Strategy Maps

Too many Strategy Maps are so complex that they look like a plate of ‘spaghetti and meatballs’ due to there being lots of objectives with arrows dashing everywhere. But too few objectives often mean a vague and meaningless map no sense of causality. What’s your observation?

Peter Ryan, Corporate Performance Manager, City of Christchurch Council, New Zealand

Perhaps the greatest value of strategy mapping is that it provides the opportunity to identify the critical few strategic capabilities and relationships that will really make the difference in delivering the strategy. However this is typically a much greater ask than it sounds. As a result, the required effort to complete the task successfully is not expended. 

So, for instance, rather than taking the time to identify those few objectives that truly create value ‘in the eyes of the customer’ organizations opt for those that are generic and easy to point to and agree upon (and hard to argue with) such as ‘satisfying customers’ or ‘increasing customer loyalty’.

Similarly, the opportunity to identify strategically critical employee competencies in the learning and growth perspective is eschewed in favour of objectives such as increase employee satisfaction.

What organizations end up with is a Strategy Map with a set of causal relationships such as increased employee satisfaction = increased customer satisfaction = increased customer loyalty = increased profits. This is the classic Service Profit Chain which has been historically hard to argue with (although it’s fast becoming an unsafe model in the knowledge era). However it is of more use as a mantra than a Strategy Map. A map containing just a handful of such ‘vague’ objectives is of little value to organizations and it soon withers simply due to its blandness and lack of inspirational power.

On the other hand, if an organization tries to isolate the minutia of value creating activities and show all of the causality, the result is often a Strategy Map that looks like a kaleidoscope of confusion. Dozens of objectives and causal arrows may be of use in understanding the drivers of value but is unwieldy and inappropriate as a day-to-day strategy management tool – it’s too difficult to communicate, severely enervating to implement (you wouldn’t do it twice) and updating would be impossible.

So if simplicity and complexity are equally found wanting, then what is the solution?

To me, there are two parts to the answer. Firstly, it’s about being simple but not simplistic. ‘Simple’ means the map has a well-defined set of the critically few objectives that are laser-focused, easy to communicate, inspirational and meaningful. For example, the dramatic performance turnaround at Saatchi & Saatchi was predicated on a Strategy Map of just 12 objectives. There was just one objective from the customer perspective ‘create permanently infatuated clients’. There was also just one from learning and growth ‘one team, one dream’, which spoke to the need to pull a disparate group of companies that had been unified through acquisition, behind one vision and in doing so create one culture.

Secondly a Strategy Map is just that – a ‘strategy’ map and not an ‘operational’ map. It should not depict every activity the company does. To illustrate, behind Saatchi & Saatchi’s 12 objectives and about 25 measures was a massive amount of value-creating activity, including a large-scale restructuring, which although vital to the organization would have confused the message on the Strategy Map.

Indeed it is typical of the inexperienced scorecard builder to attempt to portray not just primary drivers in strategy maps, but secondary and even more tenuous ones as well. Once this approach is adopted pretty much everything has some degree of effect on everything else and the inevitable result is a ‘spaghetti and meatballs’ Strategy Map, as you put it. It is simply impossible to tell from this sort of diagram what is a real-world driver and what is simply a piece of intellectual gymnastics.
A good Strategy Map will capture the former without confusing matters with the latter. Usually the overabundance of linkages comes about from the combination of an inexperienced scorecard builder and employees who are new to the scorecard. The classical process invariably involves consultation and group brainstorming – which is of course valuable – but a lot of tenuous connections are captured and not adequately quality controlled later.
It is interesting to note that in their last two books Strategy Maps and Alignment, Drs. Kaplan and Norton have de-emphasized the depiction of arrows showing causality between individual objectives, rather stressing the relationship between groups of objectives or simply from perspective to perspective. This may be their recognizing that today value is created not so much by a simple domino effect from objective to objective but a more dynamic set of relationships – more quantum physics than Newtonian cause and effect. This does not lessen the value of Strategy Maps but it may lead to an evolution in how we think about and deploy them.