Beginning as a health crisis, today COVID-19 has become a test to resilience and agility to organizations. It has created an accelerated impact on every organization from micro, small and medium enterprises to multinational corporations at a speed and magnitude the world has never witnessed in the last 100 years. The impact of the pandemic is rippling without showing any endpoint in the near future, exposing the organizations to greater risk, with unending questions about sustainability. It has redefined the future of business and its associated strategies.
It is a tall order for organizations to not only accept the new reality but also to rethink their business strategies as a result of disruptions of their value chain because most were far from being neither resilient nor agile. The weak links in the current organizational strategies have prompted the need for a radical shift in the future business models. However, the VUCA (volatility, uncertainty, complexity, and ambiguity) environment has not given sufficient clarity about the fundamental strategic decisions needing such shifts. Nevertheless, a measurable, practical, and informed approach is needed for short-term recovery and long-term sustainability.
Strategy Map, a document portraying how values are created by the organization, is no longer an exclusive document with possession by multinational or large-scale organizations. The pandemic has provided adequate evidence for every organization to have a forward-looking strategic direction regardless of the size and nature of the organization. The futuristic strategy map should consider not only the disruptions to supply chain systems but also the future shifts in market characteristics and also consumer behaviors. A review of the cause-and-effect and consequences of the COVID-19 pandemic will prompt new levers for each perspective within a strategy map. Fundamentally, it encompasses four important dimensions namely, financial perspective, customer perspective, internal business perspective, and also learning and growth perspective.
The strategy mapping requires the organizations to follow a six-step process:
Step 1: Specify overriding objectives
Guided by the vision and mission of the organization, specifying an overriding objective is the first element of the strategy map. Organizations shall set their financial and strategic objectives and each objective should contain a specific key performance indicator, target, and also a time dimension.
Step 2: Choose the value proposition
The organizations are required to choose the value proposition that will help the organization to be competitive and eventually win the market. The three options presented to organizations are operational excellence, product leadership, and customer intimacy. The organization should choose to be dominant in one of these value propositions to create a breakthrough value and maintain an adequate threshold level for the others to ensure a sustainable business.
Step 3: Choose the financial strategies
The selection of a dominant value proposition will allow organizations to formalize their plans and strategies around revenues and costs. Depending on the dominant value proposition, the organizations can focus on revenue growth, productivity, or asset utilization.
Step 4: Choose the customer strategies
Next, organizations must design their plans and strategies to win the marketplace relevant to their operations. The choice of value proposition once more prescribes where the firm should channel its energy and action. The three customer strategy options include retaining current customers and adding new customers, increasing revenue per customer, and also reducing cost per customer.
Step 5: Execute through the internal perspective strategies
To win the relevant marketplace and also to generate financial returns, the organizations will need to plan appropriate internal business processes that support customer strategies and financial strategies and ultimately allowing achievement of financial and strategic objectives. The internal business process strategy options include internal operations (operations management), innovation (innovation management), and customers (customer management) without neglecting regulatory and social adherence.
Step 6: Plan the learning and growth strategies
In realizing the internal business processes strategies, gaps in human capital (e.g., knowledge, skills, and abilities), information capital (e.g., systems and support mechanisms), and organizational capital (e.g., work culture, leadership, teamwork) will be evident to execute the chosen strategy. These gaps must be identified and bridged to ensure learning and growth perspective is sound to support the execution and attainment of strategies set in other perspectives.
Hence, recalibration of the strategy is the way forward for many organizations. This recalibration needs the organization to identify levers from different perspectives with a frequent review of the strategies in defining their future business models. As propounded in many strategic management discourses, the robustness of strategy begins from its internal business processes which define the newer characteristics of its human capital and future directions and demands of its relevant markets which ultimate objective of financial recovery and growth. For any given business model, the value is created through the internal business process: operations management, customer management, innovation management, and regulatory and social dimensions supported by learning and growth perspective comprise of human capital, information capital, and also organizational capital, both serving as the leading indicator of the improvement in customer and financial outcomes. Designing market-relevant internal business processes in line with the ever-evolving dynamics of the surrounding environment is essential for the successful execution of these processes in winning the marketplace and generating financial outcomes.