Those familiar with strategy maps know that when properly designed, they convey the cause and effect hypotheses of an organization’s strategy. No leader, no matter how gifted, is able to discern the future. But to describe strategy is to describe how leaders believe that value will be created in the future. While some organizations’ leaders may be content to simply say “our strategy is to become the number one producer of widgets in North America,” there is nothing in such a weak statement to help middle managers and front-line employees understand how the organization will become so good at producing widgets. And therein lies the critical need for conveying the hypotheses of cause and effect.
Let’s consider a simple example. In this purely hypothetical example, my wife is judging my performance in our organization (our family) by two measures: the number of calories I eat each day, and the number of days each week I exercise for at least thirty minutes. She’s even established targets for my performance; no more than 2,000 calories in a day, and at least three exercise periods a week. On the basis of those two measures, we can infer that she wants me to eat smart and to exercise. But why is my performance being measured this way? (If you have a good punchline, please leave it in the comments below.)
Of course, we could conclude that my wife wants me to lose weight. So the hypothesis implied is that if I eat smart, and if I exercise, then I will lose weight. But losing weight is only an intermediate objective. The complete cause and effect logic is far easier to show in a picture than with just words.
Each of the boxes in the picture is a strategic objective; a concise answer to the question, “What do I have to do to be successful?” By arranging the objectives with arrows as shown, we can easily read the hypothesis of cause and effect that comprise the strategy. These strategic objectives are the building blocks of strategy maps, and careful selection and arrangement of them can create an amazing level of understanding of an organization’s strategy. But reading a well-drawn strategy map is far easier than creating one.
After one especially exhausting strategy map session (usually an all-day affair), one of my clients wisely observed that “the essence of strategic planning is choosing what not to do.” In our example above, imagine starting out with only the outcome objective (Retire in comfort). My wife and I might brainstorm a series of alternative objectives that will enable us to achieve that goal (increase life insurance?!). But it would be impractical and perhaps even contradictory to simultaneously pursue all of the imagined ways to achieving the outcome objective. Thus, by ruling out alternatives, we focus the strategic energy of the organization (my family), on a few objectives that we select based on our hypotheses of cause and effect. Just remember – this is only a hypothetical example.
The power of the strategy map, and ultimately the Balanced Scorecard, is that by narrowing the description of strategy to only a few objectives on a single sheet of paper, we create a shared understanding of the direction in which we are aiming the organization. Much more about strategy map design in future posts.
For me this is one of the hardest concepts of strategy mapping to translate into action. Particularly when you layer onto the effort the desire to consider the 4 commonly-accepted perspectives of the balanced scorecard. But your posting here has helped me see that what we are doing may be easier to conceptualize and operationalize if we think of it as simply doing some ’cause-and-effect’ or fishbone diagramming. As you point out, however, to create the most effective strategy map, the hard work comes in narrowing down the influencers to the truly “key” drivers of the long-term vision (like retiring in comfort 😉 ) that we have for our organization.
maybe because these are the easily measured (and easy to talk about in polite company) and not necessarily the important to measure measures of in-family performance