The Strategy Map diagram - Click to enlarge

Strategy Map Balanced Scorecard Software
Strategy for Dummies

The Concept of linking Objectives and then measuring them is not "Rocket Science".
The Process of getting your Strategy, Objectives, Measures and Initiatives perfect so that they drive your organisation in the right direction is often difficult and requires the efforts of your whole organisation.
 
Overview.
  • The Strategic Planning Scheme involves aspects concerned with responsibility assignment and measurement.
  • The framework called Strategy Map Balanced Scorecard is a recent development by Harvard University.
  • There are many differing and older less-strategic systems in use, which causes confusion to the novice as they try to get a handle on the latest concepts for the purpose of establishing their own direction. (Hence there is also a lot of outdated material available on the Internet.)
  • There are also new alternate strategic framework systems such Lean Thinking and the Cranfield University Performance Prism (both of which can be used with this software).
  • In the case of a new department or organisation everyone is starting off in step and learning about the organisation at the one time. (They are all inspired and aligned as their links are defined and are fresh).
  • Alignment is lost when people become complacent or drift away and staff turnover is a major factor.
  • If you are applying for funding the Strategic Plan process is an excellent Communication and Collaboration tool.
  • It is essential to put your plans into an accepted structure that is shared and collaborated which everybody can "Engage".
  • The Strategy defines "We are THIS type of Organisation".
  • The Scorecard defines "HOW are we this type of Organisation".
  • Visibility is achieved when you use a standard academically accepted structure as a means of storing, collaborating, measuring and maintaining your strategic direction.
  • Strategic Direction is determined by defining:
    • Static Strategic components such as Vision & Mission statements.
    • Policy Statements such as Values, Policies and Procedures.
    • Mapped Strategic Components such as Perspectives and Objectives which are defined in the Strategy Map where the Objectives may be linked by arrows (traditionally pointing upwards towards the customer or goal).
  • HR Direction is determined by defining:
    • Personal Responsibilities or Targets that are attached to a Strategic Objective.
    • Measures and Scores that give depth and precision to the targets or responsibilities.
    • Activities and Initiatives that show how the targets or responsibilities will be achieved.
  • Financial Direction is determined by defining:
    • Income and Expenditure that is attached to each Activity or Initiative.
    • Planned and Actual figures should be maintained.
    • Comparison between Planned and Actual in a graphical environment called "Digital Dashboards".
  • Achieving Strategic Organisational Alignment:
    • This is achieved when Objectives are linked together in a flowchart environment.
    • The Objectives are classified in groups called perspectives.
    • The Objectives relate to and point to one or more Goals using arrows.
    • In a Customer based environment, the Goals may be Customer Orientated Objectives.
    • In a Project-style environment, the Strategy Map becomes a Project Map and the Goals may be physical and not a Customer Perspective.
  • Achieving Scorecard Organisational Alignment:
    • This is achieved when the Personal Responsibilities or Targets are a true component of the Strategic Opjective.
    • These responsibilities are often called Key Responsibility Areas (KRA), or Critical Performance Indicators (CPI) or Key Performance Indicators (KPI) or Targets.
    • The Strategy to HR Interface occurs in the Balanced Scorecard at the junction of the Objective and the Responsibility/Target. This is the definition of the Objective as it applies to an individual and it is possible to have multiple targets for the one Objective.
    • This Interface is the point where Strategy is transferred into Action and it should be modified accorging to challenges, relevant conditions, scorecard refinements and organisational growth.
  • Intangible Assets:
    • These are defined as the Initiatives that the employees offer as their own strategy or solution to their role definition using their own expertise.
    • This is the Micro-Strategy that lies within each single or group of employees and is derived from their training and professional industry experience.
    • This defines the Departmental Budget and what must be done to keep everything working.
    • The key is personal Professional Organisation Industry Experience and that is what Organisations try to buy when employing an applicant or consultant.
  • Engagement:
    • The Strategy Map should be general enough so that all personnel can carry it around with them.
    • This is achieved when the everyone is able to "Think Strategically".
    • In their own mind they know the basic Organisational Strategy and also their own Balanced Scorecard.
  • Strategy Map WYSIWYG (What you see is what you get)
    • WYSIWYG is achieved by showing the performance figures back in the Strategy Map itself.
    • There needs to be a feedback loop from the Balanced Scorecard back into the actual Strategy Map.
    • This feedback information would be some sort of measurement and be visible as a number or mini-graph.
    • Strategy Map WYSIWYG is the ultimate CLOSED LOOP LEARNING system.
    • A Closed Loop system is absolutely essential for effective Strategic Planning and Business Performance Monitoring.
  • It is important to remember that every Organisation is different and every Strategic Plan Application is different. What is done in another organisation or department may not be correct for you. There are both Strategy Maps and Project Maps.
  • In practice the CEO "flys solo", but the team is there to help and consultants can guide you.
  • It is your own industry knowledge that is the vital ingredient.
  • This software system is not an accounting system:
    • It exists in a different time-zone.
    • It is used in an organisation by a wide range of employees.
    • It is a budget definition system that can relate to accounting cost codes.
    • It is a system that is used to track Planned parameters against Actual outcomes.
    • It operates within a Framework of Alignment with overall Strategic Objectives.
    • It employs Closed Loop Learning.
 
Static Strategic Statements
  • These are typically the Vision, Mission, Goal.
    • Old favourites Market Segment, Slogan, Motto, SWOT (Strengths Weaknesses Opportunities & Threats) are still relevant.
    • Other statements go into areas like Value Statements and Policy Statements which are also essential.
  • Vision Statement:
    • A short, succinct, and inspiring statement of what the organization intends to become and to achieve at some point in the future, often stated in competitive terms.
    • The Ford Motor Company vision: To become the world's leading consumer company for automotive products and services.
    • Microsoft vision: To enable people and businesses throughout the world to realize their full potential.
  • Mission Statement:
    • A mission statement is an Organization's Vision translated into written or operational form.
    • How you are going to achieve the Vision!
    • A teaching organisation might have "Train employees to excellence using accepted industry assessment guidelines."
    • There is similarity between the Mission and the Objectives and the distinction is the scope and gross relevance of the text. (An Objective can be a Mini-Mission Statement and an Initiative can be a Micro-Mission Statement)).
  • Goal Statement:
    • A goal is a long-range aim for a specific period.
    • It must be specific and realistic.
    • Long-range goals set through strategic planning are translated into activities that will ensure reaching the goal through operational planning.
    • The idea of "To achieve a mission with a set period" may not exactly apply to every organisation.
    • "Enable recent graduate employees to reach professionalism with a 12 month period."
    • The goal can be inside a Customer Perspective or it can be stand-alone, depending on the application.
 
Mapped and Aligned Strategic Components:
  • Objectives:
    • The Objectives usually relate to the goal either directly or indirectly.
    • They can be linked by arrows in a Flowchart (Strategy Map) arrangement.
    • They are classified (grouped) by viewports called Perspectives
    • There are four traditional perspectives which can be renamed
    • Some organisations will have a 5th perspective and this can be a specific project or new development.
  • Strategy Map:
    • This contains the Perspectives and Objectives like in a Flowchart or Mind-map.
    • Sometimes you link them with arrows, other times you do not.
    • In a project focussed department their Strategy Maps may be more like a "Project Map".
    • The map can be simple or it can be complex.
    • There is a subtle difference between Strategy Map and Project Map, but either may be suitable.
    • There can be an overall organisational or "parent" Strategy Map as well as departmental Strategy or Project Map. The department should be able to use Objectives from both Strategy Maps.
    • The Objectives in a Strategy Map sould be reasonably broad (not too heavy, not too light). They should sit "Just Right".
    • The boundary between Objectives and Goals can be very fuzzy and there are also the hidden Outcome Goals such as the "Goal of getting your Goals and Objectives correct".
    • The primary Outcome Goal is to have every employee carry the Strategy Map around in the heads and to "Think Strategically"
    • Getting the Goals and Strategy Map so they "Sit Just Right" right is "An Artform", however the benefits of even getting it half-right are huge.
 
Scorecard Components:
  • Not every Objective will apply to every employee in an organisation.
  • The Focus of an Objective as it applies to each employee is different.
  • An Objective such as "First Class Customer Service" will mean more to the Front-Line staff but still appplies in some manner to Back Office staff.
  • Clearly there needs to be a way of breaking down the Objective into smaller or "employee customised" components.
  • These frequently take the form of a specific related responsibility and this is commonly called KRA (Key Responsibility Area) or KPI (Key Performance indicator) or Target or perhaps another name.
  • In the Objectives Table (or Grid), this takes the form of an additional column that sits to the right of the Objective.
  • It is also possible to break down the KRA into another column if you wish.
  • Hence the Scorecard is a Grid or Table as in MS-Word or Excel. In the Columns on the right you say how you are going to measure the responsibility that you have assigned and then lastly there is some representation of a score.
  • Just like in the game of Golf, you can play quite happily without the use of a scorecard and handicap system, however if you want to improve you need to compete and be assigned a card to write down your scores and a number ("Handicap") that relates to your "Personal Best".
 
Activity Components:
  • Every Objective with subsequent Responsibility, Measures and Scores will require some kind of actions.
  • In the scorecard environment, these actions are commonly called "Initiatives".
  • Associated with the Initiative there are properties such as Date Span, Expense, Income, Success and Failure.
  • There are also the concepts of Planned and Actual outcome.
  • Hence the Initiatives are normally shown in a Grid or Table.
  • Associated with each Initiative is another table for the date span. The columns are the months and the contents can relate to cost, success, failure, expense, income, planned and actual.
 
AIM Presentation March 2007:
  • Our apologies if the above is a bit theoretical or "Dry".
  • You can download our presentation powerpoint which is lighter and has several pictures.
  • Dowload AIM Presentation Powerpoint here: AIM.ppt
 
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