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Financial Goal: Gain $10M in ARR
Are your employees less engaged at work?
If so, you’re not alone.
reveals only 36% of U.S employees are engaged at their work and workplace - an issue for business leaders if you’re looking to steer your company into another successful year.
While many factors determine employee engagement, you as a business leader can support your employees and management team is to communicating the business strategy's direction while marking out how your employees contribute to the organization’s strategy.
Suppose you’re unsure where to begin, not to worry!
There are tools to help you - the strategy map.
What are strategy maps?
A strategy map is a visualization of a company’s strategic direction and how it plans to achieve its organizational goals.
Strategy maps are an essential component of the Balanced Scorecard, a performance management system developed by professors Robert Kaplan & David P Norton.
A strategic framework first introduced in 1992, the balanced scorecard provides precise visual feedback between internal business processes and external performance metrics to assist in assessing and improving performance measurement. It also communicates how intangible knowledge creates value for the organization.
How do you know if a strategy map is correct for you?
Example of a strategy map ()
Effective use of a strategy map helps to:
Communicate an organization’s business strategy and business model across the organization Keep organizational leaders focused on what they want to accomplish Display causal relationships between strategy and internal processes Showcase the contribution of intangible company assets to tangible outcomes
A strategy map helps business leaders and department heads systematically assess your organization’s priorities and goals while planning the strategy for a new year or quarter. It also allows teams to align on how their work contributes to broader organizational goals using a clear visual representation. Every employee can see how they contribute and work towards a distinct purpose, keeping roles clear and employees motivated.
Use a strategy map when:
You need a more effective way to articulate and communicate your strategy You’re seeing a disconnect between your organizational mission and vision versus strategy execution You lack clarity on what’s needed to accomplish your strategic goals
So, how do you create a practical strategy map for your organization?
Creating your strategy map: Four strategy map perspectives to consider
A strategy map categorizes an organization’s strategic themes into four categories.
Internal business processes Learning and development processes
Finance and customers are your desired business outcomes, whereas internal business processes and learning or developmental categories describe what action you’re taking to achieve these business outcomes.
1. Finance: How do you want your business to grow financially?
The financial perspective concerns everything to do with the company's financial health. Objectives related to revenue growth, enhancing company productivity, and improving company profit margins to help your company grow financially.
Some questions you can consider to develop your strategic themes:
Which customers markets should we target for profitable growth in the short-term or long term? How do we upsell or improve access to sales opportunities by increasing our value to existing customers? Do we need to modify our pricing strategy or create more shareholder value? How can we reduce our operating costs while keeping things efficient? Can we use our existing assets more effectively?
2. Customer: How do you want to grow with customers?
The customer perspective details what you need to deliver for your customers to achieve your financial objectives.
Relevant questions include:
How can we develop customer relationships to improve our net promoter scores and customer retention rates? What steps do we need to take to grow our market share in our existing markets? For example, do we need to create new products or modify a current product? Can we articulate our organization’s value proposition to our existing and potential customers clearer to improve brand awareness?
3. Internal business processes: What processes do you need to achieve financial and customer growth?
Having laid out your top-level customer and financial goals, now it’s putting processes in place that will help you hit these objectives. That’s what the internal process perspective aims to answer.
For this perspective, consider:
Which internal processes influence the success of your strategy? Processes should relate to activities delivering the value propositions set out in the customer perspective. For example, if you’re aiming to improve customer retention rates for a software product, you could examine your customer engagement processes and closely look at user satisfaction scores. How do you set relevant objectives and key performance indicators (KPIs) to help ensure you’re on the right track? Think about the metrics you’ll measure to make sure you’re delivering a better experience and progressing with your broader organizational goal
Examples of relevant internal process objectives could be:
Internal process improvements (internal team processes, approval processes, customer management processes) Optimizing quality of product deliverables (reducing wastage during production) Using existing resources more effectively (employing technology and other innovations to boost efficiency)
4. Learning & Development: What skills do your employees need to smoothly run the processes?
This perspective address the organization’s intangible resources, especially relevant for today’s knowledge-driven workplace. These elements become your foundation to help bring your business strategy to life.
Examples of learning and growth components:
Human capital: The collective knowledge, competencies, skills, and experience of your employees Information capital: databases and other infrastructural elements Organizational capital: initiatives promoting employee engagement, culture, and leadership.
These four perspectives build upon each other, with internal processes and learning and growth components forming the base of your strategy. Read your plan from the bottom up to see how the elements connect.
💡 Tip: The perspectives of learning and development and business processes are likely to have some resource requirements. Be sure to factor in these considerations while creating your strategy map.
Five benefits of a business strategy map
Is it worth the time to put together a business strategy map?
We certainly think so. Here’s why.
Strategy maps promote coherent communication across the organization
Consistent and clear communication is for business leaders, especially since the pandemic started.
Strategy maps depend on establishing a clear cause-and-effect between employee efforts and overall strategic goals. It identifies tasks to complete to realize the strategy. Team leads understand how to prioritize tasks and lead their teams effectively, whereas team members understand why specific tasks are crucial to meet company objectives.
Achieving this level of transparency helps soothe employee anxiety about the organization’s plans and their future in the organization, potentially boosting their performance.
Strategy maps keep business leaders focused on key objectives
Strategy maps provide a creative constraint when setting organizational goals.
They should contain no more between
By forcing you and your team to condense your business strategy and plan into a one-page document, the process keeps your team focused on what’s truly important.
Heightened organization-wide focus speeds up decision making
A strategy map excels at providing breadth and depth for busy business executives.
For example, it helps give you and your management team an overview of the relationships between departments and intangible assets (like the assets detailed in the learning and growth perspective) at a glance. It’s also flexible enough to help you dig deeper into individual components when needed.
Quickly spot areas for improvement and critical weaknesses without the clutter, identify potential risks to speed up decision making, all on one page.
One reference point for organizational strategy prevents silos from forming.
Every organization needs to proactively look out for the formation of knowledge silos - situations where a team has information that isn’t shared with other groups, creating frustration for all.
And silos are more common now that we’re working remotely. Since companies started working from home, employees see a in scheduled meetings, emails, and chat messages.
Strategic maps provide everyone a common reference point if they’re unclear about what to do next. Everyone knows what everyone is working on, promoting adequate knowledge sharing across teams.
Putting in the work to create a detailed strategy map and constantly referring to it during offsite team meetings, quarterly business reviews, and other strategy meetings keeps your entire organization aligned across layers and perspectives.
Track performance against company-wide objectives
Strategy maps aren’t just for review meetings.
They can also help with performance management against your company goals, turning your static map into a performance dashboard against your Identify which areas you’re performing well in and where you need to improve.
Seven steps for developing strategy maps
Let’s walk through how to create a practical strategy map.
1. Define business mission, vision, and goals
Image: The elements of an effective strategy pyramid.
Before going into the strategy mapping process, start with defining crucial information about your organization.
Company “Why”: Why does your company exist? What direction is it taking and why? Company vision: Where does your company want to be in the future? Don’t be afraid to paint a picture of your envisioned future and clearly say what you want to achieve in the future. Company goals: Based on the first two elements, what goals are you setting to make that vision and mission a reality?
Following these steps establishes the company’s true north, answering deeper questions about meaning and purpose, possibly preventing your employees from feeling that their efforts aren’t contributing to a broader goal. They help you stay firm when facing uncertainties, acting as principles to make decisions.
A clear mission and vision help beyond motivating your employees too. Getting clear on these steps will help you logically explain your strategic decisions to your team, customers, or even your external stakeholders like company investors get on board with your strategic plan or
2. Analyze the industry and market
Once you’ve gotten clarity on what your company stands for, now analyze your company in relation to the broader industry and market.
For example, consider your competitive position by using like demographics, geographics, psychographics, and customer behavior. The can also aid you in defining current market trends and Tip: Use the methodology to analyze what your competitors are doing systematically.
3. Identify business objectives and strategic priorities
Based on the four categories listed above, define your top-level and strategic business goals. Ensure a clear cause-and-effect connection between each goal - you may need to spend some time here to make the relationships clear and explain why these goals are essential.
Top-down logic explains how to achieve goals from lower perspectives and vice versa.
4. List actions to be taken
Now you get down to the nitty-gritty, breaking down objectives into clear actionable tasks to complete. Consider dividing these into phases, with defined timelines to keep your team on track. Each action should also have a clear task owner to hold teams accountable for progress.
Tip: Use Coda’s growing list of to help plan your project execution and timelines.
5. Show cause and effect relationships
Effective strategic maps thrive on cause-and-effect relationships, so ensure you can establish links between each objective and initiatives you set out. Each element and perspective should be accounted for and show how it creates value, linking to an overall goal.
Tip: The linkages between a strategy map’s elements need to be validated to make sure your mapping is accurate.
6. Define key performance indicators and metrics
How do these strategic goals translate into specific operational excellence? How can you measure progress across the value chain? Here’s where you work together defining (and agreeing with your team in charge) that these are the metrics you should use to measure and determine progress.
7. Create more specific strategy maps for each team
Once you’ve created your organizational-wide strategy map, consider working with your heads of departments (if applicable) to create a particular strategy map for each department to focus on each part of the strategy while aligning the organization across common goals.
For example, if one of your goals is to increase market penetration for a specific product, you could break down your goal by the department. The marketing team, for instance, could set goals to create engaging content or complete a website revamp.
Ultimately, strategic mapping isn’t a one-off exercise. Strategy maps should be referred to consistently as part of your strategic review process and be flexible enough to adapt to any changes on the ground to ensure their relevance.
Communicate organizational strategy clearly with less frustration using a strategy map
Communicating organizational strategy in a way that motivates and encourages your team members can be tricky.
It takes work to translate a strategy that makes sense in your head into a tangible document that others can both understand and get behind.
Tap on tools like the strategic map framework to help make sense of your plans while packaging them in a way that translates programs into action.
👉 Get started with this strategy maps template.
How to use Coda’s strategy map template
Step 1: Define mission, vision, and goals
In the page, you should write out your team or company’s mission, vision, and goals. You can create multiple sub-pages if you want to add more content and documentation around your company’s north star. Feel free to include images and embed presentations so that anyone who go this page understands the mission, vision, and goals of your company.
Step 2: Add goals and KPIs
The main page to fill out is the . Each of the four major perspectives in the strategy map are listed as sections on this page. For each perspective, write out a specific goal you are trying to achieve. Then, you can define the KPIs that your company wants to track for each perspective. For each KPI, you can indicate whether it’s a leading or lagging indicator, what the current state is, and what the desired target is for that KPI. A list of all KPIs across the four perspectives can be found in .
Strategy maps FAQs
Who should create a strategy map?
Heads of department and senior management should be involved in creating a strategy map, ensuring that you align priorities across the various departments of an organization. Once you’ve created your strategy map, these people are also responsible for communicating its contents to the people involved in completing the tasks required to make the strategy a reality.
What is a strategy map used for?
A strategy map is used to establish and communicate organizational strategy and how employee contributions contribute to broader strategic goals on a single page. While formulating a strategy map helps senior management get clarity on organizational priorities, it’s also used to help motivate employees and engage them at work by showing how their work matters to the organization.
What are the elements of the strategy map?
Strategy maps are based on four perspectives of the balanced scorecard theory - financial goals, customer-related goals, internal business process improvements, and learning and growth.
What is the difference between strategy maps and balanced scorecards?
The balanced scorecard is a strategic framework first introduced in 1992. It gives management teams a more balanced view of organizational health and performance by including the influence of essential but non-financial metrics like internal business processes and external performance metrics from four perspectives - financial goals, customer-related goals, internal business process improvements, and learning and growth on business performance.
In comparison, the strategy map is a standalone planning tool used to communicate the relationship between strategic objectives and specific initiatives easily. Teams use strategy maps to guide the tasks needed to meet strategic objectives while keeping teams accountable for progress.
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