How to use Strategy Map to Translate shareholder expectations into Key Action

Strategic Planning can be interesting process when appropriate tool is used in conjunction with it.  I used a Strategy Map to help me to develop Strategic Objectives in the four perspectives of the Balanced Scorecard concept. Then key measures and target was established based on the Lead and Lag indicators approach.    

I was in a strategic planning session yesterday with a group of senior executives in a company. We were there to develop key actions for the expectations given out by the company’s shareholder. In this article, I would share with you a brief process that we went through.

1. We review and understand the shareholder expectations.  They are as follows:-

1.1.      Market share of 55% for local and 2% – 5% for export in countries such as Singapore,    Australia, Middle East, Europe and USA

1.2.      Attained a Profit Margin of 28% average

1.3.      Cost Reduction of 30 million

2. We review the existing strategies to determine whether it is still adequately address the shareholder expectations.  Some of the strategies are:-

2.1       Branding Building

2.2       Strengthen local market and penetrate into export market

2.3       Cost Reduction Initiatives

3. We tested the expected outcome of each strategies to determine whether it help to achieve shareholder’s expectations. For this, we brainstorm the possible outcome of each strategy.

3.1       Brand Building – Achieve brand recognition hence made purchases.

3.2       Strengthen local market and penetrate into Export Market -  End result will be more sales

3.3        cost Reduction Initiatives  – OEM..  Ability to develop high end product with better margin.  It addresses shareholder expectation on Profit margin

4. After the strategies were concluded, we were wonder how to we implement these strategies holistically.  We thought of using the Strategy Map in the Balanced Scorecard concept where it address the modified four perspectives namely: Financial; Market; Process and Human Resource. 

5. Using the Strategy Map approach, we develop the strategic objectives for the modified four perspectives for all the three strategies about.  At certain point, we were concern about having too many strategic objectives. But we proceeded with all three strategy map and noted there are some common objectives between the three strategy maps.

6. At the end of the session, we ended up having about 15 strategic objectives.  Then we decided to rank them based on its impact to achieving the objectives of the strategies.

7. After we have decided the top 5 strategic objectives, we brainstormed several measures best represents the objectives of the strategies. 

8. Then we assigned two measures and target to each of the Strategic Objectives. Using the Balanced Scorecard concept of lead and lag indicators.

9. However, we realized that the Strategic Objectives are too big to implement effectively. The team decided to exploit in more detail.  The team had decided to use the Structure Tree tool for this purpose.

In summary, following the nine steps illustrated above enable the team to establish several concise strategic objectives with specific measures and target.  The next course of action is to establish key action to execute all the selected strategic objectives. 

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Dr. L M  Foong-PhD, is a TQM practitioner. He publishes TQM Articles, ebbok, case studies, trainer manual, facilitator guides and presentation slides. He can be contact at http://tqmcasestudies.com/ContactUs.html