turning strategy in action

Presenter: Ajay M. Pangarkar, CTDP, CPA, CMA

Based Upon the BookThe Trainer’s Balanced Scorecard: A Complete Resource for Linking Learning to Organizational Strategy

CentralKnowledge Where Learning…Means Business

CentralKnowledge.com Where Learning…Means Business t: 866.4.VXPERT e: [email protected] tw: @ajaypangarkar

Building Business Acumen for Trainers: Skills to Empower the Learning Function (with CD) Published by Wiley Terrence Gargiulo, Ajay M. Pangarkar, Teresa Kirkwood

additional resources

The Trainer’s Balanced Scorecard: A Complete Resource for Linking Learning to Organizational Strategy Ajay M. Pangarkar, Teresa Kirkwood Published by Wiley


Identify variables supporting strategy and to deliver results

what to expect

Develop critical process to strategy formulation

Implement a strategy for performance expectations

turning strategy into

action

Learning objectives:

Develop a framework to support strategy execution


strategy facts…

“ approximately 5% of all organizations implement their strategies successfully, and 70% of strategic initiatives fail to meet their objectives. the remaining 25% have some mild success but do not meet the full potential of the strategy devised. - Kotter International


quick question…

what’s strategy to you? •  Turn to the person next to you •  Take 3 minutes and describe

what strategy means for you


how strategy is seen…


what strategy is not…

Strategy is more than just financial results…

…financial success is a result of a well executed, performance focused strategy - Ajay M. Pangarkar CTDP, CPA, CMA


what strategy is not…

•  provides long-term coherence and direction

•  documents key choices to make

a strategic plan is not a ‘to do list’

•  focuses on ‘big picture’ direction

•  provides operational action items

What it is…It…


defining strategy…

simply as going from point A to point B…

Where you are

Where you want to be


defining strategy…

then… why do so many still get it wrong?


defining strategy… Mission

Why we exist

Values What’s important to us

Vision What’s we want to be

Strategy Our game plan

Strategy Map Connecting the strategy Balanced Scorecard

Managing strategy performance

Targets and Initiatives What we need to do

Personal Objectives What I need to do

Satisfied Shareholders

Happy Customers

Effective Processes

Motivated Workforce

Strategic Outcomes

Ref: Kaplan & Norton


?

core strategy concepts

Getting to… B

Where are we now

Where are we going

How will we get there ? ?

Can you answer these questions?

Take 5 minutes; turn to your neighbour and try


?

core strategy concepts

Getting to… B

Where are we now

Where are we going

How will we get there ? ?


core strategy concepts!

Mission and Objectives

Environmental Scan

Strategy Implementation

Strategy Formulation

Evaluation & Control

? where are we now

how will we get there ?

? where are we going ?


strategy development!

1 define the mission 2 ? 3 identify

expectations evaluate situation

4 address options 5 implement

option(s) 6 align operations

we’re going to “storyboard” strategy


the case: sky air

•  Sky Air, a value driven airline

•  Strategy shift from market growth to profitability

•  Profit growth through revenue or efficiency

•  Loyal clients enjoying value from SkyAir

•  CEO wants efficiency over revenue growth


where do we begin?

we need to start somewhere… what do you think?


basic mission concepts

Current focus: •  what is the mission? none?…imply one •  does it clearly communicate intent? no, why?

Future direction: •  does the current one fit? no, why? •  what changes/modification is required?

Keep in mind mission components why; what; how; where; values

1 define the mission


basic mission concepts

HOW an organization accomplishes what it

does to exist!

Corporate Strategy

Mission

WHAT an organization must do to become

what it aspires to be!

Vision

Business Strategy



what a mission can do…

Be the world's best quick service restaurant experience. Being best means providing outstanding quality, service, cleanliness, and value, so that we make every customer in every restaurant smile

McDonald’s mission:


what are your observations about the mission?


now it’s your turn…

In your group: §  read the SkyAir case

§  together, identify Sky Air’s mission

§  what is the current focus?

we’re going to “storyboard” SkyAir



sky air’s mission

Dedication to building a recognized brand with… •  the highest quality customer service and respect •  delivered with a sense of warmth, friendliness,

individual pride, and company spirit •  continuing building our unique position as a

leading short haul, point-to-point carrier in North America.



anchor your strategy…

customer intimacy

product leadership

operational excellence

value disciplines focus

•  customer needs •  value not price

•  market leader •  innovator, adopters

•  lean operations •  efficiency, reliability

example

2 identify expectations

Can a company have more than one?


other analysis tools?

Core Competence (P&H) •  what do we do better

than others

Porter’s ‘what is strategy?’ •  cost leadership,

differentiation, market focus




In your group: §  revisit the mission

§  decide on a primary discipline

§  what is their strategy focus?

what’s SkyAir’s “anchor”?



strategic analysis

Strategically analyze industry/competitive

conditions

Strategically analyze your company’s

situation

What strategic options does the company have?

What is the best strategy?

mission

à opportunities à  threats

à strengths à weaknesses à stakeholder needs

revised mission

3 evaluate situation


strategic analysis – external

Key Questions: •  What are the industry’s dominant features?

•  What’s changing the competitive/business environment?

•  Which companies are in strong/weak positions?

•  What strategic moves are rivals likely to make?

•  What are key factors for competitive success?

•  Is the industry attractive and what are the prospects for above-average profitability?

Strategically analyze industry/competitive

conditions


external focus


strategic analysis – internal

Key Questions: •  How well is the present strategy working?

•  What are the company’s strengths, weaknesses, opportunities, and threats?

•  Are the company’s prices/costs competitive?

•  How strong is the company’s competitive position?

•  What strategic issues does the company face?

Strategically analyze your company’s

situation


internal focus


swot analysis

S = what do we do well W= what do we do poorly

O = what is the industry growth T= what are industry challenges



‘keys’ to the company key success factors •  necessary to achieve the mission •  vital for a successful strategy •  drives the strategy forward;

makes or breaks it

key risk factors •  not meeting a KSF •  external threats or festering

weaknesses



quick question…

what are your ksf’s? •  Turn to the person next to you •  Take 5 minutes; come up with

3 ksf’s for your company

•  Ensure they are ksf’s and not competitive advantages



other analysis tools?

Porters 5 Forces •  Supplier, buyer, rivalry,

substitution, new entry

others you use?

PESTEL

•  Political, economic, social, technology, environmental, legal




In your group: §  review the SWOT provided

§  identify additional SWOT points

§  identify KSFs/KRFs

§  define is the stakeholder need

evaluate SkyAir’s “situation”



address strategic options evaluate options to address issues: 1.  operational efficiencies (flight turnaround)

2.  revenue growth (premium packages)

strategy alignment ‘test’: •  align with the mission? •  meet with stakeholder needs? •  fit with the value discipline? •  capitalizes on KSFs?

4 address options



In your group: §  select one option

§  evaluate its pros and cons

§  how well does it align?

§  hint: review the current situation

evaluate SkyAir’s strategic “options”

4 address options


strategic fit

Best Strategy

A good fit?

Competitive advantage?

Performance objectives?

Fit the Mission?

5 implement option(s)

overall objective operational performance



In your group: §  review the original mission

§  does it need to be modified?

§  if yes, then modify it

evaluate SkyAir’s “mission”…again

mission revised mission



sky air’s (revised) mission

Dedication to building a recognized brand with… •  the highest quality customer service and respect •  delivered with a sense of warmth, friendliness,

individual pride, and company spirit •  continuing building our position as a leading

operationally efficient short haul, value driven fares, point-to-point carrier in North America.


time to ‘operationalize’ the mission


operational performance

“ a set of management processes help to improve management, strategy execution and decision making.

it helps execute strategy and to measure and monitor performance to make strategic decisions and learning.

it is the quality of those decisions that separate successful companies from the rest

- Advanced Performance Institute

6 align operations

performance management is…


operational performance 6 align operations

Financial objectives “What stakeholders want?”

Customer expectations “How customers see us?”

operational financial results

market reality and expectations

support external requirements

enable operational requirements

Internal focus “What must we do well?”

Learning capacity “Improve/create value?”

• operationalize the mission

this how you:

• measure strategy performance


Customer Need Identified

Design Develop Make Market Customer

Need Satisfied

Service

Time to Market Supply Chain

CUSTOMER CUSTOMER INTERNAL PROCESS

LEARNING & GROWTH

Innovation Operations

FINANCIAL

performance & value chain 6 align operations


• Sales training program • Custom. service training • HR hiring plan

• 50% incr leads • 10% incr. satisf • Maintain/incr. level by 15% / month

• Sales/month • Client satisf. • Client retention • Weekly perform reviews

• Develop/hire sales staff • Develop/hire cust. Service staff

Learning

• Incr. Resource to R&D • Benchmarking

• <$2M/quarter • >75 days from current • >10 min/client

• Invst. in R&D • Development to mkt turnaround • Cust. resp time

• Develop innov. products • Reduce client handling

Internal

• Cust. service • Innovation management • Customer loyalty program

• < 90% satisf. rate from 2005 • Survey 75% clients • % change

• Cust. satisf survey/levels • Survey current customers

• Increase client loyalty • Build client relat. And identify client needs

Customer

• Ident. markets • Stabilize prod cost • Acquire sales tools

• 35% in 2 years • 22% / year • 40% / year

• Revenue stmt. • Production level • Sales forecasts

• Revenue incr. • Increase prod. • Increase sales

Financial

Initiatives Targets Measures Objectives Strategy Map Incr. revenue

Increase production

Increase sales levels

Increase client loyalty

Develop cust. relation.

Develop new products

Align Sales team

Develop cust. service

staff

Facilitate client interaction

performance framework 6 align operations



In your group: §  use the revised mission and swot

§  complete the BSC provided

§  map the performance links

operationalize SkyAir’s “strategy”

6 align operations


sky air performance 6 align operations

Objectives Measures Target Initiative

Financial 1.  Increase profits 2.  Increase revenue 3.  Fleet management

• P&L forecast to actual •  Incrm. revenue report • Reduce fleet size;

reduce cost; incr. profit

• 10% net profit/yr • 15% / year • 35 planes

• Optimize flight time •  Intro high margin products •  Increase customer capacity of

existing fleet

Customer 1.  Flight is on-time 2.  Lowest prices 3. Customer

satisfaction

• FAA OnTime arrival rating

• SA to industry price report

• Customer survey

• 90% on-time arrival

• Currently #2 by Consumer Report

• 85% satisfaction

• Quality management

• Manage prices to 5% lower than competitors

• Customer loyalty program

Internal 1.  Fast turn around 2.  Fast passenger

processing 3. Effective resource

utilization

• On ground time • Time to disembark and

board • Resource utilization

report

• 30 minutes or less • 25 minutes or less

• 90% resource use

• Cycle time optimization for ground crew

• Cycle time optimization for gate/boarding crew

Learning 1. Ground crew alignment

2. Boarding/Gate staff alignment

• Cycle time optimization benchmark report

• Cycle time optimization benchmark report

• 30min turnaround (15% improve)

• 90% resource use • 25 min. boarding • 95% satisfaction

• Ground crew activity analysis • Optimize value add activities • Assess resource utilization • Boarding/gate staff analysis •  Identify passengers concern


quick question…

what are you taking away today? •  Turn to the person next to you •  Take 3 minutes to name what is your

take-away and how you will apply it



turning strategy into action



learning objectives review:


§  Failure occurs when not operationalized

§  Creates tangible connections throughout the organization

§  Recognize strategy is not just financial

§  Aligns with the mission

§  Need to know where you want to go

§  An evolving process to achieve the mission

§  Objectively assess its current situation

§  Leverages what it does well, mitigates what it doesn’t



turning strategy into action



turning strategy into

action

learning objectives review:


§  Failure occurs when not operationalized §  Creates tangible connections

throughout the organization

§  Recognize strategy is not just financial

§  Aligns with the mission

§  Need to know where you want to go

§  An evolving process to achieve the mission

§  Objectively assess its current situation

§  Leverages what it does well, mitigates what it doesn’t


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Ajay M. Pangarkar CTDP, CPA, CMA

t: 866-489-7378 x 1 e: [email protected]

@ajaypangarkar

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