An introduction to

Strategic Linkage Models

Origins of the Strategic Linkage Model
A linkage model is a construct that represents our assumptions about cause and effect relationships:
we use them to keep a record of these assumptions and communicate them to others. e first cause
2GC ● Briefing Paper
and effect linkages were mental and undocumented: the early hunter-gather surely saw the linkages
between a successful hunt and both a full belly and new footwear. It is also worth noting that
developing and using these sorts of linkages is not pre-conditioned upon the linkages being ‘right’:
e.g. the appearance of a comet was seen as ‘bad omens’ in many cultures). Cause and effect modelling
would also have been familiar to the earliest engineers, as they sought to explain their understanding
of observed cause and effect relationships, within
mechanical and physical systems.
Cause and effect thinking has been applied within
the world of enterprise as a formal management
method for some time, particularly as part of the
20th Century drive to bring some science to the art
of business. One of the first (informal) linkage
models for management purposes appeared in the
1930s, in France, under the label of ‘tableau de bord’
– wherein the key drivers/causes of operational
success were identified and measured by
management (see graphic right) with a view to
improving organisational performance.

In the 1960s, the ‘logical framework’ was developed initially by the US military as a planning
framework, and was thereaer adopted widely, in particular by development agencies.
e ‘logframe’ brought the first simple, visual depiction of the relationships (proposed) between
management inputs and outputs, as an aid to planning and monitoring. e precise structure of
logframe is not specified, but typically contains four or five components (with the ‘resources’
component optional).
While the logframe is helpful for singular endeavours, for example projects, its uni-dimensional
nature makes it unsuitable for mapping the key linkages in more complex systems, for example
organisations.

Recently the LogFrame approach has been

updated to reflect developments in
performance management thinking since
the 1970s. A revised version called
“Results Based Management” (RBM) was
proposed by the OECD in the 1990s: a
modified version of this framework was
adopted by the UN in 2000, and has since
been adopted by other NGOs (e.g. WFP)
and some Governments (e.g. Canada,
Malaysia).
e RBM approach reflects the latest
thinking on performance management,
and is discussed in more detail in another
paper from 2GC. A copy of the paper -
“Balanced Scorecard and Results-Based
Management:Convergent Performance
Management Systems” can be obtained
from the 2GC web site or directly from
2GC (see address below).

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Linkage Models and Performance Management
In the late 1980s, some U.S. firms began reporting the use of a new type of
‘balanced’ linkage model as part of corporate performance management
systems.  e linkage models documented assumed linkages between
financial results (success) and other kinds of business results, with one firm
proposing that people success, process success, customer success and financial
results were linked somehow through mutually reinforcing causal
relationships. is new linkage model was more thematically balanced than
the uni-dimensional logframe, but it lacked the latter’s explicit causal
hierarchy. And while it captured the recognised importance of non-financials,
its generalised logic made it difficult to apply in practice.
In the mid-1990s, a second, improved
version of the corporate linkage model
was popularised.  is took the first
version’s four ‘perspectives’ on success
and stacked them in a simple hierarchy, on the presumption that people results drive
process results drive customer results drive financial results. is second version of the
linkage model (sometimes called a ‘strategy map’) organises results (outcomes) across
the four-level hierarchy, with these linked in a generalised manner between levels (so
three linkages only), as per the graphic at right. A further limitation of this second
version linkage model results from labels used for the four levels - the standard labels
are hard to apply in many organisation types (e.g. not-for-profit or governmental).
In the late 1990s, a third version of
the linkage model appeared, with
more ‘universal’ applicability, and
resembling a two-dimensional logframe (see graphic, right). is model’s
elements are interacting activities (enablers) and outcomes (results), across
discernible themes, towards a higher purpose (or purposes - this new form
of linkage model tolerates multiple high level outcomes in a way much
better suited to practical management than the ‘four box’ model it replaces).
It retains the logic of causal linkages as applied through logframe: activities
produce outcomes; both are part of the model.
In our experience, this third version of linkage model is more practical,
applicable and intuitive, and forms the basis for 2GC’s ‘3rd Generation’
approach to performance management system design.

Linkage Model Illustrated

What is a ‘3rd Generation’ linkage model? What does one look like? We start with a simple example to illustrate, below.
Note that causality flows (mostly) upwards; the elements at
the top happen aer the elements at the bottom; the
elements at the bottom are the main enablers of higher
elements.  e superior elements are results to be achieved,
the inferior elements are ‘how’ to achieve these results;
specific activities deliver outcomes; all elements can be
evaluated over time. e linkage model contains (probably)
the most important things to monitor (i.e. evaluate) in this
example – the pursuit of happiness.
It is important to note that a linkage model cannot be 100%
‘correct’ (although it can be manifestly wrong). e model
is simply a hypothesis about what is important, and the
relationships between these things of importance. It
describes what is expected to happen, as a result of actions
carried out. Only time will tell if these expectations are
‘true’. Linkage models cannot be proven in advance
(although there validity can be evaluated over time).
What would you change in this happiness linkage model?
Some might argue, for example, that spirituality is missing. What about morals and values - should these be incorporated
somehow? Or perhaps fruit & vegetables are not on your top dozen enablers of happiness? Try building your own model for
happiness (maximum 12 elements) to help you better understand ‘best practice’ linkage modelling.

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Linkage Models for Strategic Purposes

2GC ● Performance Management Experts

While the personal linkage model is nice in theory, in practice linkage models are designed and applied mostly by
organisations, as an aid to the articulation, prioritisation, communication and evaluation of organisational strategy.
is is 2GC’s domain – we help management teams, among other things, to design ‘strategic linkage models’ as part
of planning and delivering organisational strategy.
2GC’s approach puts this 3rd Generation, ‘best practice’ linkage model at the centre of the organisation’s strategy
management system, the main application of these activity-outcome linkage models. Built in the context of the
organisations longer term goals, this strategic linkage model is a one-page representation of the organisation’s
strategy (or at least the priorities therein), and oen forms the basis for selecting measures and targets of strategic
progress and performance as part of a balanced scorecard implementation.
Designing good strategic linkage models is hard. Good strategic linkage models reflect consensus, identify ultimate
priorities, clarify actions, clarify accountabilities, and sit at the heart of effective strategic management systems. To
work, strategic linkage models must be well designed.
Find out more about how the strategic
linkage model sits at the heart of the modern
strategic performance management system
by reading the briefing “How do I create a
strategic Balanced Scorecard?” which can be
downloaded from the 2GC Performance
Management Resource Centre - look under
the ‘implementing Balanced Scorecard’ tab on
the FAQs page.

Summary
e Strategic Linkage Model emerged during the
1990s as a device to help management teams to
record their thinking about strategic cause-and-
effect relationships: it helped them to identify
small sets of key outcomes to be achieved over the
short to medium term, and a matching set of key
activities the organisation needed to carry out if
(in their view) the organisation was going to
successfully achieve these chosen key outcomes.
e arrows linking the activities and outcomes
reflected the collective view about how the actions
linked to each other, and to the achievement of
these outcomes.
e Strategic Linkage Model has a number of
uses. Its original use as a mechanism to help
managers identify performance measures (pick one per activity or outcome on the diagram) has been broadened
over time - and now it has well developed useful application both as a device to help managers decide upon the
priority activities and outcomes for their organisation, and as a communication device to share these choices in
visual form with others.
Because the Strategic Linkage Model should reflect the views of an organisation’s leadership about what is
important, and how activity links to delivery of outcomes, best practice design methods require the participation of
this leadership group in the design of Strategic Linkage Models. Specialist Performance Management consultants
such as 2GC have developed time-efficient design processes that participation of a senior leadership team in the
design process a practical and economic option.

About 2GC
2GC is a research-led consultancy expert in addressing the strategic and performance management issues faced by
organisations in today's era of rapid change and intense competition. Founded in 1999, UK-based 2GC
has worked with organisations in over 30 countries, helping senior management teams to implement
their strategic goals. Central to much of 2GC's work is the application of its 3rd Generation Balanced
Scorecard, an approach to strategic implementation, strategy management and performance
measurement.
For more information on 2GC’s approach, please visit the 2GC web site at www.2gc.co.uk, telephone
2GC on +44 1628 421506 or email us via info@2gc.co.uk

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