It’s not unusual to hear people voice concerns about the complexity that seems to be associated with strategy maps – in fact, I’ve heard remarks to this effect at least three times in the past week alone. I think many organizations dismiss using the strategy map for just this reason – we have come to think of strategy maps as a complex mess of colors, bubbles (aka. strategic objectives), and arrows that go all over the place looking like spaghetti or the web of a crazed spider!
It’s too bad because organizations that don’t leverage the strategy map as a core component in their strategic plan are missing a huge opportunity. A good strategy map is a multi-purpose communication and business management tool that: draws out the business model business leaders believe will deliver the organization’s value proposition; highlights the key business drivers and priorities for the upcoming planning period; translates the business strategy into action so that staff at all levels of the organization can execute the strategy locally in a way that contributes to moving the business forward; and it provides employees with a guide for consistent, strategy-focused decision making.
It’s really a shame that such a powerful tool is dismissed by many organizations based on the misconception that strategy maps are inherently complex. The truth is that strategy maps don’t have to be an overly complex mess – it just seems to me that we have made them that way. I believe that the key to solving this problem is for organizations to balance the ying and yang of simplicity and complexity in their strategy mapping efforts rather than choosing one over the other.
How can this be done?
The key is to walk the simplicity-complexity tightrope in strategy mapping by (1) being sure that, in a drive for simplicity, you don’t reduce your strategy map’s ability to do all four of the things listed above well, and (2) ensuring that the level of complexity in your strategy map doesn’t obscure its power as a communication and management tool.
So, let’s talk about the two PRIMARY sources of complexity in strategy maps: strategic objectives and cause and effect arrows.
The most obvious reason why a strategy map gets labeled as “too complex” is due to the number of strategic objectives on it.
I have met many people who believe that anything other than a streamlined strategy map is too complex. These folks dream of a strategy map with 8 or fewer strategic objectives on it. Unfortunately, unless you run a very simple business, I believe that this goal is unrealistic for most companies.In my experience, I haven’t seen any real working strategy maps that are this streamlined – even in organizations I would call mature strategy map and balanced scorecard users.
As a rule of thumb, a manageable number of strategic objectives for a strategy map is between 12 and 20 (4 – 5 per strategy map perspective). It is quite usual for your first draft strategy map to include a very high number of strategic objectives (often more than 24). Your goal through an iterative process is to reduce this number by repeatedly asking the specific question associated with each strategy map perspective and then working hard to come up with a focused set of answers (translated into strategic objectives) that provide the most high value responses to each question.
The four questions by perspective are:
Financial: What financial results must we achieve to be successful in the eyes of our shareholders? (private sector); To achieve our mission and vision, how must we use our financial resources and how must we appear to our funders? (public sector)
Customer/Stakeholder: To achieve our financial performance results, want must we deliver to our customers? (private sector); To achieve our mission and vision, what must we do for our stakeholders? (public sector)
Internal Process: To satisfy our customers/stakeholders, what business processes must we excel at? (both sectors)
Organizational Capabilities: To deliver to customer/stakeholder expectations, what skills and capabilities, culture, tools, and technologies must we have? (both sectors)
The goal in answering these questions isn’t to include absolutely everything your company does – this is where the road to overly complex strategy maps begins. The key is to identify the vital few elements in your business that will make a real difference in contributing to success. When answering the four questions above, it’s critical to keep your responses focused on the question and limited to the most important drivers. A precise approach will allow you to meet the goal of 4 – 5 (maximum) strategic objectives per perspective.
It’s important to mention that, over time, as you gain more experience using your strategy map and gather deeper insights into what really drives results in your business, you and your colleagues will probably be able to streamline your strategy map further. It’s important, however, to respect the inherent complexity in your business and not try to streamline it so much that you limit the ability of your strategy map to make its contribution to business success.
Another reason why I see strategy maps getting labeled complex is as a result of the wording of the strategic objectives themselves. As a general rule, the best strategic objective names are short (3 – 5 words maximum), descriptive, and begin with a verb. The shorter the name, the less real estate each strategic objective takes up on your strategy map. It’s a small thing but don’t underestimate its impact on reducing the perception of complexity for your strategy map. Also, short, snappy strategic objective names are more memorable – making it more likely that employees and stakeholders will be able to remember the key elements of your business strategy.
Cause and Effect Arrows
There is no doubt that cause and effect arrows are the number one contributor to the complexity stigma given to strategy maps! They can be so confusing that many organizations choose to leave the cause and effect arrows off of their strategy map. This is a short-sighted solution to the cause and effect arrow problem because mapping and testing the cause and effect relationships in your business is perhaps the most valuable contribution your strategy map will make to the current and future success of your business.
The problem is that most organizations don’t know where to draw the line when it comes to cause and effect arrows. They begin mapping out the relationships between strategic objectives and, before they know it, they have a mess of arrows on their hands.
The key to success with drawing cause and effect arrows is to map out the direct and most critical relationships ONLY. By avoiding the indirect relationships, it becomes easier to simplify your strategy map while also demonstrating the complex inter-relationships that exist in your business.
Unnecessary complexity is a real problem with strategy maps. The solution, however, isn’t to go overboard and over simplify your strategy map. Doing this ignores the true complexity of your business and reduces the ability of your strategy map to deliver on all its promises as a powerful communication and business management tool.
The key to success is to walk the simplicity-complexity tightrope so that your strategy map depicts the complexity of your business accurately but in a straightforward and understandable way.
This can be achieved by including a focused set of concisely named strategic objectives, and a limited number of cause and effect arrows, that is restricted to direct cause and effect relationships only, arranged in an aesthetically pleasing way on your strategy map (don’t underestimate the value of a “pretty” strategy map in reducing the perception of complexity!).
As a closing thought, I will mention that, even when a strategy map does a great job of balancing the simplicity-complexity tradeoff, some people may still try to label it as too complex. More specifically, you’ll hear them say that there is no way that someone looking at it on their own could understand it.
While I don’t agree that this is the case with a well done strategy map, I will concede that it could happen in a situation where someone doesn’t know how to read and use a strategy map. Either way, I strongly recommend that an employee’s or stakeholder’s first encounter with your strategy map should be a guided experience. Ideally, all employees and stakeholders should have the strategy map revealed to them as part of a communication process focused on sharing your organization’s “strategy story”. By talking through your strategy map gradually and in a logical sequence, employees and stakeholders will have no problem understanding your strategy map and, ideally, seeing how they fit into the picture.
Have you been hesitant to use a strategy map in your organization because you have been worried that it is a complex tool?
If you create your strategy map following these guidelines while placing an emphasis on focus while still respecting the true complexity in your business, I am confident that your strategy map will walk the simplicity-complexity tightrope effectively and successfully.