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Od forum presentation - tom

  1. 1. Accelerating and Sustaining Growth Through Organizational Agility May 4, 2010
  2. 2. 2 Steve Sakats Vice President, Human Resources Tom O’Shea, CMC Principal
  3. 3. 3 Today's Business Landscape is Undergoing Rapid and Transformative Change Are you prepared?
  4. 4. 4 • How can I get my organization to anticipate change and not always just reacting to what happens? • How can we generate confidence with all stakeholders and lead our organization like winners? • How can we create a more decisive, responsive organization where initiating action is a smooth reflex and not always an ordeal? • How can we create an organization with fresh, liberated thinking ~ always seeking new, innovative ideas to the new challenges we continuously face? • How can we create focus in our organization ~ evaluating results on those success measures that really matter? Questions CEO’s Ask Most Often Today In other words, how can our company become more AGILE?
  5. 5. 5 • “The world is becoming turbulent faster than companies are becoming resilient”* • Volatility is redefining the business environment and today’s “best practices” are manifestly inadequate* • “The only dependable advantage is a superior capacity to reinvent your business model … before circumstances force you to.”* • Creating an “strategic agility” – # 1 CEO priority – Henning Kagermann – SAP Co-CEO • The “fog of the future” requires greater focus creating an “execution culture” - Donald Sull, London School of Business Why Is Agility Important? Quotes from Gary Hamel ~ Quest for Resilience
  6. 6. 6 "时势造英雄“ May You Live In Interesting Times! Old Chinese Proverb
  7. 7. • Organisational Agility is a core differentiator in today’s rapidly changing business environment  90% believe OA is critical to business success  Half agree that rapid decision-making and execution are essential to competitive standing  Most companies not flexible enough to compete successfully  Nearly 30% say they are at competitive disadvantage and not agile enough to anticipate marketplace shifts  Internal barriers are stalling efforts to become more AGILE  80% say they have tried one or more initiatives to improve agility over past three years  34% say they have failed to deliver desired benefits  Main obstacles to improved business responsiveness …  Slow decision-making  Conflicting departmental goals and priorities  Risk-averse cultures  Silo based information
  8. 8. 9 The AGILE Model® from Agility Consulting The Agile Model® was recognized in the 2008 book entitled “Human Resource Transformation” as the “best leadership model we have found for addressing our fast-paced world”. The American Management Association came to Agility Consulting in 2006 to design and deliver their senior executive seminar entitled “Strategic Agility & Resilience”. The seminar is built on The Agile Model® and has been conducted throughout the US, Canada, Japan and also in the UK. The Agile Model® Best Practices
  9. 9. Dynamic capability to sense and respond better and faster than competition by being … What Is Organizational AGILITY ? The AGILE Model™ from Agility Consulting The Agile Model® Key Organizational Agility Processes Anticipate Change  Visioneering  Sensing  Monitoring Generate Confidence  Connecting  Aligning  Engaging Initiate Action  Bias for Action  Decision-Making  Collaborating Liberate Thinking  Bias for Innovation  Customer Focus  Idea Diversity Evaluate Results  Creating Expectations  Real Time Feedback  Fact- Based Measures
  10. 10. 11 Building Greater Agility Into Organizations Overall Agility Goals Key Agility Processes Key Agility Indicators Focused • Visioneering • Connecting • Aligning • Creating Expectations • Fact-Based Measures • Performance mgmt % achievement • Strategic deployment activities • % Alignment on objectives Fast • Bias for Action • Decision-Making • Collaboration • Real-Time Feedback • Monitoring • Process cycle times • Go-to-market times • Problem identification & solution cycles in teams • # problem solving teams Flexible • Sensing • Engaging • Bias for Innovation • Customer Focus • Idea Diversity • Process change-over cycle time • % cross-trained in teams • Relative % WIP or FGI
  11. 11. * Return on Agility (ROA) • Greater agility builds organization capability from reactive to pre-emptive • Anticipating change early enables more options with favorable cost implications • “Agile” companies are better aligned (focused) and have measurably better financial performance … MIT 2007 study Reactive Agility Preemptive Agility Agility Boosts Financial Performance Net Margin Return on Assets Revenue Growth Earnings Per Share 20% higher 30% higher 8% higher 29% higher Industry Average Agile Companies Source: MIT Sloan School of Management, 2007 The ROA* of Agility?
  12. 12. 13 Who is Land O’Frost?
  13. 13. 14 THE LAND O’FROST STORY •Who we are? •Why change? •Why Agility? •What we did? Agile Process Process Changes Structure Changes •Is it working?
  14. 14. 15 • Company History • LOF Culture Who we are?
  15. 15. 16 Historical Growth 1969 Lansing 2007 Madisonville Plant 1969 Lansing 1976 Searcy Plant 2007 Madisonville Plant Paul Donna Antoon Who we are …
  16. 16. 17 Why Change? The Burning Platform! Is it Really that Hot? • Named new President • Aging Leadership Team • Market Position vs. Retailer Strategy • Tougher competition • Built for incremental change • History of success • Experienced/confident Leadership Team • Operational Excellence • Internally defined success measures • Like incremental change
  17. 17. 18 Cultural Transformation? Who we were Who we want to be • Operationally Focused • Strong Team Procedures • Continuous Improvement • Incremental Growth • Hub & Spoke Communication • Internally Focused • Brand Focused • Team Culture (No Silos) • Agile Company • Accelerated Growth • Participative Communication Style • Externally Benchmarked
  18. 18. 19 Why Agility & The Agile Model®? • Provide structured Model • Inclusive/open system • Respect for our culture • Hold us accountable • Great Value The AGILE Model®
  19. 19. Our Strategic Roadmap 20 • LOF Vision & Strategy Map • Enterprise-wide Agility Audit™ • Strategic deployment
  20. 20. 21 LOF Vision of the Future • Total Team Effort • Clear Vision for the Future • Specific Operating Plans • Enterprise Engagement
  21. 21. 22 Strategy Map Creation
  22. 22. 23 The primary benefit from becoming more Agile … To execute strategy better and faster than competition! Anticipate Change Generate Confidence InitiateAction Liberate Thinking EvaluateResults TechnologyTechnology ProcessProcess PeoplePeople The Agile Model® Executing Strategy … Better & Faster
  23. 23. 24 Our Agility Audit™ • Focused on people, process, and technology • Helped identify organizational strategies • Helped identify internal and external obstacles • Galvanized leadership team around feedback • Enabled leadership team to align improvement and operating plans Enterprise-Wide Agility Audit™
  24. 24. 25 How We Did It… Enterprise-Wide Agility Audit™ The insights from the Agility Audit™ enabled our leadership team to align specific improvement plans with each department’s operating plan. Impact Est $Recommendations Resp Time Recommendations Agility Profile • Anticipates Change • Generates Confidence • Initiates Action • Liberates Thinking • Evaluates Results Performance Importance C1 Agility Criteria Current State Assessment Gap Analysis People Process Structure Technology Culture Increase Shareholder Value Gap Aligned Surplus
  25. 25. 26 What Did We Change? Our Information System • External Focus  Customer Surveys  Consumer Research  Industry Benchmarking • Created Success Measures • Metrics Dashboard • Aligned by strategic objectives • Rolling 52 view of our world • Incorporate SPC Techniques
  26. 26. Strategic Deployment Through Aligned Processes & Teams 27 2 Land O’Frost Strategic Workshop Agility Consulting & Training, LLC PERFORMANCE ASSESSMENT 1. While overall category has declined over 2 year period; LOF has maintained growth (Value proposition extremely important); but growth rates are slowing 2. Recent economy conditions seems to have shifted dollars into faster, easier prep hand held foods 3. HH penetration and category share still trending upward, but overall awareness of LOF brand lower than competitors with much larger packaged meat presence, heavier advertising 4. Encroachment of space is a danger for a one segment player (only lunchmeat) 5. Innovation in category ( = space gains) value added items CONCLUSIONS 1. LOF’s value positioning in market (with heavy promotion) is holding growth up, but slowing over previous years pace. Ability to saturate our top lines (Premium & DS) is essential. Currently the money makers average less than half the line placed, in half the country. 2. Bistro growth important (revenue) and expands brands shelf presence outside of being the “deli pouch kings”. 3. Space is shifting away from LM for items that are seen as more innovative and value added. 4. Continued push to gain higher awareness and recognition of brand is key to broader acceptance of consumers. 5. Expand brand reach to other channels Strengths Weaknesses • Consistent growth brand • History of incremental growth w/o cannibalizing • High consumer loyalty • Improved HH penetration • Value positioning has been insular in last 18 months • Low brand recognition relative to category share • Small share in ttl pack meats • Ability to saturate skus relative to top competition • Lacking non-lunchmeat exposure to broader audience Opportunities Threats • Build on first year media advertising to further awareness – w/metric • Expand channels- Clubs • DINV- singular purpose • Grow Bistro • Loss of space / encroachment • Continued erosion in category shifting retail to focus on non- LM items to build on • Promotion crack addition • Retail margin madness • “Best friend” accounts die off LOF Marketing Current Performance Assessment KEY PERFORMANCE TRENDS Key Measures 2006 2007 2008 $Vol <%> 7.3% 4.9% 2.7% Eq Vol <%> 7.0% 5.0% 2.7% $ Share 4.8% 4.9% 5.1% HH Penetration 10.0% 11.3% 11.5% % Loyalty 20.4% 21.7% 21.3% % HH Repeating 4.8% 5.5% 5.5% * source: volumetric measures ACNielsen U.S. Supermarkets Consumer Purchase data- IRI Home panel • LOF has an effective system in place to support on-going focus and rapid action deployment through high-performance teams • Key is keeping the energy focused on mission critical initiatives Initiating Processes Closing Processes Planning Processes Executing Processes Monitoring & Controlling Processes Mission Critical Outcomes Mission Critical Initiatives
  27. 27. 28 Reinforcing Line of Sight to Our Strategy • Constant communications • Employee engagement initiatives • Employee rewards alignment Business Unit Company Department Work Team Core Values 1. Customers are the focus of our entire business: Our business begins with our customer. Our work must be conducted with our customers in mind. 2. We provide quality products and services: A quality product or service is one which continually meets each customer’s needs and expectations at a price they are willing to pay. 3. Continuous improvement is essential to our success: We must strive for improvement in everything we do: the value of our products, our services, our human relations, our competitiveness, our profitability and our quality. 4. Employee involvement is our way of life: We are a team. We must treat each other with trust and respect. 5. Our sales agents and suppliers are our partners: We must maintain mutually beneficial relationships with our sales agents, suppliers and other business associates. 6. Integrity is never compromised: We must conduct ourselves and our business in an honorable and ethical manner. 7. People. Our people are the source of our strength, provide our company’s intelligence and determine our reputation and vitality. Involvement and teamwork are our basic values. 8. Products. Our products are the end result of our efforts and services and must be the best in satisfying our customer’s expectations. As our products are viewed, so we are viewed. 9. Profit. Profit is the best measure of how efficiently we provide customers with the best products for their needs. Profit is required for our survival and long term growth.
  28. 28. 29 What Did We Change? Our Communication System • Message  Strategic Focus – Where are we going?  Line – of –Sight - What do you do to make a difference!  Growth Imperative  One Company • Process  Annual Managers “Strategy Map” Meeting  LOF – TV  Revitalize Traditional Vehicles  PIPS Meetings  Orientation  Director/Manager Participation
  29. 29. 30 The LOF Wiki Some of Our Communication Vehicles LOF TV
  30. 30. 31 What Did We Change? Our Decision Making System • Link to Strategy Map • Profit = Revenue – Cost • Leadership Council  Balanced Agenda  Strategic Focus • Push the “Brain Line” Down A time-compressed company does the same thing as a pilot in an OODA Loop … It’s the competitor who acts on information faster who is in the best position to win. Decision environment – Turbulence with constant uncertainty, volume and magnitude of new information, time to market, information overload ,etc.
  31. 31. 32 The Agile Model® Key Drivers for Agility Anticipate Change Visioneering Sensing Monitoring Generate Confidence Connecting Aligning Engaging Initiate Action Bias for Action Decision-Making Collaborating Liberate Thinking Bias for Innovation Customer Focus Idea Diversity Evaluate Results Creating Expectations Real Time Feedback Fact- Based Measures Leadership and Agility Workshops
  32. 32. Models of Agility at Land O’Frost 33
  33. 33. 34 What Did We Change? Our Compensation System • Move to Performance-Based Company • Leadership Compensation Framework  Individual and Shared Goals • Future Focus • Career Development & Succession Planning Based on Leadership Agility
  34. 34. 35 What Did We Change? Our Structure • Sales  Additional Resources  Customer Focused  Compete vs. “The Big Two” • Marketing  Innovation  Category Management • Leadership Team  Strategic Balance
  35. 35. 36 Some Lessons • Senior leadership team shared Vision & Commitment • Active Involvement of next tier of leadership • Involves giving both the “permission” and the skills Key Benefits • Company-wide awareness of the “agile imperative” • Building key leadership and action skills across the enterprise • Reinforcing our existing culture … but taken to new level • Transformation in mindset and operating style into what it means to become a “High Performance Team” in today’s environment • Equipping LOF to face the future with greater confidence for success! Lessons & Benefits From Our Journey
  36. 36. 37 Is it working …? • Time will tell … • Hit our revenue targets 2009 • Q1 Revenue up 30% • Address situations much faster • Feels good • Employees Positive • Greater collaboration • Have a road map with metrics for success!
  37. 37. 38 Employee Engagement Video Questions? Tom O’Shea Agility Consulting, LLC Greensboro, North Carolina 336-282-1211 tom@agilityconsulting.com www.agilityconsulting.com Steve Sakats VP HR, Land O’Frost Lansing, Illinois 708-394-8110 Steven.Sakats@landofrost.com www.landofrost.com