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Use your Strategy Map as a Decision-Making Tool

We all know that the strategy map is an indispensible tool for helping organization’s bridge the gap between strategy formulation and execution. In fact, it does this in multiple ways.

In the case of the “traditional” strategy/strategic plan, a strategy map is a key tool for translating high level strategic directions into the critical supporting strategic objectives. Basically a good strategy map does the essential job of fleshing out what an organization really needs to do to enact its high level strategic goals and ultimately achieve the results and outcomes it is striving to achieve. By translating strategy into action in this way, a strategy map becomes the key to aligning day to day organizational and employee activities with strategy.

Strategy maps also play an important role in helping you ensure that your business strategy reflects the business model required to deliver your primary customer or stakeholder value proposition (VP). Whether your primary VP is operational excellence, product or service leadership, or customer/stakeholder intimacy, having it spelled out in black and white at the top of your strategy map makes it is easier to ensure that the elements of your strategy (and strategy map) reflect the business model that “fits” with your selected VP. Do your core values, technology strategy, and process objectives (for example) align optimally with your primary value proposition or are they actively working against it? By laying it all out on one page, your strategy map gives you the unique opportunity to answer this question quickly and make the required adjustments, if necessary, before you make costly strategy execution mistakes.

Most importantly, a strategy map is a valuable strategy communication tool. In my experience, no other vehicle communicates your strategy to all of your internal and external stakeholder groups as clearly, concisely, and consistently as a strategy map. When used as part of a passionate recounting of your strategy story, your strategy map is a powerful document that continuously reminds employees and stakeholders of your strategy and helps them share your strategy story in their own words with others. In addition, your strategy map can spark deeper conversations about your strategy. Simply walking an external business partner (for example) through your strategy map enables a two way dialogue that can build greater understanding about your business strategy. And once your strategy is more commonly understood (via your strategy map), your strategy map can become a catalyst for learning and innovative thinking that helps accelerate the strategy execution curve and/or take your strategy to new levels.

All these benefits make the strategy map a powerful business management tool, however, in my mind, the strategy map makes its biggest contribution through its role in enabling business decisions that keep your organization focused on, and working in alignment with, the essentials of your strategy. Strategy maps do this in two ways.

First, a strategy map outlines organizational thinking about how everything, and everyone, works together in a series of cause-and-effect relationships to deliver your customer/stakeholder value proposition and achieve business performance results. Depicted by the arrows on your strategy map, this is called the “theory” of your business and it has important implications for efficient and cost-effective company operations. Here’s why.

Whether you admit it or not, everyone in your company has their own idea about what business objectives, priorities, and activities drive organizational performance and deliver customer/stakeholder and business results. Most of the time, unless an effort has been made to encourage otherwise, employees don’t talk about how the business produces results – they just go about their day, applying their assumptions about what’s important and what creates value. Employees’ assumptions in this regard are often based on their position in the company and their functional perspective – both impact their “line of sight” on the business strategy. The truth is that most employees don’t see or understand the big-picture business strategy and this affects their theory of how the business works. With that theory in mind, employees will make numerous business decisions during their work day, including how and where they spend their time, resources, and company money. If those decisions align with the business strategy it’s purely by chance. In most companies, the lack of a unifying theory of how the business works to produce value and results is a key driver of wasted time, energy, resources, and money.

Successful high-growth companies have a clear theory of how the business works to produce results, and that theory is shared across the organization, right down to the front line. And once a theory of the business has been agreed to, successful companies test and tweak it more rapidly than their competitors until they get it right. Then they leverage this validated knowledge of the cause-and-effect relationships in their business to make targeted investments and interventions that are guaranteed to produce results.

So, a strategy map, with its cause-and-effect arrows, displays the shared understanding of the drivers of business success for all to see. This translates into better, more aligned, business decisions; more efficient operations; the delivery of a more predictable customer experience; and, ultimately, more consistent business results.

Secondly, the strategic objectives on your strategy map can be used as key decision-making criteria themselves. When your organization is presented with new ideas and business opportunities, how do you determine whether to say yes or not? And how do you prioritize those opportunities once you have said yes? Most organizations have a variety of criteria they use to make yes-no and important prioritization decisions that include an assessment of risk and return on investment – what about an assessment of strategic value? When faced with opportunities like these, most of my clients will use decision-making criteria that include an assessment of which, if any, strategic objectives on their strategy map an opportunity directly relates to. While most will make this assessment of strategic value in different ways (some just count how many strategic objectives an opportunity or idea aligns with while others will use a more sophisticated approach that assigns weightings based on the relative priority of strategic objectives), every one of them leverages their strategy map to help them ensure that every big business decision they make aligns with their business strategy.

Are you currently using your strategy map as an important tool to translate your strategy into action and communicate your strategy to stakeholders inside and outside of your organization?

If you are then you are taking significant steps to bridge the strategy formulation – strategy execution gap. However, now it’s time for you and your team to take it to the next level and leverage your strategy map to build the concept of strategic value into you business decision-making processes. If you do, you will be that much closer to harnessing the power of strategy maps to help your organization actually execute and achieve your business strategy and realize targeted business performance results and outcomes.

1 Comment

  1. Mihai Ionescu
    Apr 11, 2015

    One of the most important benefits of the Strategy Map, as part of the BSC decision-support system, is represented by the interpretation given to the statuses of its Objectives.

    Because they are calculated based on the statuses of their lead+lag KPI & KRI Measures, either at their level, or aggregated from child-units, the statuses of the Objective tell a mid-course, forward-looking story.

    Instead of interpreting a ‘red’ status of an Objective as:

    “You’ve missed this Objective last month/quarter”,

    you should interpret it as:

    “You are going to miss this Objectives next month/quarter and it’s not doing good today either, so you’d better take the required mid-course corrective actions upon the Initiatives that help us achieve this Objective, before it’s too late”.