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I was going through chapters from a book by Robert S Kaplan & David P Norton titled Strategy maps and found some interesting points related to measuring the effectiveness of strategy which I would like to share with larger community.

Successful execution of strategy requires three components:

{Breakthrough results} = {Describe the strategy} + {Manage the strategy}

The authors say that the philosophy behind these three components is simple:

  • You cannot manage (third component) what you cannot measure (second component)
  • You cannot measure what you cannot describe(first component)

Let me now introduce you two key terms which help us provide lot of information around a strategy implementation and how can we as an organization seek measurement of it.

Balanced Scorecards are performance management tools that translate an organization’s vision and strategy into a sensible distribution of performance measures. The Balanced Scorecard model prioritizes these measures around three non-financial perspectives (Internal Process, Learning & Growth, Customer) in additional to the traditional financial perspective.

Now taking this further, it is necessary to graphically describe a strategy by explicit cause-and-effect relationships among objectives in the four BSC perspectives. This helps to bring out much desired relationship between strategy and its implementation & this particular void is filled by strategy map of a company. This concept and framework of strategy maps has been coined by Robert S Kaplan & David P Norton.

The exercise of creating strategy map clarifies the logic by which the company’s strategic goal will be achieved and visually communicate different components or elements of strategy. The framework of strategy maps links short term and long term financial aspirations of a company to the differentiated value that the company needs to provide to the customers to ensure their loyalty both in current and future time frame. While every organization’s strategy map is different, the authors have come-up with a generic strategy map to serve as a starting point for any organization in any industry. If we revisit the equation as stated above, the BSC helps us address the second component by showing how to measure strategic objectives in multiple perspectives. With introduction of strategy maps equations gets translated into:

Breakthrough results = {Strategy Maps} + {Balanced Scorecard} + {Strategy-Focused Organization}

Strategy maps apart from clarifying the strategy of the company through cause and effect relationship also help in identification of:

  • Targeted customers and the attributes of the products and services that they value.
  • Key processes of the company that deliver the company’s strategy.
  • Identification of intangible assets that would support the processes that deliver a company’s strategy.

Through this framework introduced By Robert & Norton one can get to know the following:

  • How value gets created in the internal and learning and growth perspectives.
  • Themes, based on value-creating processes that articulate the dynamics of strategy.

Identification of intangible assets is one of the most important aspects of strategy maps, as most organizations fail to establish a link between their intangible assets and fulfillment of their strategic goals. Often it is seen that HR has little or no alignment with the strategic goals of the company. Strategy maps help in converting intangible assets into tangible outcomes for following classified intangible assets:

  • Human capital (employee skill and knowledge)
  • Information capital (databases, information systems, networks and technology infrastructure)
  • Organizational capital (culture, leadership, employee alignment, teamwork and knowledge management)

The value of intangible assets can not be directly or independently measured but their value derives from their ability to help the organization in implementing its strategy, which can be ensured through strong linkages created by strategy maps & also it provides the managers with the required granularity to describe and manage strategy at an operational level.

You can refer to following website to view a sample of the strategy map which helps clarify further how the linkages are useful in bringing out meaningful information for measuring strategic outcomes in an organization: Sample Strategy Map

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Assualt in the Outdoors

The Outbound training at Lonavla was full of learnings and experiences and one of the most interesting was the Game “Assualt” held on the second day.After a exhausting and at the same time thrilling trek in the morning,in the evening we were introduced to the mind-boggling “Assualt” game.The Game consists of four sets of smaller events -“River”,”Delivery of goods”,”A-frame” & “Transfer of Goods”.These short games test to the “T” your skills in co-ordination,teamwork,speed of executing a task successfully,the ability of your team to implement and carry on a strategy successfully.Each game has a maximum time limit of 30 minutes and the team finishing with the lowest cumulative score in all the four games wins the event!If the work is not completed in the 30 minutes then the percentage of work done is adjusted in the time.For example if 50% of the work is completed by the end of 30 minutes then your time score is considered to be 60 minutes..so every minute counts!

The first game was called “Transfer of Goods”.Here all the team members are given Concave pipes and the challenge is to slide 3 balls one by one on the pipes and finally to make the ball land in bowl placed at the end.The team members have to place the pipes in tandem and continue this so that the motion of the ball is maintained.The distance to be covered is approximately about 200 meters.In the distance between the start and the finish line the conditions to be followed are that :

The ball does not get dropped

The ball does not touch any team members hand

The ball does not come to a standstill and keeps rolling.

This games tests team-coordination and depends highly on the strategy you devise at the beginning.One good strategy is to make the ball move zig-zag instead of roll straight which makes the movement a bit slower and helps the team to co-ordinate the pipes.Almost all teams finished this game with very few minutes left.

The next in line was “A-Frame”.Here a huge frame in the shape of an “A” is used and a member of the team stands in the centre of the frame.The frame is supported with ropes which have to be held by the other team members.The members have to keep the frame balanced with the ropes and the person in the center has to move the frame from the start to the finish line without ever setting his foot on the ground!Indeed a test of team balance literally!!Most teams fared well here and my team “Thunderbird” finished in a record time of 3 minutes!Wow!

Then came the “Australian War Strategy game-River”.Here the teams are given ski-like boards with ropes.The participants ranging from 5-7 have to use the boards to paddle their way from the start to finish line without ever setting foot of the ground!The highest test of co-ordination and team skills!

The last in line was the  game “Delivery of goods” .Here there are 2 bowls-one filled with water and 6 balls and the other filled with only water.Another smaller bowl suspended with 6 threads has to be articulated by the team,using only one of their hands each(if both hands are used at any point,the team member faces a penalty and has to stand backward facing for 1 minute!!) so that as many balls as possible are picked one bowl and tranferred to the other.The rules to be followed are:

When dropping the balls into the bowl,if the already present balls bounce out then they are returned to the original pool and the teams have to start over again.

All team member remain in their range and use only one hand for the movement.

Finally the team which finished in the shortest time was “The Performers” with a whopping 82 minutes!!Cheers to them for the feat!

This was indeed a experiential learning of the highest order and hats off to High Places Pvt Ltd(http://www.hpmpl.com/) for their professional management & co-ordination of the trek and the “Assault Game” and for having provided us a lifetime’s experience.

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Snapshots from Hell

While I was on my way to Mumbai to attend the “orientation” program, a friend lent me the following book.

I was initially skeptical about reading this fat book. Not that fat – it  has only 286 pages, but still…

The story is about a person – Peter Robinson who is coming from a non-engineering background. He gets admitted into Standford, one of USA’s premier B-Schools. The book is about his experience in campus and how he managed to graduate despite the rigorous schedules.

I must admit, I absolutely loved the book. Infact, some of the pages had a striking resemblance to the orientation which I attended. The book is humorous and yet does not deviate from the central theme – “tough life at a B-School”.

For all those who are interested in management studies, this book is a strong recommendation. Read it – you will not regret it.

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