Strategic Control Maps For Small Business CEOs
Can small business CEOs benefit from the
strategic control map idea featured in the July McKinsey Quarterly? McKinsey is, after all, an elite, worldwide management consulting firm engaged by billion dollar companies.
The answer is an unqualified “yes” which is good news for the owners of small businesses. It is so for the simple reason that the sophistication of strategic control maps lays in its simplicity. It is a simplicity that any size company can duplicate.
The strategic control map in the article is a simple four-quadrant matrix formed from two variables plotted on an x and y axis. Several important features come into play by limiting the map to two variables. First, the company is forced to focus on the most influential drivers of its business. Laundry lists aren’t allowed here-there are only two variables. Second, charting the variables enhances understanding because that’s what charts do. Finally, by limiting the chart to only four quadrants (to only high and low performance levels) broad strategic implications are easier to see.
The McKinsey strategic map was developed in 1996 and is not for the typical small business. This particular map tracks the relationship between the two dimensions of market capitalization by plotting a company’s size (measured by book value) against its performance for shareholders (measured by market-to-book ratio).
But small businesses can create their own strategic map to serve their own purpose. This requires only two actions:
Management must decide what are the two most important forces controlling the destiny of the company
The two variables for the company and competitors must be measured and quantified.
As simple as this sounds, this activity will consume many hours. The return, however, can be enormous when, looking at the chart, the “Aha” moment arrives.
Mission: To help small and mid-size businesses capture the power of big-picture marketing.