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Pearson principles of business implementing strategy lecture 2

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Pearson principles of business implementing strategy lecture 2

  1. 1. Principles of Business Implementing Strategy Lecture 2 – implementing strategy
  2. 2. Objectives of the session ► To appreciate the importance of excellent implementation of strategy ► To be able to work through Kotter’s 8 steps to managing a strategic implementation ► To be able to develop a balanced scorecard as a way of making strategy relevant to an organisation
  3. 3. “70% of major … strategy implementation projects fail …because organisations do not take a holistic approach to seeing change through” John Kotter
  4. 4. Implementing Strategy STRATEGY Flawed Sound EXECUTION SoundFlawed Doomed from the outset Flirting with disaster A pretty good chance A botched job
  5. 5. The map is not the territory A B
  6. 6. Kotter’s Eight Steps 1. Create a sense of urgency 2.Create a guiding coalition 3.Create a vision for the strategy/change 4.Communicate the vision 5.Remove obstacles 6.Create some short term wins 7.Build on what you have started 8.Anchor the strategy/changes into the corporate culture
  7. 7. Step One: Create a Sense of Urgency -Compelling reasons. -Spark the initial motivation. For change to be successful 75% of the management needs to buy in to it Step Two: Form a Guiding Coalition - Strong leadership. - Coalition, or team, of influential (not hierarchical) people. - Step Three: Create a Vision for the Strategy/Change - Easily grasped and remembered. - Help everyone understand why. Can you communicate the vision in 5 minutes?
  8. 8. Step Four: Communicate the Vision - Communicate it frequently and powerfully. - Keep it fresh on everyone's minds. Step Five: Remove Obstacles - Empowers the people you need to execute your vision. Are all your internal processes aligned with the vision? Step Six: Create Short-term Wins - Plan for a taste of victory early in the change process. - Have results that people can see.
  9. 9. Step Seven: Build on What you have Started - Don’t declare victory too early. - Keep looking for improvements. The first sign of improvement does not signify a war won! Step Eight: Anchor the Changes in Corporate Culture - Make the change part of the core of the organization. Changes stick when they become ‘the way we do things round here’
  10. 10. Implementing Strategy – Balancing the Scorecard
  11. 11. WHAT ARE WE TRYING TO ACHIEVE HERE? (HOW WILL WE KNOW?) FINANCIAL PERSPECTIVE CUSTOMER PERSPECTIVE INTERNAL PROCESS PERSPECTIVE LEARNING AND GROWTH PERSPECTIVE INCREASED INCOME REDUCED COST EXCELLENT EXECUTION CUSTOMER UNDERSTANDING GREAT PRODUCT INNOVATION CONTINUOUS IMPROVEMENT ENVIRONMENTAL AWARENESS THE RIGHT SKILLS THE RIGHT TECHNOLOGY A POSITIVE CULTURE KPI/UNITOFMEASURE
  12. 12. TO BE THE PERSONAL TRANSPORT BRAND OF CHOICE BY MAKING OUTSTANDING PRODUCTS FINANCE PERSPECTIVE CUSTOMER PERSPECTIVE INT.PROCESS PERSPECTIVE LEARING& GROWTH PERSPECTIVE 40% Gross Margin by 2014 10% Net Profit by 2012 20% turnover growth year on year 15% Unit Sales growth year on year Maintain cash Position £1m in the Bank Right Product to customer at the right time Innovate on existing core offering Create new Markets & Develop existing ones Provide better Information to The customer Provide Excellent service New Products to market Fair Pricing Strategy that Reflects International differences Improve dealer info managem ent Improve order & invoice completio n and tracking Improve employee engagement Improve quality cost and delivery Improve knowledge and info mgmt Greater representation in the community Greater ethical compliance, Waste management and recycling Give people the tools and permission to be effective Improved communicat ion Improved recruitment and on- boarding Greater visibility of leadership Improved performance management process Great at managing resources. Inspirational leadership, change IMPLEMENT MEASURES TO REDUCE PRODUCTION COSTS MAINTAIN CORE REVENUE GROWTH AND IDENTIFY AREAS OF IMPROVED REVENUE OPPORTUNITY
  13. 13. Our Mission is to be “The personal transport brand of choice by making outstanding products.” Our reputation will be about producing something that is truly outstanding – that is why people will choose us! So how will we do that? Well we clearly must make sure that the business itself continues to grow and we have identified two clear areas for focus: 1.Maintain core revenue growth and identify areas of improved revenue opportunity 2.Implement measures to reduce production costs We will achieve these very demanding financial progress by focusing our attention fully on our customers and: - Making sure we have the right product for every customer and we get it to them at the time they expect it - Providing excellent service EVERY time the customer makes contact with us, for whatever reason. If we do these things with our customers, we will achieve the stretching financial targets we have set ourselves. However, we cannot do any of them unless we: - Improve our overall dealer information management and keep on top of their own performance. - Deliver improvements on quality, cost and delivery We could not do it without the support and dedication to quality of every member of the organisation. And there are a number of things we are now working on that we think will improve this whole area: - We want to improve communication generally across the whole business. - As a leadership team need to be more visible - helping you to do your job by listening to you and taking away the things that get in the way. - We want to review our recruitment, induction and performance management processes so that every member of Brompton staff will understand exactly what is required of them, and what will happen when the meet or exceed those requirements.
  14. 14. In summary It is hard work developing a strategy It is hard work executing it It is particularly hard work when neither are done properly. Strategy is about knowing where you are, where you want to be, and understanding the steps you need to take to get there. Then it is about taking those steps!
  15. 15. The Seminars The seminars accompanying this part of the module will take some of these ideas and develop them further: 1. 2. 3. 4.

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