Ms Tour Em Presentation Feb3


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  • Ms Tour Em Presentation Feb3

    1. 2. Realizing Operational Efficiency Dr. Elspeth Murray Associate Professor & Managing Director, Queen’s Centre for Business Venturing Queen’s School of Business In partnership with Queen’s School of Business
    2. 3. Why Are You Here? <ul><li>“ Many more individuals of each species are born than can possibly survive. Consequently, there is a frequently recurring struggle for existence, and it follows that any being, if it varies however slightly in any manner profitable to itself under the complex conditions of life, will have a better chance of surviving, and thus be naturally selected.” </li></ul><ul><li>Charles Darwin, The Origin of the Species </li></ul>EM-506
    3. 4. The Simple Message? <ul><li>Change before you have to! </li></ul>
    4. 5. Agenda <ul><li>Great Organizations – Long term success </li></ul><ul><li>Your Radar Screen: Key Trends </li></ul><ul><ul><li>Know when & what to change…. </li></ul></ul><ul><li>Your Edge: Critical Implications </li></ul><ul><ul><li>….and in what ways </li></ul></ul>
    5. 6. What Was Darwin Really Saying? Defined & forward looking strategy Innovative approaches Dynamic culture Establish direction Expect changes Create new rules Pride, passion Raise the bar Adjust along the way Outwit the competition Energy Ability to invent the future Ability to make it happen Visionary leaders PR-103
    6. 7. The Executive &quot;Balancing Act&quot; Create and build for the future Manage today's business efficiently and effectively EM-507
    7. 8. <ul><li>I f you don't know what to do with many of the papers piled on your desk, stick a dozen colleagues initials on them and pass them along. When in doubt, route. </li></ul><ul><li>~ Malcolm S. Forbes ~ </li></ul>
    8. 9. Forward Thinkers: Their Radar Screen <ul><li>Increasing expectations from all stakeholder groups </li></ul><ul><li>Post-911 fallout </li></ul><ul><li>Post-corporate scandal fallout </li></ul><ul><li>Technological shifts </li></ul><ul><li>Demographic shifts </li></ul><ul><li>Globalization </li></ul>PR-604
    9. 10. Your “Radar Screen”: Stakeholder Expectations <ul><li>Shareholders – push for quarterly returns, ‘what have you done for me lately’ </li></ul><ul><li>Employees – ‘what’s in it for me?’ </li></ul><ul><li>Customers – better, faster, cheaper customized, high quality </li></ul><ul><li>Partners – easy to do business with </li></ul><ul><li>Suppliers – want ‘your’ attention, lock you in </li></ul>
    10. 11. Important Innovations by Customers <ul><li>Category </li></ul><ul><li>Health Products </li></ul><ul><li>Personal Care </li></ul><ul><li>Sports </li></ul><ul><li>Food </li></ul><ul><li>Office </li></ul><ul><li>Computers </li></ul><ul><li>Apparel </li></ul><ul><li>Example </li></ul><ul><li>Gatorade </li></ul><ul><li>Protein-based Shampoo </li></ul><ul><li>Mountain Bike </li></ul><ul><li>Chocolate Milk </li></ul><ul><li>White-out Liquid </li></ul><ul><li>E-mail, Desktop Publishing </li></ul><ul><li>Sports Bra </li></ul>
    11. 12. How Often Do Users Innovate? <ul><li>Study </li></ul><ul><li>Scientific Instruments </li></ul><ul><li>Process Machinery </li></ul><ul><li>Tractor Shovels </li></ul><ul><li>Plastics </li></ul><ul><li>First Device Used in Field </li></ul><ul><li>Developed and Built By: </li></ul><ul><li>Product Product </li></ul><ul><li>User Manufacturers </li></ul><ul><li>77% 23% </li></ul><ul><li>67% 33% </li></ul><ul><li>6% 94% </li></ul><ul><li>0% 100% </li></ul>Source: E.v. Hippel, The Sources of Innovation, Oxford University Press, 1988
    12. 13. Innovation Patterns Documented 77% of Innovations Developed by Users First firm Bringing Product to Markets 5 – 7 Year Transfer Lag Example: Scientific Instruments
    13. 14. Implications of Customer Loyalty 77% 21% 1% 0% 0% 100% <ul><li>Of those who rated: </li></ul><ul><li>A very satisfied rating, 77% would definitely recommend </li></ul><ul><li>A satisfied rating, 21% would definitely recommend </li></ul><ul><li>Neither satisfied nor dissatisfied rating, 1% would </li></ul><ul><li>definitely recommend </li></ul><ul><li>A dissatisfied or very dissatisfied rating, 0% would </li></ul><ul><li>definitely recommend </li></ul>Very Satisfied Satisfied Neither Satisfied nor Dissatisfied Dissatisfied Very Dissatisfied
    14. 15. High Employee Satisfaction Equals Customer Satisfaction -> Loyalty Customer Satisfaction Rating 5.0 3.67 3.80 4.01 Low 2.5 - 3.0 Employee Satisfaction Range PR-300 Average 3.0 - 3.5 Leaders 3.5 - 4.5
    15. 16. Drivers of Employee Satisfaction <ul><li>Ability to satisfy customer needs </li></ul><ul><li>Possesses the appropriate skills and knowledge </li></ul><ul><li>Ability to influence the workplace </li></ul>PR-461
    16. 17. Employee/Customer Satisfaction Drives Profitability - Two Ways Employee Satisfaction Outstanding Service Satisfied Customers Customer Loyalty Job Involvement Profitability Ideas Productivity Continuous Improvement
    17. 18. Your “Radar Screen”: Post-911 Fallout <ul><li>More hassles at the border – the future of JIT in jeopardy? </li></ul><ul><li>More regulation of transportation industry – cost pressures, H/R pressures </li></ul><ul><li>Greater scrutiny of transported goods – more delays, Homeland Security, “where is your stuff” </li></ul><ul><li>“ North American” standards and compliance – increased costs of coordination </li></ul>
    18. 19. Your “Radar Screen”: Post-corporate scandal fallout <ul><li>Corporate governance – tough to find directors, more ‘fingers in’ the business </li></ul><ul><li>SOX compliance – bureaucracy & controls abound taking ‘eyes’ off the business </li></ul><ul><li>Environmental liability </li></ul>
    19. 20. Your “Radar Screen”: Technological Shifts <ul><li>RF id (item) </li></ul><ul><li>Nanotechnology </li></ul><ul><li>Electronic Paper/Digital Ink </li></ul><ul><li>On-Demand Software </li></ul>
    20. 21. Your “Radar Screen”: Demographic & Social Shifts <ul><li>Aging workforce </li></ul><ul><li>25% of business owners retiring in next 5 years </li></ul><ul><li>Work-life balance concerns </li></ul>
    21. 22. Your “Radar Screen”: Globalization <ul><li>Outsourcing & offshoring – not just goods but services also </li></ul><ul><li>Key trends driving these views: </li></ul><ul><ul><li>Declining shipping costs & abundant and cheap bandwidth China and India emerging as economic forces </li></ul></ul>
    22. 23. The Operations Challenge Competition - Ruthless and Dynamic We are getting better! Are competitors getting better? Faster? PR-048 Time Performance
    23. 24. So What Can You Do? <ul><li>Good news and bad news – depends on your perspective….. </li></ul><ul><li>Every industry is impacted, in different but significant ways </li></ul><ul><li>To lead and manage effectively in the face of all this change, operations professionals need to be very good at: </li></ul><ul><ul><ul><li>Setting strategy – recognizing the need to change, creating a plan </li></ul></ul></ul><ul><ul><ul><li>Fostering innovative & creative thinking </li></ul></ul></ul><ul><ul><ul><li>Engaging employees </li></ul></ul></ul><ul><ul><ul><li>Leading and managing the changes that result </li></ul></ul></ul>
    24. 25. Your Radar Screen: Tracking Leading Indicators Monitor performance Execute well Avoid complacency Turnaround required: Improve operating performance Re-position the business Operating performance may mask deteriorating strategic health Re-formulate strategy Avoid long-term pain for short-term gain Operational program: Improve margins, costs, productivity Strategic Health Weak Strong Weak Operational Health Strong
    25. 26. Streamlined Strategic Planning Process <ul><li>Environment </li></ul><ul><ul><li>Macro </li></ul></ul><ul><ul><li>Industry </li></ul></ul><ul><ul><li>Competition </li></ul></ul><ul><li>Corporate </li></ul><ul><ul><li>Capabilities </li></ul></ul><ul><li>Business </li></ul><ul><ul><li>Positioning </li></ul></ul><ul><ul><li>Critical success factors </li></ul></ul><ul><li>Vision/mission </li></ul><ul><li>Objectives </li></ul><ul><li>Strategies </li></ul><ul><li>Initializing action plans </li></ul><ul><ul><li>Who </li></ul></ul><ul><ul><li>What </li></ul></ul><ul><ul><li>When </li></ul></ul><ul><ul><li>How much </li></ul></ul><ul><li>Implementation issues </li></ul>Task Forces Implement and Review Discussions Study Groups ‘ Radar Screen’ Review Informal Pre-Work Size-Up Workshop Strategic Issue Analysis Strategic Plan Development Workshop 2-4 weeks 2-3 days 4-6 weeks 2-3 days Management Reviews PR-029 Customer Surveys Benchmark
    26. 27. Engagement: Link to Business Results <ul><ul><li>Best Employer research has identified a strong and consistent link between engagement and various performance measures. An analysis of the 2003 study results comparing the 50 organizations that were identified as the 50 Best (“Best”) to the 78 organizations that did not make the top 50 list (“Rest”) indicated the following: </li></ul></ul>* Information is based on total shareholder returns for publicly traded organizations over a five-year period (annualized over five years: 1997 to 2002).
    27. 28. Engagement: 15 Related Drivers <ul><li>Hewitt’s Engagement Model TM </li></ul>Procedures <ul><li>People Practices </li></ul><ul><li>Performance Review </li></ul>Total Rewards <ul><li>Pay </li></ul><ul><li>Benefits </li></ul><ul><li>Recognition </li></ul>People <ul><li>Senior Leadership </li></ul><ul><li>Manager </li></ul><ul><li>Co-workers </li></ul>Opportunities <ul><li>Career Opportunities </li></ul><ul><li>Development Opportunities </li></ul>Quality of Life <ul><li>Work / Life Balance </li></ul><ul><li>Physical Work Environment </li></ul><ul><li>Intrinsic Motivation </li></ul><ul><li>Resources </li></ul><ul><li>Corporate Citizenship </li></ul>Work / Values Engagement
    28. 29. The Importance of Innovation “… the only sustainable competitive advantage is to innovate consistently …” EM-369 … remember Digital Equipment Corporation? … remember when gold was the precious consumer metal?
    29. 30. Different Levels of Innovation High Low Degree of Difficulty Incremental “Tinkering at the Edges” Breakthrough “Outside the Box” Quantum “New Box(es)” EM-733
    30. 31. Fostering Innovation <ul><li>Intrinsically motivated people </li></ul><ul><li>Objectives around innovation NOT just invention </li></ul><ul><li>Stay ‘close’ to customers </li></ul><ul><li>Opportunities for diversity of perspective </li></ul><ul><li>A disciplined process to evaluate and fund new initiatives with potential and ‘weed out’ the rest </li></ul><ul><li>Time for people who do the work, to “think” creatively </li></ul>
    31. 32. <ul><li>“Strategies take on value only as committed people infuse them with energy” </li></ul>EM-357 Philip Selznick
    32. 33. Managing Change: It’s Not What You Do, It’s How You Do It <ul><li>Family Vacations </li></ul><ul><ul><li>We all know what makes for a smooth journey on the drive across Canada: create the winning conditions </li></ul></ul><ul><li>Physics </li></ul><ul><ul><li>It’s all about momentum and overcoming inertia -> GUIDANCE, SPEED & CRITICAL MASS </li></ul></ul><ul><li>Heterogeneity </li></ul><ul><ul><li>The workforce is diverse, and typically operates under the ’20:70:10’ principle when it comes to change </li></ul></ul>
    33. 34. Winning Conditions for Change <ul><li>Guidance – share the itinerary </li></ul><ul><ul><li>Establish the need, create shared understanding of the entire journey, make a plan </li></ul></ul><ul><li>Speed – overcoming inertia </li></ul><ul><ul><li>Create urgency, focus on a ‘critical few’, enable rapid decision making, deploy initiatives in parallel </li></ul></ul><ul><li>Critical mass – gaining momentum </li></ul><ul><ul><li>Provide leadership, operationalize ’20-70-10’, deal with the ‘arsonists & saboteurs’ </li></ul></ul>Find the ‘Tipping Point’
    34. 35. Long Term Success Defined & forward looking strategy Innovative approaches Dynamic culture Establish direction Expect changes Create new rules Pride, passion Raise the bar Adjust along the way Outwit the competition Energy Ability to invent the future Ability to make it happen Visionary leaders PR-103
    35. 36. Staying Ahead – Reading List <ul><li>The Economist </li></ul><ul><li>MIT’s Technology Review </li></ul><ul><li>The Tipping Point ( Gladwell ) </li></ul><ul><li>Fast Forward: Organizational Change in 100 Days ( Murray & Richardson ) </li></ul><ul><li>Built to Last ( Collins & Porras ) </li></ul><ul><li>Good to Great ( Collins ) </li></ul>
    36. 37. <ul><li>Thank You! </li></ul>
    37. 38. © 2004 Microsoft Corporation. All rights reserved. This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.