Essay About Consistent Execution Of Strategy And Strategic Management

Strategic Management
Balanced Scorecard – 15/16-02-2016Bridging tools to articulate strategic management to operationMain concern: excellence in execution + consistent execution of strategy by top management + sustained and steady top-line growth + customer royalty & retention + change processThe more people in the organization, the above concerns are more significantProblems: unclear vision & strategy; lack of alignment; disjointed planning & process; inability to monitor, test & adaptProcess: design (strategy fact phase, full potential ambition, choices (where to play + how to work), financial projection) – 2x 1 th  →  execution – monthly (operation planning, budget, project management) → enabler (workforce panning, performance management, training, supporting system)Operating rhythm – 1 year cycle: strategy & development (#1 develop – strategy development Q3 + #6 refresh – strategy refresh, all year round), Strategy performance management (#2 translate – balanced scorecard development Q3 + #4 align – organization alignment Q3), business units (#4 plan – initiatives and budget development Q4 + #5 Monitor – performance monitoring, all year round)Steps: Strategy formulation → strategy execution → operational managementStrategy developmentStrategy is change. Value: business as usual (operational) + strategic vision (strategic)Tests of strategic effectiveness: what is our strategy, what does it mean for me? What do I do differently as a result of it?To communicate: 7 ways 7 times to employeesQ2: strategic fact-base (outward (market, customer, and competitive landscape) & inward looking (operational & financial strengths and weakness) – PESTEL, Porter’s 5 forces, SWOT analysis, TOAST analysis); full potential ambition (aligns leadership team around bold full potential ambition driven by leadership economics and results delivery); where to play/how to win (makes choices on where to focus expand and redefine, which leadership models to pursue, whether to play by/break the rules and core differentiation) → macro trends, market outlook, competitive landscape, point of departure/starting positionQ3: financial projection (5-year financial plan, critical assumption planning and sensitivity analysis); implementation plan (translate strategy into action, takes multiple “potential future’) Alignment: full potential ambition – where to play – how to win – key strategic initiativesTrade off → need to focus on key strategies, check revenue potential, integrated set of activities (combination of competitive advantages)GSK strategy: low cost (cost efficiency) & differentiation (customers want to pay more for the added value provided)Translate – balanced scorecard developmentTranslate strategy into operating objectives that drive both behavior and performanceHow? The easiest way: visualize, need enduranceMission (why we exist) – values (what we believe in and how we behave) – vision (what we want to be) – strategy (what our competitive game plan will be) – objectives: strategy map (translate and articulate the strategy) – measures & targets: balanced scorecard (prioritize where we need to invest) – initiatives: balanced scorecard (prioritize where we need to invest) – personal objectives (focus people on contributing to strategy)Outcomes – outward focus (customer & financial) Drivers – inward focus (internal process, talent & technology)Create strategic themesHelp to focus in aligning strategic decision to operation; limited to 3-5 major business thrusts; include a stream of linked objectives; may slice across all four business perspectives, but normally design will start in the internal perspective; resource allocation – provide budget for portfolio of strategic initiatives by theme[pic 1][pic 2][pic 3][pic 4] # of themes: 3 -5 , # of strategic objective (15 – 20); KPI: 1.5 x strategic objectiveStrategy Map – Strategic Objectives (Not business as usual, unless one of the critical weaknesses is BAU) – Measures – Targets – Initiatives