Strategy Maps
Creating coherence in strategy, telling the story in one page and building truly balanced scorecards. -- The strategy map is critical if we are to build a logical and truly balanced scorecard. Why? Because scorecards are measurement systems that help us to implement the strategy. If the strategy is not cohesive or properly aligned across the organisation, we will never have a good scorecard. The implication is that we will implement on incoherent actions that deliver a totally different result.Hence, define the vision and the overarching goals for the organisation before creating a map of the strategy. Following which, we can proceed to measures and programs for the developed strategy of the organisation.
Start: End: Publication Date: 2016-12-01
Organization: Tayo Gbenro (TG)
Submitter: Owen Ambur (Owen.Ambur@verizon.net)
Desired outcomes are achieved
To show the course of action, including outcomes
Values
The idea of map is that of connected actions that are coherent and deliver on the vision.
Strategy is about actions and outcomes that are relevant to the situation of the organisation.
Strategy is a set of competitive moves that are targeted towards the realisation of goal(s). It is the game plan of the military or businesses for conquering or becoming the top business respectively.
Several pathways are open to an organisation. Strategy is all about making choices of which way(s) to go.
It works by asking the right question. Hence proper thought has to be given to the type of question before the right answers can be provided.
Whether created before or later in the life of a business, strategy is critical to success, but it may be difficult to understand the coherence of a strategy unless it is ...mapped.
Strategy maps tell the story of the strategy in a single page -- Like nails and harmers are tools to the carpenter, so is strategy map in the hands of a strategist. Strategy maps help to visualise the logic behind a strategy.
The map is not the result in itself, it drives to a goal, which is ability to implement the strategy.
In physical terms, that refers to the scorecard. Strategy Maps are created after defining an organisation's objectives.
The objectives are then linked in a cause-effect relationship ...
The linking helps to ensure that one objective is truly a driver for another.
Once done, it is time to define measurement metrics for each objective. Each metric carries a target and in turn a project initiative to drive implementation.
The assemblage of this later architecture is termed the Balanced Scorecard.
Strategy Maps in Big Picture.
The strategy map is all about alignment, it is a check-n-balance to ascertain that the strategy is in order and that it makes sense for the company to now implement.
Goal 1:
Define the purpose and goal of the company
Stakeholder(s):
NikeObjective 1.1:
Describe what the company does best every day.
Objective 1.2:
Describe what the future looks like because the mission is done so well.
Goal 2:
Define the strategic themes, which are arrow-head activities (of the strategy).
Objective 2.1:
Ask key questions about the vision.
Other Information:
To define a strategic theme it is important to be able to imagine the future state of the company. This refers to the situation when the vision is realized. One way to achieve this is to ask important questions. When asking such questions, imagine that you are already in the future...Asking important questions about the future state is to actually question the Vision as well.Objective 2.1.1:
Determine what results can been measured in pursuit of the vision.
Other Information:
What results can I see as we achieve our vision?Objective 2.1.2:
Determine how the company is viewed by customers and other stakeholders.
Other Information:
How are people seeing the company?Objective 2.1.3:
Determine what activities lead to success.
Other Information:
What activities are we undertaking that made us successful?Objective 2.1.4:
Determine how close the company is to its customers.
Other Information:
How close are we to the customers?Objective 2.1.5:
Determine whether customers' problems are being solved.
Other Information:
And, how are we truly solving their problems?Objective 2.1.6:
Determine what has been learned that has resulted in positive changes.
Other Information:
What have we learnt in the last few years that has made a lot changes for us?Objective 2.2:
Describe the (future) situation and then reword or capture it in a succinct way (or reduce to a 3/5-word phrase).
Other Information:
To arrive at the strategic themes, describe the future successful situation. Describe as many situation as can be observed imaginatively. Merge similar situations together until three or four distinct situations emerge. Each situation can then be captured succinctly using an action-packed phrase. Each phrase becomes the strategic theme for the organisation. The themes may look similar across various organisations, but the situations will definitely differ...The resultant phrases form the strategic themes. [Goals]Objective 2.3:
Break each theme into Strategic Objectives that cohesively deliver on the theme.
Other Information:
Break down each theme to various objectives or goals, which are either results or activity based. Result or outcome objectives are goals that are achieved dependent on external factors e.g. customers, revenue. Activity based objectives are those results that are achieved based on intrinsic factors e.g. staff strength, learning improvement, core competencies, processes etc.Objective 2.3.1:
Link the objectives together in a cause-effect relationship to result into a strategic theme.
Other Information:
So, a strategic theme could be made of various objectives, say 10. These 10 objectives all link together in a cause-effect relationship to result into a strategic theme.[Editor's Note: The Relationship elements can be used to build out the full Value Chain, from Inputs to Outcomes.]Objective 2.3.2:
Categorize each objective under one of the perspectives of the Balanced Scorecard.
Other Information:
Each Strategic Objective must be Financial, Customer, Internal Process or Growth & Learning perspective.Objective 2.3.2.1:
Start with an ultimate financial objective.
Other Information:
In most cases for private and public companies it is Shareholders Value or Return. Thereafter create either or all of two kinds of financial objectives.Objective 2.3.2.1.1:
Increase revenue.
Other Information:
Revenue growing objectives such as revenues from new customers and from management of existing relationship.Objective 2.3.2.1.2:
Improve cost structure and/or asset utilisation.
Other Information:
Asset management objectives, which are for the purpose of cost containment or management. Example objectives include "improve cost structure" and "improve asset utilisation"Objective 2.4:
Define the value proposition.
Other Information:
Then define the value proposition i.e. customer-focused objectives or outcomes.The Customer Perspective -- Value proposition is the starting point for defining customer objectives. It is the core of the business strategy itself and is therefore it is critical. It shows the mix of price, quality, lead time, service, relationship and image. So, how a company blends the mix together to arrive at a value proposition is an indication of the of the specific customer group it targets. Three strategies that are align with most value propositions are: Product Leadership strategy, Operational Excellence strategy and Customer Intimacy strategy. Objectives are created along the lead strategy, while a balance is struck in the other two...One of the above three must be the lead strategy while the company maintains balance in the other two.Objective 2.4.1:
Pursue a product leadership strategy.
Objective 2.4.2:
Pursue an operational excellence strategy.
Objective 2.4.3:
Pursue a customer intimacy strategy.
Objective 2.5:
Create process objectives.
Other Information:
Next, create Process Objectives which drive the customer outcomes in turn.[Editor's note: In the StratML standard, these are called Performance Indicators of the Input_Processing and Output_Processing types.]Objective 2.5.1:
Identify internal business processes and match the process objectives with the respective customer strategy.
Other Information:
But the Process Objectives must each match the respective customer strategy...Identifying strategic internal business processes.Objective 2.5.1:
Pursue product leadership.
Objective 2.5.1.1:
Invent new products.
Objective 2.5.1.2:
Achieve superior product development.
Objective 2.5.1.3:
Achieve speed to market.
Objective 2.5.2:
Pursue customer intimacy.
Objective 2.5.2.1:
Develop solutions.
Objective 2.5.2.2:
Provide superior customer service.
Objective 2.5.2.3:
Manage customer relations effectively.
Objective 2.5.2.4:
Provide advisory services.
Objective 2.5.3:
Pursue operational excellence.
Objective 2.5.3.1:
Manage the supply chain effectively.
Objective 2.5.3.2:
Achieve efficiencies in operations: cost, quality, cycle time.
Objective 2.5.3.3:
Manage capacity effectively.
Objective 2.6:
Base process objectives on the choice of strategy
Other Information:
Choice of Process Objectives must be influenced by the choice of strategy ...carefully choose process objectives that align and promote the selected strategy.Objective 2.6.1:
Implement leading-edge innovation process with the best features and on-time delivery.
Other Information:
A company pursuing product leadership strategy must focus on leading-edge innovation process with the best features and deliver it on-time.Objective 2.6.2:
Implement processes to solve customer problems, make them happy and deepen relationship with them.
Other Information:
Similarly, a company in pursuit of customer intimacy strategy must focus on processes that will help it solve customer problems, make them happy and deepen relationship with them.Objective 2.6.3:
Implement processes to produce efficiently, build capacity for core competencies, and implement a flawless supply chain process.
Other Information:
And finally, when a company focuses on operational excellence strategy, it must think about processes that will help it be produce efficiently, build capacity for core competencies and implement a flawless supply chain process.Objective 2.7:
Define the objectives for the other three perspectives.
Other Information:
Finally, define the objectives that drive excellent outcomes in the other three perspectives.Objective 2.7.1:
Other Information:
This perspective is often regarded as unimportant among amateur professionals. Why? Because of its intangibility. However, experts all agree that it is the bedrock of strategy, one without which successful implementation would be impossible. In general, we can classify objectives from this perspective into: Organisational, Information and Human Capital.Objective 2.7.1.1:
Strengthen human capital.
Other Information:
This could be the single most important competitive advantage of a firm. Without the adequacy of this capital no company can survive. It is also essential since it a profound driver for the value proposition. This capital will refer to people, know-how, skills, coaching & mentoring activities and various programmes that deepen knowledge for the employees.Objective 2.7.1.2:
Build informational capital.
Other Information:
This is a critical resource that helps organisation function efficiently. It can be in the form of networks, databases, systems, infrastructure, equipment etc. Most organisations are able to build on this capital by using it as a fundamental to their value proposition. It could be the distinguishing factor in original company in which other competitors are striving to copy.Objective 2.7.1.3:
Build organisational capital.
Other Information:
This is the thread that weaves it all together for the company. It is the link between potential and actual performance among teams and individuals. That is why key objectives here are those like leadership and culture, motivation, empowerment and alignment. Essentially everyone is a rough diamond within the company. This capital turns that into admirable shining talents. Therefore, every company must look to build this capital which is typically displayed by the senior management.