The strategy map is a powerful picture that truly paints a thousand words about your business strategy.
Despite its simplicity and power potential, the strategy map is largely forgotten, or is sub-optimized, by many organizations. Why is this the case? Why would organizations not take advantage of a powerful and proven business planning and performance management tool? Here are a few of the most typical reasons:
● They don’t fully understand the role of the strategy map in strategy development and execution,
● Strategy mapping looks and feels complicated and they don’t know where to start,
● They don’t know how to actually do strategy mapping, and
● There aren’t a lot of examples of good strategy maps available for reference and learning.
In some cases, organizations have tried creating and using a strategy map for their company but they have not realized the power and value promised by strategy maps proponents like me. When this happens, they abandon their strategy map, and the concept, as another failed business performance management fad.
I suspect that the primary root cause problem driving both the strategy map adoption and sub-optimization issues is that little guidance has been widely available to practitioners on how to create a functional (i.e. one that works the way it can and should work) strategy map effectively and efficiently.
So let’s take a step towards eliminating this problem by reviewing the 7 key elements that will help your strategy map live up to its potential to deliver powerful results for your organization.
1. Define your primary customer or stakeholder value proposition and build it into your strategy map
What is the MAIN benefit your customer or stakeholders receive from using your organization’s products and/or services? What is your big promise to your customer or stakeholder and why should they select you over your competitors or alternate service providers? This is your company’s value proposition (VP).
Is it cool, bleeding-edge products (think Apple)? Is it the fact that you have created a new market that never existed before (think Cirque du Soleil)? Is it the low prices you offer (think Walmart)? Is it the customized customer experience you provide where you really know each customer and give them service that anticipates their every need (think a 5 star hotel chain)? Or is it because you have re-defined an existing market space (think Starbucks)?
How did you answer these questions? The most applicable question gives you an idea of your customer or stakeholder VP.
Usual VP’s include: Low Price Leadership (Walmart), Product Innovation Leadership (Apple), New Market Leadership (Cirque), Customer Intimacy Leadership (hotel), and Niche Market Leadership (Starbucks). The most successful organizations focus on just one VP (however, they do tend to keep their eye on a secondary VP to remain competitive in the overall market place). Being clear on your customer/stakeholder VP allows you to create a focused set of strategic objectives on your strategy map.In addition, a good strategy map places your primary customer or stakeholder benefit in the top strategic objective in the customer/stakeholder perspective of your strategy map. Doing this puts your customer/stakeholder VP front and centre in your business strategy and keeps it in the minds of your employees every day.
2. Name your strategy map perspectives in a meaningful way and arrange them in a hierarchy that makes sense for the “flow” of your business
What perspectives will you use on your strategy map? The best advice is to always begin with the four classic balanced scorecard perspectives – a proven framework that has been validated by thousands of organizations. These perspectives are, however, flexible and can be customized (changed or added to) to meet the unique needs (e.g. language and culture) of your organization. This makes your strategy map more “relatable” for staff members (important for strategy map adoption and use!).
Your organization must also decide how the perspectives should be oriented on your strategy map – that is, the relative position of each perspective (and the strategic objectives) in your organization’s value chain. This orientation must make sense within the context of your organization’s business and how it must work or “flow” to deliver results and achieve your mission and vision.
Bottom line? Your goal here is to decide which strategy map format makes the most sense and will work best for your organization and then just start working with it.
3. Include your mission, vision, and values on your strategy map
Your business strategy isn’t complete without your organization’s core value, mission, and vision. Your core values are the foundation of everything you do while your mission and vision define your future destination – without them, the value chain outlined by your strategic objectives really have no context. Need I say more?
4. Write clear definitions for each strategic objective that provide more depth and greater understanding
Let’s say your strategy map has a strategic objective like this one: “Put Quality and Safety First Every Day” This objective alone says so much (“Quality and safety are a priority for our organization at all times in everything we do!”) while still saying so little (“What do we REALLY mean by quality and safety anyway?”). Your strategy map is full of paradoxes like this! Strategic objective definitions are short 1 -2 sentence statements that bring clarity to each objective. They help establish a common understanding of the essential elements of the objective including what it is/what’s included and what it isn’t. Quite simply, strategic objective definitions make it easier for stakeholders and employees to grasp your strategy, understand what it looks like in action, make aligned work decisions, and take appropriate steps to move your strategy forward.
5. Include cause and effect arrows on your strategy map
Cause and effect arrows show the relationships between the strategic objectives on your strategy map. Whether you realize it or not, everyone in an organization has their own ideas about how the key components of your business (i.e. the strategic objectives on your strategy map) work together (i.e. the cause and effect relationships) to produce performance results – this is called the “theory of how your business works”. Most of the time, these theories are not in alignment. Successful organizations take the time to jointly develop and validate their theory of how their business works so they can make targeted investments (even intangibles like employee training and development) that will produce predictable business performance results. That is, they actively identify and then manage the results drivers in their business.
The cause and effect arrows on your strategy map help your organization get on the same page about the drivers in your business and develop the ability to run your organization effectively and efficiently and produce desired business results reliably.Having this capability will put you way ahead of your competitors!
6. Focus and prioritize
Successful strategy execution requires focus and prioritization and your strategy map should help you do just that. First, to achieve focus, you must limit your strategic objectives to a “vital few” set – including only the key elements of the value chain. Strategy maps that do not focus on the vital few are difficult to understand and put into action, making it likely that it will fail within the organization.
Prioritization involves deciding which components of your value creation strategy your organization will focus on over a defined period of time.A prioritized strategy map helps your organization focus its efforts today without jeopardizing the long term achievement of your business strategy because, while increased work effort and resources will be applied to priority strategic objectives (usually three to five strategic objectives) over the defined time period, the remaining strategic objectives will not be ignored. Strategic objective prioritization helps managers and employees achieve focus in their work efforts and maintain strategic priorities in the face of changing, and often challenging, operational demands – making the strategy map a very important business decision-making tool.
7. Keep it dynamic and fresh
A great strategy map, at its best, provides your company with an axis around which strategic business discussions, decisions, and activities can revolve. It offers a two-way communication and management tool (and process) that provides you with a framework for business management that is also sensitive to feedback about the success and validity of your business strategy (and the opportunities for improvement). Your strategy map should be designed to be dynamic, changing as required to accurately reflect the current thinking on the elements of the business strategy and the cause and effect relationships between them. A strategy map that remains static over time looses its value, making it irrelevant and no longer useful for strategy implementation and management.
Most successful organizations have included these 7 “must have” elements in their strategy mapping efforts and are, as we speak, harnessing the power of the strategy map to successfully execute their business strategy and achieve targeted business performance results.