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Clarifying Strategy and Tactics for Value Creation
Survey Results
What position do you hold in your organization? <ul><li>13 CEOs </li></ul><ul><li>15 BOD members </li></ul><ul><li>1 Inter...
I believe that the current strategy for our company is on target and realistic.
I believe that we have full alignment and support for our strategy across our management team, our board   and the team at...
I believe there is a high level of open, honest and transparent communication across our organization, board and the team ...
I believe that our organization shows great discipline in executing on our key strategies and objectives.
Learning Objectives  <ul><li>Establishing a common language and set of definitions around the core elements of strategy.  ...
A  few of my clients:
For the past 21 years…
Five Foundations of Effective Strategic Thinking <ul><ul><li>Business Acumen </li></ul></ul><ul><ul><li>Personal Experienc...
Key Terms:  Mission  Vision  Strategy  Objectives  Tactics
“ Simplicity is the ultimate sophistication” Leonardo da Vinci
Mission <ul><li>A  mission statement  describes what an organization is all about: its purpose and primary objectives. It ...
Medtronic Mission <ul><li>“ To contribute to human welfare by application of biomedical engineering in the research, desig...
Vision <ul><li>A  vision  statement  is what the organization wants to become. It is a picture of the desired future, wher...
Features of an effective vision statement include: <ul><li>Clarity and lack of ambiguity  </li></ul><ul><li>Vivid and clea...
Vision:  Anheuser-Busch   <ul><li>Be the world's beer company. </li></ul><ul><li>Enrich and entertain a global audience . ...
<ul><li>Early 1900s:  Democratize the automobile  </li></ul><ul><li>Current:  To become the world's leading Consumer Compa...
Workshop: Vision
Strategy <ul><li>Your strategy is the plan of action you want to take to achieve success in your business. </li></ul><ul><...
Strategy Clock
Various Strategic Options <ul><li>Low Price / Low Added Value  (Dollar General) </li></ul><ul><li>Low Price  (Walmart) </l...
Objectives, Strategic Objectives, Goals, KRA’s… <ul><li>Objectives are the major projects or programs that support the str...
Tactics <ul><li>Your tactics are the specific actions, sequences of actions, and schedules you will use to fulfill your st...
Lets go through the entire process… <ul><li>Anheuser-Busch Mission: </li></ul><ul><li>Through all of our products, service...
Vision:  Anheuser-Busch   <ul><li>Be the world's beer company. </li></ul><ul><li>Enrich and entertain a global audience . ...
Strategy:  Market domination through Differentiation
AND……
AND….
Tactics:  Fitty
Tactics: Foodies
Tactics: Bubba
The Organizational Framework for Effective Strategy WHO WHAT HOW Cross-Functional Teams BOD & Senior  Leadership Departmen...
The Key: Brutal Honesty in the Analysis !!!!!!
The Missing Element?
10 – 15%
What Inhibits Execution? National Survey of 4,000 Senior Executives <ul><li>4. Inability to work together (21%) </li></ul>...
The Four – I’s <ul><li>Ignorance </li></ul><ul><li>Inflexibility </li></ul><ul><li>Indifference </li></ul><ul><li>Inconsis...
How to avoid the Four I’s  <ul><li>Aggressive external market focus. </li></ul><ul><li>Ridiculously high level of customer...
Where are we going and how will we behave on the way? Focus Differentiation “ No” Guiding Collation Vision + Values Strate...
A few key points…  All together now!
Clear, Consistent, Continuous…
Measure & Post  Create A Dashboard of Key Indicators MPS   Margin Per Sale Talent  Customer Service  Customer Retention
BOD and Management Relationship  BOD / Management  Team / MP Company  Management  Team
Key Point: Strategy is INTERNAL as well as EXTERNAL
 
The Pattern of Business Success
(T + C + ECF) x DE = Success
<ul><li>The number one factor in increasing the level of highly satisfied and engaged  CUSTOMERS  in your business is…  </...
Job + Organizational Engagement = Employee Engagement
Actively Disengaged Employees… 22%
Key Drivers of Customer Satisfaction and Loyalty T olerate N othing L ess From: Practice What You Preach by Maister Global...
Customer satisfaction drives customer loyalty…  and customer loyalty drives profitability   A  5%  increase in loyalty amo...
Actively disengaged employees can   reduce   revenues   by up to  22%,  while highly satisfied and engaged employees   can...
Best Practices: Talent <ul><li>Create a pipeline of talent into your company. </li></ul><ul><li>Hire for attitude – train ...
Culture <ul><li>Innovation </li></ul><ul><li>Kaizen </li></ul><ul><li>Accountability </li></ul><ul><li>Urgency </li></ul><...
Web of Value VOC + MOT
Extreme Customer Focus Whoever owns the…  VOICE OF THE CUSTOMER Owns the Marketplace
Moments of Truth
The Evergreen Project <ul><li>10 year study of 160 top companies </li></ul><ul><li>40 distinct industries </li></ul><ul><l...
The Four Primary Practices: <ul><li>A sharply focused, clearly communicated and well-understood strategy for growth. </li>...
The Secondary Management Practices: <ul><li>Talent = find and keep the best people. </li></ul><ul><li>Key leaders show com...
 
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Milestone Partners Strategy vs. Tactics

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From the Milestone Partners 2011 CEO Conference.

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Milestone Partners Strategy vs. Tactics

  1. 1. Clarifying Strategy and Tactics for Value Creation
  2. 2. Survey Results
  3. 3. What position do you hold in your organization? <ul><li>13 CEOs </li></ul><ul><li>15 BOD members </li></ul><ul><li>1 Interim CEO </li></ul><ul><li>1 BOD Chair / CEO </li></ul><ul><li>31 total responses </li></ul>
  4. 4. I believe that the current strategy for our company is on target and realistic.
  5. 5. I believe that we have full alignment and support for our strategy across our management team, our board and the team at Milestone .
  6. 6. I believe there is a high level of open, honest and transparent communication across our organization, board and the team at Milestone.
  7. 7. I believe that our organization shows great discipline in executing on our key strategies and objectives.
  8. 8. Learning Objectives <ul><li>Establishing a common language and set of definitions around the core elements of strategy. </li></ul><ul><li>Exploring the disconnect between overly ambitious strategies versus actual resources available and true organizational capabilities. </li></ul><ul><li>Underscoring the critical need for full alignment and consensus on strategy between ownership and management teams. </li></ul><ul><li>Discussing the why's and how's of ensuring that the entire company understands the strategy is aligned and committed to implement it. </li></ul><ul><li>Examining the barriers to effective execution of strategy. </li></ul><ul><li>Reviewing the role of a BOD member in strategy alignment and execution. What sort of questions should they be asking, what should they be looking for? </li></ul><ul><li>Understanding that as a key foundation the business MUST function well, otherwise strategy is useless. </li></ul>
  9. 9. A few of my clients:
  10. 10. For the past 21 years…
  11. 11. Five Foundations of Effective Strategic Thinking <ul><ul><li>Business Acumen </li></ul></ul><ul><ul><li>Personal Experience </li></ul></ul><ul><ul><li>Pattern Recognition </li></ul></ul><ul><ul><li>Strategic Insight </li></ul></ul><ul><ul><li>Disciplined Execution </li></ul></ul>
  12. 12. Key Terms: Mission Vision Strategy Objectives Tactics
  13. 13. “ Simplicity is the ultimate sophistication” Leonardo da Vinci
  14. 14. Mission <ul><li>A mission statement describes what an organization is all about: its purpose and primary objectives. It answers three key questions: </li></ul><ul><li>Whom do we serve? </li></ul><ul><li>What is the benefit to our stakeholders, community and the world? </li></ul><ul><li>Why does this organization exist? </li></ul><ul><li>It should resonate with all members of the organization and help them feel proud and excited to be a part of something bigger than themselves. </li></ul>
  15. 15. Medtronic Mission <ul><li>“ To contribute to human welfare by application of biomedical engineering in the research, design, manufacture, and sale of instruments or appliances that alleviate pain, restore health, and extend life.” </li></ul>
  16. 16. Vision <ul><li>A vision statement is what the organization wants to become. It is a picture of the desired future, where they see the business 5-10-20 years from now. </li></ul>
  17. 17. Features of an effective vision statement include: <ul><li>Clarity and lack of ambiguity </li></ul><ul><li>Vivid and clear picture </li></ul><ul><li>Description of a bright future </li></ul><ul><li>Memorable and engaging wording </li></ul><ul><li>Realistic aspirations </li></ul><ul><li>Alignment with organizational values and culture </li></ul>
  18. 18. Vision: Anheuser-Busch <ul><li>Be the world's beer company. </li></ul><ul><li>Enrich and entertain a global audience . </li></ul><ul><li>Deliver superior returns to our shareholders. </li></ul>
  19. 19. <ul><li>Early 1900s: Democratize the automobile </li></ul><ul><li>Current: To become the world's leading Consumer Company for automotive products and services. </li></ul>Vision: Ford Motor Company
  20. 20. Workshop: Vision
  21. 21. Strategy <ul><li>Your strategy is the plan of action you want to take to achieve success in your business. </li></ul><ul><li>It is a thoughtfully constructed plan to address a need to be met, or a problem to be solved; determining which resources you will marshal to meet that need or solve that problem; and setting the criteria for success. </li></ul><ul><li>Strategy is not merely maintaining sight of the long term options for realizing the vision, but also includes an appreciation and study of the opponent's thinking and response to challenge. </li></ul>
  22. 22. Strategy Clock
  23. 23. Various Strategic Options <ul><li>Low Price / Low Added Value (Dollar General) </li></ul><ul><li>Low Price (Walmart) </li></ul><ul><li>Hybrid (Target / Dell) </li></ul><ul><li>Differentiation (Nordstrom / Apple) </li></ul><ul><li>Focused Differentiation (Gucci) </li></ul>
  24. 24. Objectives, Strategic Objectives, Goals, KRA’s… <ul><li>Objectives are the major projects or programs that support the strategy. </li></ul><ul><li>It is where senior leaders allocate significant resources to be deployed by mid-level and lower-level managers on specific tactics. </li></ul>
  25. 25. Tactics <ul><li>Your tactics are the specific actions, sequences of actions, and schedules you will use to fulfill your strategy. </li></ul><ul><li>If you have more than one strategic objective you will have different tactics for each. </li></ul><ul><li>Tactics are typically short-term, immediate actions… which taken together will eventually lead to the achievement of the overall strategy. </li></ul>
  26. 26. Lets go through the entire process… <ul><li>Anheuser-Busch Mission: </li></ul><ul><li>Through all of our products, services and relationships, we will add to life's enjoyment. </li></ul>
  27. 27. Vision: Anheuser-Busch <ul><li>Be the world's beer company. </li></ul><ul><li>Enrich and entertain a global audience . </li></ul><ul><li>Deliver superior returns to our shareholders. </li></ul>
  28. 28. Strategy: Market domination through Differentiation
  29. 29. AND……
  30. 30. AND….
  31. 31. Tactics: Fitty
  32. 32. Tactics: Foodies
  33. 33. Tactics: Bubba
  34. 34. The Organizational Framework for Effective Strategy WHO WHAT HOW Cross-Functional Teams BOD & Senior Leadership Departments Adapted from: Six Disciplines Execution Revolution Individuals Planning Retreat Quarterly Workshops Goals Tracking Dashboard Dept. Tactical Plans Status Reports Regular Meetings Individual Tactical Plans Status Reports Regular Meetings Individuals Action Items To-do Lists
  35. 35. The Key: Brutal Honesty in the Analysis !!!!!!
  36. 36. The Missing Element?
  37. 37. 10 – 15%
  38. 38. What Inhibits Execution? National Survey of 4,000 Senior Executives <ul><li>4. Inability to work together (21%) </li></ul><ul><li>3. Company culture (23%) </li></ul><ul><li>2. Economic climate (29%) </li></ul><ul><li>1. Holding onto the past / unwillingness to CHANGE (35%) </li></ul>
  39. 39. The Four – I’s <ul><li>Ignorance </li></ul><ul><li>Inflexibility </li></ul><ul><li>Indifference </li></ul><ul><li>Inconsistency </li></ul>
  40. 40. How to avoid the Four I’s <ul><li>Aggressive external market focus. </li></ul><ul><li>Ridiculously high level of customer focus. </li></ul><ul><li>Keep the “Main Things” the main things. </li></ul><ul><li>Bullish on knowledge sharing and learning. </li></ul><ul><li>Teamwork / communication is mandatory – not optional </li></ul><ul><li>Passion and commitment at all levels. </li></ul><ul><li>Foster a healthy paranoia. </li></ul><ul><li>Revel in change. </li></ul>
  41. 41. Where are we going and how will we behave on the way? Focus Differentiation “ No” Guiding Collation Vision + Values Strategy Objectives Initiatives Programs Procedures / Protocols Repeatable Process Clear / consistent / relentless Training + time / money / supplies / people Measure / Track Communicate Transparency Accountability Celebrate Success Eliminate Mediocrity
  42. 42. A few key points… All together now!
  43. 43. Clear, Consistent, Continuous…
  44. 44. Measure & Post Create A Dashboard of Key Indicators MPS Margin Per Sale Talent Customer Service Customer Retention
  45. 45. BOD and Management Relationship BOD / Management Team / MP Company Management Team
  46. 46. Key Point: Strategy is INTERNAL as well as EXTERNAL
  47. 48. The Pattern of Business Success
  48. 49. (T + C + ECF) x DE = Success
  49. 50. <ul><li>The number one factor in increasing the level of highly satisfied and engaged CUSTOMERS in your business is… </li></ul>The level of highly satisfied and engaged EMPLOYEES in your business.
  50. 51. Job + Organizational Engagement = Employee Engagement
  51. 52. Actively Disengaged Employees… 22%
  52. 53. Key Drivers of Customer Satisfaction and Loyalty T olerate N othing L ess From: Practice What You Preach by Maister Global study: 16 countries 529 companies 15,589 respondents Chart: 4 Workshop: 5 Financial Performance Quality P&S & Customer Relationship Employee Satisfaction Empowerment High Standards Long-term Orientation Enthusiasm, Commitment, Respect Training & Development Fair Compensation CR= 104.12% increase in profits CR= .404 CR=.334 CR=.277 CR=.275 CR=.249 CR=.280 Coaching CR=.285 CR=.371 CR=.365 CR=.191 CR=.247
  53. 54. Customer satisfaction drives customer loyalty… and customer loyalty drives profitability A 5% increase in loyalty among your best customers… Can produce a profit increase of 25% – 85% I hate you I don’t care about you I love you 100% 90 80 70 60 50 40 30 20 Extremely Dissatisfied Somewhat Dissatisfied Slightly Dissatisfied Satisfied Very Satisfied Zone of Defection Zone of Indifference Zone of Affection Loyalty Customer Satisfaction Terrorist Evangelist
  54. 55. Actively disengaged employees can reduce revenues by up to 22%, while highly satisfied and engaged employees can drive profits up by as much as a 189% Culture = Cash
  55. 56. Best Practices: Talent <ul><li>Create a pipeline of talent into your company. </li></ul><ul><li>Hire for attitude – train for skills. </li></ul><ul><li>Use team interviewing. </li></ul><ul><li>Train people how to interview. </li></ul><ul><li>Use a focused competency model. </li></ul><ul><li>Use numerous types of testing. </li></ul><ul><li>Do a thorough reference check. </li></ul><ul><li>Make sure they really want to work for you. </li></ul><ul><li>Hire slow – fire fast . </li></ul>Make “Hiring Right” a core competency!
  56. 57. Culture <ul><li>Innovation </li></ul><ul><li>Kaizen </li></ul><ul><li>Accountability </li></ul><ul><li>Urgency </li></ul><ul><li>“ Ownership Mentality” </li></ul>
  57. 58. Web of Value VOC + MOT
  58. 59. Extreme Customer Focus Whoever owns the… VOICE OF THE CUSTOMER Owns the Marketplace
  59. 60. Moments of Truth
  60. 61. The Evergreen Project <ul><li>10 year study of 160 top companies </li></ul><ul><li>40 distinct industries </li></ul><ul><li>200 management practices </li></ul><ul><li>Winners, climbers, tumblers, losers </li></ul><ul><li>Winners had an average Total Return to Shareholders of 945% ... </li></ul><ul><li>The Losers only averaged a TRS of 62% </li></ul>From: What (really) Works by Joyce, Nohria, Roberson
  61. 62. The Four Primary Practices: <ul><li>A sharply focused, clearly communicated and well-understood strategy for growth. </li></ul><ul><li>Flawless operational execution that consistently delivers the value proposition. </li></ul><ul><li>A performance-oriented culture that does not tolerate mediocrity. </li></ul><ul><li>A fast, flexible, flat organization that reduces bureaucracy and simplifies work. </li></ul>22
  62. 63. The Secondary Management Practices: <ul><li>Talent = find and keep the best people. </li></ul><ul><li>Key leaders show commitment and enthusiasm for the business. </li></ul><ul><li>Embrace strategic innovation. </li></ul><ul><li>Master the power of partnerships. </li></ul>From: What (really) Works by Joyce, Nohria, Roberson

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