Strategy Maps and Strategy Mapping 1 The benefits
"I can carry the strategy around in
my pocket. If I want to discuss the strategy with another
manager I simply say, hey, let's have a look at your strategy
map"
On these pages we explain what strategy maps are, explain some of
the benefits of strategy maps, relative to balanced scorecards,
and point you at some strategy map examples. We also describe some
common mistakes people make when designing strategy maps, and how
to avoid them.
What are strategy maps
Whereas balanced scorecard place measures in perspectives,
strategy maps sit above the scorecard and provide a structured description
of the strategy, from which you can choose the most appropriate
measures and targets.
Using a strategy map, can dramatically improve the
effect of your balanced scorecard and make it a much more strategically
useful tool, rather than a mechanism of operational detail.
Strategy maps are a powerful visual tool. As you will
see from the few examples we are able to publish, you can read the
strategy very quickly from a strategy map. This means that you can
communicate the strategy more effectively and easily so people will
get it and be able to contribute to it and execute it for you.
The benefits of strategy maps as part of a modern
balanced scorecard performance management approach
You all understand what each other has to do which
improves management performance
You have an excellent strategy communication tool
Employee attitudes are significantly improved
Obviously your performance improvement will depend upon where you
are and the particular problems and challenges you are facing. (
For more details of this research and sources read our "Making
the case document")
What do strategy maps do?
They tell the story of the strategy
Well designed strategy maps enable you to tell the
story of the strategy easily and allows people to read the story
of the strategy as well. This dramatically increases understanding
of the strategy so people can contribute to it.
They put the strategy on a single page
They are extremely powerful at creating a conversation
around the strategy and checking understanding. Instead of strategy
being in thick documents, it is on a single page. Many say this
is the most powerful part of strategy maps.
They describe how the strategy will be executed
with a simple cause and effect model
Strategy maps don't just say what you are trying
to achieve. They explain very simply, how you plan to get there.
because they contain a simple, but powerful cause and effect model,
they explain what differences you want to make in the organisation,
that will filter through to better results for your customers
and ultimately improved financial outcomes.
They provide objectives rather than measures.
We have all seen examples of measure madness where
organisations are inundated with measures, as well as dysfunctional
behaviours caused by a poor choice of measures. Strategy maps
help you avoid this by starting with objectives, so that you describe
what you want to achieve (as well as how to measure it). That
way, inappropriate measures get replaced with more suitable ones
that better represent what you are trying to achieve.
They show the themes of the strategy
Strategy maps help you explain the themes and components
of your strategy. Quite often you will have a strategy with tensions
and internal pressures: build more sales, but don't increase costs,
or improve quality and service with less people. Most strategies
have these tensions, otherwise they would not be interesting or
challenging.
Strategy maps help to explain these on a single
page, so that the organisation does not become like a car with
the brake and accelerator being used alternatively.
They also provide the framework for designing and
managing the programmes of change in an organisation.
They ensure balanced scorecards can be cascaded.
If you have ever tried to cascade measures through
an organisation you will have hit problems relatively quickly.
Whilst some do drill down easily, others are incompatible with
different departments, functions, areas, and levels of management.
In contrast strategy maps deal with objectives and
so at each level you are asking, how we we achieve this objective,
or how do we contribute to this objective? From these questions,
you can ask, "What is the best way to measure these objectives
at this level?"
So strategy maps are a powerful way to cascade objectives
through the organisation so people can understand them and contribute
to them.
They can be used to review progress against the strategy
Strategy maps are not static tools. They are tools
of management that get refined and developed as management learn
from their strategy and the strategy evolves.
When management teams use strategy maps in their
meetings the conversation rises to a highest level, there is less
operational detail and more time spent reviewing whether the strategy
is working or not, and why.
This also raises the heads of people in the organisation
who are also then able to discuss, understand and contribute to
the strategy so that it is more likely to be delivered.
If you are interested in improving your organisation's
performance, talk to us
To learn more go to:
Strategy
mapping: Some examples, or
Strategy mapping: Mistakes to avoid
We are real experts in strategy mapping and have some of the
deepest and most varied experience available anywhere. In 2008
Gower will publish our book, Strategy Mapping.
To get advice on how to develop your own strategy maps, contact
us.
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