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Strategy Map - 5 Tips

A Strategy Map is a very useful tool for any commercial enterprise or public organisation. It can take many forms; from a classic four perspectives Kaplan and Norton variety to the more esoteric Tesco circle. The primary purpose of a strategy map is to communicate a business strategy to employees, stakeholders and customers. Here are 5 things to take into account when creating a strategy map:

1. First and foremost a strategy map is a means to communicate a business strategy throughout an entire organisation. Therefore it has to be accessible to all. This means two things: 1. It can be found easily and 2. Its meaning is clear. If a strategy map cannot be found or is only available to management then its purpose has not been understood. A strategy map is usually a single page (or single screen) that describes exactly what a company/organisation is trying to achieve in a given time period. Its interpretation has to leave little room for doubt.

2. A good strategy map will have a set of objectives that clearly contribute to the company mission and vision. Yes, you do need to know what you are in business for (Mission) and what you aspire to do in the future (Vision) before you can create a strategy map (or a business strategy for that matter). The objectives must describe an activity that can be measured. ‘Better Safety’ is not an objective. ‘Reduce accidents by making it mandatory to wear hard hats on site’ is. The latter provides a tangible objective that can be measured.

3. The strategy map must be ‘balanced’ that is to say it should not be focused on financial results alone and should adopt a balanced view of the business. A little bit of theory is helpful here. The Kaplan/Norton Balanced Scorecard approach suggests that objectives should be developed in four areas: Financial, Customer, Internal Processes, Knowledge & Learning. Over a decade of implementation has demonstrated that these four areas cover all aspects of business. That is not to say one needs to be rigid about the implementation. For example, in recent years many companies have added ‘Environment’ as an additional area to highlight its importance even though it sits comfortably in the Internal Processes area. The key is to ‘balance’ measures across financial and non-financial areas.

4. It provides the means to link objectives in such a way that the cumulative effect of doing something on one area can be seen as having an impact in another. This is a very powerful visual aspect of a strategy map. For example, if an objective buried in the depths of a set of internal processes can be seen to have a direct impact on a customer issue which in turn is linked to company profitability, then the people directly involved in meeting the objective will better understand their importance to the company as a whole.

5. Strategy maps are not a black art and neither is developing a company strategy. Working on a company strategy is often seen as a job for the few who take themselves off-site every year to pontificate about what should be done next. The reality is that strategy is simply common sense and a little creativity. Yes it has to be led, good leaders have to be in place but the statistics show that most strategies fail because they are not communicated, understood and therefore not implemented well or measured. Get these things right, and your strategy will work.

For more information about Strategy Maps take a look at the Intrafocus Resources page on this subject.