Strategic business managers understand the importance of always having a finger on the pulse of their organization. Without such informed insights, it is very difficult to make effective decisions regarding optimizing existing opportunities and scoping out new directions. Strategy mapping is a tool that provides managers with a 'bird's-eye view' of the organization that clearly identifies the path to reaching ultimate goals.

Business process mapping (BPM) is a tool that is used to provide a company with a clear picture of how it does what is does. BPM actually maps out all of the business processes and clearly identifies the activities and resources required to carry out them out, thereby providing a detailed and accurate 'as-is' organization-wide snapshot. This information can then be used to optimize and streamline existing processes and to attribute exact costs to each activity and required resource, via activity-based costing. These costs can be rolled up to ascertain the total cost of providing each business processes. This information can be used in a variety of ways, such as, budget setting, quoting and efficiencies targeting.

While BPM may seem like an obvious approach, it is surprising how many companies do not have a true and detailed understanding of how they do what they do. It is the strategic manager who fully understands that breaking things down to their most basic components is the best way to see the whole picture.

The practice of strategy mapping requires senior management to literally draw out, on paper, the corporate strategies that will facilitate the attainment of the organization's ultimate goal. In the private sector this goal usually takes the form of a financial 'vision statement' such as, optimizing the company's value.

By undertaking a BPM exercise, the addition of strategy mapping is not a laborious one. There are typically three main strategy routes that lead to the attainment of the vision statement: revenue growth, productivity optimization and asset optimization. It is at this juncture that it is necessary for senior management to commit to a philosophical direction that will influence all future routes of their map.
It is imperative to decide if the organization will make its key focus on achieving operational excellence, product leadership or customer intimacy, because the focus that is selected will profoundly influence all parts of the strategy.

Through strategy mapping senior management is able to clearly articulate these strategy routes and understand which areas/activities of their organization facilitate and how these facilitate them. Systematically addressing these issues is like putting each strategy and its operational details through a stringent filter, and anything that doesn't flow smoothly through will be left sitting out in plain view to be addressed swiftly and effectively. The 'filter' process acts as a thorough checks-and-balances process to ensure each aspect of the strategy is truly assisting in the attainment of the ultimate goals of the organization. It also encourages stakeholder buy-in because members of the organization are able to actually see where their efforts directly impact the company goals.

While the concept of strategy mapping is a fairly straightforward tool, it holds real value for today's strategic manager. The fact that the corporate strategies and vision have been diagrammed for all to see and follow means that anyone, at anytime, can glance up and verify whether or not they are taking the correct route and if not, all they need to do is refer to the map and find their way to the right path.

Copyright - Kelly Melanson, Certified Management Accountant