4 constraints wbk-strategy scorecard

STRATEGY SCORECARD
Program Managers:
Roshan Thiran
roshan.thiran@leaderonomics.com
Parthiban Vijayaraghavan
parthiban.v@leaderonomics.com
The 4 constraint is a model
develop by Roshan Thiran after
more than 20 years of research
amongst organisations across
Asia, Europe and the US. This
model has been leveraged by
many organisations globally to
scale itself and transform itself
into globally sustainable
organisations.

The Four Constraints of Business
This Strategic Scorecard facilitation workshop focuses on bringing clarity to the thinking
process of each CEO and his/her team on the four constraints which typically hold the
organization from achieving greater performance.
1. BUSINESS MODEL
– Is the organisation constrained by the way it does business?
2. STRUCTURES & PROCESS
– Is the organisation constrained by its practices, structures and policies?
3. CULTURE
– Is the organisation constrained by rituals, behaviours, beliefs and mind sets?
4. LEADERSHIP
– Is the organization constrained by the lack of clarity and engagement?
Strategic Scorecard templates provided will help you to accomplish the following:
• Diagnose the area of constraint(s) that is hindering breakthrough performance.
• Deliberate on the gaps which need to be addressed.
• Decide on the order of priority for strategic clarity and design.

Strategy Scorecard Workshop www.leaderonomics.com Page 3
Tool: 4 Constraints Strategy Canvas– challenges the team to assess the
organization’s track record to-date for how each of the 4 constraints are
affecting the organisation and where we stand in each of these constraints.
Through debate and discussion, the team seeks to develop a graphic
representation of the current state regarding the degree to which each of 4
constraints are focused on during the launch and implementation of a major
change initiative.
The 4 constraints chart is shown below:
Uses: To help the team assess current habits and approaches relative to how well
they (or the organization) focus on each of the Four Constraints. For many
teams, this is an eye-opening exercise which helps them chart a new
course for the change initiative they are working on. Some have used it as
both a gauge of current performance, as well as a planning or prioritization
tool to guide the team’s work. At a minimum, the exercise should provide
the team with an opportunity to conform and deal with the organisation’s
(and their own) current habits, beliefs and practices around the 4
constraints affecting transformative change at your organisation.
Timing: Best used as part of a transformation team’s start-up process, when the
team is still forming and is attempting to incorporate 4 Constraints into its
thinking and planning. It also can be used later in the project cycle to
assess progress. Some teams use it in every team meeting to keep the
team focused on the
4 Constraints.
Four Constraints – Overview & Tips

For this to be a powerful exercise, the team needs to set aside any tendency for defensiveness and
engage in a candid, thorough examination of the organisation's past and current habits when it comes
to change. It is assumed that every organisation focuses on some, but not all four, of the 4 Constraints
when a major change initiative is launched.
This tool helps the team uncover the gaps in the organization's use of all four areas
and develop a plan for closing the gaps and more effectively attending to these sometimes
neglected aspects of change. While there are numerous profiles which might be developed through this
kind of exercise, two typical failure profiles often seen in complex organizations are shown below:
Four Constraints – Overview & Tips
A)
Profile On Change Processes
0
25
50
75
100
Business Model Structures & Processes Culture Leadership
•
•
• •
In example A, relatively considerable attention has been paid previously to developing their
business model and some effort in terms of structure and processes, however, little to no effort is
being deployed to Culture and Leadership and this has resulted the current state where
employees are very likely disengaged and uncommitted to driving growth. So, transformation
efforts need to focus on these 2 key areas
B)
Profile On Change Processes
0
25
50
75
100
Business Model Structures & Processes Culture Leadership
•
•
•
•
In example B, our business has a fundamental flaw – its business model. There is no point
working on the culture or processes until the business model issue is resolved. Companies that
have outlived their business model (in the cash cow or Dog category in the BCG matrix), may
have to relook at their business model and prioritize fixing it before working on the other
constraint.

Tool: SIPOC Process – A process-oriented tool that asks the team to consider
the various Processes and structures (the “P” in SIPOC) in the context of
Suppliers (the “S”) who provide Inputs (the “I”) in the form of data,
knowledge, resources, etc., and certain key Outputs (the “O”) for whom
there are Customers (the “C”) who have a variety of expectations, wants,
and requirements. Similar to the way many businesses are examining key
work processes these days using a technique called Process Mapping,
SIPOC challenges the team to consider all elements of the project system
while setting clear boundaries of where the project starts and stops in terms
of overall scope of work.
Use: A complex tool but valuable when trying to understand why employees
and customers are struggling and what is constraining them. It is
especially useful when there is little understanding about who supplies
critical inputs , or when deliverables and the requirements customers of
the project have for these deliverables are unclear.
Using a storyboarding technique, put seven “header cards” on the wall: Supplier, Inputs, Process Name,
Outputs, Customer, and below Process Name put the two cards that bound the process: Start & Stop. Use
the first steps in process mapping to help them identify the process they are really addressing in their project.
By doing this, they will really look at the system they must consider, and who the eventual stakeholders
(suppliers, customers) are to be mobilized, communicated with, etc.
Process Focus (SIPOC + Start/Stop)
SUPPLIER(S)
CUSTOMERSINPUTS
START STOP
SIPOC Process
PROCESS
NAME
OUTPUTS
Structures & Process

Tool: Boundaryless Audit – A tool to assess the degree to which the
vertical, horizontal, and external boundaries have been removed or
lessened within the organisation, and the ways these link to the team
project.
Boundaryless Question
Some
Examples Assessment
Vertical
Horizontal
External
How well have
we removed the
vertical boundaries
in our organization?
How well have we
removed walls
between groups
within our business?
How well have we
removed barriers
between our business,
suppliers,
customers, and
competitors?
Uses: Primarily used to assess the degree to which organisational
boundaries (internal or external) are hampering progress on the
transformation. Also, helps the team identify boundaries currently
negatively impacting progress on the project and assess which
can and should be lessened or removed.
Are our Structures and Processes Boundaryless?
Structures & Process

Culture & Leadership – The Premise
1. Leadership unity is the starting point
Cultural change begins with political willpower which is demonstrated by
the commitment to stand behind a consistent message.
2. Vision gives purpose to profits
Without an impactful vision, our business will just be like any other money
making ventures out there.
3. Right results are caused by right behaviors
Your organization is perfectly designed to achieve whatever results you are
getting now. Future results are caused by present behavioral standards.
4. Managerial competency is the sustaining point
The number one determining factor of employee engagement is the quality
of one’s relationship with the direct supervisor.
5. Cultural strength is determined by intentional rituals
The right behaviors are reinforced by the coherent and consistent rituals
within the organization. Nothing tears down culture as quickly as
inconsistent behaviors.
If everyone in the organization continues to think & act in the same
manner as they do today, can you expect to achieve the results you
need to achieve?

Vision
Mission
Values
KR1
KR2
KB1
KB2
Culture & Leadership – The Model
The Five Cultural Design Elements
1. VISION
A statement of the impact which the we aspire towards.
2. MISSION
A statement of instruction(s) when executed will drive us closer to our vision.
3. VALUES.
A statement of inspired ways of how we work together to achieve our vision.
4. KEY RESULTS (KR)
A definition of organization-wide key results to be achieved which are
purposefully aligned with the vision, mission and values.
5. KEY BEHAVIORS (KB)
A definition of character-driven behavior standards that form our cultural
DNA and accelerate the movement from KR1 to KR2.

Strategy Scorecard Workshop www.leaderonomics.com
Page 9
The Four Constraints – A Diagnostic Checklist
Constraint Emphasis Checklist on current state Focus
BUSINESSMODEL
PERFORMANCE  Are we meeting our financial commitments? Are we sustainable?
 Are we meeting our stakeholder/community expectations?
 Are we meeting our quality commitments?
TheScorecardofACCOUNTABILITY
PRODUCTS /
SERVICES
 Are our products/services market driven?
 Do our products/service connect with/excite our customers?
 Are our product/services nearing the end of its life-cycle?
POSITIONING  Are we positioned primarily to survive, sustain or shine?
 Are we positioned to fully leverage our core capabilities?
 Are we positioned with a unique value proposition?
PARTNERSHIP  Are we collaborating within the company and within BUs/groups?
 Are we collaborating with our customers and stakeholders?
 Are we leveraging strategic partnerships to scale our
organisation? What value do our core partnerships deliver?
STRUCTURE&
PROCESS
EFFICIENCY  Do we have non value-added or time-consuming processes?
 Do we have unnecessary bureaucracies?
 Are there significant structural bottlenecks constraining us?
EFFECTIVENESS  Are our processes & teams result focused?
 Are our processes optimally designed for effectiveness?
 Are our structures design to drive continuous improvement &
breakthrough innovation?
ENABLERS  Are our processes aligned to our goals and vision?
 Are our processes enabling meeting key customer expectations?
 Are our structure curtailing or enabling growth? What are the
growth enablers in our organisations?
CULTURE
MOTIVATION  Are top talents eager to join our organisation?
 Are our employees engaged in their jobs and motivated to drive
results?
 Are we recognizing employees for the right results?
TheScorecardofENGAGEMENTMINDSET  Are there specific beliefs that are constraining us?
 Are our people committed to act beyond their job description?
 Do our people play the blame game when things go wrong?
MANNERS  Do we have clear standards of expected behaviours?
 Do we consistently reward for right behaviors?
 Do we consistently reprimand for wrong behaviours?
LEADERSHIP
CLARITY  Do employees clearly understand our end goal and vision?
 Are key results understood by all levels of employees?
 Do we communicate a consistent message at all levels? What is
this consistent message that we communicate?
 Have our leaders clearly articulated the case for change?
COACHING  Do managers have scheduled conversations with employees?
 Do managers give constructive feedback to their reports?
 Do managers set clear expectations for performance?
 Are our managers constraining employees performance? How?
COMPETENCY  Are our employees trained to achieve organizational goals?
What are key skills required for all employees?
 Do we have a talent identification & development plan?
 Do our leaders have the basic competence to lead effectively?
 Are our employees trained in skills for their work?

Page 10
Constraint Emphasis Identify the gap Focus
BUSINESSMODEL
PERFORMANCE
TheScorecardofACCOUNTABILITY
PRODUCTS /
SERVICES
POSITIONING
PARTNERSHIP
STRUCTURE&PROCESS
EFFICIENCY
EFFECTIVENESS
ENABLERS
The Four Constraints – A Deliberation Checklist

Page 11
Constraint Emphasis Identify the gap Focus
CULTURE
MOTIVATION
TheScorecardofENGAGEMENT
MINDSET
MANNERS
LEADERSHIP
CLARITY
COACHING
COMPETENCY
The Four Constraints – A Deliberation Checklist

Four Constraints – The Strategy Canvass
100
75
50
25
0
Business
Model
Structures
& Process
Culture Leadership
Focus: My individual assessment of the company
(no constraint
whatsoever)
(maximum
constraint)
Observation/Notes

Four Constraints – The Strategy Canvass
100
75
50
25
0
Business
Model
Structures
& Process
Culture Leadership
Focus: Our corporate assessment of the company
(no constraint
whatsoever)
(maximum
constraint)
Observation/Notes

4 constraints wbk-strategy scorecard

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