What is a strategy map? | i-nexus

In the world of manufacturing, leaders often grapple with aligning strategic goals with day-to-day operations. That's where a strategy map is useful.

In this blog, we will explore what a strategy map is and how it works. We will show how it can help with planning and execution in manufacturing. We will also share insights from our podcast episode with Simon Wardley, the creator of Wardley Maps.

A strategy map is a powerful visual tool that encapsulates and communicates the intricate relationships between various strategic objectives within an organization. The strategy map functions as a one-page diagram, designed to simplify and clarify intricate strategic plans.

This diagram serves several important purposes. First, it provides a visual representation of the various objectives that the organization aims to achieve. By presenting these goals clearly, stakeholders can easily see the main priorities. They can also understand how these goals fit into the organization’s mission.

Moreover, the diagram illustrates how these different objectives interconnect and support one another. This interconnectedness is important. It shows how different initiatives relate to each other.

Progress in one area can help others. For example, reaching a marketing goal can improve customer engagement. This can lead to higher sales and more revenue. By visualizing these connections, stakeholders can better appreciate the collaborative nature of the organization’s efforts and the importance of aligning resources and strategies.

The one-page format is very helpful in today’s fast-paced business world, where time is often short. Stakeholders can quickly review the diagram, gaining insights without having to sift through lengthy reports or presentations. This efficiency not only saves time but also fosters more informed discussions and decision-making processes.

Robert S. Kaplan and David P. Norton created the idea of strategy maps in the 1990s. They developed this concept as part of their Balanced Scorecard framework. This framework aims to provide a more comprehensive view of organizational performance beyond traditional financial metrics. By incorporating non-financial perspectives, the Balanced Scorecard allows organizations to align their activities with their vision and strategy, ultimately driving better performance.

Strategy maps are structured around four key perspectives, each representing a different dimension of organizational performance:

• Financial Perspective: This view looks at the financial goals of the organization. It includes revenue growth, cost management, and profitability. It answers the question, "How do we look to our shareholders?" By identifying financial goals, organizations can ensure that their strategic initiatives contribute to long-term financial success.
• Customer Perspective: This perspective emphasizes the importance of customer satisfaction and engagement. It addresses questions like, "How do our customers see us?" and "What do we need to do to meet their needs?" By understanding what customers expect and prefer, organizations can adjust their products and services. This helps build customer loyalty and increase market share.
• Internal Processes Perspective: This perspective examines the internal operational processes that are critical to delivering value to customers and achieving financial objectives. It answers the question, "What must we excel at?" By identifying key internal processes, organizations can streamline operations, improve efficiency, and foster innovation, ultimately leading to better customer experiences and financial outcomes.
• Learning and Growth Perspective: This perspective focuses on the intangible assets of the organization, such as employee skills, organizational culture, and technological capabilities. It addresses questions like, "How can we continue to improve and create value?" By investing in employee development and fostering a culture of continuous improvement, organizations can build a strong foundation for future growth and adaptability.

By visually mapping out these four perspectives, a strategy map illustrates the cause-and-effect relationships between strategic objectives. This interconnectedness helps organizations identify leverage points where strategic initiatives can have the most significant impact.

Each perspective includes specific objectives, and arrows connect them to illustrate how achieving one goal supports others. For example, investing in employee training can improve how well the company operates. This can lead to better customer satisfaction and increased profits.

The benefits of Strategy Maps

Manufacturing leaders operate in an environment where operational efficiency and strategic alignment are paramount. Strategy maps provide several key benefits:

• Clarity and Focus: They simplify complex strategies into a single, cohesive view.
• Alignment: They ensure every department and team understands their role in achieving organizational goals.
• Communication: The team provides a clear narrative that stakeholders at all levels can share.
• Decision-Making: They highlight interdependencies, enabling better prioritization and resource allocation.

Manufacturing leaders can use a strategy map to connect planning and action. This helps ensure that every step supports the company’s main goals.

Insights from Simon Wardley

In Season 2, Episode 10 of the Strategy Hero Podcast, we spoke with Simon Wardley, creator of Wardley Maps. Simon’s work emphasizes the importance of visual tools in strategy.

As he puts it:

"So the maps become a vehicle for learning and from that, you learn all sorts of patterns [that] impact the way you organize yourself."

While Wardley Maps focuses on situational awareness and competition, the principles align closely with strategy maps. Both tools emphasize:

• Understanding Context: Visuals help teams grasp the broader picture.
• Driving Alignment: When everyone sees the same map, it’s easier to align efforts.
• Adapting to Change: Maps are dynamic, evolving as circumstances shift.
  
  

If you haven’t already, we highly recommend listening to Simon’s episode here.

How to Create a Strategy Map

Building a strategy map doesn’t have to be daunting. Here’s a step-by-step guide:

1. Define Your Vision and Mission: Start with the big picture – what is your organization aiming to achieve?
2. Identify Strategic Objectives: Break down your vision into actionable goals across the four perspectives.
3. Determine Relationships: Map out cause-and-effect connections between objectives.
4. Visualize: Use tools like PowerPoint, balanced scorecard software, or our free template to create a clear diagram.
5. Share and Iterate: Collaborate with stakeholders to refine and implement the map.
   
   

Common Pitfalls to Avoid

While strategy maps are powerful tools, they require thoughtful implementation. Here are a few common pitfalls to watch out for:

• Overcomplicating the Map: Too many objectives or unclear relationships can dilute the message. Aim for simplicity.
• Ignoring Feedback: A strategy map is a collaborative tool. Engage your team to ensure alignment and buy-in.
• Failing to Update: Your strategy map should evolve with your business. Regularly review and adjust it to reflect changing priorities.
  
  

Practical Applications in Manufacturing

Manufacturers often deal with intricate supply chains, complex processes, and diverse customer needs. Strategy maps can help:

• Streamline Operations: Identify bottlenecks and align internal processes to enhance efficiency.
• Improve Customer Satisfaction: Visualize how operational changes directly impact customer outcomes.
• Foster Innovation: Highlight areas for investment in skills and technology to drive growth.
  
  

For example, a manufacturer might use a strategy map to link investments in automation to reduced lead times, improved order accuracy, and increased revenue.

Start Mapping Your Strategy Today

A well-designed strategy map can be a game-changer for manufacturing leaders. By making your strategy visual, you’ll improve communication, alignment, and execution across your organization.

To get started, download our free strategy map template today and bring your strategy to life. Empower your team, align your goals, and achieve greater success with the clarity of a strategy map.

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Learn more about strategy execution

Take the next steps in your journey by exploring our strategy execution resource hub.

About the author

Sam Ancliff is the Head of Marketing at i-nexus. 

In his role, his drive is to provide leaders with the tools and insights they need to make next-level decisions in their businesses and organizations.

If you’d like to talk more about strategy, contact Sam at sam.ancliff@i-nexus.com or connect with him on LinkedIn for the latest insights.