strategy management

Cause and Effect

I have seen many strategy maps and I have also seen people working with strategy maps over the last decade. In the process of developing maps, I have observed people struggle to illustrate all causes and effects that occur in their company. At the end, it looks like the “airline route net” that you find in an in-flight magazine where all routes are crossing each other.

What is the purpose with a Strategy Map?

A strategy map describes your strategy on a high level, so it can be used as a communication tool for all employees. It is NOT a detailed “cause and effect” diagram showing all causes and effects in your company.

Engineers in charge of a “strategy map” creation process like to think that the truth of the company lies in defining all the causes and effects (ok, let me clarify it a bit – some engineers). I believe there are four main types of disciplines needed in a strategy execution program.

1. Operations (Engineers) – for structuring, planning, and developing sound processes
2. HR (Psychologists)– to introduce the psychological aspect, including motivation, training, and coaching
3. Communication (Journalists) – to communicate in a crisp and clear manner so everyone understands the strategy
4. Finance (Controllers) – as a catalyst to remove old structures such as annual plans and budgets and to serve as the facilitator for the overall process

If you have these disciplines separately you will end up with the following (I know I am exaggerating a bit to make a point)

  • Engineers – give you the most complex cause and effect maps. An engineer can make a simulation model to run the company on “auto pilot”
  • Psychologists – only talk about motivation, behaviour, and psychology that are not connected to the real business
  • Communication – it all ends with the “Vision, Mission and Value” brochure
  • Controllers – read the word again – control – control the business with their old structures of resource allocation and business planning– and be proud of it

I am a bit worried over the direction the BSC movement is going now. In Kaplan and Norton’s book “The Execution Premium” they give more attention on “a closed loop system”- a system which I believe is dominated by their engineering and operations research background.

I believe it is time to bring the HR and psychologists into the arena to move the BSC movement a step forward. Anyone wondering what my profession is? I come from the finance side.

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