How do you handle rapidly evolving and changing strategy with a strategic balanced scorecard?
We often feel that the environment around us, is changing rapidly. So, we need an approach to strategy planning, communication and implementation that can accommodate a rate of change. We also construct our strategies in times of uncertainty and risk. Thick business plans will be hard to change. Is there a better way?
The strategic learning model helps you monitor and learn from your strategy as it develops and the world around you changes.
Strategy maps help you capture the strategy an explain it easily.
This is why I like strategy maps. They describe the strategy in short (1 page) documents. You can easily put a business plan behind them that sets out the details of the financials, markets, competitions, competitors and what you are going to do.
When I was on the management team of a dot.com our strategy completely flipped inside six months. We moved from a net market providing auctions for commodities in an industry, to a collaborative supply chain solution in the same industry. The strategy map could see that coming: On the main strategy map for the net market auction model, we introduced the supply chain capability, initially as a small theme to the right. Over six months the auctions business slid into a thin sliver of a theme on the left as the collaborative supply chain solution took hold with the customers and became the focus of attention (and the source of money).
The business plans, finances, resources, staff all followed behind as the organisation rotated through 90 degrees to provide a completely different solution to the same customers.
Strategy mapping helps you explain strategy as it evolves. It provides a quick and effective way to describe the strategy, that is rich and powerful in its description yet at the same time can also change and evolve far more easily than a written document.
That is why strategy maps are often used to describe alternative strategies when they are being tested and thought through. It is also useful to develop a strategy map when acquisitions are on the horizon. It means that you concentrate on the main business whilst developing your strategy for the acquisitions and can then feed the integration often two businesses into the strategy map.
Having the strategy map allows you to then develop the measures, targets, projects, actions and responsibilities (The balanced scorecard) beneath the strategy map. That way as the strategy map evolved you can more easily refine the balanced scorecard with reference to the strategy map.
For more on strategy maps and balanced scorecards, read our introduction to strategy maps and strategy mapping