Every strategy tells a story of your organization (unpublished?)

Learning & Innovation – November 25, 2004
By Moje Ramos-Aquino, FPM

Every strategy tells a story of your organization

To lay the groundwork for a better understanding of your business dynamics, you need to think systems. Managing a business calls for discerning a coherent story of the interrelationships of seemingly random events in the life of your organization. You need to be a good systems storyteller in order to get at the heart of your business and find answers/solutions to your questions/problems after a sustained deliberation.

This has profound influence on building your Balanced Scorecard (BSC). In the BSC, you don’t simply innumerate your objectives and hope that you achieve your strategic or overarching goals to lead you to your mission along the path of your vision. These objectives must connect as in links and loops. From one objective to the other, you should be able to trace arrows (links) that influence another objective. Refer to Figure 1.

Efficient product innovation <-- Empowered and motivated employees (Intelligent risk taking and shared, acted upon aspirations)

This is only half of the story. The other half is best shown as a feedback loop or a circle of causality in which every objective is both a cause and effect—influenced by one objective and influencing another, so that every one of its effects, sooner or later, comes back to roost. What you sow is what you reap. Refer to Figure 2.

What --> --> --> --> --> How

Low cost operations <--> Customer value creation <--> Efficient product innovation <--> Empowered and motivated employees <--> Recruit, develop and retain talented people

Effect <-- <-- <-- <-- <-- Cause

A BSC is a chain of cause-and-effect loop that connects the results with the drivers (What/Results to How/Cause). This loop can be established as a vertical dimension through the four perspectives (financial, customer, internal process and learning and growth). The BSC tells a story of the strategy.

It is best that before you even attempt to map your strategy, that you have a good understanding of systems thinking. For more on systems thinking, please refer to Peter Senge’s Fifth Discipline and on strategy map, please refer to Robert Kaplan and David Norton’s Strategy Maps.

(Moje, is president of Paradigms & Paradoxes Corporation, and is an ardent student of strategic management and would be happy to share her thoughts and insights. Her email address is moje@mydestiny.net)

Objectives are basic building blocks of strategy

THE MANILA TIMES
Business Times p.B1
Thursday, November 18, 2004
http://www.manilatimes.net/national/2004/nov/18/yehey/business/20041118bus6.html

LEARNING & INNOVATION
By Moje Ramos-Aquino, FPM
Objectives are basic building blocks of strategy

IT is often said that we cannot know what the future has in store for us, but we could create a future we want by what we do today. This is exactly why you have gone through your strategic thinking process and are building your Balanced Scorecard.

Remember our story last week about filling up a jar with rocks, gravel, sand and water? Now that you have placed your rocks (vision, mission, values and overarching goals, or VMVG) in your jar, you are now ready to fill it with gravel. These are your objectives.

You now translate your VMVG into objectives that are specific, measurable, actionable, realistic, time- and resource-bound and stretched into the future. Objectives are statements of what you will have to do in order to breathe life into your overall business strategies.

Howard Rohm, vice president of the Balanced Scorecard Institute, gave the example of Southwest Airlines: It developed a business strategy to compete successfully in the crowded commercial airline market. Its business strategy includes innovation and speed in the redefinition of a marketplace; short-haul, high frequency, point-to-point routing (a significant departure from traditional hub-and-spoke routing); a high proportion of leased aircraft; a very simple fare structure; and ticketless travel.

For the public sector, Rohm gave the example of Mecklenburg County in North Carolina, where they developed a strategy to implement the Board of County Commissioners vision for 2015. The strategy has the following main themes according to Rohm: Growth management and environment; community health and safety; effective and efficient government; and social, education and economic opportunity. Their objectives include, among others: increasing employee knowledge, skills and abilities; improving technology capacity, increasing the use of partnerships, reducing reliance on property taxes, improving service value, improving the environment, reducing crime and violence; and reducing preventable/communicable diseases and other health problems.

Please refer to Figure No. 1 to situate your objectives.

(Moje Ramos Aquino, president of Paradigms & Paradoxes Corp., facilitates strategic thinking and balanced scorecard initiatives. Her e-mail address is moje@mydestiny.net)

More on the balanced scorecard: Business strategy

THE MANILA TIMES
Business Times p.B1
Thursday, November 11, 2004
http://www.manilatimes.net/national/2004/nov/11/yehey/business/20041111bus5.html

LEARNING & INNOVATION
By Moje Ramos-Aquino, FPM
More on the balanced scorecard: Business strategy

"When designing a balanced scorecard, we always start by asking: What is your strategy? Once we understand the strategy, we can build a new framework for describing the strategy, which we call a strategy map," wrote Robert Kaplan and David Norton in their book The Strategy Focused Organization.

I am reminded of a story by Stephen Covey in his book First Things First, that best describes how we manage our business: I attended a seminar once where the instructor was lecturing on time. At one point, he said, "OK, time for a quiz." He reached under the table and pulled out a wide-mouthed gallon jar. He set it on the table next to a platter with some fist-sized rocks on it. "How many of these rocks do you think we can get in the jar?" he asked.

After we made our guess, he said, "OK. Let's find out." He set one rock in the jar… then another… then another. I don't remember how many he got in, but he got the jar full. Then he asked, "Is this jar full?" Everyone looked at the rocks and said, "Yes."

Then he said, "Ahhh…" He reached under the table and pulled out a bucket of gravel. Then he dumped some gravel in and shook the jar and the gravel went in all the little spaces left by the big rocks. Then he grinned and said once more, "Is the jar full?"

By this time the class was on to him. "Probably not," we said. "Good!" he replied. He reached under the table and brought out a bucket of sand. He started dumping the sand in and it went into all of the little spaces left by the rocks and the gravel. Once more he looked and said, "Is this jar full?" "No!" we roared.

He said, "Good!" And he grabbed a pitcher of water and began to pour it in. He got something like a quart of water in that jar. Then he said, "Well, what's the point?" Somebody said, "Well, there are gaps, and if you work really hard you can always fit some more things into your life."

"No," he said, "That's not the point. The point is this: If you hadn't put these big rocks in first, would you ever have gotten any of them in?" Your VMV and Strategy are your rocks and the rests are your pebbles, sand and water.

So, let's start building your balanced scorecard (BSC) by establishing your strategy. Of course, we presume that you have done your homework: you are very sure you need a BSC; you've crafted your vision-mission and values and you've done an environmental analysis of the past six months of your organizational life to determine, analyze and draw your strengths, weaknesses, opportunities and threats to your vision, mission and values.

Now you are ready to move on to the next step: developing your overall business strategy. You need to come up with an overarching strategic theme or themes for your own organization: Howard Rohm of the Balanced Scorecard Institute suggests these business strategies: build the business, improve operational efficiency and develop new products.

For public-sector organizations, he suggests: build a strong community, improve education, grow the tax base and meet citizen requirements.

Rohm describes strategy a hypothesis of what we think will work and be successful. The remaining steps in the scorecard-building phase provide the basis for testing whether these strategies are working, how efficiently they are being executed, and how effective they are in moving the organization forward toward its VMV.

It is very important that you formulate clear strategies, because they drive the rest of the process while your people, technology, innovation and internal processes will enable you to realize your financial aims and delight your customers.

MERI KRISMAS PO: The Rotary Club of Quezon City North enjoins you to share your blessings this Christmas with the poor, but hardworking and hopeful residents of the Payatas District composed of barangays Commonwealth, Holy Spirit, Bagong Silangan, Batasan Hills and Payatas. President Elsa Cañete will be happy to receive your pledges and answer your questions at (0927) 614-9475.

(Moje, president of Paradigms & Paradoxes Corp., assists organizations in growing their business through strategic thinking, planning and balanced scorecard. Her e-mail is moje@my¬destiny.net.)

Eleven steps to successful Balanced Scorecard

THE MANILA TIMES
Business Times p.B1
Thursday, November 04, 2004
http://www.manilatimes.net/national/2004/nov/04/yehey/business/20041104bus6.html

LEARNING & INNOVATION
By Moje Ramos-Aquino
Eleven steps to successful Balanced Scorecard

DO you have a vision-mission-values statement/s? Do you have a game plan or strategy? Can you describe your strategy? How have you communicated this strategy down the line? Are your mid-term, short-term and action plans and budgets linked to your strategy? If you can't describe your strategy and, therefore, haven't communicated it and allotted funds for it, then you need a BSC.

How do you build and implement a BSC?

First, get started. Resolve scope of BSC-corporate or critical business unit? Get the top honcho, if not your board, to sponsor your BSC and to provide resources, leadership and example. Enlist the support of key managers and leaders. Be very sure there is a crying need for overhauling your performance management system. Are data for performance measure easily accessible and are people prepared to measure and be measured? Are people willing to invest ample time in preparing, implementing, measuring and evaluating their BSC at regular periods?

Paul Niven identified four barriers to implementing strategy. They are vision, people, management and resource barriers. According to Niven: "Only 5 percent of the workforce understands the strategy. Only 25 percent of managers have incentives linked to strategy. Eighty-five percent of executive teams spend less than one hour a month discussing strategy. Sixty percent of organizations don't link budgets to strategy."

Second, define your corporate vision, your collective dream of what you want to be, the direction where you are going and how you want your organization to be perceived by the world.

Third, define why your organization exists, who you are, what you do, how a functional or business unit fits in the overall organization architecture.

Fourth, establish your value system, what are important to you, your guideline for action and interaction on a day-to-day basis.

Fifth, decide on your strategy or game plan on how to create sustained value for your stakeholders.

Planning guru Michael Porter writes that strategy is about selecting the set of activities in which an organization will excel to create a sustainable difference in the marketplace. This step helps you make your vision-mission-values actionable and meaningful. If you haven't decided on a strategy yet, you may focus on key performance indicators or critical stakeholders.

Sixth, translate your strategy into a strategy map to show cause-and-effect relationships.

Seventh, specify objectives, measures and focus.

Eighth, enumerate targets, initiatives or programs and resources required to help you act on your objectives.

Ninth, prepare individual BSC, i.e. particularize objectives or what each person, from CEO down to every contributing member of the organization, need to do.

Tenth, regularly measure and analyze your performance against scorecard measures and targets and evaluate your outcomes and determine if desired results were produced or determine how they helped your organization achieve its mission and strategic goals using your core values along the path of your vision. Determine how and by how much you are moving toward creating shareholder value, delighting customers, using efficient and effective processes and attracting, developing and retaining productive talents.

Finally, go back to number one for your next cycle.

(Moje, president of Paradigms & Paradoxes Corp., assists organizations in building and implementing the Balanced Scorecard. Her e-mail address is moje@my­destiny.net)