A strategy plotted out in a good strategy map can be a lasting competitive advantage, but only if you can make sure that you’re doing different things, or doing things differently, than the competition.
Hard to beat combined connected activities
According to Michael Porter, it’s trickier for a competitor to beat a set of connected activities than to simply imitate a certain sales technique or process/product. Market positions that have been achieved thanks to an interplay of activities are much more sustainable than positions based on separate activities. The strategy map can help you become sustainably competitive. In a series of mini-articles, I’ll explain how this works.
Before I start describing the various roles of a strategy map, I’ll define some of the relevant terminology that you’ll encounter in a strategy map.
- Strategy map: an overview (a4-sized) of the most important areas of an organization that influence each other in a logical and linear way.
- Perspectives: the blocks that display the (financial) mission, sales argument, topics, and competencies of the organization.
- Critical success factors/bottlenecks: the objectives visualized by the separate blocks or circles, described by verbs that tell the challenging story of the organization together.
- Key Performance Indicators & Targets: leading and driving measurements that, in conjunction with the level of ambition, show the progress of the objectives.
- Gap: the difference between the ambition (target) and the current result of a Key Performance Indicator (KPI) or Key Result Indicator (KRI).
- Connecting lines: how management expects the various success factors to influence each other.
- Timelines: the prediction of the duration we can expect between implementing a change and its effect. For example, hiring a new salesperson usually doesn’t immediately lead to a revenue increase in the same period of time.
A strategy map tells the organization’s story
It forms the starting point of the organization’s mission translated into everyday objectives, creates a balance between the various timelines, and shapes the deliberate definitions of key performance indicators. A strategy map is the ultimate A4 that everyone inside and outside the organization can use to communicate strategic changes.