Business strategy today
What has happened to business strategy? Strategy used to be fashionable. Many consulting firms built up a considerable specialisation around the whole area of company strategy, which could be completed for hundreds of thousands of dollars. I remember one well known consulting company which developed a technology strategy for government which cost over $1million to complete. That was just the strategy report!

Over the years I have facilitated the development of business and technology strategies for a range of different companies, both as an external consultant and as an Executive. The process was often one of workshops, research, interviewing and multiple iterations of drafts. The process often took 3-4 months to complete. New markets, new products or services could be carefully considered during this process knowing there was the luxury of time before the competition could catch up or react.

Strategy today
Today the market moves so fast that businesses spending too much time contemplating their navels will be left behind. This is not to say that development of strategy is not important today – it’s just that it has to be done at lightning speed. It is then absolutely essential to get action happening. Companies large and small are still developing strategy but instead of it comprising a dossier of 50-100 pages it is now being put into 2 or 3 pages and is completed in 1-2 weeks. This brings me to the importance of strategy implementation.

Implementation of strategy – scorecards to keep companies on track

Fortune Magazine estimates that less than 10% of strategies are effectively implemented. Even very good strategies will be totally useless if not implemented well. Kaplan and Norton (the inventors of the balanced scorecard) cited a number of reasons this failure:

1. Awareness – 95% of the people in the organisation don’t understand the strategy
2. Resources – 60% of organisation don’t link budgets to strategy
3. Incentives – 70% of organisations don’t link incentives to strategy
4. Executive agenda – 85% of organisations’ executive teams spend less than 1 hour per month discussing strategy

In today’s market it is still vital to focus the whole business on the implementation of the strategy. A simple scorecard can provide (a) focus of the executive and management team on the strategic imperatives, (b) a valuable tool to report progress to the board, (c) a useful way of keeping employees informed and working to achieve the objectives, and (d) a means of early detection of areas where things are going wrong and to be able to react to fix them.

Large companies have used scorecards effectively for many years. The use of a scorecard also applies I believe to SMEs. I have facilitated a number of strategy map/scorecards for SMEs over the years and all have found them a highly effective way to achieve their goals.

The strategy map and balanced scorecard also puts emphasis on the organisation as a whole, not just the financial. It can vary dependent on the organisation but usually comprises 4 domains:

Financial, Customer, Internal Process, People

Within each domain the objectives are listed together with specific measures and targets.

An example of a good strategy map and scorecard is shown below.

The strategy map and scorecard is often accompanied by a traffic lights system which shows as green for on track, amber for keep a watch on this measure, and red for action required to address a problem.

In summary, in today’s market there is a need to develop strategy super-fast, and then implement the strategy super-fast. The scorecard provides an excellent way of implementing strategy keeping the whole company focused on delivering the organisation’s key objectives.