Setting and achieving business goals and objectives is essential to strategy execution. It can be challenging to direct employees, allocate resources, and measure performance without doing so.
Despite the importance of goals and objectives, companies struggle to map them out. According to the Phoenix Business Journal, only 51 percent of organizational leaders attempt to develop goals, and just six percent revisit them regularly.
One tool that can help ensure your goals aren’t only achievable but also create long-term value is a business strategy map.
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A business strategy map is a visual tool that helps outline your company’s objectives. It aligns actions and resources to achieve strategic goals and tells an end-to-end story about how your organization intends to create value and implement ideas.
“A strategy map illustrates the cause and effect relationships that underpin your strategy,” says Harvard Business School Professor Robert Simons, who teaches the online course Strategy Execution.
An effective strategy map needs two components:
- Arrows showing cause-and-effect relationships between value objectives
- Goals expressed as action verbs that illustrate what you’re striving for
Its main objective is communicating how your business intends to create value alongside a balanced scorecard—a tool designed to help track and measure non-financial variables at your organization.
“The balanced scorecard combines the traditional financial perspective with additional perspectives that focus on customers, internal business processes, and learning and development,” Simons says in Strategy Execution. “These additional perspectives help businesses measure all the activities essential to creating value.”
While a balanced scorecard is crucial to effective strategy execution, you must first create a strategy map.
“Without a strategy map, your balanced scorecard is really just a list of measures,” Simons says. “And those measures may or may not tie back to your intended strategy.”
If you struggle to execute strategy, here’s an overview of how to create a business strategy map for your organization.
Related: 5 Strategy Execution Skills Every Business Leader Needs
How to Create a Business Strategy Map
1. Define Your Company’s Core Values
Before outlining your company’s objectives and goals in a strategy map, you need to understand what core values they support.
Core values communicate your business’s larger purpose by:
- Inspiring employees to feel proud of where they work
- Guiding behaviors when making tough decisions
Your core values should be a framework for your strategy map's goals. This ensures stakeholders and employees are more likely to buy into strategic initiatives.
For example, Google’s mission statement focuses on making the world's information universally accessible and useful. As a result, the company’s goals of improving search algorithms and user interfaces, developing products and services that promote accessibility, and investing in new areas of technology all align with its values.
Perhaps your company values sustainability, in which case goals like transitioning to carbon-neutral production or utilizing recycled materials in products would be more likely to garner your team’s support.
With so many types of goals, it’s crucial to understand what aspects of your business strategy should appear on your map.
2. Establish Goals
Your strategy map should touch on the four perspectives a balanced scorecard typically tracks, which are:
- Financial: Creating economic value for your company and its stakeholders
- Customer: Fostering brand loyalty with your target audience
- Internal business process: Ensuring value creation for customers through your products or services
- Learning and growth: Investing in human capital and infrastructure resources to meet goals
In Strategy Execution, Simons recommends establishing goals from the bottom (learning and growth) to the top (financial). Doing so helps you reflect on how perspectives build on each other to create value for your business.
While it can be tempting to establish a financial goal first, the preceding perspectives directly impact whether it’s realistic.
For example, if you work at a retail company, its financial success may rely on factors like brand loyalty and customer service, which are driven by the customer perspective. However, improving the customer experience often requires changing internal processes, such as improving warehouse efficiency for faster shipping times.
This is why it’s better to start at the bottom of your strategy map and focus on learning and growth. Since other goals aren’t possible without a well-trained warehouse staff that understands new technologies and processes, it’s critical to establish realistic goals at the bottom before considering financial benchmarks.
Working from bottom to top also ensures that the balanced scorecard’s measures link to actionable steps for achieving organizational goals.
“Without a strategy map to tell a story, people in your organization will have no clue where those measures came from,” Simons says in Strategy Execution. “They'll be asking themselves, ‘How do I know if those are the right measures?’”
3. Ask for Feedback
Asking for feedback is an important step in strategy execution—particularly when drafting a strategy map.
Getting diverse perspectives on your strategy map can offer insights into goals’ strengths and weaknesses. It can also expose gaps you may not be aware of, such as:
- Ineffective job design
- Lack of risk management
- No employee buy-in
By asking for feedback, you can keep employees engaged, motivated, and invested in your strategic planning.
According to a study by management consulting firm Gallup, companies with highly engaged business units generate 23 percent greater profitability. They also have less turnover.
4. Revise and Refine
Much like your business strategy, you must revise and refine your map as circumstances change. If your organization is effective at managing risk, then modify your strategy map to address new market challenges.
“Competing successfully in any industry involves some level of risk,” Simons says in Strategy Execution. “But high-performing businesses with high-pressure cultures are especially vulnerable. As a manager, you need to know how and why these risks arise and how to avoid them.”
A strategy map can help address challenges such as:
- Shifting market conditions
- Emerging disruptive technologies
- Evolving customer needs
By continuously revisiting your strategy map's goals, you can integrate new insights and feedback from your team to achieve long-term objectives. Revisions don’t need to result in major changes; in some instances, they can lead to the creation of an entirely new strategy map.
“What matters, in the end, is that you’ve formally drawn the cause and effect relationships that illustrate how your business creates value,” Simons says in Strategy Execution.
Start Mapping Out Your Strategy Execution
Creating a strategy map helps align organizational goals and guide decision-making throughout the strategy execution process. While it’s best to do so during the early stages of strategy implementation, it’s never too late to start.
Taking an online strategy course can help you build a strategy map, no matter where you are in the process. Through an interactive learning experience, Strategy Execution enables you to draw insights from real-world business examples to create one that aligns with your company’s mission and goals.
Want to learn about more tools you can use to execute strategy? Explore Strategy Execution—one of our online strategy courses—and download our free strategy e-book to jumpstart your journey to implementing strategy successfully.
