The Strategy Engagement Matrix is the most powerful tool in existence for developing and engaging your people in a winning strategy
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The history and benefit of the Strategy Engagement Matrix is best described in our article: How design thinking transforms the strategic planning process. In this article our goal is to provide a practical guide to how it works, and how you might use it.
Structure
The Strategy Engagement Matrix is, as its name implies, basically a matrix. The rows of the matrix represent the goals that the organisation needs to deliver to sustain its success. The columns of the matrix represent the different structural entities or mechanisms which work together to deliver those goals. For simplicity, you can imagine these to be the separate departments that make up the organisation. But, as you will discover, they can be so much more than that. And the cells of the matrix reflect the potential for each entity (e.g. department) to impact each goal.exploring the synergies and interrelationships
At a basic level, this provides the means to better explore the synergies and interrelationships between the ‘departments’ and the goals. Through looking at each department in relation to its potential to impact each of the goals, two things happen. The first is seeing new opportunities to leverage the goals that had not been previously recognised. The second is the increased sense of collective responsibility for working together to deliver the goals.
But even as a simple matrix, the Strategy Engagement Matrix can be used to achieve much more. The skill in getting the best out of the matrix lies in the processes used to develop the objectives, the entities and the cells.
Basic Application
At a minimum level, you can simply do the following. One, take the current business objectives and list them down the left – one per row. Two, take the current top-level business structure and list them along the top – one per column. At this point, we imagine that your structure is either based on disciplines (departments) or processes. Three, invite each department/process team to think through what they can contribute. Each team, separately, should take one objective at a time, and consider what results it could pursue to help ensure the goal is met.provoking a sense of collective responsibility
In this, cut down, version the set-up is basically an extension of OKR – Objectives and Key Results. But by structuring it as a matrix, it enables each group to recognise how all of the Key Results fit together. This provokes a greater sense of collective responsibility and creativity. For example, when the finance department realises it has greater contact with the customer than sales. In this way, teams become more engaged as they see more of their own ideas forming the business strategy.
Gaining Insight
Once the grid is mapped out with the various contributions, the team can explore how the strategy can be strengthened. Cross functional teams can look along each row and assess how likely the contributions will ensure the goal. The $500 bet is a great tool to surface gaps and concerns. The teams can then add sticky notes to the matrix to propose additional contributions that will make success more likely. They can also look along the row, and make an assessment of which contributions may be redundant. When the department/process teams reform they can agree the additional responsibility. Or, if they can’t accept the additions, they can either: One, work with the whole group to adjust the goals to a more realistic set. Or two, work with the whole group to get the resources they will need to step up.scenario and what-if planning
The matrix can also be used to explore different risk and opportunity scenarios. In this way, plans can be put in place to make it resilient to disruptions. Or to encourage better positioning to be ready for new opportunities.
Using Templates for your Strategy Engagement Matrix
The Strategy Engagement Matrix used to occupy entire walls of the rooms in which the planning workshops were held. The advent of online meetings and sophisticated virtual whiteboards has been a very helpful development. For example, it is now a lot easier for teams to work on the different panels at the same time without falling over each other. Also, the end result can be more easily maintained, updated, shared and referenced. Thirdly, it makes it easier to use templates (such as the one on the right for the SEM).online tools make it much easier
And, through this, to extend the functionality of the matrix to its full potential by means of the following:
- One, the addition of metrics and target values to better clarify the goals, objectives, and the key results. This builds deeper understanding and ownership of success. And greater specificity of local goals.
- Two, the inclusion of benchmark data against the objectives to provide competitive context. This helps stretch the understanding of what may be possible. And it also stimulates research and networking practices.
- Three, the use of weighting to reflect (on a scale of 1-5) different levels of importance for the different goals. And the use of that weighting to prioritise additional resources for the departments/processes. This helps teams make disciplined choices on what they will ‘stop’, as well as what they will ‘start’.
stopping things is as important as starting things
- Four, the addition of the ‘roof’. This is a half-matrix that enables teams to explore how best to support each other. This helps teams identify where they can better work together on joint projects. And it helps ensure regular updates to avoid conflict where goals may be in contention. We pick up on the roof a bit later.
- Five, the ability to create copies which can be adapted to consider responses within scenario planning. This is done by adding in new sticky notes wherever the scenario might impact. And then looking at what related cells need to have contingencies as a consequence. The result not only helps the organisation become more robust in tackling change. It also encourages creativity from the teams that can inform future development and the next planning cycle.
- Six, the incorporation and linking of cascade matrices as the ‘departmental’ goals are cascaded into local teams. Cascade matrices are also covered later in this article. This helps everybody understand far more clearly how what they are doing fits into the overall picture. It also helps them value what their colleagues in other areas are doing also.
Focus on Value
The Strategy Engagement Matrix has huge potential. But isn’t it a lot of work? For example, how much detail should be put into each of the cells? And how many of the above bullet points should be adopted?
In answering this question, I am reminded of the response attributed to the movie mogul Sam Goldwyn. He was asked ‘How long should our film be?’ He answered ‘How long is it good?’
The general principle for all of these tools is that their primary purpose is to stimulate thought, insight, discussion, and learning. As soon as they stop doing that, stop! It is not about you and your team working on the tools. It is about the tools working on you and your team. As soon as the balance shifts the other way, it is time to rethink your approach.
your team is the product
There is a limit to the maximum level of quality and insight you can derive from the SEM. The limit is in large part determined by the processes used to develop the objectives, the entities and the cells. However, if you are just starting out, it is unlikely that the limitations will be evident. Even if you keep it at the simplest, and you simply adopt the current goals and structures, you will still get a lot of value. And this is a great place to start. It gives you a familiar basis on which to learn the new techniques and build confidence.
Using the Strategy Engagement Matrix to Engage Creativity
Once you have built your confidence, it is time to consider rethinking the rows and columns. The likely fact is: Your team has far more potential than the structure that currently contains them. And they have more promise than your current goal ambitions might indicate. Too often people are not just stressed by the structures and expectations that surround them. They are constrained by them. And, despite appearances, many of them may have fallen asleep within them. Even the lively ones.
To be frank, objectives are all too often the result of a pseudo-negotiation along established lines. They are a tension and a compromise between what is needed to keep up, and what is thought to be deployable. As a result, they are often incremental and independent of the need for creative breakthrough. The problem with that is it limits our thinking.
creativity needs headroom
If we can see that we can largely do what we need with what we have, we don’t go looking elsewhere. The reason very few meetings include sections on creativity is largely because they don’t need them. Our paradigms are still stuck in the idea of routines and continuity. But the future is less and less looking that way. And we need new paradigms to succeed within it.
However, this should not scare us. We are not talking about being held to impossible contracts. Nor are we talking about dire consequences for failure as we might have experienced in the past. We are simply talking about making sure we take a good and creative look at the options. And THEN making our choice based on a more complete understanding.
Improving the quality of objectives
When it comes to objectives, there are a number of things that can help us to stretch our thinking. One really helpful tool in this is the Why-How chart (see the example on the left) Alternatively, you can imagine replacing the organisation with a ‘black box’. And then asking what would the box need to magically deliver if it was to make the same difference as the organisation? Or ask people, if the organisation was theirs, what difference would they seek to make through it?For one organisation, I took the leaders out on a ramble through fields. Over a period of several hours I helped them to explore the following questions:
- One, if you could use the organisation to make any difference you wanted in the world, what would that be?
- Two, is there a way that the organisation could realistically contribute to that difference, and benefit itself?
- Three, what achievements in relation to your organisation would make you truly proud and fill your heart with joy?
if you could make any difference you wanted, what would that be?
What was surprising was the extent to which ‘what was on their hearts’ could be reconciled to ‘what was reasonable for the organisation’. But they had picked the organisation to work in, after all. What was even more surprising was the result when they repeated the exercise with the next level down. Everything fitted. The organisation gained new ambitious goals. And the people were passionate about delivering them.
The answers for all of these things can form the basis for the Why-How chart.
engaging passion
Once the Why-How chart is complete, look across the chart, and select a row of items from within the chart. Together they should reflect a complete set of statements for the different threads in the chart. They should also be sufficiently abstract to allow creativity in their delivery. But they should also be sufficiently specific to align activity with the business mission.
Ideally you are looking for between 5 and 10 goals. These can then be fleshed out further. A good way to define metrics is to complete sentences beginning with: We will know we have been successful when … Once the metrics are defined, the Clothesline is a great means to setting targets.Improving the quality of structural entities
‘Structural entities’ is an awful term. In part that is because it is too ambiguous. But I guess that is the point – the columns on the SEM can be virtually anything. As you start out, it may be best to stick with your current management structure. This will ease concerns and insecurity until people get used to more fluidity in their roles. But then you may want to take a more process perspective. This will help your team gain insight into improving the flows through the organisation. Essentially, whatever perspective you take on the columns of the SEM gives you a new way of understanding and improving it. You can even get creative and have teams propose radically innovative structures. These can be evaluated on their merits, and the best bits drawn together into what you will adopt.
enabling agility …
An agile organisation is one in which the structural boundaries do not get in the way of it responding to new opportunities. However the nature of most structures is that they work well in one direction and poorly in a different one. So each structure can be agile about some things but not about others.
… at a flick of understanding
But the advantage of the SEM is you can have multiple structures operating. At a flick of understanding, new challenges can be responded to with the appropriate structure. You can understand and refine the organisation from discipline, process and project perspectives simultaneously. Multiple Strategy Engagement Matrices can be overlaid all with the same goals and the same people, but with different roles.
This has big advantages for more than just agile. It provides multiple structures and development pathways with which to grow the skills and experience of your people. This enables new and fulfilling relationships and supporting roles. These provide a means to enriching and realising the potential of people, and embracing their diversity. All of this is key to meeting the needs of the future of work.
Improving the quality of cells
The cells represent how each ‘business entity’ contributes to the achievement of each goal. In the original business QFD the cells were allocated a symbol depending on the strength of the contribution. A bullseye for critical. A circle for major. A triangle for significant. And a blank for not particularly significant. Voting cards and consensus reaching was used to arrive at the answer, and the discussion was documented. It made for a great picture. But even for a modest 6×9 Matrix the discussions could take well over a day.
The solution was to create the cells on a massive wall matrix and use sticky notes to populate them.
This has evolved to the following process:
mapping the current
- One, existing deliverables and key results are drawn up on yellow sticky notes. They are stuck under the structural entity to which they relate, in line with the objectives to which they contribute. Deliverables that do not contribute to any of the objectives are stuck below the bottom row. Deliverables that do not seem to form part of any entity are stuck out to the right.
- Two, items outside the grid are reviewed. Where they indicate either a valid objective or structural entity is missing, this is resolved. Where they are now surplus to requirements, they are put into an area of ‘Things we can stop’.
identifying the new
Three, cross functional teams are formed to look at each objective. Their task is to evaluate the total contributions across the row. They then estimate the minimum additional required to ensure the objective is met. And they allocate this as pink sticky notes under the entity best placed to deliver it. These pink sticky notes represent the new incremental or creative steps required of the organisation.- Four, teams are appointed (possibly temporarily) to look after each entity. They review the pink sticky notes that have been allocated to their column. If they disagree with the allocation, they can transfer ownership by discussion with another team. Or, if that fails, they can seek arbitration. With the pink sticky notes that remain, they can make counter-proposals on blue sticky notes. This is an opportunity for the team to think creatively and ambitiously about their potential.
assessing the impact
- Five, the cross-functional teams reform. They review the likely impact of all the yellow and blue sticky notes against the objective. Where the total impact addresses the additional demand on any pink sticky notes, that note is removed. In some cases the likely impact may exceed the requirements of the objective. For these cases, any surplus yellow or blue sticky notes are turned through 90 degrees.
- Six, all groups come together in plenary. Their task is to review and reconcile what is to happen with the disputed sticky notes. Yellow sticky notes removed from the matrix are always added to the ‘Stop’ panel.
harnessing engagement
- Seven, the entity teams reform to adopt the decisions of the plenary group. Their goal is to creatively develop a strategy to deliver what is required of them. They do this on further blue sticky notes. If they cannot, then the relevant pink sticky notes remain. It is possible that, in fulfilling what is required, the demands on the team exceed current resources. This may be the case even having stopped some of the yellows. In this event, they create green sticky notes with the additional resource demands.
- Eight, all groups come together in plenary. They review the green and the pink sticky notes one by one. Where the resource demands can be met and justified, they are approved. Where they cannot, or where there are remaining pinks, they review the objective. Essentially, this debate is all about ambition, ownership, and realism. It is a key collective learning and development step in the strategy process.
commissioning
- Nine, once the main matrix is reconciled, the process can stop. The entity teams can be commissioned. And the strategy can be pursued. However, there are two other things that the teams can consider in taking the strategy forward. These are the roof and the cascade, and they are covered below.
Constructing the roof of the Strategy Engagement Matrix
The roof of the Strategy Engagement Matrix is formed by a half-matrix set at 45 degrees. It has one cell at the intersection between every entity team and every other entity team. These cells are used to record whether the teams are likely to be in conflict or synergy.Teams are likely to be in conflict if their goals are are in contention with each other. In this case, the teams should work out a regular pattern of communication. This will help them to work through their issues together and reach accommodation on them. This is much easier in the context of the whole SEM.
designing inter-team relationships
Teams are likely to be in synergy if their goals are mutually supportive. In this case teams may be at risk of duplicating effort that could benefit them both. Their pattern of communication is likely to be more about identifying common projects. This will enable them to both benefit from shared effort.
A process for conducting these discussion in a smooth and efficient way within a workshop is described here.
How to cascade the Strategy Engagement Matrix
The explanation of the Strategy Engagement Matrix to this point has been in the context of an organisation. But what is an organisation? The reality is that each division, or business, site, department, process group or team is an organisation in its own right. Therefore, each could benefit from its own Strategy Engagement Matrix. But how do all these matrices connect together?cascading ownership
We propose that, as long as the SEM is adding value at that level, each entity team should have its own SEM. In this way it can take and group its agreed key results into objectives, measures and targets. It can consider what entities (e.g. subdivisions) it has within it, and which of these reflects the most helpful perspective. And it can use these to structure the columns of its SEM.
And then it can work with its local team to do all of the above. In this way, it can explore how it can best deliver its responsibilities. And it can engage the creativity and commitment of its people to ensure it happens.
Useful links:
Track your progress to ensure the efficacy of this strategy.