Home » Understanding Strategy Maps to Help Improve your Organization’s Performance
Developing an organizational strategy is never as simple as having a brainstorming session and agreeing on what direction you want to take. In fact, it’s a complicated process that only gets more complex the larger an organization or business is. It involves taking a bird’s eye view of an organization to get a big picture. Then you can make a strategy that makes sense for every department and aspect of that organization. Of course then you have to be able to effectively communicate that strategy to the rest of the team as well as the public and any other interested parties and shareholders.
Everyone has different skill sets and strengths. If you have a group working on strategy planning, then they may approach it differently or have different motivations. This is where strategy mapping can help. It allows strategy developers to consider different angles, create conversation, and communicate their goals effectively. A strategy map can also create an opportunity for everyone in an organization, no matter what level, to participate in strategy development.
A strategy map is a powerful tool on its own to visualize and depict the strategy of an organization. When it’s most powerful, however, is when it’s part of a larger process that works to align the strategy with a mission and individual goals.
Strategy Map 101
So, what is a strategy map, anyway? The most basic definition of a strategy map is that it’s a diagram to help visualize every aspect of an organization to help with strategy development. This diagram makes it easy to see how everything connects with everything else, and how a strategy might have an impact on each department and aspect of an organization. Here are some ways to properly develop a strategy map and implement it in your planning.
Define Your Mission, Vision and Goals
Your organization’s mission is essentially the reason for it to exist. Are you non-profit? If so, then you should have a mission that states what you are trying to achieve. A corporation may have a different mission, such as creating the most affordable type of a certain product on the market. Whatever it is, it’s an internal mantra that guides everything an organization does. This should already be a part of your strategy, as anything you do going forward should be in support of your mission.
Your vision is slightly different, as it is more focused. While a mission will give a general statement about what an organization stands for, a vision will define how they will fulfill that misios. A vision statement is a declaration of goals. Your strategy should have clearly outlined goals, which will give you a strong foundation for developing a strategy and a strategy map.
Nothing exists in a vacuum. Your organization doesn’t, your team members don’t, and your strategy doesn’t, either. You must always begin mapping your strategy while appreciating the context in which your organization operates. This means understanding what the market is like for your industry, what your competition is doing, and what trends you see coming down the road.
Make sure that you understand everyone involved with your organization in any way. This includes customers, competitors, partners, investors, vendors, suppliers, and anyone else with whom you have a relationship. How might they cause issues for your strategy? How can they help your strategy along? You can look at customers and how you might be able to provide value to them. You can also consider how other stakeholders can provide value to you.
Give Your Strategy a Definition
Once you have defined your mission and vision, and properly contextualized your organization in the grand scheme of things, you can define the strategy itself. What is the ultimate goal? For a non-profit, your strategy might be “create a more efficient logistical infrastructure to provide more food to food banks and their clients.” Assuming your mission is to provide food to food banks, your strategy will revolve around doing it more efficiently.
The Strategy Map
At this point, you can bring a strategy map into play to start developing your plan. It will help make your strategy more relevant to your staff and stakeholders, and provide a solid framework to get a view of the entire picture. Your strategy map should be developed with four perspectives in mind. They are:
Growth and learning perspective
Using these perspectives, you can then build out your strategy map.
When it comes to the financial side of a strategy, in most cases it would be about how much profit you bring in based on how much you will need to invest. You will need a short-term and a long-term plan for your finances, since any strategy must take both short and long-term growth and sustainability into account.
Develop a value proposition for your target customer. This involves having a grasp of your ideal customer by having your marketing department create a profile. The value proposition should clearly state what your organization will do for your customers that’s different and better than what your competition does.
The next perspective to consider is how you will achieve what you want to do. What types of changes will you have to make in your internal operations to make it happen? This could be complicated, such as re-organizing your inventory system in the warehouse, or it might be simple and only require small changes to some job descriptions. You need to be sure that your strategy is possible based on how you currently run your operations and how easy it will be to make changes.
Growth and Learning Perspective
For your strategy to succeed, your people may need to learn new skills and techniques. You may need to involve training and knowledge building to get where you want to go.
Building the Map
Map out your objectives under each perspective. Make sure that they are represented by the same shape. In most cases, this should be an oval. Then draw arrows between the objectives that are connected and related to each other. This will show the intercausal relationship that many of them have. For example, if you have “reduce costs” as a financial objective, and “operate more efficiently” under operations, then you should have an arrow between the two.
For each objective, you need to have a clear measure and goal to define successful completion. That way everyone will understand what they need to do, and in what timeframe.
What you are left with is a diagram that clearly shows where you want to move with your organization. Any stakeholder can take a quick look and understand what is needed and what your goals are. Staff can also see where they will play a role in implementing the strategy and making it a success.
Importance of a Strategy Map
A strategy map can be a lot of work, so there must be a benefit to creating one. Luckily, there are several. It is a powerful way to organize your strategy and communicate it to a wider audience so that it’s easily understood. Your organization’s leaders will understand each and every interdependence in the organization and the strategy itself. Everyone can be on the same page while working towards achieving the objectives and reaching the finish line. Here are some of the main benefits.
One of the hardest things to grasp when developing a strategy is all of the interdependencies within an organization. They may all be affected when implementing the strategy and its sub-components. To properly develop a strategy, it is imperative to know how each component impacts the others, and how the objectives within one perspective may align and affect the objectives of another.
Measuring the Right Things
As your strategy unfolds, you might find that the metrics you laid out to measure your success are not affecting your overall performance. The metrics might be improving, but your revenue isn’t getting better or your costs are not reducing. By focusing on the metrics within your strategy map, you will quickly find out which things are the most important to measure, and which you can disregard or downgrade. You can then work to find other metrics that might be able to fill the gap.
Effective Resource Investment
If you are investing time and capital into projects and efforts that don’t align with your strategy map, then you will soon realize that you may need to reconsider those projects. With a map, you can easily spot what is relevant, and what is not. If you have some projects or processes that you’ve had for years but never changed they may have become irrelevant, and you will be able to identify what can be changed or eliminated.
Your strategy map should fit on a single page. That way anyone who is reading it can understand it in a glance, and understand the details in a minute or so. Let’s face it, many employees and other stakeholders don’t want to spend the time to read a detailed report when they can get a snapshot in a fraction of the time. A strategy map will make it easy to define where a team or employee can contribute, so they will understand their places in the overall scheme of the strategy.
As you can see, a strategy map is a crucial aspect to crafting a realistic, well-defined, and cogent strategy. It will help you not just develop the strategy, but also communicate it to others. By taking the time to map things out, you will be well on the road to success for your organization.