There hasn’t been enough debate on this blog recently so I’m hoping this post will stir things up a bit.
Over at the other guys, Frank wrote a post titled EPM and Strategy Management that I had to read four or five times to understand. Even now, I’m not completely sure what he’s getting at. My confusion starts with the very first sentence:
Enterprise Performance Management is usually seen as a tool for strategy management.
Huh? Most people would say that strategy management is a tool for enterprise performance management. EPM also includes planning/budgeting, financial consolidation, and profitability management. Choose your favorite analyst: IDC, Gartner, Forrester.
He then goes on to say:
Strategy formulation and strategy management are seen as two separated disciplines.
In reading the rest of the blog, I think he’s trying to distinguish between developing the strategy and tracking the strategy. But the latter is an incomplete view of strategy management. True strategy management emphasizes strategy articulation and answers the question that most employees have: what does this strategy mean to me? Cascading blurs the line between strategy formulation, strategy articulation, and strategy execution. Strategy management can’t exist without cascading.
Since I’m so confused, I could be misinterpreting this sentence:
A more modern view on strategy formulation is to see this as a continuous process, based on “grow as you go.” […] unlike the old way of working the way how to go there is only sketched in broader terms.
Certainly strategy shouldn’t be static; real-life execution should incrementally impact our objectives. Isn’t that why we’ve been talking about closing the gap between strategy and execution for 5+ years? But I’m troubled by the second sentence. Organizations need clear decisions on which freeway they are going to drive on to get to their destination.They just need the flexibility to change their minds when they hit a traffic jam.
In the end, I think this one sentence sums up why Frank and I can agree to disagree:
A balanced scorecard strategy map becomes a living document.
Why would it ever be dead? A true strategy map is live, interactive and constantly changing. That’s the whole point as to why it’s not a document on the shelf.
Strategy management is a mess; I’m right with you. I understand the distinction he’s trying to make — I get the sense that he too believes it should be looked at as a whole — but his post ends up perpetuating the confusion. I think he tried to do WAY too much in one post.
To me, the biggest challenge is see is with the strategy articulation piece. The cascade sounds great in theory. However, the ability to communicate well enough to bridge the gap between painting the big picture and detailing where one element fits is rare. Formally linking goals, initiatives, and metrics only goes so far. The amount of informal coaching that goes into getting teams to get these linkages in the gut is conisderable and hard to automate.
I think I’m confused as well…and there’s a lot in the post to be confused about, maybe he should have done several mini posts to break it up a bit.
From the way I see it, the elements of strategy management that he is claiming are new, really aren’t new, we’ve known them for years. The devil is,and has always been, in the details. We divide up Strategy Management, and EPM, for that matter, into manageable chunks because they are big topics and we need to be able to get our arms around them. That does not imply that they have separate disciplines embedded in them…it just means they are big! Frequently we take a continuous process and segment it into logical groupings to be able to model, mange and implement the process as a whole better.
My 2 cents.
I’m glad to know that I wasn’t the only one confused. I agree with both of you — maybe he should have expressed his ideas over multiple posts. @Frank: Want to help us out?
To Paul’s point about cascading being useful in theory but difficult in practice, I would generally agree but offer that nothing that improves performance of an organization is easy. And I probably should have linked to this entry instead: http://JonathanBecher.com/2007/03/24/cascading-satisfaction/