Learn how to implement complex strategic plans that involve multiple business units and stakeholders by cascading them into scorecards, goals, KPIs, risks, and initiatives. Explore a practical example of strategy deployment.
The Rationale: Why We Need a System to Deploy a Strategy
Studies show that most strategies are not executed successfully. Upon closer examination, the specific estimations of the percentages of failed strategies, as well as what to consider a “failure,” are still subjects of discussion. What is clear is that:
- One of the reasons for failed strategies is poor description and deployment, resulting in ineffective strategy communication and execution.
Why do organizations struggle to deploy their strategies?
The root cause is the increasing complexity of strategic planning.
This complexity is driven by a volatile, ambiguous and uncertain business environment (VUCA), the growing role of Governance, Risk, and Compliance (GRC), and the involvement of more stakeholders with increasingly complex requirements.
Goals are the quanta of any strategy. They help formulate the aspirations of the organization. In a more complex environment, the goals start behaving in a different way.
Here are some signs that complexity of the environment affects the goals of the organization:
- You have many strategic goals, but some of them are unclear and vague, there is no 100% agreement about their meaning
- Sometimes, it’s hard to explain if/how specific goals contribute to the overall strategy
- The cause and effect connections between the goals are not obvious
Under normal conditions, most of the problems related to the goals can be solved by finding a way to quantify them, e.g., finding performance indicators. With increasing complexity of the challenges, it’s hard to do quantification properly, and even when the observations are mapped into numerical form, their connection to the value created for the stakeholders is not obvious.
Here are the challenges that organizations see in this case:
- Many goals have not been properly quantified
- Your team tracks KPIs, but it’s not clear if you actually create any value for the stakeholders
- The root cause is not clear – there are indicators in the red zone on the dashboard, but it’s not clear what your team can do about them
- It’s unclear whether performance data is consistent
Increasing uncertainty and complexity of the external environment impacts the way the organizations deal with future changes:
- The analysis of external factors and competitors is irregular and not aligned with what you do daily
- Your organization recognizes the need to be more resilient, but there is no formal scenario and risk mitigation planning
- Your team don’t have specific strategies for new challenges like cybersecurity or digital transformation
Another way to perceive the impact of increasing complexity is to look at how the strategy is discussed and reported.
Your organization needs to adapt its approach to strategic planning if you see one of these challenges:
- Strategy reporting and review is time consuming; you review strategy once a year, it feels outdated most of the time
- No formal strategy – there are many opinions about where your organization is, what you should do and why; those opinions are not consistent
- No contextual information – there is always something important about the goal that only few people understand and can explain
Step 1. Create a Strategy Core
At a conceptual level, strategy consists of the choices your organization makes to create sustainable advantages. Depending on the school of thought, these choices are shaped by:
- Your understanding of stakeholders and their needs,
- The positioning of your product or service in the market, and
- Business model, including strategies for customer acquisition and retention.
At a practical level, these choices are first projected onto:
- High-level strategy: The organization’s mission, vision, and values.
- Stakeholders: The involved parties whose interests you satisfy when achieving the vision.
In the next steps, we will continue implementing these choices across all levels of the organization.
Step 2. Cascade Strategy into Scorecards
Once the high-level strategy and the stakeholders are defined, the logical questions are:
- How exactly do we implement this mission and vision in practice?
- How do we satisfy the needs of stakeholders?
- How do we execute the selected business model?
The answer to these questions is always complex… To approach this complexity in strategy deployment, we’ll cascade the strategy into a number of strategy scorecards.
Strategy cascading should be adapted to the specific organization. For example:
- Follow the organizational chart and create a dedicated scorecard for each business entity, or
- Organize cascaded scorecards around stakeholders, their needs, and value creation mechanics.
As Jeroen De Flaneer, Professor of Strategy and Strategy Execution, articulated:
Break down objectives into smaller chunks for the next organizational level. Pick a model that works best for you.
Step 3. Create Functional Scorecards
Besides having strategy scorecards, we’ll need a number of supporting or functional scorecards.
We’ll use functional scorecards for:
- GRC (Governance, Risk, and Compliance) to ensure strategy is executed in accordance with existing regulations.
- Competitive analysis, analysis of external factors, or stakeholder analysis to monitor the business landscape.
- HR, cybersecurity, quality, disaster recovery, and other functions to ensure proper operation of business activities.
Step 4. Decompose High-Level Objectives
Once the framing structure of scorecards is defined, we decompose the strategy into more specific components:
- Goals and Sub-goals
- Metrics or KPIs
- Risks
- Initiatives or action plans
When defining the metrics for the scorecard, there will be:
- Driver (or leading) metrics, as well as outcome (or lagging) metrics,
- Metrics that we track constantly (like “Customer satisfaction” or “% of returning problems”), and
- Metrics that reflect the degree of milestone completion (like “% of customers contacted”).
In a separate article, we discussed in detail how to set up a performance measurement framework.
Step 5. Align Scorecards
To finalize strategy deployment, connect or align scorecards to form a comprehensive strategy. The connection can be based on data or context.
While the system includes a separate step for strategy alignment, in practice, alignment should be integrated into other steps:
- Data connection between performance metrics and the metrics used to quantify stakeholder value.
- Contextual connection between identified external factors and the response strategies.
- Direct data connection between cascaded scorecards.
Strategy Execution
Once strategy implementation was completed, we move on to executing the strategy:
- Employees start working on the initiatives to achieve the expected goals.
- KPIs are updated with fresh data.
- The performance of individual goals and overall performance are calculated.
- Stakeholders are informed through automatic notifications, reports, dashboards, and strategy maps.
Implementation Roadmap and Timeline
A typical strategy deployment roadmap using BSC Designer as the strategy execution platform includes the following stages:
- Testing waters – learning initial mechanics.
- Pilot – implementation in 2-3 business units; cascading into scorecards; decomposition into goals and KPIs.
- Scaling – establishing internal standards for strategic planning and involving more business units.
Below, you will find the details of each stage with the estimated timeline.
Timeline: 1-2 weeks.
User involvement: 1-2 users on the free plan.
Expected outcomes: understanding basic mechanics of the platform.
- Familiarity with key terminology
- Cascading into scorecards
- Decomposition of high-level objectives into specific goals, KPIs, initiatives, risks
- Connecting scorecards by context and data
- User types and their roles
- Capabilities of the AI assistant
- Learning tools – pre-recorded tutorials and quality score
Timeline: 2-3 months.User involvement: 5+ users subscription.
Expected outcomes:
- Actual cascading into scorecards
- Decomposition of the objectives inside the scorecard
- Using the AI assistant to facilitate strategy description
- Importing historical data of existing strategy
- Setting up KPIs (update intervals, performance formulas)
- Establishing access rights for the scorecards
- Establishing reporting procedures (use of standard reports, customization of the reports)
- Customization of the tool (custom fields for KPIs/initiatives, global dashboard)
Timeline: 6-12 months.User involvement: according to the level of maturity.
Expected outcomes:
- Establishing the standards for scorecards (terminology, internal templates for scorecards, dashboards, formulas)
- Training additional power users to create and maintain their scorecards
- Automating data input
- Scaling strategy cascading into scorecards for business units
Common Pitfalls in Strategy Implementation
While helping clients implement their strategies, we have observed certain anti-patterns:
These strategies often exist in a vacuum created by top managers. When they are implemented, we often witness the creation of products that people don’t actually use. A successful strategy always maintains active contact with its stakeholders.
SMART criteria is an excellent goal-setting framework; however, the SMART goal format is not effective in strategic planning where we deal with a high level of uncertainty, volatility, and complexity.
Stakeholders’ needs are commonly articulated as broad, aspirational goals. To initiate effective work on these objectives, it is crucial to break them down into more concrete and actionable parts.
Externally, it may seem ideal to have a single, cohesive strategy aligned with the company’s vision and mission. Internally, a monolithic strategy lacks collaboration; updating it with new inputs and sub-strategies becomes challenging. Instead, consider adopting a strategy architecture based on aligned scorecards.
Automating strategies with spreadsheet and presentation software implies limitations in the consistency of calculations, maintainability, and data security. Specialized strategy execution software, such as BSC Designer, provides all these features ‘out of the box.’ We discussed all the typical challenges of strategy automation here.
Example of Using the Strategy Implementation System
We illustrate the use of the Strategy Implementation System with the example of the imaginary company XYZ Eco Group, which faced the challenge of overseeing a complex strategy across several business units and realized that the ad-hoc approach of using Excel spreadsheets was no longer sustainable.
- XYZ Eco Group: An Example of Strategy Implementation
More examples:
- Strategy implementation in an insurance company
- Strategy implementation in a VC firm
Will It Work for Our Organization?
The Strategy Implementation System is agnostic to the size of the organization.
- The best results are observed starting at the level of groups of companies or business units, where the challenges of strategic planning are more pronounced.
- At the enterprise level, the system provides additional value by establishing a standardized approach to strategic planning.
BSC Designer platform, combined with the strategy implementation approach it automates, has helped many organizations across various industries. Here are some quotes from G2, a website with independent user reviews about BSC Designer:
KPIs:
- “Facilitates the creation and management of performance indicators aligned with the organizational strategy.”
- “Monitors and adjusts for discrepancies between actual and projected KPI values.”
- “Clear visualizations of progress, easy goal setting and tracking, fostering a culture of continuous improvement.”
Strategy maps:
- “Automatically creates visually appealing and comprehensive strategy maps.”
- “Presents complex strategies on a single page.”
Strategic planning:
- “Promotes teamwork and aligns goals towards a common strategy.”
- “Has helped immensely in communicating strategies effectively.”
- “Prepares corporate strategy for executive-level discussions and decision-making.”
- “Powerful in implementing and monitoring a company’s strategy.”
- “Used as a main source of control for strategic planning follow-up.”
Strategy implementation:
- “A helpful tool for mapping and tracking Balanced Scorecards.”
- “Develops connections between core strategies, mission and vision statements, and set strategic goals.”
- “Resolves the challenge of keeping the Balanced Scorecard functioning regularly.”
- “Makes the process of developing and maintaining a Balanced Scorecard fluid and easy.”
- “Provides all the necessary features from simple to complex BSC structures.”
What’s Next?
Start using the Strategy Implementation System:
- Sign up with a free plan of the platform.
- Get training on using the platform to implement strategy, included in all paid plans.
- Contact us for strategy implementation consulting.
Alexis is a Senior Strategy Consultant and CEO at BSC Designer, with over 20 years of experience in strategic planning. Alexis developed the “5 Step Strategy Implementation System” that helps companies with the practical implementation of their strategies. He is a regular speaker at industry conferences and has published over 100 articles on strategy and performance management, including the book “10 Step KPI System”. His work is frequently cited in academic research.