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Strategy Implementation by Kurt Verweire - Book Launch

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  • 1. “TACKLING THE CHALLENGES OF STRATEGY IMPLEMENTATION” Welcome! #KurtBookLaunch
  • 2. © Vlerick Business School INTRODUCTION OF AUTHOR PROF KURT VERWEIRE ASSOCIATE PROFESSOR IN STRATEGIC MANAGEMENT PROF PHILIPPE HASPESLAGH DEAN VLERICK BUSINESS SCHOOL 2 Strategy Implementation
  • 3. © Vlerick Business School STRATEGY IMPLEMENTATION 3 “Execution is not only the biggest issue facing business today; it is something nobody has explained satisfactorily.” (Bossidy and Charan, 2002) Strategy Implementation
  • 4. © Vlerick Business School STRATEGY IMPLEMENTATION 4 Strategy Implementation
  • 5. © Vlerick Business School STRATEGY IMPLEMENTATION 5 Strategy Implementation
  • 6. © Vlerick Business School Strategy Implementation6
  • 7. © Vlerick Business School77 Strategy Implementation
  • 8. © Vlerick Business School DEFINING STRATEGY 8 Strategy Implementation
  • 9. © Vlerick Business School DEFINING STRATEGYstrategy occurs at different levels 9 Strategy Implementation
  • 10. © Vlerick Business School DEFINING STRATEGY 10 Strategy Implementation
  • 11. © Vlerick Business School11 Strategy Implementation DEFINING STRATEGY: EASYJET CASE Whom do we serve? How do we realize this? What do we provide? What is our value proposition? People paying a ticket out of their own pocket; not the ‘fat cats’ Short-haul flights, no longer than 4h European destinations Operational excellence: standardization, no-frills, the basics Low price Convenience: fast and easy
  • 12. © Vlerick Business School12 REVENUES PASSENGERS PROFIT MARGIN RETURN ON EQUITY Strategy Implementation
  • 13. © Vlerick Business School DEFINING YOUR COMPETITIVE ARENA 13 Strategy Implementation
  • 14. © Vlerick Business School DEFINING YOUR COMPETITIVE ARENA 14 Strategy Implementation
  • 15. © Vlerick Business School DEFINING STRATEGY 15 Strategy Implementation
  • 16. © Vlerick Business School DEFINING A COMPETITIVE THEME 16 What is our value proposition? What is our operating model? Strategy Implementation
  • 17. © Vlerick Business School A WINNING VALUE PROPOSITION 17 Level Access Connectivity Price Product Service Consumer seeks the company  Turn my hassle into a positive experience. Establish intimacy with me by doing something no one else can. Be my price agent; let me trust you to make my purchases. Inspire me with an assortment of excellent products I didn’t know about. Provide me with a solution, take my problems away. Consumer prefers the company  Make the whole interaction reliable and convenient for me. Care about my needs and me. Be fair and consistent in your low pricing (this does not necessarily mean lowest price). Offer continuously high-quality and well-performing products. Educate me when I encounter a product or a situation I don’t understand. Consumer accepts the company  Make it easy for me to find what I need. Respect me, treat me like a human being. Keep the prices honest; don’t jack them up or offer big savings when there are none. Be credible in your product and service offerings. Accommodate me; bend over backward some- times to show me you care. Consumer underworld   Block my way, hassle me, keep me waiting, make it hard for me to get in and out. Dehumanize me; disrespect me; ignore my needs. Be inconsistent, unclear, or misleading in your pricing. Offer me poor- quality merchandise and services that I can’t use. Give me an experience I’d just as soon forget; give me a reason to tell my friends to stay away. Strategy Implementation
  • 18. © Vlerick Business School A WINNING VALUE PROPOSITION 18 Source: Crawford & Mathews (2001) A 5-4-3-3-3 profile is optimal. Strategy Implementation
  • 19. © Vlerick Business School A WINNING OPERATING MODEL 19 Strategy Implementation
  • 20. © Vlerick Business School DEFINING A COMPETITIVE THEME 20 What is our value proposition? What is our operating model? Strategy Implementation
  • 21. © Vlerick Business School3030 Strategy Implementation
  • 22. © Vlerick Business School A MODEL FOR STRATEGY IMPLEMENTATION 31 Source: Vlerick Business School/Electrabel (GDF Suez) (2004, 2014) Strategy Implementation
  • 23. © Vlerick Business School ALIGNMENT 32 Operational Excellence Product Leadership Customer Intimacy Orchestrating theme  ‘Best price’ and/or  ‘Best access’ (‘fast, easy, painless’)  ‘Best product’  ‘Best service’ and/or  ‘Best connectivity’ (‘relationship orientation’) Direction and goal setting processes  Efficiency through process thinking  Zero-defect service  Best product through continuous product innovation  Clear innovation strategy: where to place the bets?  Understanding the broader problem  Having expertise about the customer’s business  Customers carefully selected Operational processes  The operations department drives the company  Attention is paid to process speed and quality  R&D is key: idea management  Marketing is also key: educate people with a missionary zeal  Get engineers, designers, and marketers systematically together  Demonstrate expertise and experience  Strengthen the relationship  Build loyalty: focus on customer retention Strategy Implementation
  • 24. © Vlerick Business School ALIGNMENT 33 Operational Excellence Product Leadership Customer Intimacy Support processes  Highly automated processes  Information systems increase control and coordination and streamline tasks  World-class supply chain management  Clear innovation governance process  Systematic process for allocating resources to innovation programs  Knowledge sharing and networks  Systematic collection of customer and market information (through Customer Relationship Management)  Structured sales process Evaluation and control processes  Rigid, centralized control  Detailed measures on various aspects of the process  Setting higher thresholds  Innovation performance measures  Control, learning, and experimentation  Detailed measures about account penetration and loyalty  Lifetime value of the customer Organizational behavior processes  Centralized structure  Organization structured around core processes  Culture of continuous improvement  Fluid organization structure  Stimulate diversity, tolerate mavericks  Low levels of formalization  Entrepreneurial culture  Decentralized organization  Employee retention  Focus on quality, defined from the customer’s point of view Strategy Implementation
  • 25. © Vlerick Business School ALIGNMENT 34 Strategy Implementation
  • 26. © Vlerick Business School ALIGNMENT 35 Strategy Implementation
  • 27. © Vlerick Business School3636 Strategy Implementation
  • 28. © Vlerick Business School A MODEL FOR STRATEGY IMPLEMENTATION 37 Strategy Implementation
  • 29. © Vlerick Business School38 Strategy Implementation the entrepreneurial organization
  • 30. © Vlerick Business School A MODEL FOR STRATEGY IMPLEMENTATION 39 Strategy Implementation
  • 31. © Vlerick Business School EEN STRATEGIEGERICHTE ORGANISATIE 40 Strategy Implementation the structured organization
  • 32. © Vlerick Business School COMMITMENT: INTRODUCING ‘MATURITY’ Implementing Winning Business Strategies
  • 33. © Vlerick Business School42 Op Weg naar een Strategiegerichte Organisatie the connected organization
  • 34. © Vlerick Business School COMMITMENT: INTRODUCING ‘MATURITY’ Implementing Winning Business Strategies
  • 35. © Vlerick Business School44 Op Weg naar een Strategiegerichte Organisatie the committed organization
  • 36. © Vlerick Business School COMMITMENT AT ING DIRECT USA 45 Strategy Implementation
  • 37. © Vlerick Business School COMMITMENT AT CHÂTEAUFORM’ 46 Strategy Implementation
  • 38. © Vlerick Business School COMMITMENT AT CARGLASS® 47 Strategy Implementation
  • 39. © Vlerick Business School ALIGNMENT AND COMMITMENT 48 Strategy Implementation
  • 40. © Vlerick Business School4949 Strategy Implementation
  • 41. © Vlerick Business School PANEL DEBATE Dirk Wouters CEO Bank Van Breda & C° Ignace Van Doorselaere CEO Van de Velde Stefaan Hermans COO Carglass 50 Strategy Implementation
  • 42. © Vlerick Business School52 Strategy Implementation BANK J. VAN BREDA & C°
  • 43. © Vlerick Business School DEFINING STRATEGY Financial services What do we provide? 1989: Whom do we serve? What is our value proposition ? 2005: Is this enough to differentiate?  Refining our strategy: best in assisting self employed building up finanial assets in a structured and diversified way How do we realize this? - Personal approach: 1 Account manager for both professional & private needs - Better understanding through focus on target group Strategy Implementation53
  • 44. © Vlerick Business School54 Strategy Implementation VAN DE VELDE
  • 45. © Vlerick Business School CARGLASS® BELUX Strategy Implementation55
  • 46. OUR VISION & STRATEGY
  • 47. © Vlerick Business School FROM BELIEF TO KNOWLEDGE FROM KNOWLEDGE TO IMPROVEMENT 57 Execute In take Exceed expectati on Strategy Implementation
  • 48. © Vlerick Business School59 Strategy Implementation BANK J. VAN BREDA & C°
  • 49. © Vlerick Business School ALIGNMENT 1990 – 2000: Stop servicing other retail customers in order to create focus on entrepreuneurs and liberal professions 2005 – 2014: Stop servicing entrepreneurs and liberal professions that are not interested in a partnership to build up financial assets with Bank J.Van Breda & C° in order to create focus on our main value proposition Strategy Implementation60
  • 50. © Vlerick Business School Structured Organisation: Discipline, operational processes, control processes CRM Adapted remuneration Focus ALIGNMENT Strategy Implementation61
  • 51. © Vlerick Business School62 Strategy Implementation VAN DE VELDE
  • 52. © Vlerick Business School CARGLASS® BELUX Strategy Implementation63
  • 53. © Vlerick Business School EASY TO REMEMBER… 64 Strategy Implementation
  • 54. © Vlerick Business School EVERY WEEK MORE THAN 1000 FEEDBACKS OF CUSTOMERS Net Promotor Score YTD 2014 Promotors - Score 9 or 10 84 % % Promotors % Detractorsminus Net Promotor Score 10: Detractors - Score < 7 2 % Passives - Score 7 or 8 14 % 82 %
  • 55. © Vlerick Business School67 Strategy Implementation BANK J. VAN BREDA & C°
  • 56. © Vlerick Business School COMMITMENT Corporate culture: Top 3 values employees Honesty Enthusiasm Sense of responsibility  right attitude to create a service and customer oriented business Strategy Implementation68
  • 57. © Vlerick Business School COMMITMENT Connected and Committed Organisation: IT-tools that support strategy IT provides answers on the needs (≠ questions) Credit analyst: Cash flow serves to pay back credit + to build up financial assets Dividend pay out is diminishing solvency + opportunity to build up private financial assets Strategy Implementation69
  • 58. © Vlerick Business School70 (*) Excluding ABK the net profit in 2011 amounted to Eur 21.407 million. The exceptional non-recurring impact on results (badwill) from the acquisition of ABK means that the ROE for 2011 provide a distorted picture of underlying profitability. Bank J.Van Breda & C° (consolidated): Sustainable growth 2009 2010 2011 2012 2013 Staff 399 418 462 465 466 Net profit after taxes 23.317 25.664 54.880 (*) 27.739 31.546 Equity 243.667 258.620 394.969 427.267 447.907 Cost income ratio 60% 57% 61% 58% 59% Return on average equity (ROE) 10% 10% (*) 7% 7% Impairments on loans 0,09% 0,15% 0,06% 0,08% 0,04% Core capital ratio (Tier 1) 11,80% 11,30% 14,70% 14,20% 13,70% (thousands of Euros) Strategy Implementation
  • 59. © Vlerick Business School71 Strategy Implementation VAN DE VELDE
  • 60. © Vlerick Business School CARGLASS® BELUX Strategy Implementation72
  • 61. © Vlerick Business School FEEDBACK FROM EMPLOYEES 73 Strategy Implementation
  • 62. © Vlerick Business School COMMUNICATION AND RECOGNITION IS KEY 74 Strategy Implementation
  • 63. © Vlerick Business School PANEL DEBATE – QUESTIONS? Dirk Wouters CEO Bank Van Breda & C° Ignace Van Doorselaere CEO Van de Velde Stefaan Hermans COO Carglass 75 Strategy Implementation
  • 64. Strategy Implementation77
  • 65. © Vlerick Business School SWIM TOGETHER, SUCCEED TOGETHER KEEN FOR MORE? UPCOMING PROGRAMMES Successful Strategy Execution 24-26 November 2014 We invite you to enjoy the reception and walking dinner! #KurtBookLaunch 78 Strategy Implementation