A key factor in the successful execution of strategy is organizational alignment. Many organizations are composed of multiple business units often existing in silos that are out of synch and sharing no common purpose or goals. Successful strategy execution requires aligning the skills, knowledge, and efforts of these business units to support the organization’s strategic goals. Let’s take a brief look at how this is done utilizing a strategy map.
The first step in the process is to identify those objectives on the Tier 1 or Enterprise-Wide strategy map the specific Business Unit directly impacts or supports. The objective name may stay the same or it might be modified to better reflect the purpose of the business unit in supporting that objective. For example, if Objective 12 in Illustration 1 was Improve Employee Skills and Abilities, it could retain the same wording, or it might be changed to be more specific to the Business Unit. For example, if the Business Unit was Marketing, then one option might be to change this objective to Improve Employee Marketing Abilities or something similar.
Illustration 1: Step 1 – Alignment of Tier 2 Strategy to Tier 1
After cascading all the objectives supported from the Tier 1 map, additional department-specific objectives can be added. Generally speaking, a Tier 2 map might need 8 to 12 objectives to adequately portray its strategy and be truly useful for managing unit strategy. The resulting strategy map will not only align with organizational strategy, but will also be useful for managing the unit itself. The cause-effect linkages between the objectives on the Tier 2 map are then defined and detailed in the same manner as was done on the Tier 1 build of the Strategy map.
Illustration 2: Step 2 – Alignment of Tier 2 Strategy to Tier 1
This process is repeated for each of the business units/departments, etc., at the Tier 2 level of the organization. By following this process, each business segment aligns with the Tier 1 or Enterprise-wide strategy. Remember, you cascade objectives…NOT measures or initiatives.
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Terry is Balanced Scorecard Institute's Director of Training and Senior Associate with over 30 years of experience working in both the private and public sectors.