The power of strategic themes
In one of my many interviews with Dr David Norton, he described the power of Strategic Themes, through which strategic objectives are grouped into several categories within a Strategy Map. “Strategy is about delivering solutions to common challenges that the organization is facing and this is at odds with a vertical structure,” he explained. “By identifying and laying out strategic themes on a map, organizations can overlay a horizontal form of management onto the necessary hierarchical structure.”
Themes as silo-busters
But organizations are not just hierarchical, they are also structured according to silos. Sadly, in 2017 we still generally construct organizations according to strict silo-based diktats of Frederick W. Taylor in his 1911 work, The Principles of Scientific Management. This is your area of expertise, learn it, do it, and don’t think about anything else. Hardly an encouragement to collaboration.
Strategic Themes…are designed to enable cross-enterprise collaboration and so are useful silo-busters.
Strategic Themes, however, are designed to enable cross-enterprise collaboration and so are useful silo-busters. As Drs. Norton and Kaplan said in their seminal work, The Execution Premium: Linking Strategy to Operations for Competitive Advantage, “The themes, which operate across functions and business units… support the boundary-less approach necessary for successful strategy execution.”
More organizations than ever are failing to close the gap between strategy and operational activity and silos are a key culprit. What is the cost in real terms? Click here to view an ROI of Strategy Execution infographic.
Strategy Maps were originally positioned exclusively within the internal process perspective. The reason being that is where the work gets done. So, collocate objectives according to process-focused themes such as innovation, growth and efficiency, as shown in figure 1. Together, these themes delivered the customer outcomes and from that, financial results.
However, organizations have since shaped themes according to their own needs and oftentimes across perspectives. Arrangements vary. Figure 2 shows a government entity example of how themes cut across customer and internal process perspectives – in this case, attract targeted visitors, improve tourist’s experience and contribute to social and economic development.
As another take, the Dubai-base AW Rostamani Automotive first identified six key pillars of a World-Class Organization (that would deliver to their 2015 goal of being a $2 billion company). These pillars were then transformed into Strategic Themes on the Strategy Map – see figure 3. As a powerful measure of success, the organization met its 2015 target by the end of 2014.
As an aside, its new corporate-level Strategy Map is designed in the shape of a car, something that I advised them to do as they were seeking a more impactful and inspiring way to use the map as a communication vehicle.
Constructing theme teams
Whatever the construct, each Theme Team must be led by a member of the executive leadership team. Only they have the power to drive the end-to-end process changes required to deliver transformational change, as well as the authority to second the resources required to work on strategic initiatives (functional heads typically hesitate at losing their “star” performers – the most likely candidates for large and potentially complex change projects).
Theme team leaders will be supported by a team of managers, who will be responsible for the specific objectives within the theme and supporting Key Performance Indicators and initiatives. Crucially, they need to collaborate to understand how the objectives work together.
each Theme Team must be led by a member of the executive leadership team
Potential downsides of working with themes
I must stress, however, that managing strategy through themes does come with some “watch-outs,” that might lead to there being performance-blockers, rather than enhancers.
Although enabling executives to separately plan and manage each of the key components of the strategy, themes still need to operate coherently. That is, working together as an interdependent whole that collectively delivers strategic success. A real danger is that themes default into “new” functions, in that the members of the team focus only on their theme and ignore the others on the Strategy Map, encouraging battles for scarce cross-enterprise resources between theme owners. Taylor’s message is well ingrained in the subconscious of most organizations.
Moreover, cause and effect, or causality, typically does not work in a strictly linear fashion, which is something people often lose sight of when working with themes. As an example, I advised one government organization, working in a country in which contractor treatment of low-wage migrant workers was a significant issue, that the “partner management” objective within the Outsource and Deliver theme directly impacted the “national and global reputation” objective within the Customer Excellence theme (they were located “a long way” from each other) on the Strategy Map. Not managing this carefully could have led to devastating consequences.
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There is sometimes a debate about whether Strategic Themes should be identified before or after the objectives are identified. In the latter approach, the thinking is that objectives will naturally come together into themes. I take a slightly different approach. The previous work completed on creating a Strategic Change Agenda often leads to the clear visualization of themes as well as objectives.