This document outlines a process for management by objectives. It discusses defining a company's value proposition and formulating a vision, mission, and strategic priorities. Divisions then create objectives aligned with priorities and key performance indicators. Individual objectives cascade down as well. Challenges include cultural differences across locations and determining realistic targets. Solutions involve research, leadership commitment, competence development, and incentive structures. Engagement analysis and leadership communication are important for successful implementation. Project milestones include formulating vision and mission, objectives deployment, and status communication.

1. Crafting and Executing Strategy:Management by Objectives AygunSuleymanova, May 2010

2. Starting point: Defining Value Proposition

3. Exercise/ Discussion: Current Value Proposition Analysis

4. Key Questions:IS THIS VALUE WHAT YOU EXACTLY MEAN TO DELIVER?IS IT WHAT YOU DO DELIVER?IS IT WHAT YOUR EMPLOYEES BELIEVE THEY DELIVER?ARE YOU WELL-POSITIONED INTERNALLY TO DELIVER IT?IS IT FULLY CONGRUENT WITH YOUR STRATEGY AND GUIDING PHILOSOPHY AND IS WHAT YOU BELIEVE TO BE(COME) YOUR COMPETITIVE ADVANTAGE?*DEFINITELYNOT EXACTLY*The one that would be hard for your competitors to imitate

5. DEFINITELY!Articulate it well through forming a MISSION statement around customer-centricityTogether with the Team create the longer-run VISION statement to tie your activities toAgain, with the Team, create key strategic priorities (no more than 5) for the year to focus onImmediately after, have the Direct Reports (Division heads) come up with the objectives/projects for their Division that would go under each strategic priority and a KPI for eachHave them continue the process down to individual level

6. NOT EXACTLY…Identify, considering competition, the industry and the customers what you stand for and where you are goingTogether with the Team create the longer-run MISSION statement to tie your activities toAgain, with the Team, create key strategic priorities (no more than 5) for the year to focus onImmediately after, have the Direct Reports (Division heads) come up with the objectives/projects for their Division that would go under each strategic priority and a KPI for eachHave them continue the process down to individual level

7. INPUTS FOR STRATEGY FORMULATIONSWOT Analysis. Industry-wise, opportunities and threats should capture multiple industries that the company operates in: SaaS, HSE solutions, Sustainability VendorsCongruence of values analysisIndustry Success Factors and the ways to leverage them:BRAND STRENGTHCUSTOMER SERVICE/SATISFACTIONPARTNERSHIP & TRUST

8. EXECUTION

9. Steps to Strategy FormulationVision &Mission Formulation1Company CEO, Direct reports &Key contributorsUp to 5 Company Strategic Priorities2Related Division Objectives [year]Target deployment3Direct reports to middle managers;middle managersto their teams and so forth downto individual levelUnit Objectives4Individual Objectives5

10. Example (A technology consulting firm):Vision - Enabling freedom:We will lead by providing our clients with insights and capabilities that boost their freedom to achieve superior results.Mission - Enabling transformation:We enable our clients to transform and perform through technologies.

11. We will lead by providing our clients with insightsand capabilities that boost their freedom to achieve superior results.IncreasePresence in The MarketCutting EdgeSolutionsSuperior QualityB. Dev-t:1) Bring in X new Customers2) Launch CRM,Etc.Client Services:1); 2); 3) etc.Technology:Increase capacity of existing… etc.1) Upgrade theCorporate WebsiteCompany VisionStrategic PrioritiesCorporate LevelDivision LevelTeam or Individual Level**Depending on the depth of hierarchythe objectives will be cascaded down

12. Nature of Objectives & KPIs

13. Competency Integration into Performance Evaluation is important3-4 Core Competencies that are specific to the company depending on its vision, like: Adaptability to Changes, Quality, Customer Care, etc.Job Family Competences: STRATEGIC LEADERS; PEOPLE LEADER; PROFESSIONAL KNOWLEDGE WORKERS; CUSTOMER CONTACT; ADMINISTRATIVE SUPPORT

14. Competences in ForceCompetence-based STARs/ARs that employees give one another will reinforce the development of competencesDefined competences will make the 360 degree evaluation well-defined as well Allows you to tie development activities to

15. 4Strategy Review MeetingTarget Deploy-mentIndividual Development PlansPerfor-mance Appraisal(Mass) Communication of New Strategy to EmployeesTarget Review 2360 Review7Target Review 1Target Review 3BonusesJanDecNovFeb35Annual Operational Budget ApprovalOctMar6218SepAprAugMay6IdealTimeline for PM ProcessJulJun66

16. CHALLENGESGeographical dispersion: time and cultural differencesKPI determination: the un-tested targets to be set (for e.g. in customer service, there might be set a target to close the customer issues in 24 hours, however, it might be either unrealistic or the gauges could be biased as to what is considered to be ‘closed’)It is imperative that all the processes running in the company are clearly designed and documented (in MS Visio map format) and the job responsibilities and reporting structure are as well clearly definedLack of incentive structure to complement the “Management by Objectives” framework could significantly impede the implementation of the concept

17. SOLUTIONSResearch: corporate value analysis, defining the differences in beliefs and values between the two teams for tailoring the implementation and communication strategy accordinglyLeadership commitment and intensive communication through different mediaDevelopment: creating a competence framework consistent with the strategy to develop certain set of competences in employees to reach their (and ultimately corporate) objectivesMiddle management development and commitment: This is the most important communication channel for nurturing company values and implementing strategy; Creation of Succession planningCreation of a consistent STRATEGIC incentive structure (not just monetary, but also career and recognition rewards)

18. ENGAGEMENT ANALYSISConducting a survey among the company employees to define:How they feel about being a Company employee?

19. What they value most in their job?

20. What values they see/show most in their work?

21. Is their vision and view of the company same with the leadership’s?------------------------------------------------------------------------------------ Provide recommendations on how to tailor communication and implementation strategy within the company

22. LEADERSHIP COMMITMENTIn realizing its vision through the employees it is important that the leadership show their commitment in each step of strategy formulation and execution by:Getting the Team together for strategy formulation meeting, opening the meeting with a speech and demonstrating initiative ownershipUnderlining the importance of the execution to Direct reports and instilling belief in them in the vision Following through with the Target deploymentUsing the company Intranet and e-mail to announce ‘the Company’s Way Ahead’ in a text and video formatMonitoring the implementation throughout the year

23. PROJECT MILESTONES:Formulating Vision: an interview with the CEO

24. Presenting industry, company and customer analysis for:

25. Formulating Mission, key priorities and Division objectives

26. Presenting competence framework for the strategy

27. Conducting Employee Survey (on corp. culture & values)

28. Company-wide communication of strategy to employees

29. Facilitating Objectives Deployment & integration of competences into individual development objectives

30. Maintaining and constantly communicating the status of achievements