business strategy defined
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1
Business Strategy Defined
2
Leadership
Information Communication
& Technology
Human Re-sources
Business Units
Financials
-Defined -
3
Mobilize Change Through Leadership
Align the Organization
to The Strategy
Make the Strategy
Everyone’sEveryday
Job
Translate the Strat-egy to Op-erational
Terms
Make The Strategy A Continual Process
The Wheels of Change
4
Translate the Strategy to
Operational Terms
The Means Justify The End Invest in the tangible
Solid Product and intangible
Human Capital assets of the organization. However, some ingredients are frozen, some are stale and others are active and fresh.
Formal reporting structures are replaced with strategic channels that will enable daily communica-tion and feedback to and from all employees and customers
Align the Organization
to the Strategy
Make Strategy Everyone’s Everyday Job
Communicate your vision and strategy to the front line
The commitment of all employees and their ac-tive contribution is essential and necessary in
making a successful strategy a reality
Strategy-Focused organizations require that all employees understand the strategy and conduct their day-to-day busi-ness in a way that contributes to the success of the strat-
egy.
Must a consorted effort to educate every employee on all lev-els in the organization about the key strategic components.
Make Strategy a
Continual Process
Most organization, the management process is built around the Financial plan. Meetings take place to discuss Financial
performance.
There are no meetings at which managers discuss strat-
egy. 85% of management teams spend less than one hour per month discussing strategy.
An effective leader is much like a navigator guiding a vessel on a long journey, always sensing the shifting winds and cur-rents and adopting the course and fine-tuning their strategy.
Building on the principle that Strategy is everyone’s everyday job, empowers employees by giving them knowledge needed
to do his or her job.
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Mobilize Change through Executive Leadership
It is important to stress that you need more than processes and
tools to create Strategy-Focused Organization
The single most important condition for success is the ownership and ac-
tive involvement of the Executive Team. “Things don’t happen by
themselves”. Strategy requires change from virtu-ally every part of the organization.
Strategy require team work to coor-dinate these changes
If those at the top are not ener-getic leaders of the process,
change will not take place, strategy will not be implemented and the
opportunity for breakthrough per-formance will be missed
Once the organization is mobi-lized, a strategic management sys-
tem emerges and new cultural values and structure is born and put in to place to manage the
new system
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MOBILIZATION
The organization must be
UNFROZEN
Transformational change begins at the top. The first job for executive leadership at a strategy-focused organization is to make the need for change obvious to all. Once the change process is launched, executives establish a governance process to guide the transition.
This process defines, demonstrates and reinforces the new cultural values to the organization. The competitive landscape is constantly changing, so strategies must constantly evolve to reflect shifts in opportunities and threats.
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Three actions must be taken by the leader
Establish a sense of urgency to remedy the situation
Create a guiding coalition and team spirit
Develop a vision and a strategy
Management Control System Strategic Management System
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Budget&
Objectives
Strategy&
Vision
Review&
Re-orient
PersonalIncentives
Planning& Capital Allocation
Budget &
Objectives
TranslatingThe
Vision
Communicating&
Linking
BusinessPlanning
Feedback&
Learning
Single Player =
GM
Multiple Players =
GM & EXCOM & HOD & R&F
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Many companies today moving away from performance management system
by recognizing the limitations of managing only with financial numbers
to
strategy-focused organization emphasizing customer satisfaction and employee
development and training.
Balanced Strategy requires five components;
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Planning
Coordi-nating
Com-manding
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Planning
involves considering the future, deciding the aims of the or-ganization and de-veloping a plan of
actionOrganiz-
inginvolves gathering the resources necessary to
achieve these aims and structuring the or-ganization to complete
its activities. Both of these roles remain
crucial.
Coordi-nating
involves focusing and, in particular,
unifying People’s ef-forts to ensure suc-
cess.
Com-mandingis very important in order to achieve the
optimum return from people.
Con-trollinginvolves monitor-
ing that every-thing works as
planned, making adjustments
where necessary.
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and success through answering question such as:
Where are we now? Where do we want to be? How we’re going to get there?
When designing a strategic thinking organization, you must consider long-term competitive advantage
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No business is immune from the competitive threats. Surveying and benchmarking the compe-
tition needs to be a continuous process.
The business climate and landscape is very com-petitive today and an organization must position itself in the market to provide growth, to continue to build customer value and to keep ahead of it’s
competitors.
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Develop and communicate a powerful -
compelling vi-sion of the fu-
ture
Structure and lead the orga-nization in the most effective and appropri-
ate way
Control the skills neces-sary to im-
plement and realize the vi-
sion
These include en-ergy and drive, de-termination, capac-ity for hard work, exceptional com-munication skills and the ability to
empower and mo-tivate others and to act as a role model
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The Turnaround StrategistThe decision making approach focuses on turning around the performance of an organiza-tion in decline. To achieve turnaround success, it is important to implement new control systems quickly and to focus on the reasons for decline and reverse them. It is therefore, necessary to forecast and manage uncertainties. This requires intuition, creative insight and the ability to respond to events quickly, effectively and imaginatively.
Continuous improvement is always to be valued, but there are times when more dramatic change is needed.
Controlling Costsis one way of boosting profits and reduc-ing losses. One of the most important fac-tors in controlling cost is attitude. Create an understanding throughout the organi-zation of the financial facts of business life
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Reducing Costs & Improving Efficiency
Even when things are going well, we still have to be absolutely dedicated to decreasing costs. It is not something you have to do when things are difficult, it is something you have to do all the time and in every area of the business.
Achieving low costs is not so difficult. What matters is having the right costs and high motivation. If you have low costs and people are unhappy, then you have bad results. Keeping employees motivated, energized and excited is the most important aspect to succeeding with your strategy. This must remain an ongoing process.
Setting realistic targets us also important. Reliability in achieving the target matters as much as the target itself.
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Translating the Strategy Into Desired Outcomes
Mission
• Why We Exist
Core
Value
s
• What We Believe in
Vi-sio
n• W
hat We Want To Be
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Translating the Strategy Into Desired Outcomes
Strategy
•O
ur G
ame
Plan
Proc
esses
•Im
plem
enta
tion
Strat
egic
Initiatives
•W
hat W
e N
eed
To D
o
Personal Objectives
•W
hat I
Nee
d To
Do
22
four-prong approach to succeeding with our
Strategy
Internal Business
Pro-cesses
Learning &
Growth
Cus-tomer Financial
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FinancialThe strategy for growth & profitabil-
ity
CustomerThe strategy for creating value from
the perspective of the customerBusiness Pro-
cessesThe strategic priorities for various business
processes which create customer satisfaction
Learning & GrowthSet priorities to create a climate that supports organizational change, innovation and growth
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Revenue Growth Strategy
Financial• Productivity• Increase Rev-
enues• Profitable
Growth
Customer• Brand Image• Consistency• Price• Positive Experi-
ence• Customer Acqui-
sition• Customer Reten-
tion
Business Pro-cesses
• Strive For Excel-lence
• Core Competen-cies
• Customer Focus• Employee Morale• Develop New
Products • Innovation• Increase Customer
Value
Learning and Growth
• Strategic awareness
• Goal Alignment• Staff Compe-
tency• Training• Confidence
25
Empowering and Mobilizing People with the overall Strategy
Managing Knowl-edge & Information
Fostering Creativ-ity and Innovation
Focusing on Con-tinuous Improve-mentGetting the Corporate Culture Right
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Strategic OutcomesEffective Processes
Motivated and Prepared Workforce
Satisfied Customers
Satisfied Owners
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Strategy is a Hypothesis
The foundation of a strategy is the activities in which an or-ganization chooses to excel.
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Strategy Consists of Various Themes
Improve operating efficiency
Improve growth in core segments
Improve operating margins by streamlining your business
Reduce the cost of capital employed
Increase sales through improved retail channels/alliances
29
The Value Proposition
The Value Proposition
describes the unique mix of products, price, service, relationship and image. It
determines the market segments to which the strategy is targeted and
how the organization will differentiate itself from the
competition.
30
Value Chain
Invention
Product Development
Speed To Market
Joint Partnerships
SolutionDevelopment
Customer Service
Relationship Management
SupplyManagement
Cost Reduction/Quality Control
Operation Efficiency
Health
Safety
Environment
Social
InnovationProcesses
CustomerManagement
Processes
OperationalProcesses
RegulatoryProcesses
Build theBusiness
IncreaseCustomer Value
Achieve Op-erational Ex-
cellence
Be a GoodCorporate
Citizen
31
Strategy Transforms Intangible Assets
The Learning and Growth Perspective
Strategic Competencies Strategic Technologies Climate for Action
SkillsKnowledge
SharingInfrastructure AlignmentAwarenessApplications MotivationReadiness
Strate-gic
Skills
BestPracticeSharing
UnderstandingOf
Strategy
GoalsAligned
WithStrategy
Key PositionEmploy-
ees
Morale
SuggestionProgram
Empower-ment
32
Knowledge Management StrategyCustomer Intimacy
Product Innovation
Operational Excellence
Capture KnowledgeAbout Customers
Understand Cus-tomer Needs
Empower Front-Line Staff
Ensure that Every-one knows the Cus-
tomer
Make Company knowledge to Cus-
tomers
Reduce Time to Market
Commercialize new Products
Faster
Ensure that Ideas Flow from Cus-
tomers and Front-Line to R&D
Re-use and re-ap-ply tested knowl-edge and method
Reduce Cost
Improve Quality
Use “Know-How” from Top-Perform-ing units to others
Don’t Reinvent the Wheel
33
The benefits of Scenario Planning• Scenario planning helps provide a better understanding
of how different factors affecting a business effect each other. It can reveal linkages between apparently unre-
lated factors and most importantly, it can provide greater insight into the forces shaping the future, deliv-
ering real competitive advantage.
Understanding the Present
• Scenarios should be designed to challenge estab-lished views and to overcome Business-As-Usual complacency and to enable both established for-
mulas and new ideas to be tested.
Overcoming Com-placency
• Scenarios encourages the opening of minds to new possibilities and the excitement of thinking about
how they may be realized.
Stimulating Creativ-ity and Innovation
34
The benefits of Scenario Planning
• Scenarios help people to understand their envi-ronment, consider the future, share knowledge
and evaluate strategic options.
Promote learning
• Scenarios attempt to look beyond our more lim-ited mindsets, recognizing that possibilities are
influenced by a wide range of people.
Promote Action and Ownership of
the Strategy Process
• Scenario planning works because it looks beyond current assignments, facts and forecasts. It al-
lows discussions to be uninhibited and it creates the conditions for a genuinely effective shared
sense of purpose to evolve.
Create Shared View
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Human Resources Management Process
Customer Fo-cus
SelfConfidence
Organiza-tionAwareness
Concep-tualThinking
Relation-shipBuilding
Impact andInfluence
Interper-sonal
Under-standing
Addin
g
Valu
e
To the
Cus
-
tom
erRecognizing
Market
Opportuni-
ties
Del
iver
ing
Resul
ts
Working
withCol-
leagues
DevelopingOthers
TeamLeadership
Holding PeopleAccountable
AnalyticalThinking
InformationSeeking
ConcernFor Quality
Initiative
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