A typical strategy is complex due to the increasing complexity of the business environment. Deploy strategy using the Balanced Scorecard principles with practical examples of implementation using specialized software. This approach makes it easier for the team to discuss, communicate, and execute their strategies effectively.
Below, we’ll specifically discuss the deployment/implementation of existing strategies. If you are interested in learning how to create a strategy, I recommend you start with this Strategic Planning Process article.
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
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
With this rationale in mind, there are two directions for improvement:
- Revise the current approach to strategy description and deployment.
- Revise the current toolkit, shifting from Excel/PowerPoint to specialized platforms.
Step 1. Create a Strategy Workspace
Strategy deployment starts with capturing two fundamental aspects of strategy:
- High-level strategy: The organization’s mission, vision, and values.
- Stakeholders: the involved parties whose interests you satisfy when achieving the vision.
Automating on the BSC Designer platform:
Switch to the Settings > Strategy tab where you will find the Vision textbox as well as other strategy attributes.
For stakeholders, we have a built-in stakeholder analysis template. You will find access to it on the same Strategy tab.
Strategy Team
Your strategy team belongs to the internal stakeholders. The success of strategy deployment and future strategy execution depends on their involvement levels. In a different article, we discussed various models and suggested some best practices.
- Target a “Collaborative Strategy” model, where 5-10% are involved as strategy owners, and 15-30% as strategy contributors.
- Plan to address the challenges of strategy governance, for example, by creating the Office of Strategy Management.
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 the stakeholders?
The answer to these questions is always complex… To approach this complexity in strategy deployment, we’ll cascade the strategy into a number of aligned scorecards.
Automating on the BSC Designer platform:
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 ethically, complying with existing policies and regulations.
- Competitive analysis, analysis of external factors, or stakeholder analysis to monitor the business landscape.
- HR, cybersecurity, quality, and other functions to ensure proper operation of business activities.
Automating on the BSC Designer platform:
Step 4. Decompose High-Level Objectives
Once the framing structure of scorecards is defined, we can decompose the strategy into more specific components:
- Goals and Sub-goals
- Metrics or KPIs
- Risks
- Initiatives or action plans
Business frameworks, such as the K&N Balanced Scorecard, OKRs, and Hoshin Kanri, suggest their own approaches to decomposition. Use the one that is most effective in a particular case.
Automating on the BSC Designer platform:
The platform provides strategy maps and dashboard tools to support strategic discussions and communicate performance data:
At the prototype stage, you might have done this with Excel and similar office tools. In this article, we discuss the benefits of shifting from strategies automated with spreadsheets to specialized strategy planning tools.
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.
Automating on the BSC Designer platform:
To align scorecards in BSC Designer:
- Open the scorecards you want to align in different tabs.
- Copy an item from one scorecard.
- Paste the item to another scorecard.
- Select the connection by context or by data.
Implementation Roadmap and Timeline
A typical strategy deployment and platform adoption roadmap includes these stages:
- Testing waters – learning initial mechanics.
- Pilot – implementation in 2-3 business units; cascading into scorecards; decomposition into goals, KPIs, and initiatives.
- 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.
- 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
- Learning tools – pre-recorded tutorials and quality score
Timeline: 2-3 months.User involvement: 5+ power users subscription; 5-10 data input users.
Expected outcomes:
- Actual cascading into scorecards
- Decomposition of the objectives inside the scorecard
- 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 enhance their strategies, we have observed certain anti-patterns and pitfalls.
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.
While frameworks like OKR or Balanced Scorecard play a crucial role in assisting teams to focus and execute their strategy, their optimal use often requires broader ecosystem of complementary frameworks.
In practice, we use a combination of frameworks for strategy analysis (such as PESTEL and SWOT), strategy description (such as the Strategy Change Agenda and OGSM), and execution (such as the Balanced Scorecard, OKRs, and Hoshin Kanri).
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.
Alexis is the CEO of BSC Designer with over 20 years of experience in strategic planning. He has a formal education in applied mathematics and computer science. Alexis is the author of the “5 Step Strategy Deployment System”, the book “10 Step KPI System”, and “Your Guide to Balanced Scorecard”. He is a regular speaker at industry conferences and has written over 100 articles on strategy and performance measurement. His work is often cited in academic research and by industry professionals.