Charting Your Company's Future

by W. Chan Kim and Renée Mauborgne

Harvard Business Review, June, 2002, pp. 76-83

The subtitle for this article is: "Most strategic planning involves preparing dense documents filled with numbers and jargon.  But building the process around a picture yields much better results."

"John Reed of Citicorp was known for insisting that executives get the big picture.  As chairman and CEO, he demanded that business unit heads present their proposed strategies in no more than a few slides.  Executives who failed to me his exacting standards for brevity met with his unconcealed displeasure.  And if it happened too often, they ran the risk of being left out of the loop on future strategy sessions."

"Many leaders share his obsession with the big picture, yet our research shows that few companies actually have a clear strategic vision.  The problem, we believe, stems from the strategic-planning process itself.  The process usually involves the preparation of a large document -- culled from a mishmash of data provided by people from various parts of the organization who often have conflicting agendas and poor communication." p.77.

Poke around on the web for a while, looking at strategic plans that most school systems have on their web sites, and you will be hard pressed to disagree that this statement also fits well with the documents produced by school systems.

The authors recommend drawing a strategy canvas.  The factors of competition for an industry are listed on the horizontal axis.  The vertical axis shows the degree to which members of the industry and providers of alternative services invest in the competitive factors.  For example, a strategy canvas for the short-haul airline industry showing the car as an alternative technology, Southwest Airlines, and Other Airlines, would show a value curve for Southwest more like that of the car than other airlines for competition factors such as price, meals, lounges, seating choices, hub connectivity, friendly service, speed, and frequent departure.

According to the authors, such a strategy canvas reveals whether an organization's strategy has the three complementary qualities of an effective strategy:  focus, divergence, and a compelling tag line.  Focus is shown by a high level of investment in some competitive factors, and a low level in others.  An unfocused strategy shows relatively level investment across all factors.  Divergence means the extent to which the organization's value curve differs from those of its competitors.  Finally, an effective strategy lends itself to a compelling tag line.  For Southwest, the authors suggest "The speed of the plane at the price of the car -- whenever you need it."  (Not so different from Southwest's current "You are now free to move about the country"  advertising campaign.)

Visual Awakening:  The first step in drawing a strategy canvas is to identify the factors of competition.  The authors suggest this is often far from straightforward, and the final list may be very different from the first draft.  Then it is challenging for the organization to assess the extent to which it and its competitors invest in the various factors.  Mangers of particular areas may be too much aware of small differences between their offerings and those of competitors; differences that might not actually matter to customers.  But, it is the senior managers who must make this first draft, and that usually requires discussion and resolutions of some disagreements.  The illustrative company referenced in the article pulled 20 senior managers from four continents.  They were split into two teams and given 90 minutes to draw the company's value curve.  Once done, the visual depiction of the company's strategy (or lack thereof), was a powerful motivator for the next steps.

Visual Exploration:  Next, the team goes "into the field", face-to-face with those who use their products, to both talk to them and to watch the actual use.    The authors emphasize that there is no substitute for personal observation.  Or, as I was told early in my career as a trial lawyer:  "Go to the scene."  In many cases, that includes not only customers, but lost customers, competitors' customers, and in some cases, customers' customers.  From these observations and interviews, the team should identify what factors of competition the customers value most highly.

Visual Strategy Fair:  After the exploration, the team or teams are given a short time (in the example, two weeks) to draw X new value curves (six in the illustration), and write a compelling tag line for each.  At the end of the allowed time, the teams present the new curves at a visual strategy fair.  The attendees include senior leadership, but mostly representatives of external constituencies -- the type of folks that were visited during the field trips.  Each curve gets a 10-minute presentation and is hung on the wall so the audience can see it.  The judges (the invited attendees) are given five Post-It Notes and told to put them next to their favorites, with multiple votes for any strategy they found particularly compelling.  Then the judges are asked to explain, with the teams taking notes as another level of feedback.

Now, the team should be able to draw an improved, more accurate value curve for current strategy, and a proposed curve for a strategy that will more effectively accomplish the organization's mission.

Visual Communication:  Finally, the current and proposed curves must be communicated to all employees.  If they were done well, they should be visually compelling and provide a clear picture of where the organization is, where it needs to go, and why.  This picture then becomes the reference point for project approvals, budgeting, etc.

Application to Schools and School Systems:

First, what product do public schools produce?  The answer will determine the factors of competition and the competitors.  Obviously they do not produce "graduates" as the schools do not own and cannot sell their students.  So, what do they sell?  

One answer could be that they sell "schooling" to the community.  "Schooling" would be some kind of formal educational process that entails control over the presence and behavior of school-age students on certain days and times, and that is intended to help those students learn.  Competitors would be private schools, home schooling, and dropping out.  Factors of competition would include cost, number of hours and days that the school took responsibility for the students, and results (usually measured by test scores).

But, what if we choose to view schools as in the business of selling work to students?  What then?  When I originally read this article, I made some notes and drew value curves on this basis.  I'd be happy to share them with anyone who will make a stab at answering those questions themselves.  Then we can swap, and maybe start the "Visual Awakening" process.

July, 2003