Strategy Maps: Converting Intangible Assets into Tangible Outcomes [Hardcover]

Many so-called paractical business books leave me cold- they are unreasonable, impractical and often impossible to apply to your own organisation. "Strategy maps" is different. The principles within apply to ALL organisations- charities, big banks, small start-ups, widget manufacturers. Crucially it gives a way of measuring and assessing your intangible assets, which is brilliantly useful. The principle of "what can't be described can't be measured" is a great jolt for the imagination.

A completed strategy map allows everyone within any organisation to figure out exactly how they add value and what their contribution can be. On one page of A4 it is possible to describe everything an organisation does- makes you wish more companies would give them out with annual reports :-) it also allows you describe current strategy and gives you tools to analyse it. I found the book particularly useful for my own startup- it made me think clearly about what exactly i had to do, even giving me hints on strategy formulation.

I really can't recommend this book highly enough- clealry written, easy to understand, provocative and actually genuinely useful. This is especially recommended for start-ups, of those thinking about start-ups.

Strategy Maps now becomes another essential building block in strategy implementation. Importantly, this building block should be the starting point in your search for success. In the preface, the authors describe the three essential elements behind breakthrough results:

You must first describe the strategy, then measure the strategy for what needs to be executed and then manage the strategy by the measurements. Describing the strategy is the task addressed in Strategy Maps, measuring the strategy is addressed in the Balanced Scorecard, and The Strategy-Focused Organization looks at managing the strategy by the measurements.

Here's the philosophy the authors provide behind this conclusion:

"You can't manage (third component) what you can't measure (second component) [and] [y]ou can't measure what you can't describe (first component)."

In Strategy Maps, the authors have shown the way to communicate how each element of a company's activities contributes to the overall success of the strategy. Using the Balanced Scorecard, everyone in the organization knows what to be done. With Strategy Maps, each person will understand the context of what they must do and implementation improves.

Here's what a template of a typical strategy map includes for a for-profit company in Strategy Maps. First, all of the information is contained on one page. Second, that page has four perspectives: Financial; Customer; Internal; Learning and Growth. Third, the financial perspective looks at creating long-term shareholder value, and builds from a productivity strategy of improving cost structure and asset utilization and a growth strategy of expanding opportunities and enhancing customer value. Fourth, these last four elements of strategic improvement are aided by changes in price, quality, availability, selection, functionality, service, partnerships and branding. Fifth, from an internal perspective, operations and customer management processes help create product and service attributes while innovation, regulatory and social processes help with relationships and image. Sixth, all of these processes are enriched by the proper allocation of human, information and organizational capital. Organizational capital is comprised of company culture, leadership, alignment and teamwork capabilities. Seventh, the cause and effect relationships are describe by connecting arrows.

The book is a marvel of clarity. The authors describe what a strategy map is and proceed to share dozens of examples that have been successfully used in both for-profit and non-profit organizations around the world. The examples are carefully chosen to illuminate each element of the strategy map template that they suggest you begin with. In Part IV, they make the task of strategy map building even easier by taking typical strategies that are most often employed and showing how to build a strategy map that characterizes such a strategy. Finally, every chapter also refers to the best published work on what strategies and actions are most likely to succeed. So even if you are not familiar with the literature of creating and implementing successful strategies, you can use Strategy Maps to learn what you need to know.

Strategy Maps will be as valuable for small organizations as for large ones. All organizations need to have a better understanding of how all the pieces of a strategy need to fit together. In fact, if you only read one book written about strategy in 2004, you would be wise to choose this one.

As a student of continuing business model innovation, I was particularly pleased to see the authors explain how processes can be put in place to improve business models as part of a strategy map.

The only missing element in the book from my perspective is how to make strategy maps more compelling for the viewers. In strategy presentations across the country, I've often seen strategy maps that use colorful illustrations and enticing numerical relationships to help those in the trenches to grasp the full scope of how their work connects to everything else. When Strategy Maps is ready for its next edition, I hope the authors will consider adding a section in this regard. In the meantime, they offer a look at this element in the software they advertise for making strategy maps. See their on-line offering for more details.

If you have not yet read The Balanced Scorecard and The Strategy-Focused Organization, I strongly encourage you to read those outstanding books as well after you finish Strategy Maps. With the combined perspective of the three books, you should easily outdistance the competition!

As I finished the book, I thought about what else keeps strategies from being successful. In my experience, the typical remaining problem other than miscommunication is setting a direction that cannot be implemented in the appropriate time frame. I strongly encourage those who are planning new strategies to develop a strategy map before committing to the new strategy. Then use that strategy map to ask those who would have to implement the strategy what problems they foresee in implementation. In this way, you can adapt the strategy to what you can reasonably hope to execute.

This book also made me realize that drawing such a system effects graphic can help explain anything to others. I plan to do so much more often.