Thursday, November 25, 2004

Every strategy tells a story of your organization (unpublished?)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

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