In a previously published Blog, I described a Strategy Map as originally conceived by Dr. Chuck Bamford (A Simple Strategy). The Map is an effective tool to create a company wide strategy that is simple to comprehend and applies to all levels and employees of the company. Problem is, having a strategy and executing a strategy are distinct processes. Of course, without a Strategy Map to guide the way, it would be like the old saying, “If you don’t know where you are going, that is likely where you will end up!”
However, the history of many companies is littered with strategies that have seemed both wonderful and doable that never amounted to anything at all. Why is that? Well, I believe that there are two reasons: First, most companies don’t take the next step in, that is, creating an action plan that takes into account how the strategy is being executed in various areas of the company and secondly, that most companies execute strategy from the top down, rather than from the bottom up.
To summarize, the components of a simple strategy are as follows:
• Value Driver: a short statement of how the company creates value.
• Stakeholder Experience: statements of the stakeholders view of the value driver in action
• Critical Success Factors: what the company needs to have in place in order to create the
• Must Do’s: the activities that each function within the company must perform in order to
create the Stakeholder experience
• Metrics: measurements that are taken to show that the company is performing according
to the strategy.
As mentioned in the previous Blog posting, The Value Driver, Stakeholder Experience and Critical Success Factors remain the same for each area within the company, where as the Must Do’s and some of the Metrics might change for each area. The original Strategy Map is elaborated by a group representing all functions and all levels of the company. Once completed, the Map is customized by each area of the company to fit how they will support the overall strategy.
Here is an example of how to solve the first problem mentioned above: a small manufacturing company had created their base strategy map, and was then customizing the map for each area of the company. One of the company’s Value Drivers was “short lead times”. In reviewing the Critical Success Factors and Must Do’s for “short lead time”, a production team realized that one factor keeping them from performing up to snuff was the quality of information received from the client. Quite often, the data passed on from the sales team was either incomplete or incorrect. It would take several “go-arounds” to correct the data.
Together, the Sales Team and the Production Team arrived at a solution to the problem, to train the sales team to increase their understanding of the data and the proper method of collecting it. The must do for sales then became to collect the data as accurately as possible with minimal input from the production team. A metric was created that reflected how often it took more than one “go-around” to get the data correct. Thus, the sales team and the production team created a “cross-functional” Value Driver that both teams would work on to improve performance.
As for the second problem, top down as opposed to bottom up, that same company delayed the development of management and support functions Strategy Maps until after sales and production had finished theirs. Only then did management and the support functions create Strategy Maps with the understanding that their objective was to identify and execute Must Do’s that specifically supported those of the production team and sales areas. Thus, the execution of Strategy flowed from the bottom up rather than the top down.