PERSPECTIVES DISCIPLINES

STRATEGY EXECUTION

Execution Gap Turning Goals into Actions

THE BALANCED SCORECARD

Translating Strategy Into Action

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1.  Why strategic planning? 2.  Communicating strategy 3.  The Balanced Scorecard 4.  The 4 Disciplines of

Execution

Agenda

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“If you don’t know where you are going, you may not like it when you get there.”

Mark Twain

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• A

• B

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Why Strategic Planning?

§ To get from A to B in the most effective and efficient way possible.

§ Must Win Battles in order to win the War. § To remain sustainable and competitive.

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Levels of Strategic Planning

Vision

Mission, Values

Long-term Strategic Objectives

Annual Organization wide Goals (Measures, Targets)

Department Goals

Individual Goals/Actions For more info: http://www.surveymonkey.com/s/Scorecard2013

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THE BLIND MEN AND THE ELEPHANT by John Godfrey Saxe (1816-1887)

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• You can’t manage something that you can’t describe!

• There is no generally accepted way to describe a business strategy

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• without a common language

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Development plan §  Quisque augue felis, commodo a, elementum id, faucibus id, sem. Aenean rutrum enim. Praesent pulvinar dignissim nisl. Cras a nunc. Donec tincidunt odio sit

amet lacus. Pellentesque metus tortor, ullamcorper vitae, lobortis vel, euismod in, mi. Ut laoreet, tellus laoreet blandit mollis, massa purus posuere purus, quis molestie ligula massa eu metus. Duis placerat, nulla sit amet ornare interdum, neque nunc mollis leo, vitae porttitor mi orci sit amet neque. Donec at enim. In facilisis tellus gravida ligula. Phasellus ut lorem. Pellentesque ac tortor eget augue suscipit ullamcorper. Aenean eleifend porta orci.

§  Etiam at arcu. Vestibulum lacinia nunc in eros. Suspendisse potenti. Aliquam erat volutpat. Donec gravida. Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Maecenas vel enim et metus semper fringilla. Donec ornare arcu. Maecenas faucibus ligula convallis nibh. Mauris dui quam, congue eu, commodo nec, tristique in, enim. Nulla auctor semper urna. Quisque a elit eu purus iaculis vestibulum. Aliquam dictum risus at odio. Fusce at lorem et elit faucibus placerat. Aenean velit. Proin elit odio, blandit et, scelerisque quis, pulvinar a, dui. Nunc magna dolor, bibendum ut, accumsan congue, tincidunt sit amet, neque. Proin consequat tincidunt lacus. In urna dui, congue nec, tincidunt sit amet, facilisis imperdiet, lorem.

§  Morbi sed nibh. Vivamus vitae dolor. Ut bibendum volutpat mi. Pellentesque quis magna non lectus elementum pretium. Aliquam quis est vitae arcu consequat fringilla. Cras magna risus, placerat eget, egestas consectetuer, ornare vel, felis. Nam ornare justo id orci mattis ultricies. Morbi luctus. Ut pretium odio ac libero. Nunc sollicitudin pharetra lorem. Aenean scelerisque, lacus eget ullamcorper scelerisque, ipsum urna viverra mi, eget viverra quam eros eget velit. Ut lacinia feugiat purus. Cum sociis natoque penatibus et magnis dis parturient montes, nascetur ridiculus mus. Etiam nunc nisl, aliquam blandit, luctus id, commodo laoreet, sem. Phasellus sit amet orci ut sapien vulputate pellentesque. Pellentesque dapibus purus et quam. Nam sit amet magna in neque dignissim sodales. Aenean non justo nec magna lobortis volutpat.

• Strategy

• Lorem ipsum dolor sit amet, consectetuer adipiscing elit. Cras in tortor. Sed posuere erat. Maecenas pulvinar nulla eu magna. Vivamus semper, risus ut egestas pulvinar, lectus ante feugiat quam, sit amet congue odio lacus ac ipsum. Aliquam suscipit, est ut volutpat vulputate, nulla felis

pulvinar libero, non ornare libero ipsum tristique tortor. Fusce sed lorem vitae justo feugiat malesuada. Donec aliquet. Vivamus semper eros nec diam. Vivamus sem arcu, imperdiet nec, congue ac, scelerisque vel, nulla. Donec et mauris. Integer a nulla vulputate pede consequat euismod. Praesent molestie urna nec leo. Proin eros. Maecenas ac sem nec dui sodales tempus. Maecenas suscipit egestas velit. Suspendisse vel tortor. Proin imperdiet, sem nec aliquet ultrices, nunc est egestas eros, non hendrerit magna eros eget augue. Maecenas sed leo vitae leo faucibus

vulputate. Proin dignissim eros at augue.

• Nam luctus nulla non nibh. Nam at lorem ac mauris laoreet viverra. In placerat consequat nunc. Donec rhoncus nunc ac urna. Integer vestibulum condimentum orci. Fusce velit turpis, malesuada quis, scelerisque ut, eleifend vitae, ipsum. Vestibulum eu erat. Vestibulum justo nisl, tincidunt et, semper vel, tristique quis, eros. Vestibulum tempus, massa vel consectetuer congue, erat magna consequat purus, a facilisis orci nibh vitae purus.

Nam tincidunt venenatis ligula. Nunc orci nulla, ornare quis, lobortis viverra, dapibus at, turpis. Suspendisse sit amet nisl at enim tincidunt blandit. Curabitur augue est, suscipit sed, egestas sit amet, vehicula vitae, tellus. Maecenas nec metus vel nisi interdum pellentesque.

• Words

• Text

• Text • Text • 18% • 300%

• 12%

• 1%

• through inappropriate means

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• with outdated methods

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“The formulation of great strategies is an art, and it will always remain so.

But the description of strategy should not be an art. If people can describe strategy in a more disciplined way, they will increase the likelihood of its successful implementation.”

Kaplan & Norton

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What is a Balanced Scorecard?

• A Measurement

System? • A Management

System? • A

Communication Tool? For more info:

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Components of a Balanced Scorecard

•  • Strategic Objectives • Measures • Targets • Initiatives

• Lea

rnin

g • In

tern

al • C

usto

mer

• Fin

anci

al • F1 - Improve Returns • F2 - Broaden Revenue Mix • F3 - Reduce Cost Structure

C1 - Increase Customer Satisfaction With Our Products & People

C2 - Increase Satisfaction “After the Sale”

I1 -Understand Our Customers I2 -Create Innovative Products I3 -Cross-Sell Products

I4 -Shift Customers to Cost-Effective Channels

I5 -Minimize Operational Problems I6 -Responsive Service

• L1 - Develop Strategic Skills • L2 - Provide Strategic Info • L3 - Align Personal Goals

  Return on Investment   Revenue Growth   Deposit Service Cost

Change

  Share of Segment   Customer Retention

  New Product Revenue   Cross-Sell Ratio   Channel Mix Change   Service Error Rate   Request Fulfillment

Time

  Skills Coverage

  Employee Satisfaction

  Revenue per Employee

  15%   +10%   -5%

  20%   95%

  10%   9%

  TBD   <1%

  <2 days

  100%   80%

  Finance 2000   Global Re-

Engineers

  Sales & marketing Reorganization & Training

  QFD Project   Customer Database

  Global Service Training Program

  HRMS   Knowledge

Management System

• THEME • THEME

• Strategy Map • Scorecard

• Financial

• Perspective

• Customer

• Perspective

• Internal

• Perspective

• Learning Perspective

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• Financial / Mission Success

• To Build the Strategic Capabilities..

• Needed to Deliver Unique Sets of Benefits to Customers...

• To Drive Financial/Mission Success...

• And Realize the Vision

• Equip our People...

• Internal Capabilities

• Customer Benefits

“Balanced”…Reflecting a “Natural Cause & Effect Logic” of Performance

• People: Knowledge, Skills, Systems, and Tools

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Balanced Scorecard

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RESULTS =

X STRATEGY EXECUTION

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Need  Both    

§  Vision  without  ac-on  is  merely  a  dream.  §  Ac-on  without  vision  just  passes  the  -me.  §  Vision  with  ac-on  can  change  the  world.    §   ~  Joel  A.  Barker  

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What Leaders Do

Execution Gap Turning Goals into Actions

STRATEGY EXECUTION

Ram Charan said:

70% of strategic failures are due to poor execution

of leaders. “Why CEOs Fail” Fortune June 21, 1999

It’s rarely for lack of smarts

or vision.”

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The Challenge: Ability to Execute

• “Leadership without the discipline of execution is

incomplete and ineffective. Without the ability to execute

all other attributes of leadership become hollow”

•  Larry Bossidy Chairman, Honeywell International For more info:

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Charan & Bossidy on Execution

“Leaders who execute focus on a very few clear priorities that everyone can grasp.”

—Execution: The Discipline of Getting Things Done

• 21

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General Electric - The Power of Focus

§  45+ business units §  $25.5 billion revenue

• 1980

• 1981 •  Jack Welch (CEO) announces that GE will leave any business line where they cannot hold the leadership position or a very close 2nd place

• 2000 •  12 business units

•  $129.8 billion revenue

•  40-fold increase in stock price

•  Outperformed S&P 500 by more than three times over the two decades

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• Discipline 1

• 3 WIGs • 2 WIGs • 3 WIGs

• Division A • Division B • Division C

• 2 WIGs • 3 WIGs • 3 WIGs

Create Goals with Line-of-Sight

• WIG 1 • WIG 2 • WIG 2

• Organizational Level WIGs

• Unit 2 • Unit 1 • Unit 3 For more info: http://www.surveymonkey.com/s/Scorecard2013

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• Lagging • provide an historical look at past performance.

• Leading • provide indicators that are predictive of future results.

• Real-Time • show where things are right now.

• They allow corrective action to be taken immediately to affect the outcome.

• 23

•  Must drive the lag measures

•  Should be sensitive enough to move every week

•  Behavioral, not “quick lag” measures

Three Types of Measures

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� 25

Scoreboard

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� 26 • © 2011 Narejo Human Resources

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� 27 • 47

• “Follow-through is the cornerstone of execution, and every leader who’s good at executing follows through

religiously.

• Following through ensures that people are doing the

things they committed to do.” Larry Bossidy,

Execution: The Discipline of Getting Things Done

Hold Each Other Accountable

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