If you enjoy the off-the-wall humour of memes, this may come as a bit of a wet blanket:
Not the most memorable meme to be sure. But I promise I will not leave you here. In searching for a lede for this newsletter I remembered a story from my past.
I did time in this world. Years ago when I worked for BP in South Africa I facilitated a root cause analysis process (using ATS from Kepner Tregoe) that solved a crippling and seemingly intractable problem in our local area network. And because no good deed goes unpunished in the corporate environment I was given the job of Quality Manager in IT. A connection was made between these two worlds, though for the life of me I could not recall the logic now. Arthur, the previous incumbent had given an enthralling presentation in which he slowly removed all of his clothes making a strategic point with each item. At least we were spared the Full Monty. I can’t remember any of the points he made except that in the end nobody was any the wiser about ‘Quality’. We thought we may need it but from there all paths diverged.
I had my own 15 minutes of fame with my presentation on ‘Zero Defect Thinking’. I imagine my impact was equally ambivalent. But I can’t say for sure because I left soon after to join a dynamic team in another company where we implemented ISO 15 504 also known as SPICE (See the meme above). There I learnt (and this is the point of the story) how intangible assets can only show their value through an integrated assemblage of support. For us this included a team of other experienced people, a supporting system and methodology, a sympathetic culture (well, it would have been nice), relevant processes, a marketing effort, a solid value proposition including a well understood return on investment.
Kaplan and Norton stress this point in their comment on how to get the most out of intangible assets. They identify three classes of intangible assets; Human Capital, Information Capital and Organisational Capital. They suggest the following critical success factors in dealing with intangible assets:
- Integration. The value of assets is multiplied through integration with other tangible or intangible assets. The greater the level of integration, the more value may be delivered.
- You are creating potential. The value of intangible assets should be measured in the potential you create, not the cost of assets.
- Context. The value of an intangible asset is related to the context of the strategy within which it plays out. Training your staff in innovation only makes sense if innovation differentiates your offer. If you are competing on quality, train them on TQM or Six Sigma training. Don’t ask Arthur or me to do this training though.
- Indirect value creation. There is a chain of cause and effect linking your intangible assets to business results. Skills and culture influence process which affects your value proposition measured by the particular measures you have chosen to gauge how well your offer is taken up in your market. Ultimately the effect reaches your financial performance. This connection may be lost in the confusion of time, politics and our tendency towards the ‘fundamental attribution error’.
- Human spirit is the exponential factor. In ‘Radical Strategy’ Tony Manning shares what he suggests is the most important business model you will ever see. In which he plots the spirit in a team against how compelling their strategy is. The message is quite clear. He points out that spirit drives strategy and strategy ignites spirit. Here is slightly paraphrased version:
So how are we going pull this all together? OK sorry for the unashamedly leading question. Strategy Map is the obvious answer to all of the above points. Modelling your strategy in Strategy Map will help you clearly understand the cause and effect relationships driving your organisation. You will be able to show the critical points of integration providing the context for the less tangible resources and capacity you are building. You will be able to justify these resources in terms of the potential to which they contribute. And in my experience building the strategy map allows teams to engage and generate massive spirit.
Are you ready for more on this refreshing strategy tool?
Featured image is from Pintrest.
