Denkplan – the impact step

To visually and transparently communicate a strategy one prerequisite makes sense – some kind of strategy. That might sound funny, but from my experience – by working with many companies – that point is somewhat vague. Either the strategy is confidential (i.e. only top management is authorized to view the uncensored version) or it is just in rework and available in – let’s say – six months or – and that happened to me in reality – the COO just could not find the current version on the intranet. The only version available, was the one from 2015, which is not valid anymore. However, sitting side by side with my contact in a company, I often ask them out of the blue “by the way, can you show me where I can find and read the strategy of your company”. It is a good test.

What would a sound strategy look like? There are so many different representations of a strategy – the best starting situation is that – whatever representation exists – it is transparent and communicated within the company. The typical representation is a PowerPoint holding the vision / mission statement, the companies SWOT analysis, a wish list of products, services, features and/or capabilities underpinned by a phrased ambition on how to develop these items over time. That might be a good start, although many strategies still are very company focused instead of customer focused. In case the strategy is carved in stone like a milestone plan for the next five years, with a tight budget plan signed by the board of directors, well, in this case we should expect a hard start and many impediments when trying to evolve into something customer focused and agile….

But let’s look at this in a positive way: we have some sort of representation of a strategy as a starting point. We found the current version of the PowerPoint on the internet, including the vision / mission statement and some bullet point lists with statements where the company will be in three to five years. Additionally, it explained why customers will be delighted by the companies future products and services.

One thing is obvious: the bullet pointed strategy items in the presentation typically do not reflect all elements a company has to consider in order to make the strategy work. In other words, the typical strategy definition does not reflect the full impact to the existing ecosystem. There might be some legacy systems that need to be replaced for them to be ready for digitalization. Probably we identify that we miss competences and therefore have to care for our staff members or find employees with new job profiles – probably including a mindset change all over the company, to working on the company culture. If we want our strategy to succeed, we must respect, visualize and work with all these influences and impacts. This becomes the playground for the first instrument: the impact map.

The impact map is based on the concept of a morphological box. It visualizes all the relevant influencing factors and options of a specific system. To reach a desired goal with this system, the factors and options are analyzed by three aspects: first whether a factor has an impact to reach the goal; second whether the factor is in good shape or requires improvement; and third dependencies to other factors that might require improvement as well, because of the existing dependency. The influencing factors and dependencies between factors are typically marked by using colors (for factors) and lines (to display dependencies). Such a combination of marked factors and the lines drawn between, is called a context. A context is a consistent set of factors that require measures, because they have an essential influence in reaching the desired goal.

Used to work on the company’s strategy, the impact map lists all the relevant and influencing factors and options of the company. This set is specific for each company, so it is part of the job to identify these factors and options and to configure the companies specific impact map. Candidate elements are the target customer segments, existing processes, products, the IT systems implementing the products and services, the competences and capabilities of the company including the work force, the ecosystem – like key partners – and so on. All these factors and options may be orthogonal, but heavily related. As we keep on saying: the impact map represents the map of the company. I hope you got that point.

As soon as the impact map is configured, the next step is to evaluate and analyze the state of the elements in the map against our vision and mission. Is it in good shape to reach our vision or do we have to work on an element? By going through this process, we identify the hot spots within the map. A hot spot can be a legacy IT system; a long lead time to build and offer a new customer service in appreciated quality; a hot spot can be the cash cow product on the downgrade that generates high maintenance effort; a hot spot can be that we have problems to hire specific experts on job market.

To improve a hot spot – an element in the map – typically this element has dependencies to other elements in the map. Consequently, we have as well to work on these other elements because of the inter-dependencies of the elements. For example, if we want to improve the company’s customer focus, we have probably as well to improve marketing and customer service.

Analyzing the map, we identify a context of related elements, visualizing the context by drawing lines between inter-related elements and marking the elements in bad shape. We can as well identify more than one context in the map. A context describes a goal impact relationship. Let’s say it in this way: “If we want to improve X and Y in this way to make a step towards our vision, we have as well to work on A, B, C and D.”

I stopped pointing at the top management. In my work with top management I try to find the very rare moments to start an open and safe conversation for both sides. And within the teams I ask for understanding. I try to foster conversation between top management and “all the others”. Conversation is always a good mean to create mutual understanding. I want the barrier to disappear. Top managers and leaders are smart, charismatic, engaged and it is of high value to work closely together.

Maybe it helps to offer top managers (or top leaders?) support and help instead of only expecting support and help.

Maybe some time in the future a responsible leader of X is allowed to stick with X instead of going for the larger and more demanding Y – keeping her influence and responsibility and recognition.