The Executive Roundtable Series:
Business Strategy Planning
Techniques
featuring Metrics Reporting, Inc.




             ...
AGENDA
Brief Intro and Overview
Blue Ocean Strategy
Having Trouble with Your Strategy?
 …Then Map It!
Example
E       l
Wr...
Introduction
 Metrics Reporting, Inc.
           p     g
 Two tools that create business value:
 ◦ Strategy Canvas [Blue O...
Background


           Why Measure?



Better       Better
Margins?   Execution?



                          4
5
For each:
4 Questions
 that drive
 ACTION!




              6
Blue Ocean Strategy
How to Create U
H      C       Uncontested Market Space and Make
                           dM k S    ...
Blue Ocean Strategy
 Do we know how to
 “Create Uncontested
  Create
 Market Space and Make
 the Competition
 Irrelevant?
...
Blue Ocean Strategy
                                 gy
                                          Red Ocean
              ...
Blue Ocean Strategy




Source: HBR: Value Innovation Logic,
Kim and Mauborgne

                                       10
Results of Formule 1’s Strategy
 From Formule 1’s perspective:
  Cost per room                                     100 000...
Blue Ocean Strategy




                      12
Blue Ocean Strategy
                 gy




                Source: Blue Ocean Strategy, Kim and
                         ...
Blue Ocean Strategy
                 gy
 The Four Actions Framework
                                Reduce
               ...
Blue Ocean Strategy
Eliminate-Reduce-Raise-Create Grid:
The Case of [yellow tail]

                  Eliminate            ...
Blue Ocean Strategy




            Source: Blue Ocean Strategy, Kim and
            Mauborgne                            ...
Blue Ocean Strategy
                   Costs
Strategy Canvas                          Eliminate                        Rai...
Blue Ocean Strategy
                                                                       1. List 8 to 12 important Facto...
Blue Ocean Strategy
                     Project Name:




     Tool 2
                     10

                     9    ...
Blue Ocean Strategy

Examples




                       20
Blue Ocean Strategy




                      21
Blue Ocean Strategy
                 gy




                      22
Having Trouble with Your
 Strategy? Then Map It!
       Strategy Maps




                           23
Strategy Maps
Alignment and Learning
Strategy Maps Help Organizations Get Better Faster




                              ...
Strategy Maps
      gy    p
   Focus on What Matters Most
                          Great t t
                          G ...
Strategy Maps
      gy    p
  Actions Drive Financial Results
   Theme:

              Objectives   Metrics   Initiatives
...
Strategy Maps
      gy   p
  Scorecards Drive Strategy Execution




                                        27
Strategy Maps
      gy   p
  Strategy Maps Add Causality (if-then)




                                          28
Strategy Maps
      gy   p
  Steps for Creating Your Strategy Map
  Determine:
  •   Your Th
      Y    Theme(s).
        ...
Strategy Maps
      gy   p
                                                               Financial
                      ...
Strategy Maps
      gy   p
                                                               Customer
                       ...
Strategy Maps
           gy   p

  Internal
  Processes
  (Operations)
  Perspective:
  To satisfy our
  customers, at wha...
Strategy Maps
           gy   p

  Employee
  Learning and
  Growth
  Perspective:
  What capabilities
  and tools do o r
...
Strategy Maps
      gy   p
Objectives   Metrics   Initiatives




                                     34
Strategy Maps
      gy   p
  Metrics: Accountability, not Blame




                                       35
Strategy Maps
      gy   p
  Team Exercise: Determining Objectives
  Determine:
  •   Your Theme(s).
  •   Your Perspectiv...
Strategy Maps
         Case Study
• You are the CFO for an NFL team. The
  owner wants you to focus on increasing
        ...
Strategy Maps – Case Study
Building Revenue for an NFL team
• Background on your team’s operations
  – Home games are sold...
Strategy Maps - Case Study
           Task: Identify Objectives Across Perspectives
   Theme:      NFL Team: Increase Stad...
Identify Perspectives, then Initiatives within each perspective

Financial
(Owner)




Customer
(Fan)




Operations



Em...
Should This Project Be Funded?

Financial
(Owner)




Customer
(Fan)




                           Build Ticket
Operation...
Where is Our Financial Focus (Revenue, Margin, ROE)?

Financial
(Owner)              Increase              Increase
      ...
What Customer Initiatives Are We Going to Focus on?


Financial
(Owner)                     Increase                     I...
Does this Operational Initiative Support these Customer Initiatives?


Financial
(Owner)                   Increase       ...
Decide How to Build The Ticket Website

Financial
(Owner)                   Increase                            Increase
 ...
Understand Linkages: If I do this, then that happens

Financial
(Owner)                   Increase                        ...
Metrics – Putting it all
                g
      Together
         g


                           47
http://www.michigancrc.org




                             48
Metrics




          49
Metrics




          50
Metrics




          51
Metrics




          52
Questions?



 Eric Heller
 Metrics Reporting, Inc.
 (616) 644-3190
 eric.heller@metricsreporting.com
            @       ...
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The Executive Roundtable Series: The Executive Roundtable ...

  1. 1. The Executive Roundtable Series: Business Strategy Planning Techniques featuring Metrics Reporting, Inc. 1
  2. 2. AGENDA Brief Intro and Overview Blue Ocean Strategy Having Trouble with Your Strategy? …Then Map It! Example E l Wrap-Up and Next Steps 2
  3. 3. Introduction Metrics Reporting, Inc. p g Two tools that create business value: ◦ Strategy Canvas [Blue Ocean Strategy] ◦ Strategy Map [Norton and Kaplan] 3
  4. 4. Background Why Measure? Better Better Margins? Execution? 4
  5. 5. 5
  6. 6. For each: 4 Questions that drive ACTION! 6
  7. 7. Blue Ocean Strategy How to Create U H C Uncontested Market Space and Make dM k S dM k the Competition Irrelevant 7
  8. 8. Blue Ocean Strategy Do we know how to “Create Uncontested Create Market Space and Make the Competition Irrelevant? Irrelevant?” 8
  9. 9. Blue Ocean Strategy gy Red Ocean Compete in crowded  markets Blue Ocean Create and capture  Create and capture new space Source: Blue Ocean Strategy, Kim and Mauborgne 9
  10. 10. Blue Ocean Strategy Source: HBR: Value Innovation Logic, Kim and Mauborgne 10
  11. 11. Results of Formule 1’s Strategy From Formule 1’s perspective: Cost per room 100 000 FF ↔ 270 000 FF 100,000 270,000 Cost of staff 20-23% of sales vs. 23-25% Profit Margins > 2x industry average Occupancy rates > 3x industry average From customers perspective: customers’ Hygiene > average 2* hotel Bed quality > average 2* hotel 2 Silence > average 2* hotel Price 100 FF ↔ 200 FF of industry Source: HBR: Value Innovation Logic, Kim and Mauborgne 11
  12. 12. Blue Ocean Strategy 12
  13. 13. Blue Ocean Strategy gy Source: Blue Ocean Strategy, Kim and 13 Mauborgne
  14. 14. Blue Ocean Strategy gy The Four Actions Framework Reduce Which factors should The 4 Qs be reduced well below the industry’s standard? Eliminate Create Which of the factors New N Which factors should that the industry Value be created that takes for granted Curve the industry has should be eliminated? never offered? Raise Which factors should be raised well above the industry’s standard? Source: Blue Ocean Strategy, Kim and Mauborgne 14
  15. 15. Blue Ocean Strategy Eliminate-Reduce-Raise-Create Grid: The Case of [yellow tail] Eliminate Raise Enological terminology and Price versus budget wines distinctions Retail store involvement Aging qualities Above-the-line marketing Reduce Create Wine complexity Easy drinking Wine range Ease of selection Vineyard prestige Fun and adventure Source: Blue Ocean Strategy, Kim and Mauborgne 15
  16. 16. Blue Ocean Strategy Source: Blue Ocean Strategy, Kim and Mauborgne 16
  17. 17. Blue Ocean Strategy Costs Strategy Canvas Eliminate Raise Enological terminology and Price versus budget wines Value distinctions Retail store involvement Innovation Aging qualities Above-the-line marketing Buyer Value Reduce Create Wine complexity Easy drinking Wine range Ease of selection Vineyard prestige Fun and adventure Four Actions Framework ERRC Grid Source: Blue Ocean Strategy, Kim and Mauborgne 17
  18. 18. Blue Ocean Strategy 1. List 8 to 12 important Factors of Competition Blue Ocean Strategy 2. Enter top 2 or 3 in each ERRC Grid Quadrant 3. Draw the Strategy Canvas: 1 on left, 4 on right Factors of Competition / Value Factors: Tool 1 1. List Factors of Competition 2. Top 2 or 3 in ERRC Grid Quadrants 1. Eliminate: 3. Raise: 2. Reduce: 4. Create: Rev: 2006.02.21 18
  19. 19. Blue Ocean Strategy Project Name: Tool 2 10 9 Very High 8 7 High 1. Write on 6 5 Medium Worksheet:E 4 3 Low left, C right 2 2. Draw “As Is” 1 Very Low 0 3. 3 Draw “To Be” Value Factors 19
  20. 20. Blue Ocean Strategy Examples 20
  21. 21. Blue Ocean Strategy 21
  22. 22. Blue Ocean Strategy gy 22
  23. 23. Having Trouble with Your Strategy? Then Map It! Strategy Maps 23
  24. 24. Strategy Maps Alignment and Learning Strategy Maps Help Organizations Get Better Faster 24
  25. 25. Strategy Maps gy p Focus on What Matters Most Great t t G t strategy enables everyone to set accurate priorities 25
  26. 26. Strategy Maps gy p Actions Drive Financial Results Theme: Objectives Metrics Initiatives Financial Perspective Customer Perspective Internal Processes Perspective Employee Learning & Growth Perspective 26
  27. 27. Strategy Maps gy p Scorecards Drive Strategy Execution 27
  28. 28. Strategy Maps gy p Strategy Maps Add Causality (if-then) 28
  29. 29. Strategy Maps gy p Steps for Creating Your Strategy Map Determine: • Your Th Y Theme(s). ( ) • Your Perspectives. • The Strategic Objectives in each perspective. • Metrics (Measures) and targets for each objective. Assign an owner to each metric. • Initiatives to drive each metric metric. 29
  30. 30. Strategy Maps gy p Financial Perspective: P ti What financial steps are needed p to ensure the execution of our strategy? The 4 Qs Employee Learning and Internal Perspective Customer Perspective Financial Perspective Growth Perspective Crew Scheduling System Fast Ground Turnaround On Time Service Profits and RONA Ground Crew Alignment Lower Prices More Revenue 30 Train Ramp Agents Attract and Retain Customers Fewer Planes
  31. 31. Strategy Maps gy p Customer Perspective: P ti Who are our targeted g customers, and what is our value proposition in serving them? Employee Learning and Internal Perspective Customer Perspective Financial Perspective Growth Perspective Crew Scheduling System Fast Ground Turnaround On Time Service Profits and RONA Ground Crew Alignment Lower Prices More Revenue 31 Train Ramp Agents Attract and Retain Customers Fewer Planes
  32. 32. Strategy Maps gy p Internal Processes (Operations) Perspective: To satisfy our customers, at what t t h t processes must we excel? Employee Learning and Internal Perspective Customer Perspective Financial Perspective Growth Perspective Crew Scheduling System Fast Ground Turnaround On Time Service Profits and RONA Ground Crew Alignment Lower Prices More Revenue 32 Train Ramp Agents Attract and Retain Customers Fewer Planes
  33. 33. Strategy Maps gy p Employee Learning and Growth Perspective: What capabilities and tools do o r our employees need to help them execute our strategy? Employee Learning and Internal Perspective Customer Perspective Financial Perspective Growth Perspective Crew Scheduling System Fast Ground Turnaround On Time Service Profits and RONA Ground Crew Alignment Lower Prices More Revenue 33 Train Ramp Agents Attract and Retain Customers Fewer Planes
  34. 34. Strategy Maps gy p Objectives Metrics Initiatives 34
  35. 35. Strategy Maps gy p Metrics: Accountability, not Blame 35
  36. 36. Strategy Maps gy p Team Exercise: Determining Objectives Determine: • Your Theme(s). • Your Perspectives. • Strategic Objectives in each perspective perspective. • Metrics (Measures) and targets for each objective. objective Assign an owner to each metric. metric • Initiatives to drive each metric. 36
  37. 37. Strategy Maps Case Study • You are the CFO for an NFL team. The owner wants you to focus on increasing y g stadium and licensing revenues. • Your I.T. director suggests building a website IT to let season ticket holders sell their tickets for games that they cannot attend. attend • Should you approve her project? 37
  38. 38. Strategy Maps – Case Study Building Revenue for an NFL team • Background on your team’s operations – Home games are sold out for many years g yy into the future. – Your team loses more than it wins, so a , significant number of season ticket holders do not show up for home games. – An important source of revenue comes from people who spend money on parking and concessions. 38
  39. 39. Strategy Maps - Case Study Task: Identify Objectives Across Perspectives Theme: NFL Team: Increase Stadium and Licensing Revenue Objectives Metrics Initiatives Owner (Financial) Perspective Fan (Customer) Perspective Internal Processes Perspective Employee Learning & L i Growth Perspective 39
  40. 40. Identify Perspectives, then Initiatives within each perspective Financial (Owner) Customer (Fan) Operations Employee and Supplier 40
  41. 41. Should This Project Be Funded? Financial (Owner) Customer (Fan) Build Ticket Operations Website Employee and Supplier 41
  42. 42. Where is Our Financial Focus (Revenue, Margin, ROE)? Financial (Owner) Increase Increase Stadium Revenue Licensing Revenue Customer (Fan) Operations Employee and Supplier 42
  43. 43. What Customer Initiatives Are We Going to Focus on? Financial (Owner) Increase Increase Stadium Revenue Licensing Revenue Customer (Fan) Reduce No Shows Increase Fan Loyalty Grow Fan Base Operations Employee and Supplier 43
  44. 44. Does this Operational Initiative Support these Customer Initiatives? Financial (Owner) Increase Increase Stadium Revenue Licensing Revenue Customer (Fan) Reduce No Shows Increase Fan Loyalty Grow Fan Base Build Ticket Operations Website Employee and Supplier 44
  45. 45. Decide How to Build The Ticket Website Financial (Owner) Increase Increase Stadium Revenue Licensing Revenue Customer (Fan) Reduce No Shows Increase Fan Loyalty Grow Fan Base Build Ticket Operations Website Employee Identify Train I.T. team IT and Ticket Website to Build Website Supplier Vendors 45
  46. 46. Understand Linkages: If I do this, then that happens Financial (Owner) Increase Increase Stadium Revenue Licensing Revenue Customer (Fan) Reduce No Shows Increase Fan Loyalty Grow Fan Base Build Ticket Operations Website Employee Identify Train I.T. team IT and Ticket Website to Build Website Supplier Vendors 46
  47. 47. Metrics – Putting it all g Together g 47
  48. 48. http://www.michigancrc.org 48
  49. 49. Metrics 49
  50. 50. Metrics 50
  51. 51. Metrics 51
  52. 52. Metrics 52
  53. 53. Questions? Eric Heller Metrics Reporting, Inc. (616) 644-3190 eric.heller@metricsreporting.com @ p g 53

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