hhl functionality

HHL Functionality Project - Strategy Phase

Agenda

Functionality concept. Importance of definitions Understand the process Summary and Next Steps

What else?

Functionality: the process

• Choosing Functionality will assist HHL to get through the second brick wall i.e. creating clarity and cohesion. The overlaying context in the framework is responsibility, meaning getting clear on who is responsible for what in the business.

• There is value on defining what each term means to HHL (i.e. spending time on the ‘what’ level before driving into the detail).

• We recommend appointing at least two Project Champions

• Going through the five layers of coaching will help clarify what the strategy will look like and help define the level of engagement between HHL and Shirlaws.

Functionality: the process

HHL NOTES

Layers of coaching

• L1 = Concept

• L2= Strategy

• L3 = Implementation

• L4 = Next Phase

• L5 Leverage

Recap Project Approach

Risk around strategy

RLD strategy

Your choice

Strategic:

The key to successfully adopting this approach is alignment.

What is Functionality?

/ Infrastructure

What is Functionality?

• With responsibility comes ownership.

• Functionality is a discipline and structure i.e. non hierarchical.

• There is no room for ego, meaning specifically that no roles are better or more important than others.

• It is a “top down” approach to job roles and responsibilities which allows for everyone to know what each is responsible for.

• The context of responsibility creates empowerment, control, alignment and motivation.

What is Functionality? Resources defined into 3 Areas

Costs

Growth = Increased margins Profit = Increased valuation

Cash flowStrategy

What is Functionality? Resources defined into 3 Areas

• Many companies spend most of their in red and blue and very little in black.

• Long term value is created by spending time in the black (strategy) area of a company.  

• The spaghetti diagram is an example of how businesses end up spending too much time in red and blue.

Spaghetti Diagram

How does the Spaghetti Diagram relate to Functionality?• A common result of the spaghetti diagram is the company ends up running

a “Mom and Pop” business.

• Little time is spent on moving the business forward because all your time is spent on driving short term value.

• As a result, job descriptions tend to be unclear.

• Responsibility can feel confusing.

• The good news is that we can untangle spaghetti and break it into forms.

• It is important to define the different functional areas of your business in red, blue and black terms.

• By looking at what sits under each area, we can further identify where the time is spent and begin to pick apart the spaghetti and set new parameters.

• You can then choose how you want to adjust the percentages with the intention of driving long-term equity into the business.

• Taking a look at the revenue chain enables us to understand how you get to spend the time.

Key Learnings – mid session

How does the revenue chain link to functionality?

How does the revenue chain link to functionality?

What is Functionality? ‘RBB’

• How much of the company resources are spent in blue and red?

• The consensus was..a lack of clarity about how much time is spent in each area. It differs across the board members.

• 6/9 members spend time in Strategy – roughly 13% of time in BLACK

• “If you don’t know where you are, you don’t know where to go”

• Basically the only tool you have to determine the percentages is your gut.

What is Functionality? ‘RBB’

What is Functionality? Resources defined into 3 Areas

Costs

Blue – Red = MarginBlack = growth in capacity – tomorrow’s profit

Cash flowEquity

30% 13% 57%

Functionality – what are the outcomes

Cultural Commercial

Responsibility

• Clarity around strategic allocation of resources•Knowledge• Efficiency• More porduction, less effort

•Alignment•Less agreement•Knowledge•Reduced staff frustration•Empowerment•“Everyone’s contribution is valuable” (non hierarchical

Key points around functionality?

• Project will stall if alignment poor or if the “Why” isn’t defined and agreed

• What rather than who

• Upskilling job holders

• Non hierarchical

• Consistent definitions key

What is Functionality? Overview of the process

Process to create a functional structure

1. Understand concept

2. Create Strategy document 2.1 Define present position

• Draft definitions functional roles• Define present % RBB – collect information • Collate information

2.2 Define desired position • Define ideal % • Revisit definitions functional roles

2.4 Define key stages to reach desired position

2.3 Get agreement

3. Implement strategy

Creating strategy document1. Understand concept

2. Create Strategy document 2.1 Define present position

• Draft definitions functional roles• Define present % RBB – collect information • Collate information

2.2 Define desired position • Define ideal % • Revisit definitions functional roles

2.4 Define key stages to reach desired position

2.3 Get agreement

3. Implement strategy

Creating strategy document

Resource Management – E.g. As-Is

% % %

Manger 1 10% 17.5% 72.5%

Manager 2 37% 24% 39%

Manager 3 5% 20% 75%

Management Overall

17% 21% 62%

Staff 1 31% 15% 54%

Staff 2 85%* 0% 15%*

Staff 3 14% 3% 83%

Staff 4 100% 0% 0%

Staff 5 1% 20% 79%

Staff 6 100% 0% 0%

Overall 43% 11% 46%

High Level Functionality Chart – ‘As-is’

<Client>

Board(Dir 1, Dir 2, Dir 3 etc)

CEOCEO name

BUSINESS SUPPORT – Staff name

BUSINESS MANAGEMENT – M1, M2, M3

BUSINESS OPERATIONS

Sales & Marketing – M4Operations – M1, M2

Information Technology – S1Administration- S4Secretarial – S3Accounting and Finance – S4Premises Management – S3Human Resources – S3, S4Legal – S1, S2Compliance – S1

Joint Ventures - ??Capacity Planning and Mmt – M1, M2Distribution – M3, M4Client Management – M3, S1Positioning – M2, S2New Products – S1, S2Culture – M1, M2

Training – AllSales – S2Marketing - ??Factory – S3Product Delivery – S4, S5Client Services – S5

NB - S1 – Staff member 1 etc. M1 – Manager 1 etc.

Review

• Functionality is non hierarchical; there is no job more important than another.

• Functionality is a disciple and provides structure to the business; there is no room for ego.

• At the end of this process there is clarity from top down on who does what.

• Trust increases because each person knows what they are responsible for and more empowered to get the job done.

• There is shift in humility and pride at work.

Next Steps

•Appoint two Project Champions

•Schedule meetings for at least next month