Effective Implementation Of Strategic Initiatives Nov 2009

Effective Implementation of Strategic Initiatives Seminar Workshop 27 th & 28 th October 2009 Kuala Lumpur, Malaysia Presenter: Mr Geer Iseke Director & Principal Consultant Iseke Consulting Limited [email_address] +64-21-654-987

Iseke Consulting – Geer Iseke ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Seminar Objectives – we will cover…. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Agenda ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Agenda contd ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Session 1 The 70,000 ft overview of Strategic Planning and Execution

What is Strategic Planning – Vision, Mission, Values? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Process of strategic and business planning ,[object Object],Vision Goals Define the vision and set a mission statement with hierarchy of goals and objectives, set against Values Analysis conducted according to the desired goals Actions Formulate Initiatives and processes to be taken to attain these goals KPI’s Monitor and get feedback from implemented processes to fully control the operation Objectives Strategic 3-5 year horizon Budgets Tactical 12-18 month horizon Changes Repeat Annually Initiatives Initiatives Initiatives Initiatives Planning Execution

The Road to Here………. ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Strategic Planning today & tomorrow ,[object Object],[object Object],[object Object],[object Object],Planning Lead Strategy Execution Lead Strategy The Past & Current The Future

A Missing Dimension… ,[object Object],[object Object],Fostering competitive advantages and developing the company through time Ongoing Activity Defending an established Strategy through time Everyday, continuous, unending Time Frame Intense period of formulation, followed By prolonged period of implementation Organic process that is adaptive, Holistic, and open-minded Form Unchanging plan that derives from an analytical, left-brain exercise CEO as chief strategist; the job cannot be outsourced Leadership The CEO and strategy consultants Creation of value Goal A long-term sustainable competitive edge What is Missing: Strategy as a Dynamic Process The Prevailing Approach: Strategy as a set Solution

Setting the bar at the right height for success ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

What is strategic execution? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Strategy Portfolio Engagement Programme Project Operations Transition Synthesis ,[object Object],[object Object],[object Object],[object Object]

Who is in control of strategic commitments? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

In summary, ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Session 1 Case Studies ,[object Object],[object Object],[object Object]

Case Study: Intel Corp – Who’s in Control? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Case Study: Knight Ridder – Customer’s decisions ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Case Study: Ryan Air – The CEO as Chief Strategist ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Session 2 Understanding Strategic Planning approaches and key outcomes

Choosing between 2 nd best vs ideal strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Alternative Views of Strategy ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],What is Strategy, Michael Porter, HBR Nov-Dec 1996

Hidden Flaws in Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Hidden Flaws in Strategy, Charles Roxburgh, McKinsey Quarterly, 2003 Issues 2

Hidden Flaws in Strategies ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

The Strategy Continuum ,[object Object],[object Object],[object Object],[object Object],[object Object],Strategic Planning Model Planning Cycle Year 1 Year 2 Year 3 Year 4 Year 5 Strategic Planning Cycle Define Implement Refine Implement Implement Review Refine Review Define Refine Review Implement @ ICL 2008

How to improve strategic planning ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],How to improve strategic planning, Rene Dye, McKinsey Quarterly 2007 Issue 3

Hierarchy of Company Statements ,[object Object],[object Object],[object Object],Can you Say What Your Strategy Is, David Collis, HBR April 2008 MISSION Why we exist VALUES What we believe in How we will behave VISION What we want to be STRATEGY What our competitive game plan will be BALANCED SCORECARD How we will monitor the implementation of the plan Strategy Statement OBJECTIVE = Ends SCOPE = Domain ADVANTAGE = Means Strategic Execution PROJECT = Tasks, Deliverables VALUE = Benefits RESOURCES = People, $$

Strategic Goals and Objectives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],30% X ,[object Object],[object Object]

Strategic Themes ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Be a Good Corporate Citizen Achieve Operational Excellence Increase Customer Value Build the Franchise

Strategy Maps ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Strategy Translation process ,[object Object],[object Object],[object Object],[object Object],The Execution Premium, Robert Kaplan & David Norton, 2008 ,[object Object],[object Object],[object Object],[object Object],Lower level objectives and targets are not aligned with the higher-level goals To convert strategic direction statements into measures and targets that can be linked to the management system Select Measures and Targets How do we measure our strategy? ,[object Object],[object Object],Typical strategies are built by different groups in different parts of the organisation. They are not integrated To develop a comprehensive integrated model of the strategy that pulls together the many diverse components of the plan Create the Strategy Map How do we express our strategy? Enabling Tools Barriers Objective Strategy Translation Process

In summary, ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Case Study: Theseus – Strategies change over time ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Case Study: Du Pont – Mapping a Strategic Theme ,[object Object],[object Object],[object Object],[object Object],[object Object],Strategic Themes ,[object Object],[object Object],[object Object],[object Object],[object Object],Create organisational readiness Learning & Growth ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Cross-sell the product line Process ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Increase share of customers financial transactions Customer ,[object Object],Product Portfolio ,[object Object],Customer Management ,[object Object],[object Object],[object Object],Increase revenues and margins Financial New Business Designs Supply-Service Order-Cash Operational Excellence Strategy Map Perspective

Case Study: Southwest Airlines – using Strategy maps ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Limited Passenger services Frequent, Reliable departures Lean, highly Productive Ground and Gate crews High aircraft utilisation Short-haul Point-to-point routes between midsize cities and secondary airports Very low ticket prices No seat assignments No meals No baggage transfers No connections With other airlines “ Southwest, the low-fare airline” High level of employee stock ownership Flexible union contracts High compensation of employees 15-minute gate turnarounds Automatic ticketing machines Standardised Fleet of 737 aircraft Limited use of travel agents Executing Your Strategies, Mark Morgan, et al 2007

Practical Workshop-Strategic Goals, Objectives, Metrics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Practical Workshop-Strategic Goals, Objectives, Metrics ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Executing Your Strategies, Mark Morgan, et al 2007 What does the customer think? Does he or she agree with what we think our outcome and measurements are? Customer validation: Broad and simple – the “path”; how will we reach the outcome? Strategy path What things will tell us whether we are making progress towards reaching the outcomes? Leading indicators Hard, tangible things we deliver along the way, plus the final end-state outcome How will we know we have reached the outcome? You don’t measure the strategy – you measure the outcome Which aspect of overall company strategy will this outcome help us reach? This is the future outcome, stated as if it has already occurred Deliverables or project outputs Measurement and target value for measure Linkage to overall strategy or question Goal or strategic outcome

1. Measuring Goal-setting ,[object Object],[object Object],Rating (1-10) ,[object Object],[object Object],[object Object],[object Object],Average Score: Goals are selected on the basis of affirmative topics that emphasise what the organisation wants more of Goals are created in a way that makes it clear whether they are reached or not Goals in the organisation provide clarity about both outputs and outcomes for the organisation Our systems provide information on goals, including who is accountable for meeting them Management exhibits discipline and resolve in achieving goals There is an organised and defined process for setting goals Our organisation sets clear goals for the near-term (1-5 years) that are supported by our strategy and the way we measure performance

2. Measuring Measurements ,[object Object],[object Object],Rating (1-10) ,[object Object],[object Object],[object Object],[object Object],Average Score: Metrics for the organisation measure the leading-indicator aspects that are central to the business model The organisation’s scorecard is built on lead indicators and uses lag indicators for historical purposes We know how to measure the right things to predict success and avoid pitfalls; we understand the key performance factors for the organisation Managers and leaders clearly articulate the measures of the business and how individual and business measurements relate Measurements are created in a well-developed process that makes who, what, how, how much, and when easy to understand Our measurement of the business are consistent with the way people are measured and are clearly connected to our strategy

3. Measuring Strategy Connected to Vision ,[object Object],[object Object],Rating (1-10) ,[object Object],[object Object],[object Object],[object Object],Average Score: Metrics for the organisation measure the leading-indicator aspects that are central to the business model The organisation’s scorecard is built on lead indicators and uses lag indicators for historical purposes We know how to measure the right things to predict success and avoid pitfalls; we understand the key performance factors for the organisation Managers and leaders clearly articulate the measures of the business and how individual and business measurements relate Measurements are created in a well-developed process that makes who, what, how, how much, and when easy to understand Our measurement of the business are consistent with the way people are measured and are clearly connected to our strategy

4. Measuring Organisational Culture ,[object Object],[object Object],Rating (1-10) ,[object Object],[object Object],[object Object],[object Object],The subcultures within structural areas of the organisation are complimentary to the overall culture of the organisation Average Score: Our culture is a competitive advantage for us because of the way it attracts and motivates people with the skills we need The artefacts of our culture (processes, language, rituals, stories, physical environment) are consistent with and supportive of our strategy The type of information that flows in the organisation keeps our culture alive and strong Managers and leaders are active in shaping the culture of the organisation in effective ways Our business practices are designed in such a way that they support our culture and make our jobs easier Our company culture as it is today is well suited to carry out our strategy and works well with our structure

5. Measuring Organisational Structure ,[object Object],[object Object],Rating (1-10) ,[object Object],[object Object],[object Object],[object Object],The measurements in organisational units are consistent with the way the overall organisational metrics are set We resolve disputes across organisational boundaries quickly and in a fashion that creates sustainable agreements Average Score: There is cooperation between organisational units that supports the execution of strategy Because of our structure, people know how they relate to organisationally to the strategy Our information systems breakdown organisational barriers by openly sharing information across business boundaries Our structure is created through a well-defined business process that takes into account strategy and culture The way we organise ourselves makes doing our jobs and executing our strategy easier Managers and leaders of the organisation design the organisation to optimise business performance

6. Measuring Strategy effectiveness ,[object Object],[object Object],Rating (1-10) ,[object Object],[object Object],[object Object],[object Object],We know how to best organise to execute our strategy, and the necessary reorganisation can be done without cultural conflict Our strategy can be executed, given our culture, with a reasonable level of organisational change Average Score: Our strategy drives coherent action People in the organisation get a clear sense of what they can do to support the strategy Our strategy is developed on a very strong fact and information based foundation Managers and leaders support and act in alignment with the strategy Our strategy is created in a systematic way, and changes to it are made clear to the organisation The strategy of the organisation is clear and well understood by people throughout the organisation

Session 3 Understanding the Strategic Execution Framework

What is strategy execution? ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Strategy Portfolio Engagement

Understanding Strategic Portfolio Management ,[object Object],[object Object],[object Object],[object Object],[object Object],Strategy Portfolio Engagement Programme Project Operations Transition Synthesis ,[object Object],[object Object],[object Object],[object Object]

Business and Technology strategy alignment ,[object Object],Corporate Strategy Transformation Business Domain Input SBU 1 SBU 2 SBU 3 SBU Business Plans SBU 1 SBU 2 SBU 3 Architecture & Process Impact Business Requirements Technology Roadmap Solutions / Projects Corporate IT Strategies Technology Domain SBU 1 SBU 2 SBU 3 Enterprise-wide Technology Principles Technology Business Plans SBU 1 SBU 2 SBU 3 Enterprise-wide Technology Strategies Architecture Investment Roadmaps Projects & Roadmaps Principles, Architecture, Strategies Planning Alignment Process Portfolio Alignment Process

Strategic Execution Framework ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Executing Your Strategies, Mark Morgan, et al 2007 Strategy Portfolio Transition Synthesis Nature Ideation Vision Making Strategy Executing Strategy Engagement Engaging

Navigating the six SEF imperatives ,[object Object],[object Object],[object Object],[object Object],Nature Ideation Vision Making Strategy Strategy Portfolio Transition Synthesis Engagement Executing Strategy Engaging ,[object Object],[object Object],[object Object],[object Object]

Engagement capability in a changing world ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Engaging in the right projects ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Project Governance & Sponsorship ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Prioritising the Work ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Working on the business Working in the business

Value Delivery and Benefits realisation ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Increases in: Decreases in:

Session 3 Case Studies: ,[object Object],[object Object]

Case Study: Wipro – Using the SEF ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Case Study: Carlson – chunking the execution portfolio ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Session 4 Identifying the Strategic Initiatives and Planning the Strategic Execution

Strategic Initiatives ,[object Object],[object Object],Strategic Initiatives are the collections of finite-duration discretionary projects and programmes, outsides the organisations day-to-day operational activities, that are designed to help the organisation achieve it targeted performance ,[object Object],The Execution Premium, Robert Kaplan, HBR press 2008 ,[object Object],[object Object],Executive team members are generally responsible for managing within functional or business unit silos To establish accountability for the execution of cross-business strategic themes 3. Establish Accountability Who will lead the execution of the strategic initiatives? ,[object Object],[object Object],Cross-business portfolio funding is contrary to hierarchical, departmental structure of the budgeting process To provide a source of funding for strategic initiatives that is separate from the operational budgets 2. Fund the Strategy How do we fund out initiatives? ,[object Object],Strategic investments are justified on a stand-alone basis in different parts of the organisation To define the portfolio of initiatives needed to close each of the performance gaps 1. Choose Strategic Initiatives What action programmes does our strategy need? Enabling Tools Barriers Objective Initiative Management Process

Choosing Strategic Initiatives ,[object Object],[object Object],[object Object],The Execution Premium, Robert Kaplan, HBR press 2008 Meet Regulatory Standards Programmes / Projects Warehouse upgrade X Indentify quality needs X Product development funnel X Financial system restructure X Customer call centre upgrade X ,[object Object],[object Object],X ,[object Object],[object Object],[object Object],X ,[object Object],[object Object],[object Object],Initiative “n” Sales force training Procurement redesign Strategic Themes / Initiative Portfolios Initiative Serving No Themes Theme with no Initiatives

Review and Scoring Initiatives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Input Candidate projects x 5 x 3 x 2 Output Scored projects Strategic Fit and Benefit ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Fund the Strategic Initiatives ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Linking Strategy to the Budget through STRATEX ,[object Object],[object Object],[object Object],Theme 3 Theme 2 Balanced Scorecard ,[object Object],[object Object],[object Object],[object Object],[object Object],Strategic Initiatives ,[object Object],[object Object],Integrated Strategic Plan Rolling Forecast (Budget) ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Operational Plan / Budget Total Budget $xxx Theme 1 $XX Total Strategic Investment Cost Management ,[object Object],Investment Management ,[object Object]

Establishing Initiative Accountability ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Developing the Strategic Execution Roadmap ,[object Object],[object Object],[object Object],[object Object],[object Object],New Business Designs Customer Management Product Portfolio Supply-Service Order-Cash Operational Excellence Year 3 Year 2 Year 1 Strategic Themes Minimise operating costs Improve transaction costs Offer lower prices IT Platform to allow growth Develop selling skills Optimise profit by category Consulting & program mgt Develop discipline processes Provide breakthrough value Implement order entry & Execution application Implement application mgt Develop sales model Improve productivity Drive polymer process robustness Achieve extraordinary results

Identify and Confirm Strategic Initiatives KPIs ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Translate strategy maps into metrics and projects ,[object Object],[object Object],[object Object],Executing Your Strategies, Mark Morgan, et al 2007 Objectives Measurement Target Initiative ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Statement of what strategy must achieve and what’s critical to its success How success in achieving the strategy will be measured and tracked The level of performance or rate of improvement needed Key action initiatives / projects required to achieve objectives Strategic Theme: Operating efficiency Profitability More customers Fewer planes Financial Customer Internal Learning Lowest prices Flight is on time Flight is on time Flight is on time Strategy map: Diagram of the cause-and-effect relationships between strategic objectives

Matching Initiatives with Organisational resources ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Project resourcing schedule example

In summary, ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object]

Case Study: CODASciSys – choosing strategic projects ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Execute Your Strategy without Killing it, Lauren Keller Johnson, HMU, Dec 2004

Case Study: Goodwood Insurance – tuning execution ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The Secrets to Successful Strategy execution, Gary Neilson, et al, HBR June 2008

Case Study: Serono – initiative management advantage ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],The Execution Premium, Robert Kaplan/David Norton, 2008

Workshop – alignment through the Balanced Scorecard ,[object Object],[object Object],[object Object],[object Object],[object Object]

LowCost Airlines – Strategy Map=>Balanced Scorecard ,[object Object],[object Object],[object Object],[object Object],[object Object],Balanced Scorecard Measurements Targets ,[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],[object Object],Strategy Map Theme: Operating Excellence Objectives Ground crew alignment Strategic systems Crew scheduling Strategic bob Ramp agent Fast ground turnaround Attract and retain more customers Profits and RONA * * Return on net assets ** Compound annual growth rate Grow revenues Fewer planes On-time service Lowest prices

Effective Implementation Of Strategic Initiatives Nov 2009

Effective Implementation Of Strategic Initiatives Nov 2009

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Editor's Notes