This article demonstrates the application of Kaplan and Norton’s Strategy Map framework to analyze principals’ strategies for preparing students for the Industrial Revolution 4.0 era in Indonesian secondary education.
Building on two prior studies, this research applied Kaplan and Norton’s Strategy Map framework to analyze principals’ strategies for the Industrial Revolution 4.0 era. Data from 25 participants in one private and one public high school in Malang, Indonesia, were analyzed using Miles and Huberman’s approach. Strategy Maps were developed for each school, followed by cross-case analysis to identify strategic patterns and differences.
The Strategy Map process begins with the definition of the school’s mission, values, and vision, leading to the identification of critical customer aspects and the school product. The study revealed different strategic approaches between private and public schools. Private schools adopted a product leader strategy focusing on student development, while public schools adopted a system lock-in strategy with innovative programmes. The basis differs between public schools (financial perspective) and private schools (learning and growth perspective), reflecting each school type’s unique constraints and goals in preparing for Industrial Revolution 4.0.
This study innovatively applies the Strategy Map framework to compare private and public secondary school strategies in Indonesia in facing the challenges of the Industrial Revolution 4.0, offering a new perspective on adapting business strategic management tools to the education sector.
Introduction
Leadership is vital for a school’s development, as the principal’s performance plays a key role in influencing the institution’s productivity and overall quality (Juharyanto et al., 2023; Wiyono et al., 2023). In today’s rapidly evolving educational landscape, school leaders face the challenge of preparing students for the era of Industrial Revolution 4.0 (IR4.0). IR4.0 refers to the current automation and data exchange development in manufacturing technologies, including cyber-physical systems, the Internet of Things, cloud computing, and cognitive computing (Schwab, 2016). In education, IR4.0 necessitates a shift in focus towards developing students’ digital literacy, adaptability, critical thinking, and innovative problem-solving skills to prepare them for a technologically advanced and interconnected world (Ahmad, 2024).
This article builds upon our previous research on the skills domain of high school students in the IR4.0 era (Lina et al., 2021) and principals’ strategies to interpret and implement these skills within their schools (Lina et al., 2022). In this study, we analyze these strategies using the four perspectives of the Balanced Scorecard’s Strategy Map. Our goal is twofold: to thoroughly analyze how high school principals foster essential skills for IR4.0; and to demonstrate how to develop a Strategy Map in an educational context.
The concept of strategy in this context is crucial, serving as a tool for achieving a school’s vision and mission by establishing a causal or cause-effect relationship (if-then) with the vision/mission (Kaplan and Norton, 1996, 2000, 2007). While vision and mission are typically constant, strategy is more adaptable to internal and external environmental changes (Andrews et al., 2009; Langley et al., 2007; Rajnoha and Dobrovič, 2017). It acts as a funnel, transforming abstract vision/mission statements into a coherent series of concrete and tangible actions (Kaplan and Norton, 2007; Porter, 1996). Therefore, developing an effective strategy is crucial for an organization’s performance and specific guidelines should be established to guide its formation (George et al., 2019; Islami and Latkovikj, 2022).
The Strategy Map, derived from Kaplan and Norton’s Balanced Scorecard (BSC) performance measurement tool, provides a visual framework for articulating and implementing strategy. It graphically depicts key objectives corresponding to the four BSC perspectives, showing the organization’s journey toward strategy implementation by linking various elements into a causal chain (Goldstein, 2022; Kaplan and Norton, 2000, 2004; López-Ospina et al., 2017; Zahoor and Sahaf, 2018). In the field of education, implementing the BSC offers three crucial benefits (Ulfatin, 2008): (1) prioritizing the translation of the school’s vision and strategy, rather than the budget, as the central point; (2) planning, targeting, and aligning various goals and strategic initiatives across school units; (3) promoting continuous improvement through feedback and strategic learning. The BSC helps leaders analyze achievements and results across different areas of responsibilities while establishing long-term strategic measures, positioning it as a viable alternative strategy model to navigate the constant changes and development in education. BSC’s potential in education encompasses several components of the school-based management concept, including empowering school resources with an emphasis on the quality of internal processes and organizational growth (Wiyono et al., 2019). Given these novelties, the use of Strategy Map in education should be beneficial.
While the BSC has been studied in educational contexts, the Strategy Map concept is newer and less explored in the Indonesian secondary education sector. Previous studies have primarily focused on higher education (Mfum Owusu-Ansah and Takyi, 2017; Rompho, 2020; Rosa, 2016; Schobel and Scholey, 2012; Sudaryo, 2015). Kaplan and Norton (2004) suggest creating a Strategy Map before developing a BSC, which implies that the success of the BSC is closely linked to the success of the Strategy Map (Alipour et al., 2022; Bénet et al., 2019; Li et al., 2020; Lucianetti, 2010; Marr, 2005). Therefore, this study aims to illustrate the development of a Strategy Map by analyzing the strategies used by high school principals to acquire the necessary skills for IR4.0. By doing so, we bridge the gap between business management tools and educational leadership, offering a novel approach to strategic planning in secondary education under the context of IR4.0.
Creating a Strategy Map
The Strategy Map transforms the BSC framework into a structured hierarchy, showing the role of each perspective. Starting with the learning and growth perspective as the foundation, this intangible asset is translated into valuable assets through internal business processes, leading to customer and financial outcomes. For non-profit and public organizations, the mission replaces financial goals at the top of the Strategy Map (Kaplan and Norton, 2000, 2004; Niven, 2003). Some alternatives combine customer perspective on the same level with the internal process (Bénet et al., 2019) or with a financial perspective (Islam, 2018). Others put the financial perspective under the customer perspective (Cokins, 2020) or changed perspective names to reflect the work performed (Huynh et al., 2020).
Figure 1 shows a two-way hierarchy between the organization’s vision/mission, Strategy Map, and BSC (Kaplan and Norton, 2004). From top-down perspective, the Strategy Map and BSC are derived from the vision/mission, serving as a tool for interpreting the vision/mission. Bottom-up means that the Strategy Map and BSC can serve as a tool for actualizing and achieving the vision/mission. Therefore, before starting to choose a strategy for each perspective, the organizations need to have a clear understanding and agreement of their mission, values, and vision, as well as the underlying strategy to be implemented. This underlying strategy will then be used as a guideline to develop a Strategy Map.
The process of creating a Strategy Map can be identified in several theoretical and research literature. Kaplan and Norton (2004) include case studies from various fields in their book. Theoretically, Niven (2003) and Islam (2018) provide comprehensive guidance based on the synthesis of various literature. Several studies directly practice the design of Strategy Map in various fields (Alipour et al., 2022; Huynh et al., 2020; López-Ospina et al., 2017; MacLennan and Markides, 2021; Rompho, 2020).
The strategy on customer perspective
A Strategy Map starts with identifying target customers and their needs. The organization must then incorporate these needs into its products, focusing on elements that customers value (Table 1). The strategy chosen by the organization to combine those elements in creating a product is called a value proposition (Kaplan and Norton, 2004). However, identifying the characteristics of educational products and customers is complex. If knowledge is education’s output, students are its consumers. If graduates are the products, society is the consumer. Students are both customers and future investors in sustainability of schools. They deserve high-quality education and services and should expect future benefits from their education. Meeting student expectations creates a dynamic system that ensures successful graduate placements, high-quality instructional and academic support, and positive school-parent relationships (Mfum Owusu-Ansah and Takyi, 2017; Patro, 2016; Ruben, 2007).
School's Attributes for Each Case
| Item | Case I | Case II |
|---|---|---|
| Stakeholders |
|
|
| Why does school exist? (Mission) | Internalizing Carmelite Spirituality Creating reliable leaders | Creating excellent future leaders |
| What is important to school? (Values) | Carmelite spirituality: contemplation, community, service | Bhawikarsu (Bhaktya, Widagdha, Karya, Sudhira) |
| What school want to be? (Vision) | A community of learner leaders who are at once intellectually at hearted, disciplined, hardworking, and hopeful in a spirit of contemplation, community, service | To become an excellent school that has an academic community that has faith, piety, charity, and achievement, as well as playing an active role in the global era and caring for the environment |
| Customer segmentation | Student, parent, alumni | Parent, university, business/industry (DU/DI), community |
| Product | Graduate students/alumni learners who have integrity of personality including intellectual, character, and spiritual | Qualified graduate students up to the tertiary level who will eventually work in the business/industry (DU/DI) and Community |
| Product Attributes | The quality of students who are ready to live in a society with intellectual, character, and spiritual excellence | Excellent in a balanced manner in academic and non-academic terms, with character, regional, national, and international achievements, and concern for the environment |
| Product Relationship | School performance and service to parents and students | Integration of good relationships with parents, committees, communities, and DU/DI |
| Product Brand | Discipline, family school, fraternity, consistent, school that produces students with whole persons, heterogeneous | Achievement, favorite school, producer of excellent students, school with certain excellent programs |
| Value Proposition | Product leader: development of existing products and services to become highly desired by customers | System Lock-in: a school with innovative programs that characterize and set the standard for other schools |
| Financial Strategy | Ensuring sustainability through enrolment growth, fundraising, and new opportunities | Optimizing existing resources with government funding, enhancing productivity |
| Internal Business Processes | Process innovations to handle diverse student backgrounds, improving management, and external collaborations | Program innovation and infrastructure development, continuous evaluation and adaptation |
| Learning and Growth | Enhancing teacher and staff productivity, creating a conducive work environment, integrating technology | Promoting a collaborative culture, continuous staff development, bridging generational gaps, and using technology |
Source: By authors
Kaplan and Norton (2004) identify three product categories that affect the company’s finances. Product attributes like price, quality, and functionality affect productivity in the short term. Partnerships and services help businesses grow by increasing revenue in the long term. A strong brand image helps to keep customers loyal and increases the value of the business in the long term. Furthermore, they outline four main ways companies can offer value to customers (value propositions). The Total Best Cost strategy offers consistent, on-time, and low-cost products, focusing on operations management. Product Leaders develop innovative products that exceed existing performance limits, relying on process innovation. Complete Customer Solutions aims to provide the best solutions to customers, emphasizing customer management to increase retention and profitability. Finally, System Lock-in creates high switching costs for customers through innovation and customer management, offering broad choice and easy access to widely used standardized platforms.
Strategies on financial perspective
Organizations can increase profits by increasing sales and income or reducing costs and expenditures. Financial performance can be achieved through revenue growth or productivity enhancement. Financial objectives generate specific Strategy Maps. Growth strategies include strengthening relationships with current customers to introduce new products or increase sales of existing ones and exploring new opportunities such as untapped markets or new products. Productivity can be increased by reducing costs and optimizing the use of resources, including eliminating non-value-adding activities. Productivity strategies typically yield quicker results than growth strategies. Balancing these strategies ensures cost and asset reduction without compromising customer growth potential, forming the foundation for subsequent strategy development (Kaplan and Norton, 2000, 2004).
In education, the financial perspective serves as a key indicator by focusing on the financial health of schools which allows for investments in education. Ensuring the efficient use of finances, resource well-being, and continuity in education processes is crucial. Financial excellence is expected to stimulate educational development and expansion (i.e. improvements in educational quality, institutional capacity, and mission fulfillment), enhance stakeholder value, fund new services, and support curriculum and program development (Karathanos and Karathanos, 2005; Mfum Owusu-Ansah and Takyi, 2017; Patro, 2016; Ruben, 2007; Yeung and Connell, 2006).
Strategies on internal business process perspective
Based on strategies from two previous perspectives, this perspective oversees internal processes and resource growth to fulfill the value proposition by delivering valuable products/services or by enhancing procedures and minimizing expenses to boost productivity and financial performance (Kaplan and Norton, 2000, 2004). In education, this perspective refers to the comprehensive set of procedures required to facilitate the successful attainment of educational objectives, such as influencing student performance and growth. Schools must identify key processes in educational services based on customer expectations, focusing on ensuring excellence in teaching and learning processes, and the efficiency of supporting instruments.
This perspective is vital in converting intangible assets on learning and growth perspectives into tangible assets on customer and financial perspectives, by managing four key processes: operations, customers, innovation, and regulatory and social processes. The operational management process includes essential activities to produce and distribute products, such as acquiring raw materials, transforming them into finished goods, distributing products to customers, and managing risks. The customer management process involves identifying the target audience, acquiring customers through communication and sales methods, retaining customers by providing exceptional service and fostering relationships through strong branding, innovation, and product diversification. Innovation management involves creating new products, processes, and services to access untapped markets. This includes identifying areas for new products, managing research and development projects, refining products, and launching them in the market. Engaging in social activities to build strong relationships with stakeholders, such as government and communities, also enhances an organization’s reputation. This process includes environmental factors, health and safety, community investment, and regulatory standards. Organizations can enhance their reputation as responsible corporate citizens by engaging in social activities that foster strong relationships with external stakeholders, including government and communities. The process encompasses environmental factors, safety and health considerations, community investment, and regulatory staffing standards (Kaplan and Norton, 2000, 2004).
Strategies in learning and growth perspective
Determining the resources needed to implement strategies within internal business processes completes the preparation of a Strategy Map. This perspective includes three aspects: (1) human resources (access to expertise, talents, and work-related knowledge); (2) technological resources (availability of information systems, networks, and infrastructure); and (3) organizational resources (leadership, culture, teamwork, and alignment that drive and sustain change management) (Kaplan and Norton, 2004). In education, the learning and growth perspective emphasizes the necessity of having skilled and committed staff to effectively oversee internal business operations and provide satisfactory services to students. Productivity depends on the workforce's proficiency and the presence of necessary infrastructure. The commitment of human resources is shaped by the workplace quality, cultivated through effective communication, sincere appreciation, and steadfast support from the school administration. The learning and growth perspective focuses on how schools improve technological infrastructure, develop a work and learning culture, create a conducive work climate, and implement sustainable and innovative work systems (Karathanos and Karathanos, 2005; Mfum Owusu-Ansah and Takyi, 2017; Patro, 2016; Ruben, 2007; Yeung and Connell, 2006).
A brief overview of the Indonesian education system
The Indonesian education system consists of four levels: primary (grades 1-6), junior secondary (grades 7-9), senior secondary (grades 10-12), and higher education. The system operates under a dual management structure: the Ministry of Education manages general education, while the Ministry of Religious Affairs oversees religious-based schools. At the senior secondary level, schools are divided into four types: general high schools (SMA), Islamic high schools (Madrasah Aliyah/MA), vocational high schools (SMK), and Islamic vocational high schools (Madrasah Aliyah Kejuruan/MAK).
In terms of ownership and management, public schools are fully funded by the government and managed by their respective ministries, while private schools are managed by foundations with partial government support through teacher certification and operational assistance programs. School principals in both sectors must meet national competency standards, though their appointment processes differ. Public school principals are appointed by local government, while private school principals are selected by their respective foundations. This dual system significantly influences how schools develop and implement their strategies, particularly in resource allocation and stakeholder engagement.
Method
This article employs a strategy mapping process utilizing the Strategy Map framework from Kaplan and Norton (2004) to analyze and visualize the principal's strategy in preparing students for the IR4.0 era. This approach aims to provide an in-depth understanding of how principals' strategies in preparing students for the IR4.0 era can be mapped and analyzed using the Strategy Map. This research focused on the development and analysis of the Strategy Map based on the data collected and validated in the second study (Lina et al., 2022). The reliability and validity established in the second study, through the rigorous triangulation process described, support the credibility of the current analysis. No further testing or validation of the Strategy Map model developed in this study was conducted.
Data source
The data employed in this study were derived from the analysis of two preceding studies, one conducted at a private and another at a public high school in Malang, Indonesia. A total of 25 participants were involved in the study, comprising principals, vice principals, school staff, and students. The second study collected data through semi-structured interviews, observations, and document analysis. To ensure the validity and reliability of the data, the researchers employed a triangulation of techniques (the use of different techniques to obtain data from the same source) and a triangulation of sources (the use of the same technique to obtain data from various sources) (Denzin, 2015).
Data analysis
The data analysis applied the Miles and Huberman (1994) approach. First, we conducted single-case data analysis. For each school, the data from the second study was used to create a Strategy Map. This process involved data reduction (selecting and simplifying data relevant to the Strategy Map Framework); data presentation (organizing information into a visual strategy map); and conclusion drawing (identifying cause-and-effect relationships between elements in the Strategy Map). Second, we implemented cross-case data analysis. Once the Strategy Maps for each school were established, we looked for patterns, similarities, and differences between private and public schools’ strategic approaches in their Strategy Maps. The results of this analysis are presented, and further discussed in the discussion section, where the findings are compared and contextualized with existing theory.
Strategy Map framework
Deduced from Kaplan and Norton (2004), the Strategy Map development process involved six key steps.
Identifying the school’s mission, values, and vision: analyzing interview data and school documents to identify and formulate mission, value, and vision statements that form the basis of the Strategy Map.
Analyzing the customer perspective based on interview data with principals and staff:
i. Identifying school customer segments
ii. Identifying school interpretation of its product
iii. Identifying product aspects: attributes, relationships, image
iv. Determining value propositions
Analyzing school’s financial strategies: considering the different funding models of private and public schools.
Identifying key internal processes in the school context that support the achievement of customer and financial objectives.
Developing the learning and growth perspective: analyzing human resource, technology, and organizational needs that support internal processes.
Connecting elements in the Strategy Map: identifying and visualizing cause-and-effect relationships between elements in the Strategy Map.
Findings
Table 1 compares the key elements of the strategy map between Case I (private school) and Case II (public school), covering steps 1 to 5 of the strategy map development process. Significant differences are seen in the customer segmentation, product definition, and value proposition, reflecting the unique characteristics of each school. The financial strategy and approach to internal business processes also differ, reflecting the nature of the schools. However, both cases strongly focus on innovation and people development in the learning and growth perspective. Figure 2 and Figure 3 present the full strategy map for each case, illustrating the cause-and-effect relationships between the identified elements.
Discussion
A robust strategic plan is essential for enhancing an organization’s overall performance, providing a clear roadmap for accomplishing its mission and goals (Biondi and Russo, 2022; Hauser et al., 2020). This involved a comprehensive evaluation of the organization’s present circumstances and potential opportunities for development and growth (Cokins, 2020; Knott and Thnarudee, 2022; Sinnaiah et al., 2023). However, a common challenge lies in bridging the gap between strategy formulation and implementation, which can diminish the effectiveness of strategic plans (Han and Zhong, 2015; Sanborn, 2009). The Strategy Map, as a cognitive tool, addresses this challenge by visually representing the connection between an organization’s strategic goals and its daily activities, effectively linking strategy formulation with implementation (Armstrong, 2019; Bénet et al., 2019; Huynh et al., 2020; Li et al., 2020; de Salas and Huxley, 2014; Zanin et al., 2020).
In this study, the application of the Strategy Map in two high schools, one private (Case I) and one public (Case II), provided insights into how educational institutions can align their strategic objectives with the demands of the Industrial Revolution 4.0. The process began with identifying and reviewing each school's mission, values, and vision. This foundational step helped understand the uniqueness and purpose of each school, and analyze the relevance of their guiding principles to the current educational landscape and technological advancements. Once these three elements are confirmed, the school can determine the specific type of product it offers.
The customer segmentation differed significantly between the two cases, reflecting their distinct strategic focuses. In Case I, the private school identified current and potential students and parents, as its primary customers. The school’s sustainability relied on student enrolment, making it essential to attract and retain students by offering meaningful educational experiences. The school’s reputation as a family school, with many students being the children of alumni, highlighted its strong community connections and tailored educational approaches. Conversely, Case II, the public school, recognized a broader spectrum of customers, including parents, universities, the business, the industrial sectors, and the wider community. Customers were those who would directly or indirectly experience the impacts of the students’ outcomes.
The differences in customer segmentation influenced the schools’ product and value propositions. In Case I, the main product focus is knowledge; therefore, the strategy of Product Leadership was adopted, focusing on delivering high-quality educational content and services to students and parents. This entailed developing innovative curricula and teaching methods that foster digital literacy and critical thinking, preparing students for technological advancements. This focus aligns with the need to equip students with critical thinking, creativity, and adaptability, skills essential in the IR4.0 era (Lina et al., 2021). In Case II, the school positioned its graduates as its main product, aiming to produce qualified individuals who are ready for higher education and capable of contributing to the workforce and society. The strategy focused on System Lock-in, which involved creating programs and standards that connect the school with a network of higher education institutions and industries. This approach reflects an understanding of the broader societal needs in IR4.0, where collaboration between educational institutions and industry is crucial for developing a skilled workforce (Lina et al., 2022).
Determining the value proposition is important because it influences strategy for the internal business processes, learning, and growth perspectives (Islam, 2018; Kaplan and Norton, 2000). In education, these perspectives played pivotal roles in achieving the strategic objectives. The learning and growth perspective identifies assets that must be aligned and integrated to create products and ensure the school’s ability to adapt and grow. The internal business process perspective focuses on the key processes that schools must master to transform intangible assets into desired outcomes. Both schools identified key processes that needed mastery to transform their intangible assets, such as faculty expertise and organizational culture, into desired outcomes. For Case I, this involved investing in teacher training and curriculum development to enhance instructional quality. For Case II, the emphasis was on building partnerships with external stakeholders and aligning educational programs with industry standards.
The financial perspective in the Strategy Map was adapted to suit the non-profit nature of educational institutions. In Case I, the financial perspective is positioned alongside the customer perspective, highlighting its importance in sustaining operations and enabling strategic initiatives. The private school relies on tuition and fees. It thus requires effective financial management to maintain high educational standards and invest in innovation, aligned with a revenue growth strategy that aims to expand opportunities and provide added value for customers. In Case II, the financial perspective forms the basis of the Strategy Map, reflecting the school's dependence on government funding. This position emphasizes the importance of public accountability in resource management. The principal must ensure transparent and efficient utilization of public funds by complying with strict government regulations and reporting requirements. School principals must account for their financial decisions to various stakeholders: the local education office, the school committee and the wider community. This layered accountability affects how strategies are developed and implemented. Public schools’ financial strategies focus on productivity, optimizing the use of existing resources to improve efficiency and effectiveness. Despite budget constraints, schools prioritize the allocation of funds for quality improvement and human resource development.
The impact of the school’s status on financial strategies is also proved by Sumarsono et al. (2020). Public school funding in Indonesia is still largely dependent on government funds, with minimal contributions from the community. Lack of community participation is a dominant problem in implementing school-based management in Indonesia (Triwiyanto et al., 2017). At the same time, it should be one of the pillars for stronger school development and management (Mustiningsih, 2017). Schools struggle to raise funds through parent contributions, local community involvement, alumni participation, and other income-generating activities. As a result, public schools are not financially independent, so the principal’s role in ensuring accountable and transparent financial management is critical to maintaining public trust and government support.
This study contributes to the theoretical understanding of strategic management in educational settings. It demonstrates the adaptability of the Strategy Map framework beyond the corporate sector, supporting Kaplan and Norton’s assertion of its universal applicability. By customizing the Strategy Map to reflect educational institutions’ unique missions, customer segments, and financial models, schools can develop coherent and effective strategies that address their specific contexts and challenges. However, the study acknowledges certain limitations. The findings are based on two case studies within Indonesia, which may limit the generalizability to other educational contexts or regions. Future research could expand the scope by including a more diverse range of schools, both geographically and institutionally, to validate and refine the application of the Strategy Map in education.
Conclusion
Applying the Strategy Map in the context of Indonesian secondary education provides valuable insights into how schools can align their strategies with the demands of the Industrial Revolution 4.0 era. This research demonstrates that mapping the principal’s strategy using the Strategy Map must begin with the definition of the school’s rationale for existence (mission), its fundamental principles (values) and a clearly defined vision. These elements, combined with the unique characteristics of each school, influence customer perceptions of the educational offerings provided. The findings reveal notable discrepancies between private and public schools with regard to customer segmentation, product definition, and financial strategy. Private schools tend to adopt a product leadership approach, emphasizing knowledge as the main product. In contrast, public schools adopt a system lock-in strategy, with quality graduates as the main product. This reflects the fact that strategies are tailored to the needs and expectations of their respective stakeholders.
The Strategy Map proved to be an effective tool to link strategy formulation and implementation in an educational context, helping schools identify and align key resources to achieve their vision. This research highlights the importance of adapting business frameworks such as Strategy Map to the educational context, providing a more structured and integrated approach in the strategic management of schools facing the IR4.0 era. This study is limited to a sample of senior high schools in Indonesia and may not fully represent the educational context in other regions. Future research could expand the scope to include different levels of education and geographical locations, as well as explore the long-term impact of Strategy Map implementation on school performance and student achievement.
We would like to convey our gratitude to Indonesia Endowment Fund for Education or Lembaga Pengelola Dana Pendidikan (LPDP) Scholarship for granting the studies and reinforcing this publication.
