The expanded edition features two new chapters. The first covers the Balanced Scorecard, the second zooms in on strategy. It also offers 12 new downloads, including a 60 minute audio file from the Next Generation Strategy event, where I shared the stage with Michael Porter to talk about  strategy and strategy execution in 2020.

Two new chapters: 

IX. Challenge 7: Cascade: 1000, 999, 998… take off (it can take some time)

Some facts and figures about the Balanced Scorecard

The four benefits of a Balanced Scorecard

• Benefit 1: The BSC cascades your strategy
• Benefit 2: The BSC measures your strategy progress
• Benefit 3: The BSC communicates your strategy
• Benefit 4: The BSC boosts your strategic thinking skills

What not to do with the Balanced Scorecard

How to get more from your Balanced Scorecard

• 14 tips to get the basics right
• Beyond Kaplan and Norton: 24 tips for the advanced practitioner

A view on Strategy Execution by Abdullah Al Nuaimi, Director General, ADWEA and Toufic Allaf, Technical Advisor and BSC Implementation Champion

Performance takeaways

X. Challenge 8: Choose: pick a number between 1 and 10, said the magician

8 things every leader should know about strategy

Innovation + strategy: a dangerous cocktail in the hands of a strategy tourist

Where to find a strategic edge for your company

The next big thing in strategy thinking: Shared Value

• The Shared Value concept explained
• Three generations of Corporate Social Responsibility

Spice up your strategy process (in times of crisis)

• Beyond the classical Porter analysis
• Avoid the budget boomerang
• Build an execution edge

Performance takeaways

“The essence of strategy is choosing what not to do”

– Michael Porter

If you have clearly defined what you go for – a clear value proposition for a specific client segment (who) and a set of distinct, unique activities in your value chain to offer the needs of this client group (what), you will find out that there are lots of things that you are not going to do. There will be customers that you are not going to serve, activities that you are not going to perform and services/products that you will not be offering.

In strategy, choosing what not to do is equally important. Using the words of the founding father of modern strategy thinking, Michael Porter: “The essence of strategy is choosing what not to do”. Each strategy should also have a section where it clearly states the noes.

Ask yourself the following questions: “In our organisation, what do we say no to?”, “Which customers in our industry do we make unhappy?” and, more practically, “Where did we systematically deliver a clear ‘no’ last year?”. Be as specific as possible. A clear ‘no’ is a very good indication of a ‘yes’, a choice you or your company have made, maybe even without putting it in writing.

So, when working on strategy, pay as much attention to the yeses as to the noes. In more academic terms: you need to know where your trade-offs are. You cannot be everything to everyone. If you decide to go north, you cannot go south at the same time.

Reducing the effects of CO2, fighting poverty and cradle-to-cradle: topics that you will find on quite a few corporate agendas today. But are they launched with the idea to create Shared Value or are there other motives in play?

I’m not sure. I think it depends on the company. But I do believe that quite a few companies that categorise Corporate Social Responsability as a marketing word.

These companies hope to buy consumer goodwill through CSR. They commit an amount of money to show the world that they are sustainable; they give their annual report a nice green shine, put some trees or windmills on the front page and show nice pictures of smiling people with their executive in some far-off country. And the costs are written off as an expense. For them, CSR is a smart marketing move.

What does CSR realy mean in your company?

1. “Strategy is a pattern in a stream of decisions” —Henry Mintzberg

2. “The essence of strategy is choosing what not to do.”  —Michael Porter

3. “We don’t like their sound, and guitar music is on the way out” —Decca Recording Co. rejecting the Beatles 1962

4. “Perception is strong and sight weak. In strategy it is important to see distant things as if they were close and to take a distanced view of close things” —Miyamoto Musashi, legendary Japanese swordsman

5. “Corporate Social Responsibility should be more than colouring your annual report green and giving a bag of money to your favorite charity in return for some nice pictures”

6. “Strategy without tactics is the slowest route to victory, tactics without strategy is the noise before defeat.” —Sun Tsu, Ancient Chinese Military strategist

7. “Strategy is thinking about a choice and choosing to stick with your thinking”

8. “If companies would invest as much time in their strategy cascade as they do in their budgeting process, most would perform a lot better”

9. “From Good to Great is nice, but knowing when great is good enough is even better.”

10. “In many organisations, budget is king. It’s like the Amazon, the source of life. The strategy process is more like a small stream that meanders slowly through the organisation (and if you’re unlucky, the water doesn’t flow at all and starts to smell).” 

11. In a crisis: “A previously approved strategy could very well be less realistic today, due to reduced execution capacity in your organisation.”

12. “Budgets are like oil tankers – they need time to change course. You don’t want to be left standing on the deck of your oil tanker, watching all the opportunities pass you by unable to stop and turn to chase after them.”

13. “When building a new strategy, don’t ever let people seduce you with the line, ‘But that’s always been budgeted for’.”

14. “When working on strategy, pay as much attention to the yeses as to the noes. In more academic terms: you need to know where your trade-offs are. You cannot be everything to everyone. If you decide to go north, you cannot go south at the same time.”

15. “Like strategy, innovation is a cool word. Put strategy and innovation in a single phrase and a strategy tourist starts drooling.”

But the problems lies is the way this happens. The heads of these support departments get involved too late, get caught by surprise and respond re-actively. This results in a short-term, stop-go approach. “Quick, get more recruiters because our business in China is growing” or “We need to cut our recruitment pool by 10 percent in the next 6 months because they have sold business unit C.” As a result of these actions, they end up worse off than before.

Support departments also need a long-term vision and budget approach. Make sure you know the end game – the business model that you would like to aim for – and look ahead at flexible budget solutions (interim, joint venture,…) as preparation to shift when the time is right.

Do you have them in place in your company?

“If you have too many rear view mirrors , it will be very difficult to see the road ahead”

I see too many managers getting carried away with measuring strategy. When that happens, it does the organisation more harm than good.

But how do you measure correctly. And what do you measure?

Here are 6 important measurement tips to focus on. You can use them to challenge existing measures of check the quality for new ones.

1. Measures: aim for relevance

Performance indicators should be deduced from strategic objectives and measure the degree of achievement. Focus your measurement on the outcomes, not the means. Here’s an example from Balanced Scorecard expert Carlos Guevara: “Once, in a BSC workshop, a Supply Chain Manager told me that one of her key objectives for the next year was to implement a new procurement system. She had even set out the measures and targets – in 15 months the system should ‘go live’. I asked, “Why do you need a new procurement system?”. After a few seconds pause, she replied: “You are right, that’s not my objective, that’s my initiative. My objective would be to improve the efficiency of procurement”. In this example, the real benefit, the outcome, is a more efficient procurement. And that outcome deserves a measure and one or more targets.

2. Measures: aim for simplicity

Using ratios – correlating two variables such as cost per unit or CAPEX per employee – may seem like a good idea at the start, but when your ratios are so complex that you can’t explain if it is going wrong because of your numerator or denominator, using ratios become useless. Measures should be simple to understand and easy to act upon.

3. Measures: aim for recurrent ones

Always spend enough time defining your measures. Stay away from those that can only be measured once a year. Great measures are backed up by reliable data, can be reported frequently and are easy for target setting. First of all, this means no ‘yes/no’ indicators. Indicators should be constantly measurable and suitable to show development over time (e.g. the improvement or deterioration of the indicator over several periods). This means that an indicator that is measuring the achievement of a certain condition, such as a quotation of the division at the stock exchange, is not a good indicator, even though the objective might show strategic relevance.

4. Measures: aim for consistency

Performance indicators have to be consistent over time and across several operating units. It starts with a clear indicator so that measuring the same value by two different people gives the same result and a stable measurement process. How? Make a definition card that clarifies the purpose of the measure, the source of its data elements, the calculation method, frequency of update, data owner or owners and evaluation limits. If management asks “Where did this number come from?”, you probably missed a few steps.

5. Measures: aim for a good mix between leading and lagging indicators

A lagging indicator is an indicator that looks at the past. It trails behind reality and offers an accurate, but historical view of the facts, such as turnover. A leading indicator tries to predict the future. It shows trends before lagging indicators show the actual result, for example, customer satisfaction before customer loyalty. Your dashboard should have enough leading indicators so you can predict where you are going and take corrective action if needed. Having only lagging indicators limits your corrective ability. Also, having a dashboard full of lagging indicators gives you a false sense of control.

6. Aim for efficiency

If it takes you a week to collect the data or you need to reconfigure your complete ERP system to get it automated, you are probably better off selecting another measure.

But there is also an upside. I believe their behaviour offers a very useful career guide for the strategy execution hero. Tourist show how execution heroes should not behave. So take advantage of all the strategy tourists in your company and develop opposite behaviour.

THE STRATEGY TOURIST: 22 BEHAVIOURS 

1. In all things, focus on yourself first. You are more important than the organisation you work for.

2. Create diversions when things get difficult. How? Get a consultant on board, preferable a firm with a good reputation, and launch a new strategy.

3. If things still don’t improve , blame it on the consultant.

4. Develop your power play skills and use them as often as you can.

5. Surround yourself with people less smart than yourself.

6. Don’t support hero promotions. High-quality people can make your life misserable when they get into key jobs.

7. Change jobs regularly to outrun major execution challenges.

8. Once you arrive in your new job, tell everyone how bad you predecessor did and start from zero (preferably with a consultant). This buys you at least a year.

9. Focus obsessively on the short run. Go for quick wins that put you in the spotlight. Define long term “something we can focus on once the basics are in place”. This buys you another year.

10. Create walls between departments. Promote ‘Us against Them’. It creates a great diversion from the real issues.

11. Keep crucial knowledge close to you. Avoid sharing or, if you have no other option, do share and tell everyone how important knowledge diffusion is. At least you get some benefit.

12. Compromise over the important company issues, but dig in and fight forever over smaller topics that are important for you and your career.

13. Learn to identify other tourists and bond as hard as you can. Long lunches are ideal: they are effective and enjoyable.

14. Inflate budgets. This gives you enough money to fund you pet projects or cut costs without any effort when you are forced to do so.

15. Fervishly promote work-life balance. It’s a popular topic and it gives you a ligitimate reason to go to the golf course when the sun is shining or quit at 5 PM.

16. Take lot’s of time to promote yourself and actively campaign for a better job.

17. Blame the market, other departments or poor IT-systems for the fact that you are not taking brave, independent action.

18. Always take credit for the work your team did. Never take the blame.

19. Try to join as many steering committees as possible, but avoid taking on responsability as a sponsor or project manager.

20. When a difficult problem shows up, turn it into a project and delegate this to an eager hero in another department. Call it a learning experience or talent exchange. When the project is finished, make sure the person gets a promotion to a job far away from your territory. They might know to much.

21. Learn to outlast passionate resistance from heroes by quietly ignoring it and waiting for it to go away.

22. Develop a good headhunter network and take advantage of your contacts when you feel that you cannot outrun the heroes anymore. Start again, but much wiser, in another company.

Just because you have a strategy map, doesn’t mean that you have a strategy. A strategy map often looks fancy but mostly it’s a lot of ‘map’ and very few ‘strategy’.

BEYOND THE FANCY POWERPOINT

I like a written strategy document in Word format, with all the hypotheses clearly explained. I like a document where there is no hiding behind an arrow and people saying ‘But that’s what that arrows means’ when you point out something that isn’t clear.

DO IT RIGHT, AIM FOR CONTENT

I’m not against strategy maps at all. In fact, they can be quite useful to communicate strategy and create involvement. But I’ve seen too many sexy PowerPoint presentations that look strategic from a distance, but are far from strategic if you take a closer look and start questioning the content. So I advocate prudence. Each strategy map should include a written two or three-page Word document that captures customer and industry insights and the choices that you have made based on this information (the Who), plus a clear overview of the way you deliver unique value to your customer (the What) using your value chain.

The second half of motivation is to keep yourself going when you don’t feel the same excitement as you did in the beginning. Perhaps something new has come into your life and your old goal isn’t as much of a priority anymore. Perhaps you skipped a day or two and now you can’t get back into it. Perhaps you blew it and got discouraged. If you can get yourself excited again, and keep going, you’ll get there eventually. But if you give up, you won’t. It’s your choice — accomplish the goal, or quit.

Here’s what Leo Babauta suggest to stop from quitting, and get to your goal:

1. Hold yourself back

When I start with a new exercise program, or any new goal really, I am rarin’ to go. I am full of excitement, and my enthusiasm knows no boundaries. Nor does my sense of self-limitation. I think I can do anything. It’s not long before I learn that I do have limitations, and my enthusiasm begins to wane. Well, a great motivator that I’ve learned is that when you have so much energy at the beginning of a program, and want to go all out — HOLD BACK. Don’t let yourself do everything you want to do. Only let yourself do 50-75 percent of what you want to do. And plan out a course of action where you slowly increase over time. For example, if I want to go running, I might think I can run 3 miles at first. But instead of letting myself do that, I start by only running a mile. When I’m doing that mile, I’ll be telling myself that I can do more! But I don’t let myself. After that workout, I’ll be looking forward to the next workout, when I’ll let myself do 1.5 miles. I keep that energy reined in, harness it, so that I can ride it even further.

2. Just start

There are some days when you don’t feel like heading out the door for a run, or figuring out your budget, or whatever it is you’re supposed to do that day for your goal. Well, instead of thinking about how hard it is, and how long it will take, tell yourself that you just have to start. I have a rule that I just have to put on my running shoes and close the door behind me. After that, it all flows naturally. It’s when you’re sitting in your house, thinking about running and feeling tired, that it seems hard. Once you start, it is never as hard as you thought it would be. This tip works for me every time.

3. Stay accountable

If you committed yourself publicly, through an online forum, on a blog, in email, or in person … stay accountable to that group of people. Commit to report back to them daily, or something like that, and stick to it! That accountability will help you to want to do well, because you don’t want to report that you’ve failed.

4. Squash negative thoughts and replace them with positive ones

This is one of the most important motivation skills, and I suggest you practice it daily. It’s important to start monitoring your thoughts, and to recognize negative self-talk. Just spend a few days becoming aware of every negative thought. Then, after a few days, try squashing those negative thoughts like a bug, and then replacing them with a corresponding positive thought. Squash, “This is too hard!” and replace it with, “I can do this! If that wimp Leo can do it, so can I!” It sounds corny, but it works. Really.

5. Think about the benefits

Thinking about how hard something is is a big problem for most people. Waking early sounds so hard! Just thinking about it makes you tired. But instead of thinking about how hard something is, think about what you will get out of it. For example, instead of thinking about how hard it is to wake early, focus on how good you’ll feel when you’re done, and how your day will be so much better. The benefits of something will help energize you.

6. Get excited again! 

Think about why you lost your excitement … then think about why you were excited in the first place. Can you get that back? What made you want to do the goal? What made you passionate about it? Try to build that up again, refocus yourself, get energized.

7. Read about it

When I lose motivation, I just read a book or blog about my goal. It inspires me and reinvigorates me. For some reason, reading helps motivate and focus you on whatever you’re reading about. So read about your goal every day, if you can, especially when you’re not feeling motivated.

8. Find like-minded friends

Staying motivated on your own is tough. But if you find someone with similar goals (running, dieting, finances, etc.), see if they’d like to partner with you. Or partner with your spouse, sibling or best friend on whatever goals they’re trying to achieve. You don’t have to be going after the same goals — as long as you are both pushing and encouraging each other to succeed. Other good options are groups in your area (I’m part of a running club, for example) or online forums where you can find people to talk to about your goals.

9. Read inspiring stories

Inspiration, for me, comes from others who have achieved what I want to achieve, or who are currently doing it. I read other blogs, books, magazines. I Google my goal, and read success stories. Zen Habits is just one place for inspiration, not only from me but from many readers who have achieved amazing things. I love, love, love reading success stories too.

10. Build on your successes

Every little step along the way is a success — celebrate the fact that you even started! And then did it for two days! Celebrate every little milestone. Then take that successful feeling and build on it, with another baby step. Add 2-3 minutes to your exercise routine, for example. With each step (and each step should last about a week), you will feel even more successful. Make each step really, really small, and you won’t fail. After a couple of months, your tiny steps will add up to a lot of progress and a lot of success.

11. Just get through the low points

Motivation is not a constant thing that is always there for you. It comes and goes, and comes and goes again, like the tide. But realize that while it may go away, it doesn’t do so permanently. It will come back. Just stick it out and wait for that motivation to come back. In the meantime, read about your goal, ask for help, and do some of the other things listed here until your motivation comes back.

12. Get help

It’s hard to accomplish something alone. When I decided to run my marathon, I had the help of friends and family, and I had a great running community on Guam who encouraged me at 5K races and did long runs with me. When I decided to quit smoking, I joined an online forum and that helped tremendously. And of course, my wife Eva helped every step of the way. I couldn’t have done these goals without her, or without the others who supported me. Find your support network, either in the real world or online, or both.

13. Chart your progress

This can be as simple as marking an X on your calendar, or creating a simple spreadsheet, or logging your goal using online software. But it can be vastly rewarding to look back on your progress and to see how far you’ve come, and it can help you to keep going — you don’t want to have too many days without an X! Now, you will have some bad marks on your chart. That’s OK. Don’t let a few bad marks stop you from continuing. Strive instead to get the good marks next time.

14. Reward yourself often

For every little step along the way, celebrate your success, and give yourself a reward. It helps to write down appropriate rewards for each step, so that you can look forward to those rewards. By appropriate, I mean 1) it’s proportionate to the size of the goal (don’t reward going on a 1-mile run with a luxury cruise in the Bahamas); and 2) it doesn’t ruin your goal — if you are trying to lose weight, don’t reward a day of healthy eating with a dessert binge. It’s self-defeating.

15. Go for mini-goals

Sometimes large or longer-term goals can be overwhelming. After a couple weeks, we may lose motivation, because we still have several months or a year or more left to accomplish the goal. It’s hard to maintain motivation for a single goal for such a long time. Solution: have smaller goals along the way.

16. Get a coach or take a class

These will motivate you to at least show up, and to take action. It can be applied to any goal. This might be one of the more expensive ways of motivating yourself, but it works. And if you do some research, you might find some cheap classes in your area, or you might know a friend who will provide coaching or counseling for free.

17. Never skip two days in a row

This rule takes into account our natural tendency to miss days now and then. We are not perfect. So, you missed one day … now the second day is upon you and you are feeling lazy … tell yourself NO! You will not miss two days in a row!

18. Use visualization

Visualize your successful outcome in great detail. Close your eyes, and think about exactly how your successful outcome will look, will feel, will smell and taste and sound like. Where are you when you become successful? How do you look? What are you wearing? Form as clear a mental picture as possible. Now here’s the next key: do it every day. For at least a few minutes each day. This is the only way to keep that motivation going over a long period of time.

19. Be aware of your urges to quit, and overcome them

We all have urges to stop, but they are mostly unconscious. One of the most powerful things you can do is to start being more conscious of those urges. A good exercise is to go through the day with a little piece of paper and put a tally mark for each time you get an urge. It simply makes you aware of the urges. Then have a plan for when those urges hit, and plan for it beforehand, and write down your plan, because once those urges hit, you will not feel like coming up with a plan.

20. Find pleasure again

No one can stick to something for long if they find it unpleasant, and are only rewarded after months of toil. There has to be fun, pleasure, joy in it, every day, or you won’t want to do it. Find those pleasurable things — the beauty of a morning run, for example, or the satisfaction in reporting to people that you finished another step along the way, or the deliciousness of a healthy meal.

Good luck with your goal setting and execution in 2012!

Often the problem with goals is not setting them, but sticking to them. If you can stick with a goal for long enough, you’ll almost always get there eventually. It just takes patience, and motivation. Motivation is the key, but it’s not always easy, day in and day out, to find that motivation.

The best motivation, then, is a way for you to really want something, to get excited about it, to be passionate about it. Remember that, as there are many other types of motivation (especially negative), but in my experience, this is the kind that works the best.

There is only so long that you can go trying to motivate yourself to do something you don’t like to do, something you don’t want to do. But if you find ways to really want to do something, you can sustain your effort for much, much longer.

What follows is a guide to motivation from Leo Babauta

8 Ways to Motivate Yourself From the Beginning
It’s important to start out with the right motivation, because a good start can build momentum that you can sustain for a long time. If you start out right, you have a much better chance of succeeding. Here are some tips for starting out:

1. Start small

Don’t start out big. Start out with a ridiculously easy goal, and then grow from there. If you want to exercise, for example, you may be thinking that you have to do these intense workouts 5 days a week. No — instead, do small, tiny, baby steps. Just do 2 minutes of exercise. I know, that sounds wimpy. But it works. Commit to 2 minutes of exercise for one week. You may want to do more, but just stick to 2 minutes. It’s so easy, you can’t fail. Do it at the same time, every day. Just some crunches, 2 pushups, and some jogging in place. Once you’ve done 2 minutes a day for a week, increase it to 5, and stick with that for a week. In a month, you’ll be doing 15-20. Want to wake up early? Don’t think about waking at 5 a.m. Instead, think about waking 10 minutes earlier for a week. That’s all. Once you’ve done that, wake 10 minutes earlier than that. Baby steps.

2. One goal

Too many people start with too many goals at once, and try to do too much. And it saps energy and motivation. It’s probably the most common mistake that people make. You cannot maintain energy and focus (the two most important things in accomplishing a goal) if you are trying to do two or more goals at once. It’s not possible — I’ve tried it many times. You have to choose one goal, for now, and focus on it completely. I know, that’s hard. Still, I speak from experience. You can always do your other goals when you’ve accomplished your One Goal.

3. Examine your motivation

Know your reasons. Give them some thought … and write them down. If you have loved ones, and you are doing it for them, that is more powerful than just doing it for self-interest. Doing it for yourself is good too, but you should do it for something that you REALLY REALLY want to happen, for really good reasons.

4. Really, really want it

This is essentially the same as the above tip, but I want to emphasize it: it’s not enough to think it would be cool to achieve something. It has to be something you’re passionate about, something you’re super excited about, something you want deeply. Make sure that your goal meets these criteria, or you won’t stick with it for long.

5. Commit publicly

None of us likes to look bad in front of others. We will go the extra mile to do something we’ve said publicly. For example, when I wanted to run my first marathon, I started writing a column about it in my local daily newspaper. The entire island of Guam (pop. 160K) knew about my goal. I couldn’t back down, and even though my motivation came and went, I stuck with it and completed it. Now, you don’t have to commit to your goal in your daily newspaper, but you can do it with friends and family and co-workers, and you can do it on your blog if you have one. And hold yourself accountable — don’t just commit once, but commit to giving progress updates to everyone every week or so.

6. Get excited

Well, it starts with inspiration from others (see above), but you have to take that excitement and build on it. For me, I’ve learned that by talking to my wife about it, and to others, and reading as much about it as possible, and visualizing what it would be like to be successful (seeing the benefits of the goal in my head), I get excited about a goal. Once I’ve done that, it’s just a matter of carrying that energy forward and keeping it going.

7. Build anticipation

This will sound hard, and many people will skip this tip. But it really works. It helped me quit smoking after many failed attempts. If you find inspiration and want to do a goal, don’t start right away. Many of us will get excited and want to start today. That’s a mistake. Set a date in the future — a week or two, or even a month — and make that your Start Date. Mark it on the calendar. Get excited about that date. Make it the most important date in your life. In the meantime, start writing out a plan. And do some of the steps below. Because by delaying your start, you are building anticipation, and increasing your focus and energy for your goal.

8. Print it out, post it up

Print out your goal in big words. Make your goal just a few words long, like a mantra (”Exercise 15 mins. Daily”), and post it up on your wall or refrigerator. Post it at home and work. Put it on your computer desktop. You want to have big reminders about your goal, to keep your focus and keep your excitement going. A picture of your goal (like a model with sexy abs, for example) also helps.

Missed part one of the personal goal series? 5 tips to pick the right goals