ABSTRACT
The way that strategy maps and balanced scorecards represent risk is one of the most misunderstood areas of their design and use. Many suggest they ignore risk, but this is far from the case. This chapter explains how they do capture risk, but only a specific part of the overall organizational risk specific to the strategy and its implementation. It explains how one can capture risks to the implementation of the strategy, and how to manage those risks using strategy maps and the strategic learning model. The management of risk has become very topical in business and in the public sector, especially since the banking crisis and credit crunch. The strategy map's approach to the management of risk is actually more subtle and systematic than this. The consequences of risk can be represented in the external perspective or regulator's perspective. Risk can be embedded in characteristics of process objectives and also mitigated in the choice of learning and growth objectives.
