What is a Strategy Map?

Last week I posed a question around the relevance of Strategic Initiatives in the creation of a Strategy Map.  Typically, like most of us who are familiar with strategic methodology, I made the basic mistake of assuming everyone knows about Strategy Maps.  A quick review of the blog comments, my e-mail inbox and a straw-poll of colleagues and I’ve concluded everyone thinks they know what a Strategy Map is but every view is different.  This is not as bad as it may seem, after all, creating a business strategy is all about creating a competitive edge so differentiation is key.  There are of course some fundamentals that should be adhered to (and some myths that need to be exposed).  So what is a Strategy Map:

1. First and foremost it is a means to communicate a company strategy throughout an entire organisation.  So it has be be accessible to all.   Both in terms of being physically available and an terms of its meaning to individuals.  A company strategy exclusively available to management is not a company strategy, it is a management strategy.  A company strategy that is so high level it cannot be related to by the shop floor is not a company strategy.  It may have valuable company messages but it will not help in providing indicators to people as to how they can align to the strategy.
2. A good Strategy Map will have a set of Strategic Initiatives 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 strategic initiative must describe and activity that can be measured.  ‘Safety’ is not a strategic initiative ‘Continually improve safety in all aspects of the business’ is.  The latter informs the company that measures need to be developed across the company.
3. The Strategy Map must be ‘balanced’ that is to say it should not be focused on financial results but should adopt a balanced view of the business.  A little bit of theory is helpful here.  the Kaplan/Norton Balanced Scorecard approach suggests that strategic initiatives 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.
4. It provides the means to link strategic initiatives in such a way that the cumulative effect of doing something on one area can be seen as having an impact in another area.  This is a very powerful visual aspect of a Strategy Map that relates directly to point one above.  For example, if a strategic initiative 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 the companies profitability and the company vision, then the people involved in that initiative 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 strategy fails because it is not understood, bought into 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 Strategy Maps

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