Creating your Own Strategy Map and Strategic Picture:
This video explains a method for the difficult-but-essential and Highly Rewarding task of creating your Strategy Map and adding in the Visionary Statements to create your Strategic Picture.

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Video Script:- Creating your Strategy Map:

A Strategic Plan is a multi-layered structure of targets and goals;
- core goals, strategic goals, performance goals, activity goals and monthly goals.

The Strategy Map deals with the Strategic Goals which are commonly called Objectives.
These provide a link between the statements defined in the Visionary Goals (Vision/Mission group) and the Balanced Scorecard Performance Goals (such as KPI/KRA objectives grid columns), as defined in the Balanced Scorecard.

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Strategic Plan Definition
Visionary Goals -> <- Strategic Goals -> <- Balanced Scorecard
     Performance Goals
Visionary Statements STRATEGY MAP Balanced Scorecard
Core Goal,
Vision,
Mission,
Slogan,
Market.
Perspectives &
Purpose Descriptions
Objectives &
Objective Destinations.
Strategy Map Objectives,
Key Performance Indicator,
Key Result Area,
Key Responsibility Area,
Measures and Scores.


What is a Strategy Map?

1. The Strategy Map is an active data table or grid, with a defined row structure.

2. Each Layer or Row is called a Perspective and it contains a number of medium-term goals, commonly called Strategic Objectives.
A persective can have the one layer, which sometimes spans accross two or more actual rows to provide an improved linkage layout.
Hence it is common to use the terminology "Perspective Layer Rows", implying one layer may contain one or more actual rows.

3. Upward pointing arrows are normally drawn between the objectives to indicate either cause & effect or strategic support.

4. From top down there are 4 common perspectives:
  Finance, Customer, Internal Business Process plus Learning & Growth.
Alternatively the bottom row is sometimes called: Research & Development, Organizational Capacity, Employees and Resources or a combination of these.
An extra perspective row is sometimes added to provide a special focus, such as Safety when applied to a Dangerous Environment.

5. The top row or layer is often considered to be the Organizational Public Interface and these Objectives in this row should show support for the Visionary statements.
Inside the map, each row is supported by the layer or row below, as indicated by the arrows.

6. These objectives are considered to be replacing the earlier concept known as Critical Success Factors.
However you can still use the CSF term by renaming the text Objective to Success Factor (many people rename the objective to use the terms Goals or Targets).
Also it is possible to add a CSF column into the Objective or Initiative grids.

7. The map objectives with the arrows are also considered to be the replacement for the previously used Value Chain concept which indicated cause & effect or process flow.
Many people consider the Strategy Map to be a group of linked or companion Value Chains.

8. Strategy Maps can often illustrate a primary Critical Success Factor objective, such as a funding goal or an overall product quality issue.
In which case you would expect to see a number of arrows pointing both towards and away from any CSF objective.


Strategy Map Categories:

There are many categories of Strategy Maps and it is possible to classify them this way.
1. Reason for Existence.
2. Industry Application.
3. Map Structure Types.
4. Map Phases.
5. Map Focus Areas or Themes.
6. Descriptive Statements.

Reason for Existence:

Strategy Maps can exist to define either an Organizational Operation or a Project Completion plan. Project maps are great and fit well into the Balanced Scorecard scheme, but do this in the knowledge that your map is a project map.

Map Type Reason for Existence Objective Statements
Strategy Map Align the organizational operations with the corporate goals and visionary statements. Statements tend to be slightly abstract and orientated towards the bigger overall picture.
Project Map Achieve a set outcome either with a particular project or for a project-orientated organization. Statements will need to indicate a specific outcome.
Arrows may not always point upwards.

Our examples here will deal with Third Generation Strategy Maps not Project Maps, but there is much similarity.

Industry Application:
Strategy Maps can also be categorized by the industry style that they are applied to.
Some industry groups have applied and moved much further with this concept than others.

In Engineering & Technology Industries:

 - Whenever you have an active layered structure there will always be issues with the junction between the layers.
   - These are called the layer interfaces.
 - It is essential to have clearly defined cause-effect and value-chain interfaces.
 - These interfaces are sometimes defined using a Service Level Agreement contract, commonly called an SLA.

Application 3rd Generation Statements Other Definitions
Engineering & Technology Perspective Purpose, Objective Description and Destination. Objective Arrow connections define SLA, Cause-Effect and Support.
Major Corporate Objective Description and Destination. Possible SLA.
Medium Office Objective Destination  


Strategy Map Structure Types:

There are 3 basic Strategy Map structures with a focus on the top row, or external interface as the organizational outcome or product.

For example, a sales department sells operational solutions bu reassuring the customer.
So what they are really selling is quality customer service and product knowledge, which when added to a tool provides some kind of automated or labour saving solution.

The map top row is either Customer or Finance, depending on the organizational output focus.

Organizational Map Type Funding Visionary Statement Supported by Location of Finance Row Finance Row Supported by
Financially Focussed organization Critical Finance Top Level Customer
Customer Focussed Sales organization Closely Linked Customer Second Level Internal Process
Government or internal service department Indefinite & Budget based Customer Mid or Lower levels Budget Submissions


Strategy Map Phases:
Strategy Maps also have Activity and Outcome phases and the definitions of these can sometimes illustrate differences between government and commercial.

The Government Stakeholders are the people who pay taxes and vote at the elections.
Commercial Stakeholders are either the owners or shareholders.

Commmercial Rows or Layers Phase
Stakeholders Happy Outcome
Make Profit Outcome
Customers Happy Outcome
Organise Products Activity
Organise Operations Activity
Train Staff Activity
Government Rows or Layers Phase
Electoral Success Outcome
Government Happy Outcome
Customers Happy Outcome
Manage Projects Activity
Obtain funding Activity
Budget Submissions Activity


Strategy Map Focus Areas or Themes:

Some Strategy Maps may also define Themes or Focus Areas.

These are simply groups of Objectives that may range across multiple rows anywhere in the map, for the purpose of applying a focus.
A theme is any concept that can be represented by two or more Objectives, and you can choose the names according to your needs.

Generally speaking the use of Themes is not a well used concept for these reasons:
1. There is a lot of design work to be done with the map before you can consider showing the Themes, even if they are pre-defined.
2. There are many maps where the existing Objectives actually represent the Themes as they need to be measured.
3. Themes or focus areas are sometimes added as Perspective Rows.

However there is no doubt that when the Strategy Map is complex, the use of Themes will aid the management of a strategic Plan. In our Drill-Down Dashboard software module, the ability to cross reference the entire database by a theme is a powerful facility. Our software Version 5 will support the use of Themes.

Some examples of Themes are: Customer/Client Management, Operational Excellence, Stakeholder Needs, Organizational Needs, Innovation Management, Product Innovation, Sales Expansion, Performance management, Executive Enhancement, Compliance & Communication, Brand Development, Fiscal Responsibility & Success, High Quality Programs, Superior Customer service, Accountability & Efficiency, Teaching & Learning Excellence, Himan Capital, Information Capital, Organizational Capital, plus just about anything that applies to your business.

These Themes or Facets are used in the Cranfield University Performance Prism:
SWAN: Stakeholder Wants & Needs
OWAN: Organizational Wants and Needs
OPEX: Operational Excellence

Strategy Map Descriptive Statements:
As the concept of the Balanced Scorecard progressed, users found that they needed to know the reason for the choice of all Strategy Map Perspectives and Objectives.
To provide improved motivation, management also needed to demonstrate that these medium-level strategic goals are permanent and defendable.

Hence each Perspective and Objective should be backed up by statements that explain and defend their existence. These are commonly called 3rd Generation Balanced Scorecard Statements.

As mentioned below many Strategy Maps have the customer as the top row, however this is ultimately a decision that the author needs to make. This example puts the finance perspective at the top and shows the perspective purpose statements.

Perspective Description or Purpose
Finance Our stakeholder wants and needs will be fully satisfied through innovative initiatives which will maintain and improve our financial performance.
Customer We will strive to always impress our customers through innovative product provision, proactive industry knowledge and productive relationships.
Internal Business Process Our staff will constantly focus on Operational Excellence issues including safety, efficiency and proactivity.
Learning & Growth To achieve our operational performance, our staff will perform learning based initiatives that will enhance organizational capability.


Strategy Map with the External Interface or top row as Finance:

In the situation where you have Finance as the top perspective row, you are probably focussed on maximising shareholder returns.
The row below will probably be the customers, as this is your source of funding and therefore supports the Finance objectives.
Below this, all rows exist to support the customer.

Perspective Row Objective Destination Interfaces
Finance These Objectives are here to define your external interface. 1. Strategic Visionary Statements
2. Banks
3. Stakeholders
Customer Objectives must support the finance rows. Customer Sales = money.
Finance Objectives can succeed as planned.
Internal Business Process What are we going to do to achieve our customer objectives? All customer objectives depend on these processes.
Learning & Growth (or Research & Development) What will we do to support improvement to our Internal Processes? We must improve our products and processes by research and learning.



When the External Public Interface Layer is the Customer:

If you are a customer focussed sales or service organization, then this model may suit you and it may be that this model suits some government organizations.

1. You declare that your primary external interface is the customer and everything you do is Customer focussed.
2. The Sales-Finance Income link is assumed. So you automatically get increased profit from improved sales to better quality customers.

Shown here the Finance Perspective supports the customer level.
Some Finance Objectives may not point any higher, in which case they would be supporting the Visionary Statements.

Perspective Row Objective Destination Interfaces
Customer Improved customer satisfaction and loyalty creates greater income, which leads to better development. How does the customer see you?
Would the customer recommend you to others?
What more does the customer want?
Finance Define Sales Improvement targets. Budget support for the sales team.
Finance General Financial outcomes. Improve Efficiency & Stakeholder Dividends.
Internal Process What are we going to do to achieve our finance and customer objectives? All Customer and Finance objectives depend on these processes.
Learning & Growth (or Research & Development) What will we do to support improvement to our Internal Processes? We must improve our products and processes by research and learning.


Some people prefer that Finance supports Internal Process layer and this then supports the Customer layer:

If you are a government department, then this may well be the case.
Hence you may decide to position the Finance layer rows further down in the map and create an extra perspective for Project Funding.


Design and Analyse Perspective Layer Rows:

It is your Strategy Map and it depends on your industry knowledge.
You create it by surveying the bigger picture and making a value judgement based on how the layers work inside your organization.

It is natural that most people will have difficulty designing & creating Strategy Maps, this is often because their initial focus is too broad.
In creating a Strategy Map, you are taking a real world situation and forcing this into a layered structure.
It can be helpful if you focus on one perspective layer or row at a time.

1. Determine your initial focus for each Perspective Layer, starting at the top and working down.
2. Consider the relationship with the other adjacent layers.
  - How does this layer exist?
  - Is the layer in the correct position?
  - Should we define any SLA style support agreements?
3. When you have defined your layers and know why they exist, the Objectives in each layer row will fall into place, according to their need to support the layers above.
4. Improve what you have created over time with assistance from work associates.
6. Add 3rd generation statements that say why you have chosen that Objective and where it is heading.

So when you have broken down the Map into layers or rows, it becomes easier to decide each row of Objectives based on what needs to be supported above.
  - Looking at each perspective row, we can decide what needs to be done from a bigger picture framework.
  - Remember that it is not the job of the Strategy Map to get involved in the applied processes; this is what the Balanced Scorecard does when it defines how each strategic objective applies to each employee.


Creating StrategyMap Objectives:

Keep the Objectives broad so that they can be assigned to people from multiple departments, this allows them to effectively engage and collaborate.
The employees will use this to build success-orientated communication links within the organization.
Often you will find that some or your Objectives seem to have more of a project flavour and hence they would naturally have a shorter time focus.
  - They may be important this year but be changed or removed the following year.

One option might be to make them a bit more abstract or general so that the Strategy Map Objective is unchanged for three years.

Alternatively you might choose to merge these in with some other more permanent Objective.
You can then use a KPI/KRA to define the objective goal.

Hence you avoided the difficult task of changing the organizational Strategy Map in the future.
  - You have assigned the KPI or KRA to deal with this project task.
  - The allocation and the Initiative activities can be varied from year to year.

The primary immediate outcome of the objective definition process is to enhance staff collaboration on each objective:
  - 1. Staff should form teams from different departments to focus on each Objective.
    - The Balanced Scorecard software should show who else in the Organization is working towards this Objective.
  - 2. Objective Teams should provide presentations to other staff and take pride in their work.
  - 3. You should expect improved Objective Collaboration, Engagement and Performance.


Summary:

This presentation defines how some people would create a Strategy Map.
There are as many methods and map styles as there are industry groups and categories.
We hope that this is useful as a guide for creating you own Strategy Map.
In producing this presentation we have used Layer & Row Theory to define what a Strategy Map actually is, and to position it inside the overall Strategic Plan.
We believe that once the rows are carefully defined, if is much easier to create each objectives within each row.

We provide the following example objectives with the warning that it is industry standard practice not to copy existing definitions.
It is highly recommended that you maintain a focus on your own industry environment and work from this platform, and only use the examples as a guide.

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