Cardsmith

How to Create a Business Strategy Map

In my last post, we talked about how you can rethink your approach to your business management strategy. I covered how to fine tune each element of your strategy discussion, refine your company goals, and get buy-in from your team. It has been a minute since we posted that article (a lot has happened since then) so refresh your business strategy knowledge before forging ahead. Once you’ve done that, it’s time to dive in with the next step: how to create a strategy map! 

Why create a strategy map at all? 

A strategy map is a very useful tool for jumpstarting your strategic thinking. While strategy maps do not enjoy the same popularity as the SWOT (Strengths, Weaknesses, Opportunities, and Threats) tool, I believe they can be even more powerful.  

Here’s what creating a strategy map will do for you:  

  1. Clarify how you intend to be unique in the market you’ve selected to serve. 
  2. Discover if you have the resources to be successful. 
  3. Uncover conflicts or inconsistencies in your strategy that can cause it to fail in implementation. 
  4. Collaboratively discover and communicate a strategy so that those that need to execute on it are aligned. 

How to create a strategy map 

Just as you don’t have to be a master strategist to begin your conversation about strategy, you need not be a cartographer to begin building your strategy map.

I’m using Cardsmith for this because it’s so easy to move things around. Plus, the default card size forces me to be clear and concise, and, of course, this is a tool I’m passionate about. If you prefer a more analog process, you can easily start with nothing more than a whiteboard or a notebook.

Getting started

Remember what we learned in our last strategy mapping discussion:

We start by choosing a set of customers, learning what they care about, and setting out to serve them in a way that will stand out from the competition. And we remember that a good strategy is customer focused.  

different cars need different business management strategy
Figure 1

Let’s walk through creating a strategy map using a simple example. I will demonstrate how to do the map, as well as show you how the map uncovers a conflict that is likely to cause us problems if we don’t adjust our strategy.  

Begin with a goal

The first step is to get clear on the goal. Put your primary goal in a Cardsmith card (or sticky note) at the top of the map. It’s best to put this card at the top and in the center of a large board. In the end, your map may look a bit like an upside down tree, or an Organizational Chart, and you want to make sure your big goal is centralized and easy to find.

Using Cardsmith to build your strategy map allows you to reposition things and make space, should you need it later (likely).

Outline the steps

Next, at a very high level, describe the things you imagine you will need to do in order to achieve this goal. Aim for about 3-7 things. If you have less than three, you’ve most likely left something major off the map. If you have more than seven, you will want to group some of them into a higher level item (we’ll be breaking things down further in a later step). 

For example…

Imagine you own a company that sells food carts. 

Here is an example of what your strategy map may look like at this stage:

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Figure 2

As you can see, the top card outlines your strategic goal of owning over thirty percent of market share of the food cart sales in the United States.  The three cards in the bottom row describe what you think are the top level objectives that your team must meet in order to achieve this goal.  

Here’s a way a food card business owner (aka YOU in this hypothetical) should talk through the map in Figure 2: 

“In order to achieve thirty percent (or more) market share, we must have an aggressive marketing program. We must deliver a truly innovative design that supports our Unique Value Proposition (UVP)–which is to optimize our clients’ time and money via the use of smart design, so that our clients can sell more of their products. And, we must keep costs low, so we don’t price ourselves out of the market”. 

The above language may sound overly formal and repetitive, but the precise method of reading the map this way is important. You need to make sure you believe that all of the ‘We must….’ statements are true.

Break your strategy map down further

You and your team now need to expand on each of these three objectives and describe how you will accomplish each of them. This is where things can get sticky quickly.

For each of the cards on your second level of the map, you will add additional cards to the next (third) level. This third level of cards will express how you will go about achieving the second level of things (and subsequently, how they are helping you reach your goal).

These things may in themselves also be objectives, or they might be projects. They might be decisions. Don’t worry too much about categorizing things though, just name them. Your creativity will be impeded if you worry too much about what things should be called at this stage. Right now, they are just sticky notes!   

You and your food cart team discuss how to best meet the objective of having a truly unique value proposition (UVP).

You agree that you should hire top level designers.  Yes, that’s it.

In order to have a truly unique design that is different from all the other food carts, we need to hire creative, top level designers with a track record. So add this card to the Map in Figure 3.

During the discussion, your team also explored the idea of developing a portfolio of patents to ensure that your unique value stays unique, but you quickly decided that you do not have the resources to pay for the patent attorneys and you don’t have time to wait for patents to be issued.  

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Figure 3
In Figure 3, we detail how we will achieve our innovative design concept as a unique value proposition to the market. 

Based on the discussions around the time and expense of developing patents, the team now removes the patents idea card. This is how these things tend to go. You are adding ideas, testing them, discussing them, and then deciding if they make sense and truly belong on the map.

What to do if you get stuck?

For each card on your map, if you are not sure how to accomplish it, you might want to move away from the map and do a freeform brainstorming session.

The idea of brainstorming is coming up with lots of ideas (of course). Then, when you have an idea that you want to test, bring it back to your strategy map and see if it fits.  

Back to our food cart company example…

Your award winning designer co-founder believes that the best way in for the design team to develop groundbreaking new design ideas starts with careful study of existing food cart operators. She has done this kind of thing before, and has deep intuition about how these things go. 

Users of poorly designed products often figure out ways to make things function by creating ad-hoc work arounds. So your team agrees to add this card as another supporting card to our Innovative Design Card. Note that we use arrows pointing upwards to indicate which cards are supporting the higher level things.

Check your work:

Read this section in the formula above in order to test it for validity and completeness. 

Often this step of reading the diagram this way will highlight things that need to be changed or added to the map.

Here we read:

“In order to gain a unique competitive advantage via innovative design, we must hire top level design talent and the design team must perform studies of food cart operators working in today’s commercially available food carts.”

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Figure 4
Here, we have documented all the objectives that must be met in order to achieve a unique value proposition in the market of our innovative design. 

Satisfied with the high level approach for developing a unique food cart design, your team now moves to the second top level objective: an aggressive marketing plan in order to meet your market share goal. 

Here are some questions they can ask themselves as they move into this next top level objective:  

  • Is this still true?  
  • Why is this true?  
  • Could there be other ways that we might accomplish our goal instead of this?  

Your team discusses this idea that they need an aggressive marketing program in order to accomplish the market share goal. You ask, “Why is this true?” Your team realizes through this question that you all believe the aggressive marketing plan is required in order to get to market quickly so that you’ll gain market share before competitors have a chance to step in and copy your designs. 

This may or may not be achieved via a marketing plan. There could be other solutions. At this point, you could decide to brainstorm other ways to accomplish this objective, or you might decide to leave things as they are.

At this time, though, it feels like the “time to market” idea is strong enough to have it become the top level objective. And the marketing plan is a way to achieve this time to market objective. So, the team now changes the strategy map to explicitly communicate this. Figure 5 shows where the team moved the aggressive marketing plan card beneath the time to market card and drew the arrow pointing up. 

You now discover that your other idea, hiring top design talent, is supportive of getting to market quickly. We draw an upward facing arrow here as well. It is a good sign when cards under one objective support multiple objectives. This suggests we are starting to have a congruent plan!  

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Figure 5
Here we discover that an aggressive marketing program is a means to get market share quickly, so we move it down a level. We also discover that hiring top design talent supports our objective of getting to market quickly. So far, our strategy map is congruent.  

To sum up this step shown in Figure 5, we read this section of our map as:

“In order to get to market quickly, we must implement an aggressive marketing plan AND we must hire top design talent.”

It is important to read these sections out loud as you build them, because this is where you might just say to yourselves, “Is this really true?”

Feel free to pause and challenge your thought process at each stage.

Be aware that you may come back to this map later and challenge or change various sections. The best maps are built iteratively, over time. This is a creative process and it is hard!  

Strategy map revelations!

Moving forward with this example in Figure 6 your team discovers something very important. They have a conflict!  

You can see the idea that they must pay top salaries to attract top level designers is in conflict with another approach on how to keep costs low!  

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Figure 6
Here’s where we discover a conflict in our strategy map. 

This is actually one of the great benefits of a strategy map. It can reveal, in stark visual fashion, where the points of contradiction or inconsistency in your strategy may lie. 

When you uncover such contradictions, you must resolve them. To resolve them, you must bring (and recruit!) creative thinking. A strategy that contradicts itself is bound to fail.

One way to think creatively is to examine your premises.

The very top goal in this strategy map pertains to profitability. The second tier goal – while it supports profitability – pertains primarily to growth.

Here are some of the questions the food cart team should ask:

Can you set aside the goal of growth while continuing to focus on profitability? If not, is there another entirely different approach you can try that includes both?

These are the types of fundamental questions you’ll inevitably explore with your team when you use strategy maps.

After much discussion and debate amongst your team, you decide that it would be unrealistic to try to gain 30% market share AND keep profits high via low costs. In fact, this is a core strategic insight: a good strategy should be focused on either growth, or profitability, but to try to go for both is likely to fail.  

Compromising strategically

We decided to resolve the conflict in our map as shown in Figure 7 by explicitly stating that we are going to sacrifice short term profits for market share growth.

This is key to document and I really like seeing statements like this in a strategy map. This is the sort of thing that is likely to be forgotten in the next meeting where decisions are being made about costs! It is so easy to get wrapped up in our own desire to have everything be just so (e.g. keep costs low).

When we create a visual reminder that we are intentionally choosing something that, without context, could be perceived as suboptimal is critical. While it may be suboptimal without understanding our full trajectory, but outlining a clear strategy map, we know it’s part of how we reach our top level goal.   

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Figure 7
When we realize we’ll have to trade off profitability for growth at this stage in our organization’s trajectory, we correct the incongruent objective to keep wages as low as possible. Also, note how this card now supports the time to market card, too. Whenever lower level cards can support multiple higher level objectives, you know your strategy is aligning!  

Wrapping up

Finally, to wrap our food cart company example, you and your team decide to add a fourth top level objective: don’t run out of cash.

This satisfies the CFO for the moment, and the team now must plan to either raise money or conserve the cash that you have on hand. More things to add to your map. 

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Figure 8
Instead of keeping costs low, we realize there’s another top level objective: don’t run out of cash. While we are concentrating on growth, we need to plan strategies to either raise money or conserve the cash that we have on hand.    

The team continues to flesh out their strategy map, find more conflicts, move things around, debate and discuss. 

Strategy is hard work.

Fostering and harnessing creativity in teams can be tough. But when you tackle it systematically, where everyone can see all of the connections, conflicts, synergies, and where they remember all of this good thinking, even when the map is taken away, is so valuable. One of the benefits of using Cardsmith is that you can keep a digital record of the thinking that went into the mapping activity.  

Other benefits of a strategy map

A strategy map gives you a handy, graphic “bird’s-eye view” of a strategic plan. This makes it more intuitive to grasp than a white paper or a list. 

Also, when you collaborate on a strategy map with a team, the map minimizes (or even removes) any sense of personal criticism when people see things differently. Rather than directing disagreement at a person, a team member can simply make changes to the map. The map becomes a kind of art object that everyone creates together, adding and subtracting ideas as appropriate.

Is an explicit strategy always necessary?

Many businesses don’t bother to create a strategy. They don’t write down their goals and action steps, much less create a map. And some of them survive. But it’s a safe bet to say that, on average, organizations that are clear about their strategy are far more successful than those that are not. 

A strategy gives teams a touchstone, a shared understanding, a way of making sure that their actions are in alignment with goals and values.  

For the effort it takes you to create an explicit strategy and construct a strategy map, the ROI will pay you back many times over. 

Featured image by Elina Sazonova from Pexels

Have questions about strategy mapping? Tweet us @gocardsmith.

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