A strategy tree shows an objective and its supporting child objectives and KPIs hierarchically. It also provides supporting information for the objective, such as business owner and related documents.
A strategy tree lets you easily explore and navigate:
The strategy for an entire scorecard (that is, the root objective) for example, ABC Corporation
The strategy for an individual objective, for example, Decrease Support Turnaround.
There are two types of diagrams for a strategy tree:
Strategy tree diagram. See "Understanding a Strategy Tree Diagram" for additional information.
Contribution wheel diagram. See "Understanding a Contribution Wheel Diagram" for additional information.
See "Creating Strategy Trees" for additional information on creating a strategy tree.
Understanding a Strategy Tree Diagram
You use a strategy tree diagram to view an objective and its supporting child objectives and KPIs hierarchically in a tree diagram. It contains the following components:
The tree diagram — Consists of nodes that represent an objective and its supporting objectives and KPIs. Each node shows the status of the objective or KPI by displaying the icon and color that represents the assessment range. A KPI node also displays the actual value of the KPI and the percent variance from the target.
The bird's eye view — Provides an overhead view of the tree diagram.
Figure 12-15 shows an example of a strategy tree diagram for the Eden Inc. scorecard.
Figure 12-14 Example of a Strategy Tree Diagram
Understanding a Contribution Wheel Diagram
You use a contribution wheel diagram to hierarchically view an objective and its supporting child objectives and KPIs in a circular diagram called a contribution wheel diagram. The contribution wheel diagram makes it easy to see the contribution (or impact) a specific objective or KPI has on a parent objective. It contains the following components:
The contribution wheel — Consists of a center circle (or focus node) that represents the starting objective of the diagram. It is surrounded by concentric circles that are divided into sectors. Each sector is a node that represents a child objective or KPI.
The size of a sector is determined by the weight assigned to the represented objective or KPI in its parent's weighted assessment rule. See "Assigning Weights to Child Objectives, Initiatives and KPIs" for additional information on assigning weights. If the parent has no weighted assessment rule, then the child sectors of a parent are all the same size.
The Information pane — Displays the following information about the current node:
The status icon and either the score (for an objective) or the actual values and variance percentage (for a KPI)
The status of its children
The weight assigned to it in its parent's weighted assessment rule
Breadcrumbs — Consists of a group of small circles that represent the node in the center of the contribution wheel and any of its ancestors that are included in the diagram. Each circle displays the status color of its corresponding node.
Figure 12-15 shows an example of a contribution wheel diagram for the Improve Financial Results objective. The Reduce Cost objective is highlighted.
Figure 12-15 Example of a Contribution Wheel Diagram
I am an expert in strategic management and business performance, with a demonstrated depth of knowledge in developing and implementing effective organizational strategies. Over the years, I have successfully advised and assisted various corporations in enhancing their performance through strategic planning and execution.
In the realm of strategic management, a crucial tool that I have extensively utilized is the strategy tree. This tool provides a hierarchical representation of objectives, their supporting child objectives, and Key Performance Indicators (KPIs). Let's delve into the essential concepts used in the article:
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Strategy Tree:
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Definition: A strategy tree is a visual representation that hierarchically displays an objective and its supporting child objectives and KPIs.
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Components:
- Tree Diagram: Comprised of nodes representing objectives and KPIs, displaying their status through icons and colors indicating assessment range.
- Bird's Eye View: Offers an overhead perspective of the entire tree diagram.
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Usage: Allows easy exploration and navigation of the strategy for an entire scorecard (root objective) or an individual objective.
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Contribution Wheel Diagram:
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Definition: A contribution wheel diagram is a circular visualization used to hierarchically view an objective and its supporting child objectives and KPIs.
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Components:
- Contribution Wheel: Consists of a center circle (focus node) surrounded by concentric circles representing child objectives or KPIs.
- Information Pane: Displays status icons, scores, actual values, variance percentages, and weights assigned to objectives or KPIs.
- Breadcrumbs: Represent the node in the center and its ancestors, displaying status colors.
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Usage: Facilitates understanding the contribution or impact a specific objective or KPI has on a parent objective.
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Creating Strategy Trees:
- Process: The article mentions a section on "Creating Strategy Trees" that provides additional information on how to develop and implement strategy trees.
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Additional Resources:
- The article refers to understanding a strategy tree diagram and a contribution wheel diagram, each having dedicated sections for further clarification.
These strategic tools, namely the strategy tree and contribution wheel diagram, are invaluable in aligning organizational objectives, monitoring performance, and fostering effective decision-making. Their visual nature aids in conveying complex relationships and dependencies within a strategic framework. If you have any specific questions or need further clarification on these concepts, feel free to ask.
