
Some, like Venezuela or Saudi Arabia, have many physical resources but have made unfortunate investments in their towns or systems. As a result, they produce much less per person and have much slower growth rates than countries like Singapore and Taiwan that have few natural resources but invest heavily in human and information capital as well as efficient internal systems. Peru, despite its economic growth in the last decade, has not invested more than 2% of GDP in promoting the potential of human resources in research focused on creativity and innovation.
The little relevance of intangible assets has changed in the competitive business world of this 21st century, even more integrated into business management strategies at a transversal level. To monitor and evaluate such comprehensive business management, it is necessary to use a management tool that helps us know how we are to make decisions where we are going. At present I share the interest of many, that the DASHBOARD (Balanced Scorecard) has become the most required. Which allows us to focus on the entity's strategy, that is, how it expects to create future and sustainable value.
When designing a Balanced Scorecard (BSC) the company must measure those few fundamental objectives that represent its strategy for the creation of long-term value. Given the broad definition of strategy and its structuring, many times it leads to it being developed in partial perspectives that limit its results and many times the results are not achieved, a study by Bain & Company examines the results of large companies (defined such as those with incomes greater than 500 million dollars) in seven developed countries - the United States, Australia, the United Kingdom, France, Germany, Italy and Japan - during the best years of economic history, from 1988 to 1998. Only one of eight showed a real cumulative annual growth rate of 5.5% in earnings and achieved areturn to shareholders greater than cost of capital. More than two thirds of these companies had strategic plans with real growth targets above 9% and less than 10% of these companies achieved this target. It is clear that most companies fail to successfully implement their strategies. In contrast to these poor results, the companies that had made the BALANCE DASHBOARD the cornerstone of their management systems overcame this difficulty.
These companies applied the new strategies efficiently and quickly. They used the CMI to describe their strategies and then linked their management systems to the CMI, and consequently, to their strategies. They thus demonstrated a fundamental principle underlying the BSC: " If you can measure, you can manage."
The strategy map is a visual representation of the cause-effect relationships between the components of a company's strategy, it is as revealing for managers as the Balanced Scorecard. A strategy map provides a consistent and consistent way of describing strategy so that objectives and indicators can be set and managed. The strategy map provides the missing link between the formulation of the strategy and its execution.
The strategy map is based on several principles:
• The strategy balances contradictory forces. Investing in intangible assets with a view to long-term performance usually conflicts with cost reduction for good short-term results. Thus, the starting point for describing the strategy is to balance and articulate the short-term financial goal of reducing costs and improving productivity with the long-term goal of profitable revenue growth.
• The strategy is based on a differentiated value ratio for the customer. Satisfying customers is the source of sustainable value creation. The clarity of this value proposition is the most important dimension of the strategy.
• Value is created through internal processes. The financial and customer perspective on strategy maps and balanced scorecards describe the results, that is, what the company hopes to achieve: increases in value for shareholders through revenue growth and productivity improvements; increases in the share that the company obtains from customer spending through the acquisition, satisfaction, retention, loyalty and growth of those customers. Effective and coordinated internal processes determine how value is created and sustained.
Internal processes are classified into four groups:
-Operations
management - Customer management
- Innovation
- Regulatory and social processes
In the Strategic Map, the combination of all the strategic objectives of each of the perspectives should focus on strategic axes, directly related to the institutional mission and vision. In other words, we can orient ourselves through the various strategies defined in the logical correlation of the strategic objectives of each of the perspectives defined to the interests of the organization.
The steps to create a strategy map based on the Balanced Scorecard we could mention the following:
• Carry out a strategic diagnosis.
• Define the strategic axes of the strategic plan, which will be considered in the Strategic Map.
• Address each of the strategic objectives for each of the CMI perspectives (Customers, Finance, Internal Processes and Learning).
• Correlating the various strategic objectives of each of the perspectives based on those strategic axes, considering the strategies and the time that the organization will have. All these paths will converge in the mission and vision of the company.
