A company laser-focused on its strategy – it sounds like a given, right? But turning that focus into a thriving reality, that's where the magic happens. This is where we explore the strategy-focused organization. This isn't just about crafting a brilliant strategy; it’s about weaving that strategy into the very fabric of your company.
I am Lonnie D. Ayers, PMP, CSM, SAFe, and a Senior Certified SAP Project Manager and a Certified SAP Value Engineer and Certified BSC (Balanced Scorecard Consultant). As the president of SAP BW Consulting, Inc., and 26 year SAP industry veteran, I've been in the trenches implementing SAP enterprise resource systems (SAP ERP) for a very long time.
Think of the strategy-focused organization as a company-wide symphony. Every department, every employee, plays a critical role in bringing the grand vision to life. It’s not enough for leadership to hold the sheet music; each member needs to understand their part and how it contributes to the melody.
Becoming a strategy-focused organization doesn't happen overnight. It demands commitment and a roadmap. Thankfully, experts Robert S. Kaplan and David P. Norton, of Harvard Business School fame, renowned for their work on the Balanced Scorecard, have provided a blueprint in their book, "The Strategy-Focused Organization." published by the Harvard Business School Press. Let's explore their five principles that serve as pillars:
| Principle | Description | Key Takeaway |
|---|---|---|
| Translate Strategy into Operational Terms | Don't let strategy get lost in lofty language. Break it down into concrete, measurable actions, and use strategy maps for clarity. | Clarity and actionability are paramount to the strategy focused organization. |
| Align the Organization to the Strategy | Each department, team, and individual should have goals directly linked to the overall strategy, fostering synergy and focus. | Alignment creates a unified force moving in the same direction. |
| Make Strategy Everyone’s Everyday Job | Empower employees at all levels to make strategy-driven decisions. Provide them with the context and tools they need to incorporate strategy into everyone's everyday job. | Strategy execution shouldn’t be confined to the boardroom. |
| Make Strategy a Continual Process | Strategic planning isn't a yearly event; it’s an ongoing conversation. Regularly review, adapt, and refine your approach based on performance management and market shifts. | Stay agile and responsive in a dynamic business environment. |
| Mobilize Change Through Strong, Effective Leadership | Leaders need to champion the strategy. This involves communicating the vision, removing roadblocks, and celebrating wins along the way. | Inspire and empower through action and commitment. |
What happens when these principles come to life? The story of Mobil North America Marketing and Refining (NAM&R) offers a powerful example of transformation through a strategy-focused approach.
Facing dismal performance, NAM&R, led by Bob McCool his executive team, adopted a Balanced Scorecard project. This provided a chance to breathe life into a shared strategic vision. Focusing on internal measures alongside external results allowed Mobil to create a system for success.
The Balanced Scorecard didn't just track their progress–it became their strategic roadmap. It was both visible to and acted upon by every employee. The proof? Within a year, Mobil went from industry laggard to profit leader. They held the top spot for five consecutive years and achieved breakthrough performance, surpassing the industry average.
Let's dive deeper into the key takeaways from Mobil's strategy-focused transformation:
By embracing a strategy-focused organization model (SFO), Mobil NAM&R was able to achieve a remarkable turnaround and establish itself as an industry leader.
Think about a basketball team. You've got really talented players, maybe even some all-stars. But they need direction, right? They need a coach to help them work together and reach their full potential. That's what executive leadership does for a strategy-focused organization.
Leaders set the tone. They're the ones who communicate the vision and strategy to everyone in the company. They make sure everyone's on the same page and working toward the same goals. But it's more than just talking the talk. They also need to walk the walk.
Think about it this way: if a coach spends all their time in the locker room talking about winning, but never actually shows up for practice or games, do you think the team's going to be successful? Probably not. It's the same with business leaders. They can't just talk about strategy, they need to live it every day.
That means making decisions that support the strategy, even when those decisions are tough. It means holding people accountable for results. And it means being willing to change course when things aren't working. Executive leadership is about setting the right example for everyone else to follow.
Think about a company where everyone understands the game plan and how their job helps the team win. That's what a strategy-focused organization looks like. They don't just have a strategy; they live it. This is where the Balanced Scorecard comes in. It's a way to track if everyone is moving in the right direction.
Let's say your company makes furniture. You want to be known for great prices and getting furniture to people fast. A Balanced Scorecard helps you keep track of those goals. It's like a dashboard, but instead of gas and speed, it shows you things like:
Each of these things gets measured. This way you can tell if your big plan is working. But here's the thing, the Balanced Scorecard isn't just for the boss. Everyone in the company should know how they contribute. This helps everyone understand their role and how it impacts the company.
Think of a time you planned a vacation. You probably picked a place you wanted to go. Then you might have looked at how much it would cost to get there. You also thought about what you would do once you got there. This is strategic planning in action.
Companies do the same thing but on a larger scale. A strategic management framework helps them set goals, figure out how to reach those goals, and measure their progress. One popular framework is the Balanced Scorecard, created by Drs. Robert Kaplan and David Norton.
The Balanced Scorecard looks at your business from four key areas:
By looking at all four areas, companies get a complete picture of their health. It's like getting a check-up at the doctor's office, but for your business! This helps them make smart decisions and stay competitive.
Think of your company's strategy like a tree. The main strategy is the trunk, strong and giving the tree its direction. Each business unit is like a branch. Each branch grows in the same direction as the trunk, but they also have their own, smaller goals. These goals support the overall strategy.
But how do we make sure these branches grow the right way? This is where the Balanced Scorecard comes in. This isn't just some fancy chart; it's a powerful tool that helps businesses connect their strategy to their day-to-day work.
With a Balanced Scorecard, each business unit gets its own set of goals. These aren't random; they connect directly to the main strategy. This way, everyone in the company is working together, even if they are in different departments.
Many think a strategy is something only executives and senior managers worry about. Nothing could be farther from the truth. When you run a strategy-focused organization, everyone in every single business unit must be involved. That's how you get everyone on the same page, all rowing in the same direction.
Think about the accounting department. They might think their job is just crunching numbers, but their work is really important for reaching strategic goals. They can track key performance indicators (KPIs) like never before, helping the whole company see if it's on track to meet its objectives. Plus they can use their data to find any problems or opportunities hiding within the financials.
But it's not just accounting. Sales, marketing, even human resources -- they all play a role. For example, HR can make sure the company has the right people with the right skills to make the strategy a reality. They can also create training programs to help employees develop the skills they need to be successful. When everyone understands how their work connects to the bigger picture, it can really boost morale and productivity.
In the strategy-focused organization to work, your human resources team plays a big part. They are like the coaches who help everyone understand the game plan and how to play their position well. The leadership team counts on them to get the right people on the bus.
Think about it. Human resources are responsible for making sure you have the right people on the team. This means finding people who not only have the skills you need, but who are also excited about your company's strategy. They are also the ones who develop training programs to help employees develop the skills they need to succeed.
But it's more than just hiring and training. Human resources also help build a company culture that supports your strategic goals. They come up with ways to reward and recognize employees who are contributing to the strategy's success. When employees feel valued and appreciated, they're more likely to be engaged and productive. It's all connected!
Building a strategy-focused organization is a big deal. But it's worth it because it can really help you build better relationships with your customers. Think of it this way: when everyone in your company knows your strategic goals and how they fit in, everyone can work together to give your customers a really great experience.
This means getting everyone on the same page. Your team needs to understand what your customers want and need. This isn't just about selling them something, it's about solving their problems and helping them succeed. When you put your customers first, everything else falls into place. It's why balanced scorecard companies thrive, in both up and down markets.
Think of your company as a ship, sailing towards the "Isle of Success". But how do you chart a course? How do you know if you're even going in the right direction? You ask your customers. Their feedback is your compass and your map. It tells you where you are, where you need to go, and what you need to do to get there.
This is where the strategy-focused organization comes in. This means putting your strategy at the heart of everything you do. It's about making sure that every single person in your company understands the strategy and how their work contributes to it. When everyone's rowing in the same direction, you can achieve amazing things.
But it's not enough to just set a strategy and hope for the best. You need to constantly measure your progress and make adjustments along the way. And one of the most important things to measure is customer satisfaction. After all, satisfied customers are the key to any successful business.
Think about it. If your customers are happy, they're more likely to stick around. They're also more likely to tell their friends about you, which can lead to even more business! On the other hand, if your customers are unhappy, they're going to jump ship and swim to your competition.
Creating the strategy-focused organization requires commitment, leadership, and a system that goes beyond mere words on paper. The Balanced Scorecard is a powerful tool, a framework that brings these elements together. But more than tools, success hinges on a deep commitment to embedding strategy into every fiber of the organization. By embracing these principles, you too can foster a culture of shared understanding, alignment, and accountability. You can create an organizational symphony where every part plays its role in achieving strategic harmony. This is where sustainable growth and industry leadership truly take root.
It's more than having a plan; it's a company culture where strategy guides every action, big or small. It's when departments are in sync, employees get the big picture, and leadership empowers action aligned with strategic goals.