A while ago a client asked me why, having created the strategic objectives using Strategy Map, it is not better just to list these objectives and drop the framework. I was nonplussed. Why would anyone want to dump such a useful tool. But then again I have since found many people who grapple with the understanding of Strategy Map.
There are many reasons to keep the framework. Not least of these is it will allow everyone to think in terms of cause and effect at a strategic level. But here is another one.
If you don’t make a difference you don’t matter. To create significant difference, leaders consider what is happening in the strategic neighbourhood. They talk about who they are, what they bring to the industry, how they are performing, who they want to be, and how they want to engage in their industry. Many topics! Each with useful models and content.
To engage everyone to deliver the difference you need a plan. Actually you need a few plans. These may include:
- A process improvement plan
- Sales plan
- Balanced Scorecard
- Project portfolio
- Operating plan
- Budget
- Resource capacity plan
The complexity can be confusing. Teams can get lost between talking about what is happening in their industry, how well they have done and what they intend to do next.
To resolve the complexity, leadership teams need to pause and decide on their offer, how they will deliver this offer and what criteria they will use to measure success. And there is a tool designed to document these decisions.
Success may be measured in many dimensions. In the past, business measured success purely in financial terms. But there was a growing call to measure other criteria. About 20 years ago Kaplan and Norton published their ‘Balanced Scorecard’. They included measures for the success of the value proposition, the ‘Customer Perspective’. They also included a focus on the process used to deliver the offer, ‘the Internal Perspective’ and the intangible assets required to implement the processes, the ‘Learning and Growth Perspective’ . The Balanced Scorecard was an immediate hit in planning circles. The ideas soon found their way onto the strategic agenda and K&N responded by defining the ‘Strategy Map’, a strategic view of the business.
Strategy Map is a powerful tool to converge all the strategic decisions onto a foundation for planning. This provides a pivot point, a fulcrum, a lever for heavy lifting in the strategic conversation.
Strategy Map provides a systemic view of Strategy. Intangible assets, including Human Capital, Information Capital and Organisational Capital are required to drive the Internal Processes. The Internal Processes describe the work carried out to present the Value Proposition to the market. The Value Proposition is how leadership would like the market to perceive the offer. A positive response to the Value Proposition leads to financial rewards, measured against the targets set in the Financial Perspective.
Here is the format of Strategy Map we use in StrategyWorks:
The top block in our one-page plan covers the core of the strategic conversation. This includes the business concept, vision and the core values.
A core activity in most of our strategy workshops is ‘brainstorming the strategic issues’, which we do using the Strategy Map. We use these issues to agree a core set of strategic imperatives, also plotted on the Strategy Map. Leadership teams doing this work create a solid foundation within which to reflect on strategy.
Very well organised article, thank you!
It may take a while to get all employees aligned with strategy and I think one should not aim for immediate full alignment.
Christo Nel developed a questionnaire to measure the influence of the strategy in an organisation. This is measured from four angles: Alignment with Vision, Structure, Interdependence and Action.
Sample question from the questionnaire: “The senior leadership personally interacts with people to enable them to translate the vision and strategy in ways that make sense to them in their areas of work.” and another “People clearly understand the limits of their accountability and what they are empowered to do without supervision.” Each question is rated on a scale from “Not true at all” to “Definitely true” In this way, alignment with strategy can be measured and more easily plans can be made to improve alignment.
My current approach for my team s to use data from this questionnaire to firstly build on strengths, and do more of that; also to look at areas with a low rating. In combination with this to use a strategy map to show everyone how low-level actions impact the strategic goals. Also, the performance contracts of employees should tie up with the strategy.
Stephen – Your diagrammes are always a delight and as important as Kaplan & Norton’s Strategy Map. They and the Strategy Map are tools for making strategy accessible and I am certain your clients appreciate their practical value.
Regards, Albert .
Thanks Albert – the danger is that the diagrammes may add further the complexity to the topic. Strategy Map is such a simple structure, and yet really so deep. This perspective, the structured warehouse for strategic information for an organisation made sense to me so I decided to share it. It is heartening to hear it made sense to you too.