Make Your Strategy Map a Top Performer

Joseph Logan

If you’re running a successful business, there’s a good chance you use a strategy map. There’s an even better chance that your strategy map is under-performing.

Strategy maps represent business logic. The concept of using a map to represent strategy comes from the Balanced Scorecard (a commonly misused tool itself), and its purpose is to distill the complexity of the value chain. When the strategy map is well designed, people are able to easily understand and communicate about strategy.

Yet, most organizations don’t know how to execute strategy. The statistics are well known: less than 10% of strategies effectively formulated are effectively executed. The reasons are clear:

  • Only 5% of the workforce understand the strategy
  • Only 25% of managers have incentives linked to strategy
  • 60% of organizations do not link budgets to strategy
  • 85% of executive teams spend less than one hour per month discussing strategy (source: The Strategy-Focused Organization)

The strategy map is often a good-faith effort to try to solve this problem by enabling clarity and dialogue about strategy and metrics, but the problem again returns to quality of execution. Most executive teams make terrible strategy maps.

The strategy map relies upon cause-and-effect relationships between the four quadrants (Financial, Customer, Internal, and Capability) to show how the strategy builds from actions to outcomes. The central idea is that those priority pieces of work are related in a “this causes that” relationship. Employee capabilities enable internal processes, internal processes produce customer satisfaction, and customer satisfaction produces financial outcomes. Here’s what that would look like for some priority items in a retail strategy map:

Better Employee Experience —> Better Line-of-Sight to Customers —> Better Service Experience —> Increased revenue

This logic establishes a direct, causal relationship between employees, internal processes, customer experience, and financial outcomes. Employee experience is no longer a “nice to have”; it is essential to building engagement with customers. Customer experience is no longer an isolated buzz phrase; it is directly linked to revenue.

Most executive teams miss the “this causes that” relationship among strategic objectives, instead merely theming the key initiatives within the organization. When these initiatives are isolated, they exist on their own instead of in direct relationship to each other. The strategy map has a lot of “what” without much “how” and (most important) “why”.

Articulating the causal relationships between objectives makes the corporate strategy clearer and easier to support and describe, and it shows why each piece is essential. People can better see why what they do matters. It also enables clear line of sight to the effects of decisions, enabling a robust discussion of trade-offs inherent in each decision.

There is no excuse for an under-performing strategy map. Where the thinking is clear, it is easy to describe. Where the thinking is fuzzy, the strategy map enables crisp conversations that clarify. That is the job of executing strategy.

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