Page 39 - Performance Leadership

28 • Part I A Review of Performance Management

F igur e 2.4
U.S.-Based Retailer’s Strategy Map

Financial
Leading $1 retailer
F1: Grow
earnings faster
F3: Improve
operating margin than sales
F2: Manage
F4: Grow
revenue
Customers C3: Pleasant
C1: Convenient C2: Thrill of the shopping
locations hunt
experience
Business BP2: Right
Process BP1: Continuously product, place, BP3: Attract new
improve processes customers
time
BP4: Execute
great store
opening process BP5: Know our
customers
Learning and
Growth
LG1: Develop strategic LG2: Develop and LG3: Cultivate our
information systems retain associates culture

something the retailer is aggressively pursuing. Knowing your cus-
tomers leads to new insights in improving internal processes (BP1). It
also leads to being able to put the right products at the right place at
the right time (BP2). From the perspective of customers, it also leads
to being able to attract new customers by addressing them with the right
products and promotions (BP3). Success in retail is all about location
(C1) and customers finding the right products (C2), which this retailer
calls the “thrill of the hunt,” based on impulse-buying behavior. Enter-
ing the shop with no particular need in mind and finding something
attractive is the customer experience (C3) the retailer is looking for.
Convenient locations, the ability to attract new customers, and a pleas-
ant shopping experience all lead to revenue growth (F4) in the finan-
cial segment. Continuous improvement in the company is aimed at
managing margins and costs (F2). Cost reductions and revenue growth
lead to improvement in operating margins (F3), which is the driver for
growing earnings, even more than growing the sales (F1). The retailer