Part 2: We weights the seven factors in terms of relative importance, discuss the weights and highlight differences of opinion.
Part 3: We score the factors in terms of historic, current, forecast and objective and determine the Strategic Trajectory then determine the weighted gap by applying the weights to the scores – see example below.
Part 4: We analyze the gaps and develop a list of projects to close the gaps.
The Strategic Map
In conducting the analysis so far we have looked at a single Focus Question which might, for example, have been “What are our Critical Concerns with regard to the current strategic situation” leading to “Critical Strategic Objectives” or similar.
This is one very specific view of the organization and its competitive environment. This is frequently all that is required for a small business with one or a few personnel but at the level of an organization employing thousands this is clearly not sufficient. In discussing what follows it is important to recognize that there is a continuum from potentially a single SnapShot© for a one person business to dozens of SnapShots© for a large business. The method is entirely scalable!
In considering what follows it is important to understand the SnapShot© as a quick and effective strategic analysis technique for any facet of the organization be it a large enterprise, a government department or agency, or a large not-for-profit. At the other end of the scale, SnapShots© can be used right down to the level of formulating the structure and conclusions of a report, book or presentation.
For now, I will focus on moderate sized businesses with the understanding that elements of this can be employed for an ambitious small business right down to a one person operation with limitations. It can also be applied to a very substantial organization.
The figure below illustrates an example of a Strategic Map for a moderately large organization:
This level of detail would typically be applicable for an organization running to a few hundred personnel and much bigger.
The exact components of the map will be determined by the Executive leadership team at the time that the Strategic Planning initiative is being planned and it is so that the map can look very different to what is depicted above although I consider the above design to be optimal for most organizations.
Following is a brief discussion of the major components of the map presented above:
- Core Strategic Objectives — maximize value creation while minimizing value consumption or destruction – one or more SnapShots© for example “Critical Objectives”, “Essential Elements of Value Creation”, “Critical Elements of Value Consumption / Destruction”.
- Core Strategic Parameters – what is the “Strategic Essence”, what are the core “Strategic Drivers” (financial, personnel, assets, raw materials, etc.).
- Owner Critical Success Factors – why have the owners / investors invested in the business? What will keep them invested, what will keep them from disinvesting. In the case where the owners are still the founders of the organization this may go deep in terms of the fundamental reason they started the organization.
- Market and Product Factors – depending on the size of the product portfolio this could be quite a substantial number of SnapShots© starting with “Core Markets”, “Critical Market Attractiveness Factors”, then for each Market, “Customer Critical Success Factors” for our products in our markets, one analysis per Customer Type. This might also look at “Critical Alienators” – things we do to drive customers away.
- Supplier Factors – this could look at “Supplier Critical Success Factors”, “Core Suppliers”, etc.
- External Strategic Environment – looking at the horizon, medium term and short term situation in terms of “Critical Threats”, “Key Opportunities”, etc.
- Internal Strategic Environment — “Key Strengths”, “Critical Weaknesses”, “Core Operational Components”, “Critical Concerns” with regard to each major Department, with regard to Staff, with regard to Workforce, with regard to Systems, with regard to Information Technology, etcetera. This could cascade down to SnapShots© at the level of individual Departments in individual Branches, Districts and National Regions.
- Strategic Capability (The Ability to envisage a future state and get there) – “Essential Executive Questions with regard to Strategy Implementation”, “Critical Concerns with regard to Strategy Implementation”, performance relative to the “Critical Factors causing strategic plan implementation failure” and the “Critical Factors for strategic plan implementation success”, etc.
- Corporate Strategy Governance – the effectiveness of the leaders of the organization from the perspective of strategic management, could include “Critical Concerns with Regard to Strategic Governance”, “Critical Success Factors for Strategic Plan Implementation”, etcetera. Would typically also look at availability of Executives and Managers for Strategic Activities and look at the effectiveness of Delegation throughout the organization.
You will note from the diagram that relative weights are assigned to each of the nine major building blocks of the Strategic Map. These weights then cascade down to the individual SnapShots© in each block. Relative weights are assigned to each of the SnapShots© within a block so that the weights cascade all the way down to the individual projects in the Gap Analysis and thereby ripple through into the Strategic Action Plan. So every single project in the entire plan has a fractional percentage relative weight that allows overall prioritization of all initiatives.
The Strategic Map provides a logical structure to tie together all elements of the analysis leading to the Strategic Plan. By the nature of the processes they are very inclusive and there is a high level of engagement with managers at many levels in the organization so the resulting plan is the consequence of the collective wisdom of the entire management cadre of the organization. By extension, the implementation of the plan is also very inclusive and collaborative.
The use of cascaded relative weights from the very top levels of the plan to the fine detail of the executable projects ensures that the entire organization is focused on the 20% of the projects that will deliver 80% of the Strategic Value and competitiveness. The process removes the mystique from Strategic Planning and replaces it with a robust, easily understood model that can be applied at all levels of the organization no matter how large or small.
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