savi chapter1

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Managing with SAVI

A new approach to the basics

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The management cycle

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What does SAVI mean?

• GOAL SETTING:

– Stakeholders need Added Value from their Investment.

• DECISION MAKING AND CONTROL

– Screening Added Value Initiatives.

• PERFORMANCE MEASUREMENT/MANAGEMENT

– Speed, Accuracy, Volume and Investment.

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CHAPTER 1- GOALS:

The Reason For Planning

Stakeholders need Added Value from their Investments

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THE CYCLE OF ACHIEVING GOALS

• Figure 1.1

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THE CYCLE OF ACHIEVING GOALS

• Figure 1.1

Long term

results

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THE CYCLE OF ACHIEVING GOALS

• Figure 1.1

Long term

results

Budgets and

people

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THE CYCLE OF ACHIEVING GOALS

• Figure 1.1

Long term

results

Budgets and

people

Implementation

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THE CYCLE OF ACHIEVING GOALS

• Figure 1.1

Long term

results

Budgets and

people

Implementation

Performance Measurement

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Figure 1.6 The beginning of the model

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Figure 1.7 THE SAVI MODEL

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Benefits Of Using The Model

• Forces management to think

• Enhances problem solving capabilities

• Improves the quality of decisions with the group approach

• Resource shortfalls are identified

• Resistance to change is reduced

• Builds a framework for performance improvement

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Risks Of Using the Model

• The process is time consuming

• If planning and implementation are separate, responsibility is shirked

• Managers must be trained to respond when results are different than expected

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What is goal setting?

• Strategic goal setting is an interactive and dynamic process involving constant review and assessment of:

– External environmental factors, now and in the future

– Internal business profile factors, now and in the future

– Performance tracking to measure results.

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Preparing for effective Strategic Goal Setting

• The two most important issues of effective strategic goal setting are:

– Don’t wait for the culture to be in place before you begin.

– Make the necessary investment to keep the process alive.

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Other important issues

• Remove the fear.• Keep an open mind and be honest with

yourself.• Be willing to challenge current practices.• Look outside for Best Available Practices.• Complete the full cycle of the model.• Use success as an opportunity to share

rewards.• Use failure as an opportunity to correct and

improve.

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Five dimensions of goals

• Fig.1.10  

Profit-S 

Sustainability Of The Organization In The Economic System

Safety Of The Public And Employees, (including the Motivation and Retention of employees)

Stewardship Of The Natural Environment

Satisfaction Of Customers At All Levels

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Corporate financial goal

Strategic issues

Objective Goal

FinancialMaximize financial returns to stockholders

To maintain an average return on investment of a minimum of 15% for the next five years

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Corporate sustainability goal

Strategic issues

Objective Goal

Sustainability of the Organization In The Economic System

Maximize the impact of the organization on the regional economy

To create and maintain 50 new jobs per year for the next five years

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Corporate safety goal

Safety Of the Public And Employees, (including the Motivation and Retention of employees)

Minimize the probability and severity of employee and public injury

To maintain an injury rate less than the national average for the next five years

Maximize the motivation and retention of employees

To maintain a 90% satisfaction level of employees and to have a retention rate higher than the industry average within two years.

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Corporate stewardship goal

Stewardship Of The Natural Environment

Minimize the impact of operations on the natural environment

To reduce the level of solid particulate emissions to the landfill to 3 parts per million by June 2005.

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Corporate customer goal

Satisfaction Of Customers At All Levels

Maximize the satisfaction of customers at all levels

To achieve and maintain a 90% customer satisfaction level regarding service, product quality and perceived value for the next five years

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Figure 1.12 corporate goals to operating goals

Corporate Long-range Goal

Measurement Concept

Maximize financial returns to stockholders

To maintain an average return on investment of a minimum of 15% for the next five years

Operating Short-range goals by department

Measurement concept

Sales Department

Maximize Revenues

Increase total sales by 5% this year

Minimize selling costs

Reduce selling cost per customer by 5% this year

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Strategic Goal Settingfour sections, figure 1.13

Sec. 1

VISION

Defining the long term picture of success

MISSION

Defining the organization in terms of what is done, who it is done for, where it is done and how it is done

VALUES

Defining how the people in the organization will treat customers, stakeholders and employees

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Strategic Goal Settingfour sections

Sec. 2

CHALLENGES AND OPPORTUNITIES

Defining the opportunities that exist for the organization through an assessment of the external

environment and the challenges faced by the organization through an assessment of the

competencies an weaknesses of the organization

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Strategic Goal Settingfour sections

Sec 3

CRITICAL SUCCESS FACTORS

Defining the areas of the organization that must be proactive in responding to opportunities and

challenges by matching what needs to be done with what can be done

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Strategic Goal Settingfour sections

Sec 4

“CORPORATE” AND “OPERATING” STRATEGIC GOALS

Defining how the organization will take advantage of opportunities and overcome challenges to achieve the

mission from a corporate and operating view

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Closing remarks

GOALS: The Reason For Planning