Milestone Partners Strategy vs. Tactics
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Milestone Partners Strategy vs. Tactics



From the Milestone Partners 2011 CEO Conference.

From the Milestone Partners 2011 CEO Conference.



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Milestone Partners Strategy vs. Tactics Milestone Partners Strategy vs. Tactics Presentation Transcript

  • Clarifying Strategy and Tactics for Value Creation
  • Survey Results
  • What position do you hold in your organization?
    • 13 CEOs
    • 15 BOD members
    • 1 Interim CEO
    • 1 BOD Chair / CEO
    • 31 total responses
  • I believe that the current strategy for our company is on target and realistic.
  • I believe that we have full alignment and support for our strategy across our management team, our board and the team at Milestone .
  • I believe there is a high level of open, honest and transparent communication across our organization, board and the team at Milestone.
  • I believe that our organization shows great discipline in executing on our key strategies and objectives.
  • Learning Objectives
    • Establishing a common language and set of definitions around the core elements of strategy.
    • Exploring the disconnect between overly ambitious strategies versus actual resources available and true organizational capabilities.
    • Underscoring the critical need for full alignment and consensus on strategy between ownership and management teams.
    • Discussing the why's and how's of ensuring that the entire company understands the strategy is aligned and committed to implement it.
    • Examining the barriers to effective execution of strategy.
    • Reviewing the role of a BOD member in strategy alignment and execution. What sort of questions should they be asking, what should they be looking for?
    • Understanding that as a key foundation the business MUST function well, otherwise strategy is useless.
  • A few of my clients:
  • For the past 21 years…
  • Five Foundations of Effective Strategic Thinking
      • Business Acumen
      • Personal Experience
      • Pattern Recognition
      • Strategic Insight
      • Disciplined Execution
  • Key Terms: Mission Vision Strategy Objectives Tactics
  • “ Simplicity is the ultimate sophistication” Leonardo da Vinci
  • Mission
    • A mission statement describes what an organization is all about: its purpose and primary objectives. It answers three key questions:
    • Whom do we serve?
    • What is the benefit to our stakeholders, community and the world?
    • Why does this organization exist?
    • It should resonate with all members of the organization and help them feel proud and excited to be a part of something bigger than themselves.
  • Medtronic Mission
    • “ To contribute to human welfare by application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life.”
  • Vision
    • A vision statement is what the organization wants to become. It is a picture of the desired future, where they see the business 5-10-20 years from now.
  • Features of an effective vision statement include:
    • Clarity and lack of ambiguity
    • Vivid and clear picture
    • Description of a bright future
    • Memorable and engaging wording
    • Realistic aspirations
    • Alignment with organizational values and culture
  • Vision: Anheuser-Busch
    • Be the world's beer company.
    • Enrich and entertain a global audience .
    • Deliver superior returns to our shareholders.
    • Early 1900s: Democratize the automobile
    • Current: To become the world's leading Consumer Company for automotive products and services.
    Vision: Ford Motor Company
  • Workshop: Vision
  • Strategy
    • Your strategy is the plan of action you want to take to achieve success in your business.
    • It is a thoughtfully constructed plan to address a need to be met, or a problem to be solved; determining which resources you will marshal to meet that need or solve that problem; and setting the criteria for success.
    • Strategy is not merely maintaining sight of the long term options for realizing the vision, but also includes an appreciation and study of the opponent's thinking and response to challenge.
  • Strategy Clock
  • Various Strategic Options
    • Low Price / Low Added Value (Dollar General)
    • Low Price (Walmart)
    • Hybrid (Target / Dell)
    • Differentiation (Nordstrom / Apple)
    • Focused Differentiation (Gucci)
  • Objectives, Strategic Objectives, Goals, KRA’s…
    • Objectives are the major projects or programs that support the strategy.
    • It is where senior leaders allocate significant resources to be deployed by mid-level and lower-level managers on specific tactics.
  • Tactics
    • Your tactics are the specific actions, sequences of actions, and schedules you will use to fulfill your strategy.
    • If you have more than one strategic objective you will have different tactics for each.
    • Tactics are typically short-term, immediate actions… which taken together will eventually lead to the achievement of the overall strategy.
  • Lets go through the entire process…
    • Anheuser-Busch Mission:
    • Through all of our products, services and relationships, we will add to life's enjoyment.
  • Vision: Anheuser-Busch
    • Be the world's beer company.
    • Enrich and entertain a global audience .
    • Deliver superior returns to our shareholders.
  • Strategy: Market domination through Differentiation
  • AND……
  • AND….
  • Tactics: Fitty
  • Tactics: Foodies
  • Tactics: Bubba
  • The Organizational Framework for Effective Strategy WHO WHAT HOW Cross-Functional Teams BOD & Senior Leadership Departments Adapted from: Six Disciplines Execution Revolution Individuals Planning Retreat Quarterly Workshops Goals Tracking Dashboard Dept. Tactical Plans Status Reports Regular Meetings Individual Tactical Plans Status Reports Regular Meetings Individuals Action Items To-do Lists
  • The Key: Brutal Honesty in the Analysis !!!!!!
  • The Missing Element?
  • 10 – 15%
  • What Inhibits Execution? National Survey of 4,000 Senior Executives
    • 4. Inability to work together (21%)
    • 3. Company culture (23%)
    • 2. Economic climate (29%)
    • 1. Holding onto the past / unwillingness to CHANGE (35%)
  • The Four – I’s
    • Ignorance
    • Inflexibility
    • Indifference
    • Inconsistency
  • How to avoid the Four I’s
    • Aggressive external market focus.
    • Ridiculously high level of customer focus.
    • Keep the “Main Things” the main things.
    • Bullish on knowledge sharing and learning.
    • Teamwork / communication is mandatory – not optional
    • Passion and commitment at all levels.
    • Foster a healthy paranoia.
    • Revel in change.
  • Where are we going and how will we behave on the way? Focus Differentiation “ No” Guiding Collation Vision + Values Strategy Objectives Initiatives Programs Procedures / Protocols Repeatable Process Clear / consistent / relentless Training + time / money / supplies / people Measure / Track Communicate Transparency Accountability Celebrate Success Eliminate Mediocrity
  • A few key points… All together now!
  • Clear, Consistent, Continuous…
  • Measure & Post Create A Dashboard of Key Indicators MPS Margin Per Sale Talent Customer Service Customer Retention
  • BOD and Management Relationship BOD / Management Team / MP Company Management Team
  • Key Point: Strategy is INTERNAL as well as EXTERNAL
  • The Pattern of Business Success
  • (T + C + ECF) x DE = Success
    • The number one factor in increasing the level of highly satisfied and engaged CUSTOMERS in your business is…
    The level of highly satisfied and engaged EMPLOYEES in your business.
  • Job + Organizational Engagement = Employee Engagement
  • Actively Disengaged Employees… 22%
  • Key Drivers of Customer Satisfaction and Loyalty T olerate N othing L ess From: Practice What You Preach by Maister Global study: 16 countries 529 companies 15,589 respondents Chart: 4 Workshop: 5 Financial Performance Quality P&S & Customer Relationship Employee Satisfaction Empowerment High Standards Long-term Orientation Enthusiasm, Commitment, Respect Training & Development Fair Compensation CR= 104.12% increase in profits CR= .404 CR=.334 CR=.277 CR=.275 CR=.249 CR=.280 Coaching CR=.285 CR=.371 CR=.365 CR=.191 CR=.247
  • Customer satisfaction drives customer loyalty… and customer loyalty drives profitability A 5% increase in loyalty among your best customers… Can produce a profit increase of 25% – 85% I hate you I don’t care about you I love you 100% 90 80 70 60 50 40 30 20 Extremely Dissatisfied Somewhat Dissatisfied Slightly Dissatisfied Satisfied Very Satisfied Zone of Defection Zone of Indifference Zone of Affection Loyalty Customer Satisfaction Terrorist Evangelist
  • Actively disengaged employees can reduce revenues by up to 22%, while highly satisfied and engaged employees can drive profits up by as much as a 189% Culture = Cash
  • Best Practices: Talent
    • Create a pipeline of talent into your company.
    • Hire for attitude – train for skills.
    • Use team interviewing.
    • Train people how to interview.
    • Use a focused competency model.
    • Use numerous types of testing.
    • Do a thorough reference check.
    • Make sure they really want to work for you.
    • Hire slow – fire fast .
    Make “Hiring Right” a core competency!
  • Culture
    • Innovation
    • Kaizen
    • Accountability
    • Urgency
    • “ Ownership Mentality”
  • Web of Value VOC + MOT
  • Extreme Customer Focus Whoever owns the… VOICE OF THE CUSTOMER Owns the Marketplace
  • Moments of Truth
  • The Evergreen Project
    • 10 year study of 160 top companies
    • 40 distinct industries
    • 200 management practices
    • Winners, climbers, tumblers, losers
    • Winners had an average Total Return to Shareholders of 945% ...
    • The Losers only averaged a TRS of 62%
    From: What (really) Works by Joyce, Nohria, Roberson
  • The Four Primary Practices:
    • A sharply focused, clearly communicated and well-understood strategy for growth.
    • Flawless operational execution that consistently delivers the value proposition.
    • A performance-oriented culture that does not tolerate mediocrity.
    • A fast, flexible, flat organization that reduces bureaucracy and simplifies work.
  • The Secondary Management Practices:
    • Talent = find and keep the best people.
    • Key leaders show commitment and enthusiasm for the business.
    • Embrace strategic innovation.
    • Master the power of partnerships.
    From: What (really) Works by Joyce, Nohria, Roberson