STRA
TEGY
EXECUTION
T
OOLKI
T
The
Ho
w I Learned To
Stop W
orrying
and Lo
ve
The
Balanced Scor
ecar
d
WHY Y
OU
SHOULD CARE
About Str
ate
gy
But why
?
Don
’t worry
, we have a structur
e
d way
to answer those question
s…
Managers ne
ver ask
themselve
s the
two
fundame
ntal question
s
that drive a company’
s strategy:
Who ar
e we
going to
serve?
Ho
w ar
e we going to s
erv
e them?
Nine out of 10 or
ganizations fail to
e
x
ecute str
ategy
.
Sources: Stephen R. Covey, The 8th Habit: From Effectiveness to Greatness ©2006, Fort
une M
ag
azine
What It’
s All About
A purpose st
atement
tells ho
w yo
u will be differ
ent tha
n your
competitors. (And differ
en
t is good.)
If you don
’t t
hink you
have
competitors, tak
e some time
to do some
serious
Goog
le
sear
ching,
and then join
us aga
in
.
What goes into it?
What’
s your goal?
This shou
ld be somethin
g numerical, lik
e dou
bling
your
r
e
venue e
very year for the ne
xt
five years.
It coul
d also
describe why you ar
e in
business, lik
e to
become
the
pr
emier fruit stand fr
anch
ise.
What will you do differ
ently than your
competiti
on?
Perhaps you will be the best at deli
verin
g or
g
an
ic fruits and
vegetables.
What won
’t you do?
Y
ou can
’t do
e
verythin
g, and if
you try to
do so, you’ll
fail.
This is wher
e you dr
aw the line (and it’
s super important.)
O
A
S
Objective
Advantage
Scope
THE PURPOSE S
T
A
TEMENT
An Example: Kosm
o
’
s F
ruit
Stand
What goes into it?
What’
s your goal?
What
will you
do
differ
ently than
your
competition?
What
won
’t you
do?
O
A
S
Objective
Advantage
Scope
Purpose Statement: We will double r
e
venue e
very
year
for the
ne
xt thr
ee years
by selling
locally-sour
ced, or
ganic fruits
an
d
vegetables in do
wnto
w
n Manh
attan
.
We will double
revenue every
year for the next
three years.
We sell locally-
sourced, organic
fruits and
vegetables.
We sell exclusively
in the downtown
Manhattan market.
+
+
=
THE PURPOSE S
T
A
TEMENT
How should you share it?
Share it with your friends and family (and buy them a beer?)
Share it with your colleagues (buy them lunch?)
Share it with your boss, and ask if she’d like to share it with the rest of the team
Get lots of input at each round and make it better.
Y
our T
urn
Nice work! Y
ou have a purpose statement.
Don
’t k
eep it to yourself, though.
No
w
, sit back and enjo
y your genius.
(Oh! And post it
on the
wall.)
Ho
w should you shar
e it?
Shar
e it with your friends and famil
y (and
buy th
em
a
beer?)
Shar
e it with your colleagu
es (and
buy th
em
lunch?)
Shar
e it with your boss, an
d ask if
she
’
d lik
e
to
shar
e
it with
the
r
est of the team
Get lots of
inpu
t at each r
ound
and mak
e it
better.
THE PURPOSE S
T
A
TEMENT
THE CHANGE A
GEND
A
What It’
s All About
A change agen
da
is a
simple list of
what ne
eds to cha
nge in
or
der
to carry out your purpose.
Think noth
ing nee
ds
to chang
e? Then
you ar
e fr
ee to go. If you’
r
e still with me, let’
s k
eep going…
What goes into it?
What part of the or
ganization do you want
to change?
Don
’t worry
, we have some suggestions comi
ng up
.
What ar
e you curr
ently doing that needs
to change?
Keep
it simple and
be dir
ect. Y
ou’ll d
efinitely n
eed
some outside input
her
e.
What would you r
ather be doing in
the futur
e?
Again, mak
e sur
e it is dir
ect an
d actually f
easib
le.
Y
ou’ll have to hit
th
is to be
consider
ed successful.
Perspectives
Pr
esent
Futur
e
THE CHANGE A
GEND
A
An Example: Kosm
o
’
s F
ruit
Stand
Kosmo’
s Fruit Stand’
s leaders realize the
y need to change. The
y’
r
e
bleeding mone
y
, the fruits a
r
e
r
o
tting, an
d
their stan
d
is
in a
back alle
y
.
What must you do differently?
Pr
esent
Futur
e
Financial
Custo
mers
Pr
oduct
Locatio
ns
Emplo
yees
Cultur
e
Inconsistent cash flow
Consistently making
money
Random foot traf
fic
Hipsters and baristas
Daily special of a
single fruit
Diverse
mix
of
organic
and
local fruits
2 carts on inexpensive
side street
10+ carts in
high-traffic areas
High turnover,
no
experience required
Career path to
cart owner
“I think this is better
than not working.”
“I’m proud to work
at Kosmo’s.”
THE CHANGE A
GEND
A
An Example: Kosm
o
’
s F
ruit
Stand
Kosmo’
s came up with some good ideas for change. No
w it’
s time
to or
ganize them
by
gr
ou
p:
Ho
w ar
e your change items or
ganized?
Pr
esent
Financial
Customer
Pr
oduct
Service
Pr
ocess
People &
Pr
ocess
Futur
e
Inconsistent cash flow
Consistently making
money
Random foot traf
fic
Hipsters and baristas
Daily special of a single
fruit
Diverse
mix
of
organic
and
local fruits
2 carts on inexpensive
side street
10+ carts in
high-traffic areas
High turnover,
no
experience required
Career path to cart
owner
“I think this is better
than not working.”
“I’m proud to work
at Kosmo’s.”
W
ant some other ideas for ar
eas of change?
T
ry these: Finance
s (sour
ces
of r
e
venu
e), Ideal Cu
stomers,
Ke
y
Oper
ations (what ar
e we good
at or ne
ed to be good a
t), Em
plo
yee
Skills,
Partnerships,
Fundr
a
ising Appr
oa
ch.
THE CHANGE A
GEND
A
Y
our T
urn
What must you do differently?
Pr
esent
Futur
e
THE CHANGE A
GEND
A
Y
our T
urn
No
w or
ganize your ideas by gr
oup. (W
e
color-
coded th
e fruit
stand’
s change a
genda, if
you’
r
e
looking f
or
some s
uggestions
.)
Ho
w ar
e your change items or
ganized?
Pr
esent
Financial
Customer
Pr
oduct
Service
Pr
ocess
People &
Pr
ocess
Futur
e
THE CHANGE A
GEND
A
Celebr
ate good times, c’
mon.
Nice work! No
w you have a solid change ag
enda.
Y
ou kno
w the drill…
Y
ou’ve isolated the key issues facing your company
.
Y
ou’
r
e a genius and a superher
o in our book.
Ho
w should you shar
e it?
Shar
e it with your frien
ds, colleagues and
especially you
r
boss.
Get lots of
inpu
t at each r
ound
and mak
e it
better.
THE STRA
TEGY MAP
Perspectives
A str
ategy map sho
ws
the path
to su
cces
s. The
map is
made up
of four perspectives (as the
y’
r
e kno
wn in Balanced Scorecar
d
lingo). Feel fr
ee to call the
m what
yo
u’
d
lik
e.
What ar
e the four perspectiv
es?
If
we succeed, ho
w
will we look to ou
r stak
eholders?
FINANCIAL PERSPECTIVE
CUST
OMER PERSPECTIVE
PRODUCT
, SERVICE, OR PROCESS PERSPECTIVE
PEOPLE & CUL
TURE PERSPECTIVE
What do our cu
stomers e
xpect
fr
om u
s?
To satisfy our customers, at which pr
ocesses must we
e
x
cel?
To be successful, ho
w must our or
ganization
learn
and impr
o
ve?
Source: Strategy Maps© 2004, Robert
S. Kaplan / David P. Nort
on
THE STRA
TEGY MAP
Str
ategic Objectives
Remember ho
w you wante
d
to change
fr
om the
pr
e
sent st
ate
to a futur
e one in your
change
agenda?
No
w we
need to a
dd
objectives for each. Wh
at ar
e
yo
u going to do to ma
k
e that
chang
e happen?
Ho
w do you cr
eate str
ategic objectives?
Her
e
’
s a typical format:
VERB
ADJECTIVE
NOUN
+
+
THE STRA
TEGY MAP
Objectives Example
Her
e
’
s an e
xample fr
om our friend Kosmo.
Remember t
his chang
e the
y wa
nted to ma
k
e to th
eir pr
oduct
offering?
Her
e
’
s ho
w the
y
cr
ea
ted a str
at
egic objective in or
der to
mak
e
that
change
a r
eality:
Str
ategic Objective
Partner with local and or
ganic
pr
oduce s
uppliers.
VERB
ADJECT
IVE
NOUN
+
=
+
Pr
esent
Futur
e
Pr
oduct
Partner
With
Local,
Organic
Produce
Suppliers
Daily special of a
single fruit
Diverse mix of organic
and local fruits
THE STRA
TEGY MAP
Y
our T
urn
What will you do to mak
e the change?
Pr
esent
Futur
e
Financial
Customer
Pr
oduct
Service
Pr
ocess
People &
Pr
ocess
Objective
VERB
ADJ.
NOUN
+
+
THE STRA
TEGY MAP
We will double r
e
venu
e e
very ye
ar for the
ne
xt thr
ee
years
by selling loca
lly-sour
ced, or
ganic fruits
and vege
tables in
the
do
wnto
wn Ma
nhattan
mark
et.
An Example: Kosm
o
’
s F
ruit
Stand
FINANCIAL PERSPECTIVE
CUST
OMER PERSPECTIVE
PRODUCT
, SERVICE, OR PROCESS PERSPECTIVE
LEARNING & GRO
WTH PERSPECTIVE
Increase
revenue
Grow profits
Reduce costs
Attract
hipsters’
crowd
Create dynamic
pricing system
Develop employee
training system
Invest in
culture
Find the
new “kale”
Invest in
emerging
neighborhoods
Match offerings
to hipster needs
Partner with local
and organic produce
suppliers
Explicit cause
and
effect linkage
Explicit cause
and
effect linkage
THE STRA
TEGY MAP
So, what’
s the story her
e? Y
ou can put the map into a
story by r
eading
fr
om the
bottom up.
Her
e
’
s ho
w Kosmo
’
s str
ategy
map r
eads:
An Example: Kosm
o
’
s F
ruit
Stand
Kosmo’s Fruit Stand will invest in culture and build
an employee training program in order to part
ner
with local and or
gan
ic
produce suppliers to “find
the new kale.”
This
will help match our offerings to hipsters’ need
s
and attract
the hipster crowd. We’ll also invest
in
emerging neighborhoods and
create a dyn
ami
c
pricing system that will
drive revenue.
By carefully managing costs, we’ll d
rive
overall
profitability.
THE STRA
TEGY MAP
Boom! Y
ou have a str
ategy map. Congr
atulations.
But wait…it’
s sharing time, again.
Y
ou’ve mapped the way to succe
ss.
Y
ou’
r
e a
genius, a superher
o, and the ne
w Magellan.
Ho
w should you shar
e it?
Shar
e
it
with
your
friends
(if
you
have
an
y
left),
y
ou
r
colleagues,
and
your
boss.
Y
our
boss
will
sur
ely
shar
e
your
w
ork
no
w
,
since
it
mak
es
them look good.
Get lots of
inpu
t at each r
ound
and mak
e it
better.
STRA
TEGIC MEASURES
What mak
es a good
measur
e?
As Sir Winston Chur
chill
put it,
“H
o
we
ver
beautiful
the str
ategy
, you
shoul
d occasionally look
at the r
esults.”
Measur
es help you understand if you’
r
e e
x
ecuting your
str
ategy
.
Specific – It clearly and
pr
ecisel
y states what w
ill be measur
ed.
Measur
eable – It is numerical
an
d can
be gr
aphed.
Actionable – Results can be easily interpr
eted an
d you
kno
w
what actions to tak
e to affect the
measu
r
e.
Repeatable – Y
ou can consistently gath
er
informat
ion o
ver
time.
Timely – Y
ou can measur
e it at an ap
pr
op
ri
ate
fr
eq
uency
.
Have you e
ver hear
d of a SMART measur
e? (
No
w you
have.)
What The
y’
re All About
STRA
TEGIC MEASURES
What mak
es a good
measur
e?
Ther
e
’
s a bit mor
e tha
t goes
in
to cr
eating m
easur
es.
Keep this
in mind:
Y
ou should not
have mor
e
than 1
-2 measur
es per str
ategic
objective.
Y
ou’ll have two types of measur
es: “
ou
tcome
measur
es” and
“
driver measur
es.”
Outcome measures answer, “Ho
w would I kno
w?”
The
y ar
e the measur
es
tied to you
r
Financial a
nd
Customer
objectives.
Driver measur
es describe, “What we need to do well.”
The
y ar
e the
measur
es
tied to you
r
Pr
oduct,
Service, or Pr
ocess
and Learn
ing & Gr
o
wth perspectives.
What The
y’
re All About
STRA
TEGIC MEASURES
Ho
w will we measur
e success?
Y
our T
urn
Pr
esent
Futur
e
Objective
Measur
e
Financial
Customer
Pr
oduct
Service
Pr
ocess
People &
Pr
ocess
Increase
revenue
Partner with local
and organic
produce suppliers
Total Revenue
The % of
revenue from
top 10
products
The number
of organic
farmers
signed
up
Consistently
making money
Diverse mix of
organic and
local fruits
Inconsistent
Cash Flow
Daily special of
a single fruit
STRA
TEGIC MEASURES
What kind of tar
gets should you set?
Y
ou have all your measur
es in place for each objective. That’
s
amazing! No
w it’
s time to set targets. For e
xample, if your measur
e is
annual
r
e
ven
ue, your tar
get wou
ld be $
450,0
00 o
ver thr
ee years.
Set a str
etch tar
get for 3 – 5
years
into the
futur
e, then
cr
eate an
nual
and quarterly tar
gets
to
match
.
Y
our T
urn
Derived Fr
om
Over
all
Missi
on
Benchmark
Industry Leaders
Historical
Performance
Ne
w
Baselines
Based on
r
e
venue
tar
gets
Established
standar
ds
Pr
ocess
impr
o
vement
Ne
w
Measur
es
Customer
adoption
assumptions
Publish
ed or
industry
studies
Customer/
Emplo
yee
satisfaction
Inno
vative
or
pioneering
work
STRA
TEGIC MEASURES
Document each measur
e
and tar
get (one objective
per sheet.)
Objective Nam
e
Measur
e Name
Descript
ion
Formula
Periodici
ty
Owner
T
ar
g
et(s)
Insert selected measure
from measure worksheet
:
Brief description (if needed) of the measure
and
what
it should reveal:
Is there a calculation required to report the measure?
How frequently should this measure be
reported (mo
nt
hl
y, quarterly)?
Who is the person or department to report on the measure and performance?
What level of
perfor
mance do you expect?
STRA
TEGIC MEASURES
Y
ou’
r
e done with four of the five parts, and you’
r
e
steering this ship in the right dir
ection.
Carry on, you genius, superher
o,
Magellan-y captain.
Her
e
’
s a quick, frien
dly r
eminder to sh
ar
e it
with y
our team
and
boss! (Y
ou can leave the frien
ds out of
this p
art).
If
the
y don
’t
lik
e the measur
es, ask them to
r
ecommend a
better
measur
e, and mak
e sur
e to
look at all of
the measur
es as a gr
oup
(one measur
e alone
won
’t e
xplain
your entir
e str
ategy).
Y
our T
urn
INITIA
TIVES
Y
ou might be an initiative if (with apologies to
Jeff F
o
xworthy):
Wher
eas objectives tell us wh
at we
’
r
e g
oi
ng to do to achie
ve ou
r
str
ategy
, and measur
es tell us if we
’
r
e on tr
ack, initiatives tell us
ho
w we will accomplish our objectives.
Subtle? Y
es. Important? Oh yeah. “Measu
r
es
vs.
Initiatives” is on
e
of
the most confusing elements of the
scor
ecar
d. Her
e
’
s
some clarity:
Y
ou have accountability at
th
e leadership team le
vel
Y
ou have clearly defined start an
d stop d
ates
Y
ou have
pr
og
r
ess milestones
Y
ou have
a
budget
Y
ou have r
eal p
eo
ple working
on tasks
Y
ou’
r
e not “bu
si
ness as usual”
Y
ou answer the question,
“H
o
w will
I get th
is done?”
What The
y’
re All About
INITIA
TIVES
Change Agenda
It’s time to welcome back Kosmo’
s! Let’
s check out what they’ve set
up as an initiati
ve.
Objective: Partn
er with local a
nd
or
ganic pr
oduce suppliers
Measur
e: Number of
or
ga
nic farmers
signed
up
Initiative: Local Hudson V
alle
y fa
rm
er
outr
each and education
pr
ogr
am
What The
y’
re All About
Pr
oduct
What
ar
e we doing?
Ar
e we doing we
ll?
Ho
w ar
e we
going
to close
the
gap?
Daily special of a
single fruit
Diverse mix of organic
and local fruits
INITIA
TIVES
Ho
w will we close the gap if
we
’
r
e
falling behind?
Initiatives ar
e typically tied to objectives at the
bottom of th
e
map
.
Pr
esent
Futur
e
Objective
Measu
r
e
In
itiatives
Pr
oduct
Service
Pr
ocess
People &
Pr
ocess
Local Hudson
Valley
outreach
program
Partner
with local
and organic
produce
suppliers
• The number
of organic
farmers
signed
up
Diverse mix of
organic and
local fruits
Daily special of
a single fruit
C
ONCL
U
SION
No
w that you’ve built your scor
ecar
d
,
bring it to life with ClearPoint, th
e leading
Balanced Scor
ecar
d Softwar
e.
That was a lot of work, an
d we w
an
t to cong
r
atulate
you for making
it. Y
ou’
r
e about to tak
e o
ver
the or
ganization—i
n a good
way
, of
course.
But, k
eep in mind that the Balanced Scor
ecar
d is th
e
startin
g
point, not the end. No
w it’
s time to get to work on your initiatives,
tr
ack your pr
ogr
ess, and
commu
nicate the r
esults ar
oun
d the
or
ganization. Good
luck! We
belie
ve in
you. If
you e
ver need
help,
just r
each ou
t to us
at info@clearpointstr
ategy
.com.
And Y
our Ne
w Begin
ning
CLICK HERE TO GET A FREE TRIAL
