iconax

What is a Strategy Map?

iconax — Fri, 27 Jan 2012 12:12:20 +0000

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:

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.
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.
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.
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.
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

Strategic Creativity

iconax — Thu, 19 Jan 2012 14:50:08 +0000

Having recently built a number of Balanced Scorecards for various companies/organisations I had been researching the topic of Strategic Themes and come across a very useful blog written by Sandy Richardson from Ontario, Canada. The blog entry that interested me was entitled “Do Strategic Themes Add Value in Strategy Mapping?”. I was a bit taken aback as in the purist Kaplan/Norton Balanced Scorecard model it states quite clearly that “Themes are essential strategic elements that form the foundation for a Balanced Scorecard”. Having a reasonably well organised mind I had been quite comfortable with the progression of Mission to Vision to Strategic Theme to Strategic Objectives followed by the creation of a Strategy Map, Metrics and Strategic Initiatives.

On closer examination, I have found that in creating Balanced Scorecards, the process, like most things we do in life, is a bit more haphazard with several activities inevitably running in parallel. Frequently I have found that Strategic Themes have only become useful at the end of a strategic planning exercise when the participants feel the need to ‘group’ objectives and assign ownership. Again, for an organised mind, it seems sensible to group things together in an act of simplification. However, the use of Strategic Themes to help in the process of determining Strategic Objectives is questionable. In my experience, most executives will jump to the things that need to be done to improve the business long before thinking about the overall strategic themes required to underpin them in the business. Is this a bad thing? I think not. Let them be creative and push the boundaries, let them explore and get excited about the future. There will be plenty of time to put the reins on and draw them back to the reality of metrics, budgets and ownership. For more on Strategy Maps, check out my latest Whitepaper

Build or buy corporate management / business intelligence

iconax — Mon, 09 Jan 2012 10:49:26 +0000

Business Intelligence (BI) evokes all sorts of emotions in management circles of large organisations. Not least of which is the conviction that company information is confidential, private and for management use only and therefore the false assumption that the systems providing the information have to be unique. How many times have we heard the statement in IT circles that “our company is unique and therefore we need a unique (bespoke) system, it will give us competitive advantage”. Nonsense! It is of course true that the data should remain confidential and it is unique but the structure of the data and its presentation will be similar across all companies/organisations and the same across industries. How many different ways can revenue be presented? How many unique cost lines are there in a business? Should sales calls be presented as a line or bar graph or as a number? The real point here is that over the past 10 years significant research and investment has gone into how to best present this information and therefore the need to re-invent the presentation systems has long since gone away. The significant change in the past three years has been the emergence of Software as a Service (SaaS) Business Intelligence solutions. This has shaken things up a bit. With these solutions there is a need to export (company confidential) data to a cloud environment. With the general acceptance that there are no longer any additional security issues with the Cloud comes the need to look at exactly what data will be exported. Then the 80:20 rule comes into play, that is, 20% of the data will provide 80% of your corporate management needs (and frequently even less data will provide all of your corporate management needs). The realisation soon dawns that 80% of the data is not actually needed and therefore the need for the antiquated systems that produce the data is not needed either. This is of course an over-simplification of a much more complicated situation, however, the advent of SaaS based CPM/BI solutions has given a viable route to ring-fence certain areas of corporate management and experiment with tried and tested new technologies. That way, you can take advantage of product vendors investments rather than re-inventing and investing yourself.

Who is predicting what for 2012?

iconax — Tue, 20 Dec 2011 11:57:55 +0000

It’s that time of the year where the blog world is obsessed with publishing predictions about the future. Some are fascinating, some quirky and some obvious. This year, like every year since 2007, I will resist joining the bandwagon. My 2007 predictions for 2008 were reasonably accurate apart from the due date. In fact, I could have rolled them out every year since and still had a reasonably good set. Yet another demonstration of how long it takes to make serious changes in the business world. While trawling through this years predictions, there was an item that caught my attention from Stace Hipperson , Chief Technology Officer of Real-Status published by BCW IT Leadership. He has predicted “Companies will stop paying for bloated enterprise applications and go back to basics. A large percentage of enterprise applications feature sets are simply not being used. According to client feedback, only about 10% of application features are being used in any meaningful way”. It has always been difficult to prove that only a small proportion of all the features available in any given application are ever used, but it is certainly held as a universal truth. In recent years we have seen a phenomenal growth of mobile devices and a dramatic change in the way we consume applications. The Apple iPhone and iPad are the prime examples. By connecting the devices to an Apps Store we find ourselves downloading, using and throwing away applications on a regular basis. They serve a purpose for a short time and are discarded either when the need has gone or a better app comes along to replace it. This ‘consumerism’ of applications is changing the way use technology to interact with the world. Hipperson is correct, we are beginning to realise that we don’t need ‘bloated enterprise applications’, what we want are nimble applications that perform a specific function that are cheap and disposable. Clearly there will always be a need for major line-of-business applications, they will never disappear, but we will see a much greater proportion of smaller do-the-job apps infiltrating business over the next few years. I’m not going to make any predictions but here are my top 7 predictors for 2012:

IBM – 5 in 5 – Mind reading, no more passwords, junk mail extinction

The Real Story Group – Big data, social media, death of the intranet

CNET – Marc Andreessen: Predictions for 2012 (and beyond)

TechMarketView – The economy, consumerism, IT as a utility

Business Computer World – Cloud monitoring, merchant silicon, simplified apps

Motley Fool (on MSN) – Ubiquitous connectivity, social advertising, mobile data

PC Magazine – Apple TV, netbooks, smartphones

We shouldn’t forget that according to the Mayan calendar the world will come to an end in 2012 so I guess we shouldn’t worry too much about whether these technology predictions will come true or not.

Mobile Business Intelligence

iconax — Wed, 14 Dec 2011 15:07:46 +0000

If you have not as yet been caught up in the ‘Domo” storm then I would recommend a quick look at the Domo website if you are interested in how Business Intelligence is going to be revolutionised over the next year or so – well that’s the Domo claim. I have to say that the website is pretty cool and the introductory video is very impressive, (if lacking in real content) particularly when it gets to the roll-call of investors at the end. For a company that has not officially launched yet, the customer list is equally impressive. I was drawn to the website because of a blog entry by Shawn Dickerson, Domo Director of Marketing, on Mobile BI. These guys have done their homework and once again put together some slick collateral underpinned by research from Aberdeen, Compass Intelligence, Forrester and Gartner to name a few. According to the research by the beginning of 2013 33% of BI functionality will be consumed via handheld devices, 40% of organisations will provide data exclusively on servers for mobile devices and 73% of the workforce will be made up of enterprise mobile workers. If there was ever a time to ensure the products you are buying are mobile enabled, it is now!

Why you need a Performance Management System

iconax — Wed, 30 Nov 2011 16:31:30 +0000

It is a constant surprise to me that large organisations and businesses still manage their activities in a largely unstructured way. Yes they undertake annual or quarterly ‘strategy’ sessions and monthly reviews and hold weekly status updates, but the content associated with these activities often based on PowerPoint slides and Excel spreadsheets. There is rarely any connection between the activities or consistency in data input/output, it is usually a case of “we have always done it like this and it seems to work”. Why invest in a Performance Management System? Here are ten good reasons:

1. A Performance Management System can force the alignment of strategy and operations and make people accountable for both.

2. An open and consistent measurement system better supports accurate and faster decision making and therefore reduces risk.

3. Visibility of a single source of management information provides accountability based on real data, not subjective judgements based on anecdotal ‘evidence’.

4. By measuring process efficiency, information becomes available to determine what business process improvements should be made and when.

5. Best practice can be more easily identified and rolled out across the organisation.

6. Over time the collection of data in a consistent format can be invaluable for forecasting and estimation of future costs.

7. All parts of the organisation can be engaged in the activity through the use of a common language and common set of reporting processes.

8. The act of introducing a performance management system forces the organisation to take a good hard look at what is being measured and why and thus remove redundancy.

9. It provides the means to standardise information and benchmark process performance with external agencies or between organisations.

10. All of the above will improve profitability by; reducing process cost, increasing productivity and implementing the organisations vision.

Leading in finding, consuming and sharing

iconax — Wed, 23 Nov 2011 17:22:13 +0000

“Not all those who wander are lost” said J.R.R Tolkien. The quote has been recently ‘mutated’ by The Learning Explosion to read “Not all mutant wanderers are lost” as part of their recent series on how to become a ‘Mutant Learner’. Now I have to say from the outset I’m not keen on the terminology, to me a mutant is not something that I would not immediately aspire to become, but that’s because I have a typical Hollywood view of mutants being deformed monsters. However, the term does work in the context of their exposition, that is, to become a Mutant Learner you need to rapidly evolve. The basis of the proposition is that rather than using technological advances to stumble around hoping that you will find what you are looking for, by changing our approach we can learn more effective ways to find, consume and contribute relevant information not only for our own use but for the common good as well. The ‘Wanderer’ is one of four types of mutants who, not surprisingly, wanders around discovering new fragments of information. Nothing new in that, there are plenty of wanderers around. The difference in approach however, is that the mutant wanderer takes the time to publish/share the new information and at least start a dialogue that may result in the ‘fragment’ of information becoming useful to resolve a problem or create a solution. My last post looked at lead indicators, I think there is definitely something to be said for finding, consuming and sharing information in this area, measuring how effective we are in these activities would surely pay dividends.

Supply Chain – A Good Lead Indicator

iconax — Tue, 15 Nov 2011 09:34:54 +0000

If you are looking for a good early indicator that can predict the success or failure of your business, then you may want to consider looking at your supply chain performance. If the relationships with your suppliers are good, then the buying, movement, storing and selling of your products or services will also be good. This will result in customers receiving products/services on time, no excessive storage charges or maintenance of of stock to meet demand or large amounts of redundant or obsolete stock that will never be moved. A close, open relationship is required to ensure accurate forecasting and drive a just-in-time replenishment programme. Building a close, open relationship takes time and effort and one part of the process that is often missed is Supplier Evaluation and Benchmarking. A supplier wants to know where they stand with you. If there is a clear process in place to define what is good performance and what is not, then a supplier can respond (or suffer the consequences of not responding). Building a set of assessment criteria need not be an onerous task and should be undertaken in collaboration with your suppliers. Once created, a quarterly assessment process will quickly provide benchmark data on your suppliers and the ability to feedback (potentially the most important aspect of the process) to your suppliers about their performance. As a by-product, you will have created an excellent lead indicator for your overall business performance. For more information on lead and lag indicators check out “Lead and Lag Indicators”

Evidence Based Management

iconax — Fri, 04 Nov 2011 11:10:16 +0000

As managers we would all like to believe that our decision making process is based on real evidence. The reality is that we have a tendency to rely on our experience and intuition and at best listen to one or two people who in the past have given us good advice. We do have huge amounts of data available and occasionally we may have the time to sift through it to find a fact or two that will support a decision we have already made. While researching for a client on Evidence Based Management I came across a quote by Thomas H Davenport, author or co-author of 12 books on Knowledge Management and the President’s Distinguished Professor in IT and Management at Babson College, MA, USA who said “You may hold the comforting belief that evidence and data are widely used in making business decisions. Alas, that is often not the case. Despite the rapidly growing availability of information from online transaction systems, the internet, point-of-sale systems and other sources, our use of evidence-based management isn’t growing at the same pace. Many managers still manage and decide as if modern computing tools didn’t exist”. His premise is that we are not using technology to best advantage and therefore not making ‘evidence’ based decisions about the businesses we run. Although a relatively new subject born out of the work done in evidence-based medicine, the movement has gained momentum quickly with several papers and books published in the past couple of years. One book stands out for me, Bernard Marr’s ’The Intelligent Company – Five Steps to Success with Evidence-Based Management’. Marr provides a model for Evidence-Based Management and outlines what to do with the evidence gathered. well worth a read.

Balanced Scorecard Software – Nowhere to hide

iconax — Thu, 27 Oct 2011 09:00:07 +0000

Life as a manager in a medium to large corporation often revolves around PowerPoint presentations and Excel spreadsheets (and of course the ever present e-mail systems, but that is another story). We have been led to believe that effective communication requires that ideas are put into presentations and fact and figures into rows and columns. We have become so used to these mediums and the ubiquitous nature of the software that to do things differently requires an extraordinary effort. Even though we are often presented with more elegant, less time consuming and more cost effective options. The use of a Balanced Scorecard is a case in point. The majority of organisations using a Balanced Scorecard approach set out their strategy and initiatives in a presentation and their metrics in spreadsheets. These are then manually updated on a regular basis and distributed to interested parties for review. The system works and we are comfortable with it. However, it is not the most efficient way to manage a business so I was delighted to find that the Balanced Scorecard Institute has formally recommended the highly acclaimed Spiderstrategies performance management software Quickscore.

Quickscoreis an online metric assessment, action planning, and performance collaboration tool. It brings together overall strategy, strategic initiatives, objectives and metrics into one place in a SaaS application with an intuitive and comprehensive web based interface. Alerts notify owners when metrics take a turn for the worse, and corrective actions can be put in place to fix problems as they come up. It then rolls up all of the metric data and shows progress towards reaching overall strategic objectives.

A system like this takes a bit of getting used to. Not because it is difficult to use but because it provides a single version the truth that is open and accessible to the whole management team. It means that the control you may have had by owning a presentation or spreadsheet is no longer available. For those businesses that are serious about moving their strategies forward, this is an absolute must have.