Creating Value: Building the Strategy-Focused Library

By Alvin L. Jacobson,

and JoAnne L. Sparks

Al Jacobson is senior partner of Hartwell Associates, a management consulting firm located in Cambridge, MA. He can be reached Al at aljacobson@mediaone.net.

JoAnne Sparks leads the content, training, and marketing team in the Knowledge Integration Resources group at Bristol-Myers Squibb. She can be reached at Joanne.sparks@bms.com.

There is no magic wand to wave that will instantly produce a strategic plan. Instead, it takes a lot of hard work.

Mention "strategy" or "strategic plan" to your senior manager

and you will be guaranteed an immediate reaction. Most "good" managers are supposed to have a strategy, or at the very least to have thought about one. So it makes sense that the subject should be engaging. Yet, beyond this opening line, where do you think the dialogue is likely to go? Ask the next question such as "What elements belong in a good strategic plan?" or "How do I get started doing it?" or "What do I do with it when I'm done?" and you will most assuredly be greeted by one of those killer enigmatic smiles.

Fortunately, or perhaps unfortunately, information professionals are not immune to the challenge of thinking strategically. Given the importance and ubiquity of information and knowledge today, strategy, and strategic plans are morenot lessimportant to librarians. Caught between the proverbial "rock and a hard place," where should you go and what should you do?

There is no magic wand to wave that will instantly produce a strategic plan. Instead, it takes a lot of hard work. Moreover, and much to the chagrin of the planning side of the process, the most difficulty work begins after, not before, the plan is completed. Getting direct and indirect reports, customers, and suppliers on board with the plan is a long, arduous process, particularly where significant change is involved.

For most of us starting out, the question is "where and how to begin?" The specifics will vary from company to company and situation to situation, but we believe there are four essential elements in the process:

1. Determine the central value proposition and objectives of the plan.

2. Conduct an opportunity assessment of existing services, projects, technologies, and skill sets against the value proposition.

3. Build strategic maps that visually show how you plan to get from where you are today to where you want to be tomorrow.

4. Design and implement a measurement system that will monitor ongoing performance to plan and enable "mid-stream" corrections.

This article discusses and illustrates these four points using our recent and extensive experience of designing and building a strategic plan for the Knowledge Integration Resources group at Bristol-Myers Squibb (BMS).¹ To enhance the practical "take-aways" of this piece, our discussion is specifically focused on the tools or techniques we found especially helpful during this process.

Step # 1: Define the Value Proposition

Arguably the most critical and difficult first step in developing a strategic plan is to clearly state what it is that the library can and must do to add value to the broader organization. The operative term in that sentence is, of course, "the broader organization." Usually, the special library or information centers exist within a larger for-profit or not-for-profit organization. Not unlike accounting or human resources, it is a support or resource center whose purpose is to enhance, facilitate, and encourage the achievement of the goals and objectives of the larger entity. Therefore, the process and steps involved in identifying the value proposition must begin and end with a clear understanding of where the organization is going.

On the surface, defining the value proposition from the standpoint of the larger organization sounds straightforward. Yet, our experience is that it is anything but straightforward or intuitive. Invite the manager or staff of most special libraries to respond to the question, "what can we do to enhance the value of our services?" and the typical response you will get is " ask the customer."² The response seems to flow naturally from the deep service mentality of librarians and their view of the purpose of libraries themselves.

Developing a value proposition from the standpoint of the firm, however, requires a much more pro-active involvement in understanding where the firm is going, what are the principal drivers making this happen, and how does information services relate to that plan. It is about strategically aligning the library and information services with the organizational setting in which they are embedded.

Why is this different from simply asking what the end-user wants? Because in many instances the customer or potential customer may not have a good sense of where the firm is headed strategically. Certainly your customers are and will be familiar with what they need today, and they will likely suggest how some things may be different tomorrow. But this is not the target you should shoot for with a strategic plan; the aim should be in the future, and it should be about how best to align the products, services, and resource base of the library with the strategic goals and objectives of the corporation.³

If you are to identify the strategic direction of the firm, the obvious thing to do is to ask senior management. This is exactly what we did at BMS and their response was clear and unequivocal.

Within the R&D setting of the firm, management had two major strategic objectives:

1. Enhance the speed and quality of decision-making.

2. Facilitate the creation, management, and leveraging of intellectual capital.

In addition to the senior management interviews, we also conducted a series of end-user focus groups as well as individual and group interview sessions with KIR staff members. The results strongly supported the general sentiments of management, albeit at a much more detailed level. One "new" strategic objective did emerge from these discussionsthe need to build and extend the KIR franchise to serve a broader net of end-users within and outside of the BMS R&D environment. Accordingly, we added a third strategic value proposition:

3. Build and extend the KIR franchise.

Step #2: Opportunity Assessment

Everything that happens after identifying the value proposition should be about creating a "strategy-focused organization (SFO)."⁴ The SFO is a way of thinking, managing, and behaving in such a way as to align and channel the maximum effort towards the achievement of the agreed strategic objectives.

The process begins by classifying current products, services, and resources around each of the strategic objectives. In addition to understanding how the current portfolio of products, services, skill-sets, and technologies stack up, this effort helps you to identify "gaps" that need to be addressed going forward. For managers, it provides a familiar anchor point and connection between what they are doing today and where they want to go tomorrow.

In the case of BMS, this assessment was conducted in a group setting. Each member of the KIR core management team was assigned to one of three groups, with each group representing one of the three strategic objectives. Each group was provided a statement of its objective, and then asked the following questions:

1. What current initiatives, services, and projects contribute directly to the achievement of your objective?

2. What goals do you have for your objective one and five years out?

3. What specific and measurable objectives do you want to set for the next year?

4. What impact would you have on the overall objective, if you hit year one objectives?

5. What are the principal service and product drivers underlying achievement of the overall objective?

6. What resources are needed to achieve next year's objectives?

7. What are risks and implementation issues associated with meeting plan objectives?

At the conclusion of the exercise, each group reported their findings to the entire KIR management team.

In addition to showing current links and gaps to the strategic objectives, one of the real benefits of this assessment is to encourage managers to think strategically. The give and take of the discussions at BMS were revealing in this respect. Several managers began to ask, "Why are we doing this anyway, and who is really benefiting from this service?" Others correctly pointed out that there were some services and projects that really contributed to both speed and quality of decision-making and facilitated a build-up of intellectual capital. This is precisely the ongoing dialogue required to build and sustain a strategy-focused organization.

Step #3: Build the Strategy Maps

The difficulty with most strategic plans is they are hard to describe and communicate. This is unfortunate for a number of reasons, not the least of which is poor understanding contributes to poor execution, and in turn, to poor results. When you are talking about changes that are significant and long-term (like most strategic changes), it is absolutely essential that all levels of the organization understand what you are doing, how you are doing it, and what their role is in making it happen.

One of the more useful tools of Kaplan and Norton's strategy-focused organization is the concept of strategy maps.⁵ Built around the concept of the balanced scorecard⁶, the strategy maps offer an overall "cause and effect" visual for how strategic components are linked to one another. While maps can be customized to fit a particular situation, they follow some simple conventions:

· The map is divided into four principal functional layers; each one represents one of four key components in the balanced scorecard report financial factors, customer-related attributes (e.g., satisfaction), internal processes, and technology infrastructure and learning.

· Financial outcomes are viewed as the ultimate result of activities and outcomes associated with prior investments in technology and learning, internal processes, and customer perspectives.

· Arrows illustrate cause-and-effect relationships between actions in one layer and results in another.

· Maps can be broken down into a cascade of more detailed, underlying maps or they can be aggregated up across a number of more specific activities, functions, or business units.

The graphic below illustrates strategy mapping for the KIR group within BMS. It shows the consolidated view for all three strategic themes facilitate the creation, management, and leveraging of intellectual capital, build and extend the KIR franchise, and enhance the speed and quality of decision-making⁷. In terms of financial outcomes, we can see that enhancing speed and quality of decision making are viewed as increasing overall productivity, therefore reducing expenses, and increasing profits. The intellectual capital objective, by contrast, impacts revenues directly (e.g., revenues from patents and licensing agreements), and building and extending the KIR franchise affects both revenue growth and productivity outcomes. The customer strategic thrust is built around creating a positive experience and long-term image and relationship. The "cause-and-effect" assumption is that if this is done and done well, it will positively impact all three strategic objectives. In similar fashion, the internal processes identify what needs to happen (e.g., innovation, customer relationship management [CRM], and operational excellence) to achieve the positive customer experience and long-term relationship/image. Finally, the "learning and growth perspective" describes key human and technical resources required to service the internal processes.

The power of strategy maps is found in their ability to succinctly summarize and graphically display for executives and senior managers what the strategic plan is and how it works. In one single graphic, it is possible to lay out the plan's key objectives, priorities, measurement concepts, and how you propose to get to the end point. At BMS, this visualization was critical in gaining management support for the plan. The strategy maps also served to further promote understanding and dialogue among the KIR managers as they explored how their day-to-day work is tied to corporate revenue growth and productivity strategies.

Step # 4: Define and Implement

a Measurement System

There is an old dictum that says, "if you don't measure it, you can't manage it," and strategic plans need to be managed. Senior management, as well as your own managers, need to know how you are performing according to planwhether you are on target to hit your milestones, what has changed in the environment that may require adjustments to the plan, and what resources need to be applied and where to get things back on track. Particularly as a support unit within a larger organizational environment, you need to demonstrate how you are doing relative to your goals and objectives, and ultimately show the value you are creating for the firm. Metrics go to the heart of the question: is your work making a real difference?

Based on our work at Bristol-Myers Squibb, we suggest the following steps in designing and implementing a measurement system:

1. Measure objective or outcomes for each strategic objective (in our case, speed and quality of decision making, extend the franchise, facilitate creation of intellectual capital). Identify at least one measure. The measures can be qualitative and quantitative and often you may choose to assign more than one indicator to each objective. What is important is that the measures be outcomes or "effect" indicators (e.g., percent of priority requests completed within a four hour turnaround or number of new service users per month).

2. Measure selective inputs or driversselectively measure the inputs or drivers to the strategic plan. Referring to Figure 1 above, the drivers are the things you are doing from the customer, internal process, and learning and growth perspectives to make a difference in the strategic outcomes. Here again, you may choose to have multiple measures for some activities, while for others there may not be a "good" measure available. A good place to start is to review your existing measurement system and see how that fits with the strategic categories.

3. Define target points and include manager's comments for each measure that you define, try to identify a target value (e.g., 97 percent turnaround with 4 hours or 50 new users per month). There should also be space in the measurement system for managers to comment on reasons why performance may be "under" or "over" expectations.

4. Keep it simpleone of the traps that measurement systems fall into is that they quickly become too burdensome and too complex. Rather than spending valuable time keeping an onerous system going, effort should be focused on the day-to-day work that is adding real value to the company. For this reason, it is best to start with a simple measurement plan, and then add complexity as may be required.

5. Communicate the system with an effective plan describing the purposes and mechanics of the measurement system. Managers in need to be told clearly what is expected from them and what the objectives and purposes of the measurement plan are all about. It is especially important to allay natural concerns of a "gotcha" game.

6. Revise the measurement systemstrategy does not exist in a vacuum but in a real working setting that is constantly changing and shifting. It is therefore important that the measurement system used to monitor the strategy is reviewed and updated to reflect these changes.

Conclusion

Directors, managers, and staff of special libraries frequently describe themselves and the library as under-valued, under-leveraged, over-worked, and even adrift in the corporate rush to "create shareholder value." Whether this is true or not, we believe the only adequate response to these concerns is for the library to develop and execute its own strategic plan, one that demonstrably shows alignment and commitment to the larger organization. Only in this way, will it be possible to demonstrate convincingly the long-term value of information and library services.

¹ The authors would like to express their gratitude and appreciation to the staff at Bristol-Myers Squibb (BMS) for allowing us to share this experience with Information Outlook and their readers. Particular thanks are due to Karen Lyons of BMS who reviewed an earlier draft of this article, and led the design and application of the strategy maps and balanced scorecard approach that served as the foundation for much of the work described here.

² As used here, "customer" refers to the end-user(s) of library and information services, not management.

³ For similar reasons we believe traditional approaches to looking at the value of library and information services in terms of replacement, accounting, and even economic costs are somewhat flawed. Most of these frameworks tend to look at the special library as a stand-alone entity, and not part of a larger organizational environment.

⁴ Robert S. Kaplan and David P. Norton, The Strategy-Focused Organization, Harvard Business School Publishing, 2000.

⁵ Robert S. Kaplan and David P. Norton, "Having Trouble with Your Strategy? Then Map It," Harvard Business Review, September-October, 2000, pp. 167-176. An alternative but similar approach is described in Marc J. Epstein and Robert A. Westbrook, "Linking Actions to Profits in Strategic Decision Making," MIT Sloan Management Review, Spring, 2001, pp. 39 - 49.

⁶ The balanced scorecard is a top-down strategic performance measurement system that seeks to complement the traditional focus on financial outcomes. The scorecard proposes four mutually exclusive perspectives to be considered in building a comprehensive business performance measurement system the internal business perspective, the innovation and learning perspective, the customer perspective, and the financial perspective. Robert S. Kaplan and David P. Norton first proposed the balanced scorecard concept in a paper entitled "The Balanced Scorecard Measures that Drive Performance," Harvard Business Review, February, 1992.

⁷ Individual maps for each of the three strategic objectives taken separately were also prepared.