STIA-LAN:Balance.Score.Card on Strategic.Management

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STIA-LAN:Balance.Score.Card on Strategic.Management

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STIA-LAN:Balance.Score.Card on Strategic.Management

  1. 1. Strategic Management, Balance Score Card and Scenario Planning by Ir.Djadja Achmad Sardjana, MM. djadja@bapinger.web.id
  2. 2. Strategy Purposes • Where do you want to go? • How do you want to get there? Loren Gary, Harvard Management Update, Special Report July 2001
  3. 3. Strategy as Simple Rules Position Resources Simple Rules Logic Establish Leverage Chase position resources opportunities Question Where What How Best in Stable, well- Changing, well- Ambiguous, structured structured evolving markets markets markets Goal Profitability Long-term Growth dominance Kathleen M Eisenhardt and Donald N Sull, Harvard Business Review January 2001 Page 107- 116
  4. 4. Strategy Overview Analysis Design Implementation Analysis Tools Decision Making Making It Happen Positioning Options Roadmap Resource Measurement Communication
  5. 5. Strategy Overview Analysis Design Implementation External Mapping Decision Trees PESTEC Scenarios 5 Forces Critical Success Factors SWOT Internal Core Competencies Balanced Score Card Value Chain Knowledge Management
  6. 6. The Challenge - Developing Strategies in an Uncertain World •How do we cope with risk and uncertainty? •How do we select the right indicators to track? •How do we identify key trends and developments? •How do we spot new opportunities, ‘white spaces’ and the potential for major discontinuities? •How do we plan, operate and survive in a turbulent and fast-changing world? •How do we handle those not playing by ‘our rules'?
  7. 7. Successful Strategies Successful Strategy Effective Implementation Simple, Profound Objective Consistent & Understanding Appraisal of Long-Term of the The Objectives Competitive Organisation’s Market Resources Source: Contemporary Strategy Analysis, R Grant 1998, p 10
  8. 8. A Path Through Strategy • Environmental Audit - e.g. 5-forces, PESTEC • Organisational Audit - e.g. Balanced Scorecard, SWOT, Value Chain Analysis, Knowledge, Resource, Competence Based analysis • Map Out alternative Futures - e.g. Scenario Planning • Define Rules / Guiding Principles / Values • Determine Strategic Direction • Develop Business Model • Design Strategic Architecture • Define Strategies and Objectives for Business Units • Create Change Roadmap and Implementation Programmes • Embed into Operational Plans • Create Measurement and Communications Framework • Learn, Implement, Learn
  9. 9. Gap on Strategic Management
  10. 10. BSC & Strategic Management
  11. 11. Power of BSC
  12. 12. The Balanced Business Scorecard Customer Perspective What’s important to the customer? How well are we meeting their expectations? How effectively are we managing the key drivers of customer satisfaction? What are the key drivers of Which processes are key shareholder value? to achieving customer How well are we meeting and financial Internal Financial shareholder expectations? How effectively are we performance objectives? How effectively are we Business Perspective using financial resources managing those Process across the organisation? processes? How good are we at Perspective changing key processes? How effective are we at sharing our knowledge? Have we the right mechanisms in place to support learning and innovation? Are we doing enough and in the right areas to ensure survival and growth? Innovation & Learning Perspective
  13. 13. A Strategy-Focused Organization
  14. 14. TRANSLATE THE STRATEGY TO OPERATIONAL TERMS
  15. 15. BSC Strategy Map
  16. 16. Defining Strategic Direction What Is Who Are How Will What Is Why Are We The Basis The We Our in Of Our Stake Measure Ambition? Business? Offering? Holders? Ourselves? Strategic Specific Distinctive Customers Balanced Intent Goals Capabilities Policy Scorecard: Mission Scope Knowledge Financial - CSF’s Values Scale Product/ Commercial - KPI’s Speed Service Ethical - Learning/Growth Portfolio Regulatory - Service Partnerships/ - Innovation Alliances - Creativity Leverage - Financials Assets / - Outcomes Resources
  17. 17. Strategic Architecture Strategy & Stakeholder Relationships People Resources & Knowledge Core Values Management Skills Culture Operational Processes, Technology & Structures Financial and Social Performance
  18. 18. Shaping Strategy in the Face of Uncertainty Demography Climate The Economy Global Commercial Developments Developments Infrastructure Media S&SR Lifestyles Education People Knowledge Values Resources & Natural Crime Management Culture Core Skills World Operational Processes & Structures Providers Technology of Finance Financial and Social Performance Government Suppliers Policy Environment Interest Alternative Workers Public Providers Groups Regulation Expectations Substitutes & Values
  19. 19. Alternative ‘Futures’ Approaches • Strategies, goals, intentions, objectives, plans and tactics • Possibilities, options and opportunities • Projections, assumptions, simulations, models and forecasts • Alternative arguments, cases, rationales and causes • Models of stakeholder behavior • Follow the Leader / Regulator / Market influencers • Anticipation and prediction of events or sequences of events All of these might be considered ‘Scenario Planning’ techniques
  20. 20. Scenarios - A Definition “The precise definition of ‘scenario’ is: a tool for ordering one’s perceptions about alternative future environments in which one’s decisions might be played out. Alternatively: a set of organised ways for us to dream effectively about our own future.” Peter Schwartz, The Art of The Long View (Doubleday Currency, 1992) p4
  21. 21. An Effective Scenario Tells a story about possible future changes in a particular ‘system’, domain, environment, society, etc. Engages the imagination Is written in the past or present tense - as if the forecasted trends and events had already happened Helps clarify the causes and consequences of key developments Challenges our current thought processes and assumptions about the future Enables us to define and assess a range of alternative policies, strategies and actions Is seen as relevant and an important element of the strategic process
  22. 22. Scenarios Challenge us to ‘Rehearse the Future’ • Engaging the Future - “using scenarios is rehearsing the future. You run through the simulated events as if you were already living them. You train yourself to recognize which drama is unfolding. That helps you avoid unpleasant surprises and you know how to act.” (p.200) • Role Playing - “by the end of the session, managers (at Shell) understood the implications of each possible future, because they had literally rehearsed them” (p.205) • Challenging Beliefs - “that was the reason for creating the scenarios in the first place” (p.202) • Changing Behaviour - “the test is not whether you got future right... The real test is whether anyone changed his behaviour because he saw the future differently. And did he change his behaviuor in the right direction?”(p.214) Peter Schwartz, The Art of The Long View
  23. 23. Scenario Planning may be Valuable but... • We don’t have enough time • We haven’t got the budget • We’re not convinced • Our people are very cynical • We have a long term plan • We are too busy with current projects • We are a numbers organisation …So is there a way we can prove the value quickly?
  24. 24. The Basic Scenario Process 1. Assess the Current Situation 8. Implement and Monitor 2. Gather the Data 7. Define Strategy and Plans 3. Identify the Driving Forces 6. Assess the 4. Generate Alternative Implications for your Scenarios Organisation 5. Assess the Implications for your Environment
  25. 25. Assessing the Implications • Identify what we think will be the main implications of this scenario on how we will live, how we will work and the general impact on the business environment • Identify the implication, threats and opportunities this will create for your company
  26. 26. Defining Improvement Objectives The clearer we can be about the improvement objectives, the easier it will be to assess whether the new design will meet its requirements. Typical objectives might include: Adding Value Create new customer offerings or product features Improve customer service, added value and responsiveness Provide better, more timely performance information Increasing Efficiency Faster product launch Reduce time spent on routine tasks Reduce paperwork / Minimise processing errors Cut transaction costs / Simplify and streamline processing steps Consolidation and elimination of roles, procedures and tasks Improving Effectiveness Clarify roles and responsibilities Increased empowerment / Devolution of responsibility Standardise processes and procedures performed in multiple locations Make more effective use of technology Improve speed, flexibility and productivity
  27. 27. Typical Strategy Options 1. Select most probable 2. Hope for the most attractive 3. Parallel strategies - e.g. Nokia 4. Risk Aversion / Hedging 5. Wait for indicators of developments on key drivers 6. Seek to influence - choose your own destiny 7. Ignore

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