The Strategy Canvas: Ditch Strategic “Planning” for Strategic “Thinking”
In this post, we’re going to dig deeper into a powerful diagnostic tool that captures your organization’s strategic landscape and prospects in a simple visual.
The strategy canvas was developed by Chan Kim and Renée Mauborgne, professors of strategy at INSEAD business school and co-directors of the INSEAD Blue Ocean Strategy Institute in Fontainebleau, France. They created it as an alternative to the typical strategic planning process.
You know the drill: consultants swoop in and gather random, potentially contradictory intel from key team members. They go away and conduct independent market research. From this dog’s breakfast, they piece together disparate pieces of data and perspective into thick, densely written reports full of figures and jargon.
Not only does this approach, in which strategy is done to rather than with or, even better, by your team, not engage people, but it can also create confusion, resulting in opaque direction and subpar execution.
“No wonder so few strategic plans turn into action,” Kim and Mauborgne write in a Harvard Business Review article in which they break down their strategy canvas process. “Executives are paralyzed by the muddle.”
I couldn't agree more. In more than 30 years of corporate and consulting work, I’ve seen managers’ bookshelves groan under these dust-collecting bricks. And I’ve seen too many organizations miss a chance to grow and thrive because they couldn’t get clarity and alignment at the strategy creation stage.
There’s specificity in simplicity.
If strategy is all about having a clear vision that can be easily shared and translated into the right actions to deliver better results, it’s no wonder 75-90% of strategy fails at the execution stage. No one knows how to turn that big, rambling strategic planning report into action.
Kim and Mauborgne’s deceptively simple solution is an elegant alternative. It favors brevity, big-picture thinking and aligned research that literally gives you a picture of where your organization’s at, and where to focus future efforts. It’s clear, easy to understand and share. It’s tangible, in other words.
The strategy canvas does three things in one picture. It shows:
Your industry’s strategic profile–what the authors call your value curve–by mapping current and potential future competition factors.
The value curve of current and potential competitors.
Your company’s strategic profile, showing current and potential future investment in customer choice factors.
To get started, chart the choice factors, such as price, quality, flexibility, etc. (this will vary depending on your industry, of course) along the horizontal axis. The vertical axis is where you chart the degree of investment in each, moving from low to high. Connect the dots across all factors to reveal your and your competitors’ value curves.
Elements of a Great Strategy
Kim and Mauborgne have found that all effective strategies have these three things in common:
Stay tuned for my next post on The Strategy Canvas where we break it down into 4 stages to get the clarity and alignment you might be missing at the strategy creation stage to engage your entire team and develop a clear game plan for your organization.