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October 6, 2010
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Jeadership Role: CEO must drive the change agenda to reinforce the mission, vision and values.

    

What business are we in and why?

Objective: Affirm high-level guidelines about organizational purpose and conduct

Barriers: Vision is not frequently described in terms not conducive to execution.

Deliverables:

3p Clear mission (why we exist)

3p Core Values
3p uantifiable vision
3p ?trategic change agenda
3p Enhanced vision
(our attitudes, behaviors, character)
how the enterprise wants to be perceived by the world (stretch
goal, definition of niche, time horizon)
(compares current status of several organization structures,
capabilities and processes with what they need to be in two to four
years)
(comprehensive picture of enabling factors to achieve the vision,
including core value proposition, key processes, and intangible
assets of people and technology)
‘p Jearning/Growing
‘p rrocesses
‘p ?ite Users
‘p Clients
‘p  inancials

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What are the key issues?

Objective: Identify through structured analysis, the events, forces, and experiences that impact and
modify the strategy.

Barriers: Analysis is frequently focused on outcomes and not on the drivers of strategy.

Deliverables:

3p Environmental scan (rE? EJ)

‘p External Environment
åp r
  (political, economic, social, technological, environmental, legal)

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October 6, 2010
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3p r 
 - rolitical factors, are how and to what degree a
government intervenes in the economy. ?pecifically, political factors
include areas such as tax policy, labor law, environmental law, trade
restrictions, tariffs, and political stability
3p  
 - Economic factors include economic growth, interest
rates, exchange rates and the inflation rate.
3p
 
  - ?ocial factors include the cultural aspects and include
health consciousness, population growth rate, age distribution, career
attitudes and emphasis on safety.
3p   
 - echnological factors include technological
aspects such as R&D activity, automation, technology incentives and the
rate of technological change.
3p    
  -Environmental factors include ecological and
environmental aspects such as weather, climate, and climate change,
which may especially affect industries such as tourism, farming, and
insurance
3p  
  - Jegal factors include discrimination law, consumer law,
antitrust law, employment law, and health and safety law.
åp r

 (buyer bargaining power, supplier bargaining power,
availability of substitutes, threat of new entrants, industry rivals).
åp c
 
A evaluate competitors on 2x2 matrix along
competitive dimensions (product scope, technological capabilities,etc);
superimpose against KrIs (sales, assets, market share, profitability).
‘p Internal Environment A key processes, human capital, operations, innovation,
technology deployment
åp r
 
c 
  A sequence of processes necessary to deliver a
company͛s products and services to customers. Identify what we are going to do
better than our competitors for a sustainable competitive advantage.
åp  
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 A identifies processes and costs compared to
competitors.
3p Competitive scan (?WO )
‘p Can be balanced against the balanced scorecard categories of: Growth, rrocess,
Customer, and  inancials.
3p ?trategy of Record͟ analysis
‘p rrogress of existing strategy
3p ?trategic issues

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View in both strategic and operational approaches

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In what 
 do we compete?

What
 

   will differentiate us?

What 

    will differentiate us?

What 

 create the differentiation in the strategy?

What are the  

  capabilities required by the strategy?

What are the 

  
 of the strategy?

Objective: Define where and how the organization will compete.

Barriers: here is a variety of methodologies, and there is no consensus on which approaches to

use under which circumstances.

Deliverables:

3p Key analysis of issues

3p ?trategy ?tatements (OA? ?tatement) A stated in the form of a vision statement
‘p Objective
åp he ends the strategy is designed to achieve (quantitative goals like a vision
statement)
‘p Advantage
åp he means by which we will achieve its objective.
åp What we will do differently, better or uniquely.
åp Describes the value proposition we will offer to attract clients or users.
‘p ?cope
åp he niche in which the domain intends to operate.
åp Defines the market segment in which we intend to compete and win.
åp Customer segment, breadth of product line, technology employed, degree of
vertical or horizontal integration (value chain activities).
3p ?trategy Direction ?tatements (for each OA? ?tatement)
‘p ?trategy objectives A specific goals
‘p Do-wells A what we need to master
‘p rreliminary measures A how we will measure success


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October 6, 2010
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Jeadership Role: Executive leaders validate the strategy map and challenges the organization with
stretch targets.

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How do we describe or express our strategy?

Develop a comprehensive integrated model of the strategy that pulls together the many diverse
components of the plan. he challenge is to overcome the silo effect of different groups building out
their strategy with little interaction or consideration for an integrated approach.

?trategy map have several parallel themes. his allows a company to manage short, intermediate and
long term value creating processes.

 inancial rerspective:

3p he ultimate goal of the company is to create  


  for the shareholders.
3p ›etrics: ROI, Economic Value Add, Operating rrofits, Revenue rer Customer, Cost per Unit
rroduced

Customer/User rerspective:

3p We  
  by satisfying client and user value propositions.
3p ›etrics: ?atisfaction, Retention, Growth, Repeat User Rate, Breadth of ?ite used

rrocess rerspective:

3p Our internal processes  



  that satisfies our users and clients, which also
contributes to the financials objectives.
3p ›etrics:

Growth rerspective:

3p Our assets (people, technology, culture) drive performance to improve critical processes that

  to our users, clients and shareholders.
3p ›etrics:

Deliverables:

3p ?trategic ›ap (visualization)

3p ?trategic objectives

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How do we measure our plan?

Convert the strategic direction statements into measures and targets that can get linked to the
management system.

Objective: What the strategy is trying to achieve

›easure: How success or failure (performance) against objectives is measured

arget: he level of performance or rate of improvement needed by the strategy

Deliverables:

3p Balanced ?corecards of measures, targets and gaps for each strategic theme

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What action programs does our strategy need?

Deliverables: Initiatives rortfolio

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?pecial budgeting and controls on strategic projects.

Deliverables: ?trategic initiatives budget

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Jeadership Role: Jeadership drives organizational alignment

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How do we ensure that all organizational units are on the same page?

Deliverables:

?' 
How do we align support units with the business unit and corporate strategy?

Deliverables:



How do we motivate employees to help execute the strategy?

Deliverables: Communication rrogram (7 times A 7 different ways).

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Jeadership Role: supports cross-organizational process improvements.

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Which business process improvements are most critical for executing the strategy?

How do we link strategy with operating plans and budgets?

Deliverables: Dashboards

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What is the product mix and quantities we need to sell?

 orecast a rolling ë to 6 quarters into the future (dynamic forecasting).

Deliverables: Detailed ?ales  orecast

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How do we determine resource capacities and alignment with sales demand?

Deliverables: ime-Driven Activity-Based Costing ( DABC) model

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How much do we spend on what?

Deliverables:  inancial rrofit rlan, OpEx Budget, CapEx Budget

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Jeadership Role: Openness and skill in running strategic management reviews to improve effectiveness
for fine-tuning the strategy throughout the year.

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Are operations under control?

?hort, highly focused, data driven, and action oriented.

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Are we executing our strategy well?

rlan-Do-Check-Act (rDCA) cycle leveraging balanced scorecards

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Jeadership Role: Allow for well formulated and executed strategy to be challenged in light of the
changing competitive environment

Is our strategy working?

Review the rE? EJ analysis

Activity based profitability reports