BUSINESS GENERATION IS A SPECIALIST BUSINESS PLANNING CONSULTANCY

Strategy maps describe how the organisation creates value

A strategy map is a visual representation of the cause-and-effect relationships among the components of an organisation’s strategy. It provides a uniform and consistent way to describe a strategy, so that objectives and measures can be established, communicated and managed.

The objectives in the four perspectives are linked together by cause-and-effect relationships.
Starting from the top is the hypothesis that financial outcomes can be achived only if targeted customers are satisfied.
The customer value proposition describes how to generate sales and loyalty from targeted customers.
The internal processes create and deliver the customer value proposition.
And intangible assets that support the internal processes provide the foundation for the strategy.

In particular, strategy maps specifically recognise that more than 75 percent of an organisation’s value is represented by its intangible assets – its human capital, information capital and organisation capital – and that the value of those intangible assets depends on their alignment with the organisation’s strategy.

The concept of strategy maps was developed by Professors Robert Kaplan and David Norton of Harvard Business School. It followed their development of the Balanced Scorecard® as an integrated tool for operational performance management.

Implementation plans and programs – and the establishment of a monitoring system for the Beneficiary Performance Indicator (BPI) – represent the final stages of the Argenti strategic planning process. When the Strategic Plan is being documented, these implementation plans and programs are usually assembled into a so-called ‘work break-down structure’ which integrates the various strategic responses and sets out the next level of detail for the Board in terms of work elements, owners, time lines, inputs and impacts. In that context strategy mapping simply provides one possible tool to assist in fleshing out the strategies – ie articulating and sequencing the specific initiatives required within each strategy. Strategy mapping is however a powerful dynamic in its own right. It provides an intuitively compelling framework for housing the suggestions that arise in strategy sessions, and it helps to highlight any gaps in the logic sequence.

Web-based utilities and workshops

For those clients who are completing their Strategic Plan and wish to utilise strategy mapping to develop their work break-down structures, we provide access to a customised web-based utility. This utility is provided via an application server provider (ASP) on a monthly subscription basis for the number of concurrent users required. It is highly visual and intuitive, while providing the functionality for executives to ‘drill down’ where more information is required.

We can assist with getting you up and running. In particular we facilitate hands-on workshops where nominated teams of participants with on-line access take ownership of the mapping process, thinking through the various intermediate objectives, performance measures, correlations, initiatives, owners, timelines and resourcing. Please contact us for further information or to organise a trial run.

Performance management and
the Balanced Scorecard^®

In the course of providing assistance with strategic planning we encounter considerable confusion about the various management planning and reporting tools available – what they are, and where they belong. Sometimes it’s just semantics, but we do like to differentiate between operational performance management tools – which are transaction and process-based, and which lend themselves to KPIs, targeting and continuous improvement - and strategic planning, which, because of the scale and time frames involved, lends itself more to project management disciplines.

The framework of the Balanced Scorecard^® is familiar to many managers, and we leverage off that familiarity where we can. In turn, we often find that our clients’ existing operational reporting is largely financial, one-dimensional, and relies on lag indicators which hamper its agility in the marketplace. More importantly, they fail to engage the majority of the workforce. We may introduce strategy mapping to develop work break-down structures, and then be asked to assist with enhancing the existing operational performance management systems which support and drive existing organisational activities. In that event we find the above-mentioned ASP-based tools a very effective way of introducing concepts visually; and then we can migrate to additional web-based options more specifically designed for the Balanced Scorecard^® itself. Although that may sound back-to-front, we then have the benefit of understanding the strategic significance of particular underlying processes, which in turn enables us to adopt the most potent KPIs for achievement of real performance improvement.