BECOMING A STRATEGY-FOCUSED

ORGANIZATION

Presented by

Paul Kenny

Chief Executive Officer

June 16, 2011

We had the distinction of being the first Asia Pacific representative

from the food & beverage industry

In 2010, MFG was inducted into Palladium Balanced Scorecard Hall of

Fame for Executing Strategy™

►1

Who Are We

► 2

Owns, operates or

franchises more than

10 brands and a

profitable system of

1148 restaurants, in

15 countries across

Asia Pacific

Minor Food Group (MFG) is Thailand’s

largest QSR operator with a combined

33% share of the QSR market

In 2010, MFG’s system of company owned

and franchised restaurants served more

than 88 million customers and generated

sales of THB21.4 billion

100% owned

subsidiary of Minor

International, listed

company on The Stock

Exchange of Thailand

We were inducted for exemplifying these Strategy-Focused

Organization principles

► 3

1. Mobilize change through

executive leadership

2. Translate strategy

to operational terms3. Align the organization

to the strategy

4. Motivate to make

strategy everyone's job 5. Govern to make strategy

a continual process

Financial measurements as key performance measures were no longer enough

The change catalyst – Thailand’s financial crisis in 1997

► 4

Ideas on how to translate strategy into actions

Tested some ideas

Confirmed the need for change

An eye-opener – “The Balanced Scorecard”

Our top leadership team were convinced of the need for change

We then engaged several small consultancies to work on implementing a strategy execution system, over several years

Securing top leadership buy-in

It turned out to be a poor investment of time and efforts – example of a complex chart that defeats understanding!

If at first you don’t succeed…

►7

China

Middle East

SEA

2007

• 7 Brands

• 676 Outlets

• 8 Countries

2007

• 7 Brands

• 676 Outlets

• 8 Countries

Meanwhile, the business was becoming more complex due to rapid

expansion

In 2007, we engaged Palladium to embark on our journey to become a strategy-focused organization

Palladium started working with one of our Brands

Learning #1: Engage the right professionals to improve chances of

implementation success

►9

(Their logo sums it up.)

Learning #2: Total commitment from the CEO is critical for success

► 10

The buck stops here!

We used our strategic framework (adopted from the 6-step Execution

Premium) to work with the Brand

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Develop Corporate Strategy

Align Brand Strategy

Link with Organization

Cascade to Individual Control and Learn

Execution

Functional Plan

(Operational)

1

2

3

4 5

Individual Plan

Corporate Strategy &

Plan

Brand Budget Book

(Strategy & Plan)

Company vision/mission

Strategic analysis

Strategic formulation

Performance measure and

target

Brand vision/mission

Strategic analysis

Strategic formulation

Performance measure and

target

Functional focus

Initiative definition including

work plan and milestones

Performance measure and

target

Individual action plan

including milestones

Performance measure and

target

Personal development plan

Corporate performance

review

Brand performance review

Functional performance

review

Individual performance

review

Learning #3: Be prepared for implementation challenges

►12

“This is a waste of time!”“This is a waste of time!”

F

inance

C

usto

mer

In

t.P

rocess

In

t.P

rocess

L &

G

Sales

100% Customer Satisfaction

Product

CleanlinessServices

Quality

QSC Checklist

QSC is one part of Operation Excellence Training

Sample QSC training

materials and in-store QSC checklist.

Increase Customer LoyaltyIncrease Customer Frequency

Profits

Learning #4: Analyze the organization culture to find solutions

Sustain Growth of Sustain Growth of Thailand BusinessThailand BusinessSustain Growth of Sustain Growth of Thailand BusinessThailand Business

Transform Transform International International FranchisingFranchising

Transform Transform International International FranchisingFranchising

Drive Growth through Drive Growth through Strategic Acquisition Strategic Acquisition

and Alliance and Alliance

Drive Growth through Drive Growth through Strategic Acquisition Strategic Acquisition

and Alliance and Alliance

Develop and Deploy Global Functional System

Create and Execute Operational Excellence (OE)

Build Human Capital and Develop Partner Management Capabilities

11

22

33

Vision To be A Global Integrated Operator of

Multiple Food Brands with the objective of

providing 100% satisfaction to all stakeholders

Vision To be A Global Integrated Operator of

Multiple Food Brands with the objective of

providing 100% satisfaction to all stakeholders

Transform China into Our Key Growth MarketTransform China into Our Key Growth Market

We changed to a top-down approach, where we defined the Group’s 5-year Strategic Direction and cascaded it the business units

Learning #5: Be flexible and adapt the approach

F

inance

C

usto

mer

In

t.P

rocess

In

t.P

rocess

L &

G

Sales

100% Customer Satisfaction

Product

CleanlinessServices

Quality

QSC Checklist

QSC is one part of Operation Excellence Training

Sample QSC training

materials and in-store QSC checklist.

Increase Customer LoyaltyIncrease Customer Frequency

Profits

Once again, Operations Excellence was the “link” that connected

successfully with our operations-oriented team

Learning #6: Change how the business is managed to change mindset

Fortnightly Brand

Meeting

Weekly Support

Function MeetingMonthly Excom*

Meeting

Quarterly Business

Review (3 days)

* (Executive Committee)

Answers to 3 questions:

• What are our Goals?

• Where do we Play?

• How do we Win?

Result- Oriented and

Strategy-Focused

Result- Oriented and

Strategy-Focused

Established an Office of Strategy Management (OSM) that reports directly to the COO, with direct access to the CEO

Resource to govern and sustain the process of strategy management in the organization

Learning #7: Govern to make strategy a continual process and instil

discipline

► 17

CEO

COO

Office of Strategy Management (OSM)

Finally, our breakthrough results from 2007-2009 are a testament that

the system works!

►18

Financial Customer

Learning & Growth

Internal Process

BSC

• NPAT: 530M THB – increase of

72%

• Combined sales: 19,338M THB

– increase of 123%

• Number of outlets: 1,112 outlets

– increase of 65%

• NPAT: 530M THB – increase of

72%

• Combined sales: 19,338M THB

– increase of 123%

• Number of outlets: 1,112 outlets

– increase of 65%

• Talent retention: 95% –

increase of 21%

• Succession planning –

number of identified leaders

per position for executive

team and middle

management: 3 – increase

from 1 candidate to 3

candidates for each position

• Employee satisfaction survey

results: 90% - increase of 5%

• Talent retention: 95% –

increase of 21%

• Succession planning –

number of identified leaders

per position for executive

team and middle

management: 3 – increase

from 1 candidate to 3

candidates for each position

• Employee satisfaction survey

results: 90% - increase of 5%

• Total customers: 101,736,000 –

increase of 29%

• MC (Mystery Customer) survey

results: 97% - increase of 5%

• Brand perception index:

• The Pizza Company: 100% -

increase of 5%

• Swensen’s: 100% - increase of 6%

• Sizzler: 94% - increase of 7%

• Total customers: 101,736,000 –

increase of 29%

• MC (Mystery Customer) survey

results: 97% - increase of 5%

• Brand perception index:

• The Pizza Company: 100% -

increase of 5%

• Swensen’s: 100% - increase of 6%

• Sizzler: 94% - increase of 7%

• Franchise satisfaction score:

93% – increase of 22%

• Quality/Service/Cleanliness

score: 92% – increase of 4%

• Supply chain delivery KPI –

In Full On Time %: 97% -

increase of 4%

• Franchise satisfaction score:

93% – increase of 22%

• Quality/Service/Cleanliness

score: 92% – increase of 4%

• Supply chain delivery KPI –

In Full On Time %: 97% -

increase of 4%

And it can only be achieved with partnership and teamwork –

Palladium and MFG Teams at the 2010 Hall of Fame award ceremony

► 19

THANK YOU