Create a strategy map


We are writing here about ‘strategy map’ it means that a strategy for the firm must have a suitable plan for implementation. Strategy precedes planning and planning must follow strategy. This sounds more of a theory but helps the concerned managers how to go about creating the strategy map or structure or guidelines for the firm.

Clarifying your firm’s strategy sets the stage for implementing that strategy. But it is just the first step. In most organizations, the customer value embodied in the firm’s products and services is the result of a complex, cumulative process- what Michael Porter refers to as the firm’s value chain. All firms have a value chain—even those that haven’t articulated it—and the company’s performance measurement system must account for every link in that chain.

To define the value-creation process in your organization, we recommend that the top –and mid-level managers who will be implementing the firm’s strategy develop what Bob Kaplan and Dave Norton call a strategy map to represent the firm’s value chain. Such graphic representations of the company’s value chain reveal how the firm creates value in terms that managers and employees alike can grasp and act on. The value-chain mapping process should involve managers from all functions across the organization. This broad participation not only improves the quality of the strategy map but also increases buy-in among critical players. To begin the mapping process in your own organization, take a close look at your company’s strategic objectives and ask yourself the following questions:

* Which strategic goals / objectives / results are critical rather than nice to have?
* What are the performance drivers for each goal?
* How would we measure progress toward these goals?
* What are the barriers to the achievement of each goal?
* How would employees need to behave to ensure that the company achieves these goals?
* Is the HR function providing the company with the employee competencies and behaviors necessary to achieve these objectives?

These simple questions can generate a wealth of information about how well a firm’s HR function has been contributing to the organization’s success. We also suggest supplementing these discussions with a variety of other information –gathering tools, including questionnaires to test employees’ understanding of the firm’s goals, and surveys to generate additional data about the firm’s performance drivers and organizational capabilities. Once you think you have a full picture of your firm’s value chain, translate the information that you have gathered into a conceptual model using language and graphics that make sense in your organization. Then test for understanding and acceptance in small groups of opinion leaders and though leaders throughout the firm.

A strategy map of the value-creation process contains hypotheses, or predictions, about which organizational processes drive firm performance. Normally, a company validates these hypotheses only after achieving targets on performance drivers and observing the impact of these results on firm performance. However, if the organization can graphically depict the relationships among performance drivers while mapping the firm’s value chain, it can have that much more confidence in its strategy implementation planning.

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