Do you know where your business is going? More importantly, do your employees understand precisely how to get there?
You might have a list of goals tucked away on an Excel sheet somewhere, but you won't reach the promised land if you lack something more important: a strategy map.
If you're going to reach your goals, your people need purpose, clarity, and direction. Let's explore what a strategy map is and how you can use it to empower your team and help your organization succeed.
Here’s what you’re about to discover:
- What is a strategy map?
- Why is strategy mapping important?
- How to make a strategy map?
- 3 biggest mistakes to avoid in strategy mapping
- How strategy execution software unlocks your map and most meaningful work
What is a strategy map?
A strategy map is a visual business planning tool representing the cause-and-effect relationships between an organization's actions and its strategic goals. This simple graphic helps communicate how strategic objectives deliver value for the company and provides more context about how the separate goals connect to the overarching vision.
Strategy maps come from the Balanced Scorecard (BSC) framework. When it comes to business performance measurement, the authors, David P. Norton and Robert S. Kaplan, advise companies to assess key performance indicators (KPIs) in four core areas:
- Financial perspective: Includes metrics like cash flow, sales performance, operating income, or return on equity.
- Customer perspective: Includes metrics like the percentage of sales from new products, on-time delivery, net promoter score, or share of wallet.
- Internal processes perspective: Includes aspects like unit costs, cycle times, yield, error rates, etc.
- Learning and growth perspective: Includes metrics like employee engagement scores, retention rates of high-performing staff, skill increases of staff, etc.
You can learn more about this topic from our post: How to Implement the Balanced Scorecard (Strategy Framework). But let’s not get off-track yet because we’re about to answer the big question…
Why is strategy mapping important?
When chaos ensues, you'll need something to keep you on track. At the very least, you'd hope your leader could give you a map. Here are five reasons your company should create a strategy map:
Ties your goals together
A strategy map unifies all goals into a single strategy, so everyone can stay on course even if they operate in different teams.
Offers a single source of truth
Strategy maps are much easier to remember, you can display your map around the workplace to emphasize its value proposition, so people can remember the key messages and refer to them during challenging periods.
Improves team alignment and collaboration
A unified vision will reduce friction at all levels of your organization. Of course, teams have their objectives, but a strategy map shows everyone how things fit together. With that holistic view, your team has a better platform to test out ideas in line with the organizational goals.
Communicates the value of intangible resources
Harvard Business Review explained that “strategy maps show how an organization will convert its initiatives and resources—including intangible assets such as corporate culture and employee knowledge—into a tangible outcome.”
With this clarity, everyone will understand that building stronger relationships with the rest of the team helps generate more strategic value for the company.
Empower employees to become better contributors
A strategy map helps employees to feel engaged because it helps teams better understand their work's positive impact on a company. When your organization shares information with all employees, it gives them more context, which helps improve employee engagement and focus.
How to make a strategy map?
Let's walk through the seven steps below, so you know how to design a strategy map that guides your company toward its goals and more positive outcomes.
Step 1: Define your mission, vision, and core values
If you want everyone to move in the same direction, they must understand your company's mission. With clarity on what you want to achieve, your vision and company values will be easier to define.
Together, these elements act as the "true north" on your journey, guiding decisions in uncertain times (e.g., if there's a pandemic, you know, standard business challenges).
Step 2: Define the four perspectives
You can assess your business performance in the four core areas mentioned earlier: finance, customers, internal processes, and growth.
In this step, you must analyze the company environment and consider all the stakeholders. Think about your customers, competitors, suppliers, investors, and employees. With a human-centric approach to strategic planning, you can think about the roles they play and any issues they might create.
Step 3: Set strategic priorities and business goals
The strategic priorities of almost any organization typically boil down to one of three top-level business goals:
- To serve clients better
- To improve operations
- To improve the product
- To destroy an evil ring
You’ve set the foundation with your “north” and the four perspectives—now you must map out the activities that will help you realize the vision and fulfill your mission.
Remember that your strategy map should have a cause-and-effect relationship between the goals. Move top to bottom, and arrange the steps so that the goals in lower perspectives explain how you plan to accomplish the goals in higher perspectives.
Step 4: Describe the rationale
In this step, you bring meaning to your map. When you explain the reasons behind your decision-making, it makes the business strategy more relatable. People understand why they are doing specific tasks, and therefore, they’ll be more likely to engage and do their best work. Give context to your employees, and you’ll empower them to drive your strategy.
Step 5: Set lead and lag metrics
There's not a lot of sense in doing strategy if you aren't going to track the impact of your activities. Performance management helps you measure the data and use the feedback to figure out ways to improve the overall strategy.
When you assess your performance, use lead and lag metrics. Lead indicators relate to future outcomes, and lag indicators tell you the actual results. Including these competencies on your strategy map helps to convey the causal relationships between your tactics and goals.
Step 6. Define your company initiatives
You can highlight themes in your strategy map by vertically grouping related objectives. These strategic themes—or initiatives—are the collaborative action plans that inspire your employees to act upon goals. For example, you might have sustainability, customer satisfaction, or innovation initiatives.
Step 7. Strategy map software - Cascade
Within your different departments, it’s good to create local versions of the main strategy map that lay out specific goals and indicators.
This cascading approach will help lower-level employees continues to roll out the democratization of your company strategy. Every employee can understand the cause-and-effect relationships and the clear value they add to the vision.
3 biggest mistakes to avoid in strategy mapping
Even when you put your brightest minds together, mistakes can happen. Tyrion Lannister was the most intelligent man in Seven Kingdoms. Still, even he was prone to the odd mental short-circuit.
As you build your strategy map, take care not to set your people up for a nasty surprise (like Tyrion did when he sent the women and children to hide in the crypts. You were at war with zombies, man! Bad call!)
Here are a few common strategic mapping mistakes to watch out for:
You don’t know where to draw the line
You must resist the temptation to list every activity on the map. It should be short and sweet, ideally confined to a single page. If you include over 50 objectives, you won’t have a strategy that clarifies what action people should take. Instead, you’ll have a daunting list of internal business processes and operations that makes people freeze.
You devise a strategy without a plan of action
It's crucial to think about how you will take your ideas to implementation. You can create a ready-made map for execution as you visualize the plan in action. That type of strategic thinking will help you identify roadblocks that stand in the way of progress, like current operations, resources, or skills gaps.
You don’t get company-wide buy-in
The C-suite might have big dreams of explosive growth and increased shareholder value, but your strategy will not flourish if it’s kept in the boardroom. The people on the front line in marketing, sales, customer support will have valuable input as they are the ones who deal with customers.
Strategy map software for strategy execution
It will be hard to keep an eye on the strategy map at all times. You might work in a 10,000-person enterprise with countless cascading maps, or you might work remotely, so there is no office wall to pin up the map.
The best approach to create and promote a strategy map in your organization is through digital tools. When you give all employees access to your strategy execution platform (ahem, like Cascade), they can refer to the map whenever they need guidance.
And that’s not all—Cascade Maps can help in other ways:
- Map out your strategy: See your plans and strategy from a birds-eye view for the first time.
- Give everyone context: Bring out the best of your team by helping each of them understand how each of their work matters in driving your organization’s success.
- Break down silos: Anyone from your organization can understand how their work fits together with their team and the rest of the company.
- Track and measure with ease: Monitor your entire organization and how you and your team are tracking across projects and other teams with absolute clarity.
- Improve team alignment: View cross-functional alignment and detect inefficiencies before they become problems. Make sure communication happens early and effectively so that everyone stays on the same page.
We believe that strategy should be available to everyone, everywhere. The Cascade Strategy Execution Platform gives your team access to the vision, focus areas, plans, KPIs, and maps needed to move your business forward.
Stay on track with strategy maps
If you're serious about your goals, you must go beyond a simple list. It doesn't matter if you jazz it up on Powerpoint—there must be clarity about how it all fits together.
People need to understand the cause-and-effect relationships between your objectives and how their work plays a role.
A strategy map brings everything together, and in doing so, this methodology brings your people together under a shared vision and collective understanding of the mission.
When you have a well-defined map and everyone embraces this radically human approach to strategy, nothing can stop you. Not even an evil wizard with an army of orcs.
You can get the most value from your strategy when you use Cascade's strategy execution platform to create your strategy map.
Start with templates from our library. But our app doesn't limit you to specific models: you have complete freedom to customize your organization's strategy, goals, and initiatives your way.
Are you ready to map your way to the top? Start building, executing and tracking your strategy at no cost.