Previously I talked about a useful test of any scorecard or strategy map is, “Can I tell the strategy from this?”. You will have already realised that if you cannot, then that begs the question, “What purpose is this serving? “What effect it is having on the organisation?” Ouch! Does your balanced scorecard explain your strategy?
Is your strategy map a $1m/£1m powerpoint slide?
I recall David Norton talking to us about a client of ours. He said that previously the CEO would not have been that worried if their strategic plan got lost on an aeroplane. Frankly it wasn’t that useful to anyone. However if their new strategy map fell into a competitor’s hands, then he would be worried. Not only that, but the strategy map was on a single page. He described it as the $1m powerpoint slide for that client. That was how valuable the client regarded the strategy map.
Now we all have a grip on the strategy. There are themes, decisions to do things and not to do things, ambitions, visions, mission investments and usually tensions.
So the acid test for your strategy map is, and our 7th principle is
Are you communicating and explaining your strategy?
One of the things we do with clients is to coach the Directors and managers in the effective presentation of their strategy maps. Rather than leaving it as a lifeless page, that people have to read, these Directors present their strategy maps to their teams. I have seen a Chief Executive and her six Directors present the overall strategy and the implications for each of their Directorates to the whole of their middle management (in this case some 50-60 people) in under an hour. Moreover they did it in such a compelling and effective way that, even with the tensions and complexities, they got real understanding and engagement. It made sense to them. The middle managers were able to interact with the strategy maps, develop and build upon them and provide ideas as to where they could contribute to and help each other across the various departments.
Now I don’t know how you are using your strategy maps like this, or even whether you are using them at all. Sooner or later you will have an idea of what value you could be missing out on. When you are using a strategy map you are probably already aware of how it improves understanding and communication when you design it well.
Strategy maps are about making a difference to the future: Making it happen. In six months time, or perhaps a year or even further out, when you are thinking about how much you have achieved, you will be able to look back and recall how getting the message across had been such a key element. How much a well-designed strategy map makes a crucial difference.
To do that you need to be clear about the strategy. There will be tensions, between costs and growth, between different market segments of customer groups, between making product available and cash flow.
Be careful not to make strategic themes into perspectives.
You have to be clear about the different roles of the various perspectives of the strategy map (Financial, customer, process and learning and growth) and the themes of your strategy. As you realise they are quite different. Yet, I have seen so many organisations start to swap the perspectives with strategic themes such as sales, innovation, cost reduction, etc. When I see these sorts of strategy maps and scorecards I just stop and think , “This does not make sense”.
As a test,take teh strategic theme, “Innovation”. Now just ask yourself this, “If I am to improve innovation which of the scorecard’s standard perspectives do not apply?” Being smart you will notice that all apply. There are financial implications, implications for the customers, an innovation process and learning & growth pieces that will make the change happen. As you think this through, https://www.excitant.co.uk/Seminars_workshops.htm gives some alternative ways to open the discussions with your management.
The big lesson from this is:
“Be clear about the themes of your strategy and how they relate to Balanced Scorecard perspectives”
When clients are engaged in our strategic planning and strategy mapping workshops we are not only developing a view of the strategy with them but getting it into the collective heads of the management team.
Take a good hard look at your strategy map. If you don’t yet have one, then have a look at your balanced scorecard. Can you read the strategy in it? If not, just think how much more effective your organisation could be if it did?