Wednesday, April 1, 2009

There Are Only Three Corporate Strategy Diagrams in the World

I have come to the conclusion that there are only three strategy diagrams in the entire world. Oh, the labels change and someone may use five or six boxes instead of four or five, but the basic diagrams are the same.

The Cloud

This is perhaps the oldest corporate strategy diagram around, dating back to at least the early 1980's. It depicts a set of known entities (usually shown on top as inputs), a whirling cloud of activity, and a set of one or more desired outputs. (Usually fewer outputs than inputs.)

This diagram is very good when trying to explain how to get from chaos to sanity. Strangely enough, the cloud is not the chaos, the plethora of unintegrated inputs at the top is the chaos. The cloud is the magic black box which boils the chaos down to a smaller, manageable set of outputs.

I have seen this diagram used to describe datatype conversions, programming interfaces, repurposing of content, and several other things.

As a side note, in the 1990's this diagram morphed sightly. As the multitude of disconnected systems diminished, the cloud was replaced with a solid object: a box, pipes, or a two-headed arrow. But the basic intent of communicating the integration of disparate systems into a manageable system remained.

The Pyramid

The pyramid is the preferred strategy diagram of non-management types. Non-techies use it in its 2-D form; techies prefer it in 3-D.

The pyramid represents a hierarchy of importance. Its origins as a diagram are as ancient as its inspiration, the pyramids of Egypt. We all know the recently dethroned food pyramid. Also Maslow's hierarchy of needs utilized this diagrammatic shape. However, its application in corporations is primarily to categorize – and prioritize – whatever the business is doing or producing.

As I mentioned, non-techies use the 2-D pyramid, usually accompanied with an arrow indicating the goal of moving from the lowest state of being to the most refined at the top. In KM, the pyramid is data -> information -> knowledge -> wisdom. (How you achieve this is never clearly defined.)

Engineers and other technical professions prefer the 3-D pyramid because it provides more surface to divvy up, classify, and subclassify into its component parts. The obvious problem with this is that no one but an engineer can understand or appreciate the level of detail provided, and the pyramid is lost for the trees (to mix a bad metaphor).

I actually had a software architect try to replace the pyramid with a cube – he wanted to show the products as the intersection of three different architectural perspectives, each suitably cut and divided into even further refinement. Once I explained that he could not show the back side of the cube on paper, he abandoned the plan (and, I might add, much of his respect for my abilities as a graphic artist. Oh well....)

The Arrow

Finally, there is the arrow -- the quickest, shortest path to any target. As a strategy diagram, the arrow is usually segmented to show the linear steps needed to reach the goal. Managers like the arrow because it not only identifies the necessary tasks but a sequence as well, making management (and the assignment of blame) much easier.

One important variant of the arrow is the circular arrow. The circular arrow is not as popular with management types since it does not have a clear start or end point. However, this variant is extremely popular with program teams

Intersecting Circles

Finally, there is a fourth diagram that is frequently seen in corporate presentations, but it is not a strategy diagram. This is the intersecting circles.

The circles can be labeled with anything you like: people , processes, technology... customers, managers, employees... music, video, telephony... etc.

This diagram is often mistaken for a strategy diagram because the center of the intersection is viewed as an end goal. However, the diagram is actually an illustration of the current state. Add an arrow and another stage where all three circles overlap and you might have a strategy diagram!

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