Most strategy off-sites deliver a sense of cohesion for the participants –and a slightly edifying town hall for everyone else. But few go the distance of becoming the guiding document for every employee. But a robust strategic plan should be the foundation for every decision. 

In the first two parts of this 3-article series, we touched on the critical content that most strategic plans lack—that is, a clear statement of their differentiator—the strategic theory. 

Article 2 dug into all the different traits that a great strategic plan needs to perform and why most of the common formats don’t work.

And finally, what kind of document can do the hard job of being everyone’s north star? That document—and the one I recommend you use in your off-site—is the strategy map.

It was created by Robert Norton and David Kaplan as a prerequisite for their balanced scorecard, a way of tracking and measuring strategy

The strategy map is a cause-and-effect flowchart of a strategy.

By connecting inputs to expected outputs, we can see how individual projects will eventually lead to achieving the goals. Most items on the map are precursors to achieving other initiatives, or to fulfilling the differentiator, and then meeting the financial goals.

The basic model is simple. 4 rows.

Those 4 rows from top to bottom represent the Financial, Customer, Process, and People perspectives.

Once the team has rallied around a crystal-clear statement of the differentiator (or “Customer Perspective” on the map)—everything else can fall into place.

At the Off-Site

The power of the strategy map begins with our natural ability to infer. Say your company is an analytics platform, unique in its integration with all power plants ERPs (your Customer Perspective). You have likely already begun to extrapolate possible areas of focus just from that sentence:

Maybe a marketing hook or the idea of sales reps from the power plant industry. These ideas naturally arise –but they appear without their explicit connections.

But, when we make those connections explicit we can powerfully share them.

During the conversation at your retreat, the goal is to tease out the exact rationale behind every strategic initiative. That demands rigor. The facilitator must drill down from the financial goals and differentiator to the specific processes that will deliver them.

That logic emerges as you build the strategy map.

Because you build the map in from the top down.

But—and this is a very important caveat—YOU EXECUTE THE MAP FROM THE BOTTOM UP!

Let’s look at an example.

Malice, Inc.

Although it’s mostly illegal, organized crime applies most of the same strategic principles as in any other enterprise.

Our client, Malice, has been grappling strategically. Historically they have been dilettantes. A bit of drug trade, some loansharking, blackmail when the opportunity arises, and a few prostitution rings in several parts of town.

As a result, they have never dominated the competitive landscape.

The boss’ son, Dmitry, has just come into an executive role. He’s a hacker with an MBA.

As the group craft their goals, he is annoyed by their small, incremental aims. Instead, he says “when I’m in my 40’s we will own the market for gambling, extortion, and pornography—not just in this town, but nationwide.”  

“But”, says one of the middle-aged lieutenants “we could never do that—what about Evil, LLC—they always eat our lunch!”.

Dmitry paints a vision, explaining the strategic theory.

“We move everything to Cloud. 90% of our business will be legal. And we can offer free, private gambling —plus skim key information while we’re at it.”  

In other words, they will own the category of digital vice.

Digital Vice

The group is rapt. “Digital? No more guns or violence?”, says Bruto, the enforcer, looking sad.

“Well,” Dmitry says, “maybe a bit.”

“But most of our business will be payments made through crypto currency. It’s completely untraceable!”

The bookie, Boris, pipes up, “Crypto? If we get in to crypto, we could even start a crypto betting market. I can easily build in our cut”.

The Chief Extortionist shyly raises his hand, “do you think we can do some of that ‘deep fake’ stuff?  I mean, you know, to manufacture some porno?” He mimes quotation marks as he says “manufacture”.

For a minute it’s quiet. Imaginations are racing ahead.

Finally, all heads swivel toward the head of the table. Vlad hasn’t yet spoken. His eyes slowly move over every face, and finally at his son. Then, the boss smiles! “Let’s build the strategy map!”

Strategy Mapping

You build the strategy map from the top down. In other words, starting from the financial goals—which are always lagging indicators—you ask specific questions about what the inputs will be to that dimension.

The Malice Map

Because a strategy map mimics our own inferential thinking, once the group agrees on the Customer perspective (the strategic theory) the rest of the map is surprisingly easy to build.

For every dimension, the group addresses the question defining it. As they do so, they connect the new initiatives to the more macro outcomes for which they are inputs.

For example, if you were Southwest Airlines and asking the question “What processes must we master so that our customers see us as the low-cost, fun airline?” in order to work on the Process Perspective, you might have answered “we need to turn planes faster”. That process has an arrow that points to the strategic theory above it –and then to the profitability box.

Process and People have lots of individual initiatives, and each one has an arrow toward a box for which it is an input.

In the Malice strategy map, AI Skills (in the People dimension) are used by Research and Development which is needed by Deep Fake Pornography.

And Political Influence is needed by Crypto Market to ameliorate regulatory issues.

Ultimately, this strategy map would have many more arrows –but this is a good start.

Although the execution is complex and long-term, everyone in the company, whether an engineer or an ‘enforcer” could understand how their role eventually leads to the top financial goals. They can trace a line from input to output, arrow by arrow.

That transparency alters every individual’s relationship to the strategy and how they, individually, propel it. As a tool, the map is integral to onboarding new employees, iterating new processes and product changes, and over time, determining whether the strategy itself is valid.

The tool has legs. It lives and changes throughout the execution, and is responsive to new information or even the news that it is not getting executed well. And so, as the execution proceeds, the map will be amended. New boxes enter and failed ones leave.

That is how strategy can be both a driving force behind every decision and a flexible tool that responds to change.