© the delos partnership 2007 page 1 integrated enterprise leadership priority and senior team...

© The Delos Partnership 2007 page 1

Integrated Enterprise Integrated Enterprise LeadershipLeadership

Priority and Senior Team Reviews


IEL Process StepsIEL Process Steps

AACCTTIIOONN

AACCTTIIOONN

Week 1 Week 2 Week 3 Week 4

InnovationInnovationReviewReview


CustomerCustomerDemandDemandReviewReview


SupplySupplyPlanPlan

ReviewReview


ReviewReview

PriorityPriorityReviewReview


Stage 1Stage 1

Stage 2Stage 2

SeniorSeniorTeamTeam

ReviewReview


ReviewReview

Stage 5Stage 5

Stage 7Stage 7

Stage 3Stage 3

SupportSupportReviewReview


Stage 6Stage 6

Stage 4Stage 4


Two Leadership StagesTwo Leadership Stages

Prioritisation•Family Summary

Major Changes Main Assumptions Threats & Opportunities Decisions Taken Decisions to Take Recommendations,

Implications, Costs•Alignment to Business Plan•Innovation Status

Senior Team Review

SUMMARY BY FAMILY

MAJOR ASSUMPTIONS________________________________________________

DECISIONS OUTSTANDING________________________________________________

RECOMMENDATIONS________________AND COSTS ________________

________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________

VULNERABILITIES ________________________________________________________________




________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________


Demand Supply InventoryBudget Current Plan Previous Plan Prior Year

SUMMARY BY FAMILY




________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________





________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________



SUMMARY BY FAMILY




________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________





________________________________

MAJOR CHANGES ________________________________________________________________

DECISIONS MADE ________________________________________________________________



Total Number of Changes

Current Last Project

1020

30 4050

6070

Engineering

20

2530

35

40

Other


20

2530

35

40

Business Review

-8 -4 0 +4 +8


1020

30 4050

6070

20

2530

35

40

20

2530

35

40

-8 -4 0 +4 +8-8 -4 0 +4 +8

Current Goal

Current Plan FY9x

Plan Actual

0

2550

75

100

10

1520

25

30

100

125150

175

200

100

125150

175

200

Current

Margins

Revenue

Project Cost to Date

0

2550

75

100

10

1520

25

30

100

125150

175

200

100

125150

175

200

1st Pass Test Percent

-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

INVENTORY

ACTUAL

BUDGET

DEMAND PLANSUPPLY

ACTUAL

ACTUAL

VOLUME

TIME/MONTHS TIME/MONTHS-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

BUSINESS PLAN

ACTUAL

£ M'sREVENUE

BUSINESS PLAN

PROFITABILITY

ACTUAL

Weeks0

20

40

60

80

100

O/T Delivery Performance

3 1 3 2 0 0 0

7 7 12 6 8 6 11

#No. of Late Deliveries #No. of On-Time Deliveries

A

B

CMonths

Customer's Rating

A

B

C

STDHRSOR

UNITS

WEEKS

REQUIRED CAPACITY

PLANNED CAPACITY(DEMONSTRATED OUTPUT)

RESOURCE A

Total Number of Changes


1020

30 4050

6070

Engineering

20

2530

35

40

Other


20

2530

35

40

Business Review

-8 -4 0 +4 +8-8 -4 0 +4 +8


1020

30 4050

6070

20

2530

35

40

20

2530

35

40

-8 -4 0 +4 +8-8 -4 0 +4 +8

Current Goal

Current Plan FY9x

Plan Actual

0

2550

75

100

10

1520

25

30

100

125150

175

200

100

125150

175

200

Current

Margins

Revenue

Project Cost to Date

0

2550

75

100

10

1520

25

30

100

125150

175

200

100

125150

175

200

1st Pass Test Percent

-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

INVENTORY

ACTUAL

BUDGET

DEMAND PLANSUPPLY

ACTUAL

ACTUAL

VOLUME

TIME/MONTHS TIME/MONTHS-3 -2 -1 0 1 2 3 4 5 6 7 8 9 10 11 12 13 14 15 16 17 18

BUSINESS PLAN

ACTUAL

£ M'sREVENUE

BUSINESS PLAN

PROFITABILITY

ACTUAL

Weeks0

20

40

60

80

100


3 1 3 2 0 0 0

7 7 12 6 8 6 11

#No. of Late Deliveries #No. of On-Time DeliveriesWeeks0

20

40

60

80

100


3 1 3 2 0 0 0

7 7 12 6 8 6 11

#No. of Late Deliveries #No. of On-Time DeliveriesWeeks0

20

40

60

80

100


3 1 3 2 0 0 0

7 7 12 6 8 6 11

#No. of Late Deliveries #No. of On-Time Deliveries

A

B

CMonths

Customer's Rating

A

B

C

A

B

CMonths

Customer's Rating

A

B

C

STDHRSOR

UNITS

WEEKS

REQUIRED CAPACITY


RESOURCE A

STDHRSOR

UNITS

WEEKS

REQUIRED CAPACITY


RESOURCE A

Strategic Programme 1Strategic Programme 2 Strategic Programme 3 Strategic Programme 4 Strategic Programme 5 Strategic Programme 6 Strategic Programme 7 Strategic Programme 8 Strategic Programme 9 Strategic Programme 10 Strategic Programme 11 Strategic Programme 12 Strategic Programme 13 Strategic Programme 14

Strategic Programme 1Strategic Programme 2 Strategic Programme 3 Strategic Programme 4 Strategic Programme 5 Strategic Programme 6 Strategic Programme 7 Strategic Programme 8 Strategic Programme 9 Strategic Programme 10 Strategic Programme 11 Strategic Programme 12 Strategic Programme 13 Strategic Programme 14

Continuously reviewing the balance between strategy and operationsContinuously reviewing the operational projection and strategic fit


Priority ReviewPriority Review

Objectives To resolve issues around demand supply

and innovation plans - timing and resources To provide proposed financial statement To facilitate what-ifs and provide basis for

decisions (facts not opinions) To provide issues for resolution by Senior

Team


Reviewing the GapReviewing the GapFinancial Strategic Forecast

0

5

10

15

20

25

1 2 3 4 5

Year

£m.

All New

New

Extend

Current

Aspiration


Agreement on Strategic ActionsAgreement on Strategic ActionsStrategicPlan

Where Where AmAmI now ?I now ?

Where Where AmAmI now ?I now ?

Where Where AmAmI going ?I going ?

Where Where AmAmI going ?I going ?

Where Where Do I Want Do I Want to Go ?to Go ?

Where Where Do I Want Do I Want to Go ?to Go ?

What Am I What Am I Going To do ?Going To do ?

Choices



Requirements Updates on Innovation, Demand, Supply and support

plans Financial statement of all the plans External events/Risks

Governmental Competitive

Internal events Launch threats Supply constraints

Alternatives for evaluation Proposals from prior stages to go forward to STR


Alternatives to testAlternatives to test

• Sales volumes• Supply plans• Overtime• Capacity change (up or down)• Service level strategy• Phasing of development plans• Timing and size of capital expansion• Price/Volume effects• Manufacturing strategy• Marketing strategy• Outsource/In source

ONESETOF

NUMBERS


TeamworkTeamwork

A common vision and shared strategy allows:

• Common goal

• Common objectives

• Agreed targets

• Consensus on performance measurement


ProblemProblem

FINANCEFINANCEHRHRITIT

FINANCIAL IMPLICATIONSFINANCIAL IMPLICATIONS

DEVELOPMENTDEVELOPMENT


FunctionalFunctionalAgendasAgendas


SUPPLYSUPPLYDEMANDDEMAND


Team SolutionTeam Solution

DEVELOPMENTDEVELOPMENT

FINANCEFINANCEHRHRITITDEMANDDEMAND

SUPPLYSUPPLY

BUSINESSBUSINESS IMPLICATIONS IMPLICATIONS

IntegratedIntegratedApproachApproach



Outcome Decisions on capacity short term etc. where

they can be made Options for Senior Management Team to

review Review of current financial picture Options for closing the gap Numbers to form the basis of next year’s

budget


PrioritisationPrioritisation

• Led by Integrated Enterprise Leadership Director/Manager

• May mean a series of meetings to discuss options

• May require simulation capability for review of numbers

• Multiple sets of numbers based on one set of plans!


IEL Process StepsIEL Process Steps

AACCTTIIOONN

AACCTTIIOONN







ReviewReview


ReviewReview



Stage 1Stage 1

Stage 2Stage 2


ReviewReview


ReviewReview

Stage 5Stage 5

Stage 7Stage 7

Stage 3Stage 3



Stage 6Stage 6

Stage 4Stage 4


Objectives for Senior Team ReviewObjectives for Senior Team Review

• Make decisions on major issues• Delegate issues to the right level• Review the long-term picture not short

term crises• Review process based performance

measures• Review and develop long-term strategy• Make it the meeting for the Executive


Agenda for discussionAgenda for discussion

• Current Business situation Plan versus Budget/Business Plan Plan versus last plan (volume/value)

• Strategic Review [1/quarter]• Assumptions on which plan is based• Issues for Resolution

Innovation development issues Supply/Demand Allocation issues Major Capacity changes required Outsourcing Capital Expenditure Plans HR/IT support issues Reorganisation requirements

• Performance measures• Review of IEL process against assessment criteria


Financial review by family and in aggregateFinancial review by family and in aggregate

Major ChangesNew Product XYZ included in ForecastTender for country ABC included

Major AssumptionsMarket Growth of 5 %Competition will reduce price by 5 %We Win Tender

Major ThreatsCompetitor ABC introduces competitive product

Decisions RequiredInvestment of Eur 0.5 m in Additional capacity for New ProductMove to three shift working to meet demand

0

5,000

10,000

15,000

20,000

25,000

30,000

Euros

Sales Contrib EBITDA

Sales/Profit

Financial Analysis

Budget

Previous

Current

Major OpportunitiesNew emerging market in XYZ region

Decisions TakenTo discontinue product ABC


Financial justification for XYZ projectFinancial justification for XYZ project

Year 1 Year 2 Year 3 Year 4 Year 5

Volume 100 115 120 140 150

Sales 10 12 13 15 17

Contribution 2 2.5 2.75 2.5 2

Inc Overheads 0.5 0.5 0.5 0.5 0.5

Cash Flow 1.5 2.0 2.25 2 1.5

Wkg Capital 1 0.5 0.2 0.2 0.2

Cap Expenditure

4

Net Cash Flow -3.5 1.5 2.05 1.8 1.3

Net Present Value @ 15 % =


Forecast must be supported by Forecast must be supported by assumptionsassumptions

Jul Aug Sep Oct Nov Dec Jan Feb Mar Apr May Jun

1254 145 145 156 156 170 170 135 135 135 145 160 160

1345 145 167 135 180 200 200 200 200 150 150 150 200

1256 100 200 200 200 200 200 300 300 200 200 200 200

1347 50 50 50 50 40 40 30 30 20 20 40 50

NUMBERS !

ASSUMPTIONS


Integrated Enterprise LeadershipIntegrated Enterprise Leadership

-3 -2 -1

Demand Plan 120 120 120

Actual Demand 119 125 132

Difference -1 5 12

Cum Diff 4 16

Months 1 2 3 4 5 6 7 8 9

Last Demand Plan 120 120 120 120 120 120 120 120 120

New Demand Plan

Difference

Cum Diff

Months Q4 Q1

360 360

-3 -2 -1

Supply Plan 125 125 125

Actual Supply 119 118 121

Difference -6 -7 -4

Cum Diff -13 -17

1 2 3 4 5 6 7 8 9

Last Supply Plan 125 125 120 120 120 120 120 120 120

New Supply Plan

Difference

Cum Diff

Q4 Q1

360 360

-3 -2 -1

Stock Plan 71 76 81

Actual Stock 66 66 59 48

Difference -5 -17 -33

1 2 3 4 5 6 7 8 9

Last Stock Plan 86 91 91 91 91 91 91 91 91

New Stock Plan

Difference

Q4 Q1

Family AX Senior Team FocusMPS Focus


The Core Measures and Financial The Core Measures and Financial EffectEffect


Delos Delos ROCEROCE model model

ROCEROCE

ProfitProfit CapitalCapital

SalesSales CostsCosts

MaterialMaterial LabourLabour OverheadOverhead

FixedFixed CurrentCurrent

StocksStocks CreditorsCreditors DebtorsDebtorsProjectsProjects


Leverage our Product P

and Product L assets

Protect and expand our

Product Family F

franchise

Grow our Product Family B business

Develop / acquire

innovative products and technologies

Achieve a profitable leadership position in

key countries

Derive 70% of company sales from top 10 markets by 2006

Maintain our leading position in S. America & France, Canada, UK, and Italy

Optimize public policy, regulatory, and communications to drive growth

Finalize Corea market strategy by 2003

Articulate a new Branding strategy

Meet timelines on bulk mfg. facility and packaging outsourcing for Bd

Acquire market knowledge in key countries

Develop/acquire Product Bk

Ensure launch of Bd Child by 2008

Develop ATO strategy

Develop Product P end-game strategy that maximizes Industrial utilisation

Accelerate the conversion from extP to intP

Consolidate and optimize ATO strategy to support Product P end-game and extP conversion

Slow competitor XX uptake in US

Develop comprehensive product delivery strategy

Institutionalize the Technology Visioning process

Ensure appropriate upstream / downstream balance

Ensure full alignment of Sales, Development, Legal Affairs and Marketing activities

Implement Goodwill optimization organization

Maximize existing assets for Product Fa and Fc

Ensure leadership in Family F delivery systems

Ensure optimal

capacity, quality and customer

satisfaction

Develop/ Upgrade Quality systems to ensure 50% yearly reduction in rejects and rebuild

Maximize utilization of existing capacity

Achieve Delos Platinum level at all sites

Implement Delos Global Integrated Enterprise Leadership

Explore continuous improvement approaches

Defend, and then expand, our leadership position through sustainable profitable growth.

Launch Product N

and Product M in 2005; >50% of sales

from new products by

2012

Achieve all critical path milestones to ensure 2005 launches

Complete Product N and product M pre-launch activities

Upgrade sales and marketing competencies for adult markets

Develop trust and transparency between IO and R&D groups

implement programs to accelerate the product development process.

Maximize our key assets

Continue to develop and implement e-strategies to enhance the effectiveness of Company corporate strategy.

Align our capacity and capital investment with our strategy.

Rapidly upgrade our

technical and leadership

competencies

Aggressively fill the competency and values gap

Become a truly global organization

Empower through broad spans of control in a flat organization

Differentiate rewards and career opportunities based on performance

Regain our leadership position Regain our leadership position in product development and in product development and

approval approval Reliably supply quality XXX Reliably supply quality XXX Foster a culture that Foster a culture that

demands excellence demands excellence Continue to lead in Continue to lead in

marketing and sales marketing and sales


Priority and Senior Team ReviewsPriority and Senior Team Reviews

• Long-term - not short-term• Strategic - not tactical• Assumption based - not opinion based • Formal - not informal rumours• Team based decisions - not functional• Forward looking - not backward looking• Decisions – not request for information


Delos IEL ProcessDelos IEL Process

AACCTTIIOONN

AACCTTIIOONN


Stage 7Stage 7

InnovationReview

InnovationReview

CustomerDemandReview


SupplyPlan

Review

SupplyPlan

Review

PriorityReview

PriorityReview

Stage 1Stage 1

Stage 2Stage 2

SeniorTeam

Review

SeniorTeam

Review

Stage 5Stage 5

Stage 3Stage 3

SupportReview

SupportReview

Stage 6Stage 6

Stage 4Stage 4

InnovationReview

InnovationReview



SupplyPlan

Review

SupplyPlan

Review

PriorityReview

PriorityReview

Stage 1Stage 1

Stage 2Stage 2

SeniorTeam

Review

SeniorTeam

Review

Stage 5Stage 5

Stage 3Stage 3

SupportReview

SupportReview

Stage 6Stage 6

Stage 4Stage 4


Action plansAction plans

Chairman XXXXXXX Innovation meeting

Note taker XXXXXXX Date : 21/03/06

Timekeeper XXXXXXX

Item ActionDate

1. Outsource product ABC GL 24/5

2. Focus on XYZ strategic RW 30/6

Market sector, and prepare

Strategy to develop………

…….

• Review of process

Chairman XXXXXXX Innovation meeting

Note taker XXXXXXX Date : 21/03/06

Timekeeper XXXXXXX

Item ActionDate

1. Outsource product ABC GL 24/5

2. Focus on XYZ strategic RW 30/6

Market sector, and prepare

Strategy to develop………

…….

• Review of process


Plan to ExecutionPlan to Execution

Plan

Execution

Plan theSale

Sell thePlan

Plan theWork

Work thePlan

Vision and Vision and StrategyStrategy


Process OwnershipProcess Ownership

Sales Ops R & D Finance Mktg

New Product ProcessNPD

Owner

Supply side processSupplyOwner

CustomerDemand ProcessDemandOwner

Innovation

OwnerInnovation process

ManagementTeam

Support: Finance, IT,HR,QA, …. Support

Owner

Horizontal

Owners Act at the interface with the functions, to provide the link with other processes

The process Managers are responsible for managing the process within the « vertical » function.


Process OwnersProcess Owners

Assure and guarantee the quality of the major processes in the organisation

•Innovation

•Demand

•Supply

•Support

•Integration

•Strategy

Analysing the environment, and ensuring best practise is adopted

Sales Ops R & D Finance Mktg

New Product ProcessNPD

Owner

Supply side processSupplyOwner

CustomerDemand ProcessDemandOwner

Innovation

OwnerInnovation process

ManagementTeam

Support: Finance, IT,HR,QA, …. Support

Owner


Senior Team ReviewSenior Team Review

• Strategic direction •Update on Projects/Demand and supply•Latest Financial Forecast• Issues requiring resolution• Performance Measures

• Decisions on issues• Actions to meet plan• Agreed changes to strategic direction• Revised annual plan• Proposals for improving process

Inputs Outputs

Agenda

1. Current Plan versus Business Plan2. Plan versus last plan

(volume/value)2. Strategic Review [1/quarter]3. Assumptions on which plan is based4. Issues for Resolution5. Performance measures6. Review of IEL process against

assessment criteria

Agenda

1. Current Plan versus Business Plan2. Plan versus last plan

(volume/value)2. Strategic Review [1/quarter]3. Assumptions on which plan is based4. Issues for Resolution5. Performance measures6. Review of IEL process against

assessment criteria


Framework for Process ReviewFramework for Process ReviewProcess Name : Process owner :Process Name : Process owner :

Inputs:Inputs: Purpose:Purpose: Outputs:Outputs:

People:People: Culture/Behaviour:Culture/Behaviour: Measures:Measures:

System/module:System/module: Requirements:Requirements: Expected Actions:Expected Actions:

Link to other processes :Link to other processes :


The Delos ModelThe Delos ModelFor Business Integration For Business Integration

InnovationInnovation

VisionVision

StrategyStrategy

PrioritisationPrioritisation

DemandDemand

SupportSupport

SupplySupply


Integrated Enterprise LeadershipIntegrated Enterprise Leadership

1. Formal process leading to effective decisions2. Facts rather than opinions3. Organised common-sense4. Long-term rather than short-termist5. Performance measurement based rather than “making it”

against the budget6. Ownership and responsibility for the numbers7. A Rolling financial plan – giving time to adjust rather than panic

at year end8. Team-based decision making based on common goals and

objectives9. Strategy set and communicated and delivered10. Requires democracy for the planning phase, and adherence to

plan for the execution phase


Prerequisites for successful processPrerequisites for successful process

1. Common agreed process2. Prepared agendas3. Right attendees4. Focussed discussion5. Actions identified and being taken6. Honesty and realism throughout7. Elimination of other meetings8. Commitment to formal process9. Commitment to follow the plan10. If you can’t do it say so – Silence is approval.


Typical BarriersTypical Barriers

1. Data not available

2. Geography

3. “My calendar is already overloaded”

4. Poor meeting discipline

5. “Lack of time”

6. We are an entrepreneurial organisation


Typical solutionsTypical solutions

1. Start with Pilot information2. Plan ahead with meeting calendar3. Allow time between meetings for preparation4. If you don’t need a meeting don’t have one5. Look for informal meeting time which is

wasted6. Recognise reality – a formal process allows

greater flexibility

© the delos partnership 2007 page 1 integrated enterprise leadership priority and senior team...

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