best practice: transformational leadership_bsc_pm
TRANSCRIPT
BEST PRACTICE: TRANSFORMATIONAL LEADERSHIP; BALANCED SCORECARD AND PERFORMANCE
MANAGEMENT
SUMMIT MANAGEMENT CONSULTANTS
RANDBURG TOWERS25 FEBRUARY 2015
CHARLES COTTER
• #1: Leadership
• #2: Balanced Scorecard
• #3: Performance Management Framework
THE NATURE AND DEFINITION OF LEADERSHIP
• Defining leadership
• The leadership process
• Transformation leadership – principles and characteristics
LEADERSHIP COMPONENTS
LEADERSHIP PROCESS
• Creating a Vision
• Articulating that vision in a Compelling and Inspirationalmanner
• Guiding and Supporting followers in the pursuit ofachievement of the vision
• Being a Driver and Agent of Change
• Nurturing, Developing and Empowering followers
• Serving as a Role Model
CHARACTERISTICS OF TRANSFORMATIONAL LEADERSHIP
BENEFITS OF TRANSFORMATIONAL LEADERSHIP
• Transformational leadership enhances the motivation,morale and performance of followers through a variety ofmechanisms:
Connecting the follower's sense of identity and self to theproject and the collective identity of the organization
Being a role model for followers that inspires them and makesthem interested
Challenging followers to take greater ownership for their work
Understanding the strengths and weaknesses of followers, sothe leader can align followers with tasks that enhance theirperformance
SYNDICATE GROUP LEARNING ACTIVITY
• Refer to page 9 of the Learner Manual
• By referring to the characteristics of aTransformational Leader, describe how you’llapply these to optimize performance fromyour followers in the field of HigherEducation
• Provide feedback in the form of a summationof your group discussion
BALANCED SCORECARD
• Defining a Balance Scorecard (BSC)
• BSC Perspectives/dimensions
• The value, purpose and benefits of BalancedScorecards
• The key benefits of using Balanced Scorecards
• The Steps in Strategic Planning and Management
• Strategy Mapping
BSC MEASURES
• The balanced scorecard suggests that we viewthe organization from four (4) perspectives, andto develop metrics, collect data and analyze itrelative to each of these perspectives:
Learning, Innovation and Growth
Business (Internal) Processes
Customer
Financial
BSC PERSPECTIVES/DIMENSIONS
ILLUSTRATION: BSC PERSPECTIVES/DIMENSIONS
• Strategic question:
“To achieve our vision, how will sustain our ability to change and improve?”
• Examples (measurable indicators):
Time to develop new generation of products Life cycle to product maturity Time to market versus competition Is there the correct level of expertise for the job? Employee turnover Job satisfaction Training/Learning opportunities
• Value Outcome:
Organizational knowledge and growth capacity
LEARNING, INNOVATION AND GROWTH PERSPECTIVE
• Strategic question:
“To satisfy our shareholders and customers, what business processes must we excel at?”
• Examples (measurable indicators):
Cycle time Unit cost Yield New product introductions Number of activities per function Duplicate activities across functions Process alignment (is the right process in the right department?) Process bottlenecks Process automation
• Value Outcome:
Efficiency
BUSINESS (INTERNAL) PROCESS PERSPECTIVE
• Strategic question:
“To achieve our vision, how should we appear to our customers?”
• Examples (measurable indicators):
Percent of sales from new products On time delivery Share of important customers’ purchases Ranking by important customers Delivery performance to customer Quality performance for customer Customer satisfaction rate Customer percentage of market Customer retention rate
• Value Outcome:
Customer satisfaction
CUSTOMER PERSPECTIVE
• Strategic question:
“To succeed financially, how should we appear to our shareholders?”
• Examples (measurable indicators):
Cash flow Sales growth Operating income Return on Equity (RoE) Return On Investment (ROI) Return on Capital Employed (RoCE) Financial Results (Quarterly/Yearly)
• Value Outcome:
Financial performance/profitability
FINANCIAL PERSPECTIVE
• Articulate the business's vision and strategy
• Identify the performance categories that best link the business's vision andstrategy to its results (e.g., financial performance, operations, innovation,employee performance)
• Establish objectives that support the business's vision and strategy
• Develop effective measures and meaningful standards, establishing both short-term milestones and long-term targets
• Ensure company-wide acceptance (ownership) of the measures
• Create appropriate budgeting, tracking, communication, and reward systems
• Collect and analyze performance data and compare actual results with desiredperformance
• Take action to close unfavourable gaps
PURPOSES OF THE BSC
• Clarify or update a business's strategy
• Link strategic objectives to long-term targets and annual budgets
• Track the key elements of the business strategy
• Incorporate strategic objectives into resource allocation processes
• Facilitate organizational change
• Compare performance of geographically diverse business units
• Increase company-wide understanding of the corporate vision andstrategy
STRATEGIC UTILITY AND FUNCTIONAL VALUE OF BSC’S
4-STEP STRATEGIC MANAGEMENT PROCESS
ILLUSTRATION: STRATEGY MAP
• Refer to page 20 in Learner Guide
• By means of a cost-benefit analysis, develop abusiness case for BSC.
Viability
Feasibility
Sustainability
• Present a summary of group discussion
SYNDICATE GROUP LEARNING ACTIVITY
• #1: BSC is aligned with organization’s strategic business plans
• #2: BSC is future-focused, adopting a strategic, medium to long-term approach
• #3: BSC is pro-active, sensitive and responsive to (internal and external)environmental change and trends
• #4: BSC enjoys company-wide acceptance (ownership) of the measures andprocesses
• #5: BSC is organized, well-coordinated and systematic approach
• #6: BSC is a collaborative and partnering effort (managers have co-opted businesspartners to the process)
• #7: BSC is integrated (with other business management and administrative) andcohesive process
BEST PRACTICE GUIDELINES FOR BSC
• #8: BSC generates meaningful business intelligence which informs business planningand supports strategic decision-making
• #9: BSC integrates both scientific (metrics and analytics) and artistic (planning)principles
• #10: BSC utilizes cutting-edge and innovative technology and software
• #11: BSC is continuously monitored, reviewed, evaluated and adapted
• #12: BSC yields a positive business ROI, with tangible/demonstrable outcomes andimpact – creates sustainable competitive advantages and organizational change
• #13: BSC incorporates strategic objectives into resource allocation processes e.g.financing/budgeting
• #14: BSC is a logical and rational process making use of cause-effect logic
BEST PRACTICE GUIDELINES FOR BSC
• Refer to page 22 in Learner Guide
• Critically evaluate your organization’s currentBalanced Scorecard processes and systemsagainst the best practice criteria.
• Identify gaps and recommend improvementstrategies.
• Present a summary of group discussion
SYNDICATE GROUP LEARNING ACTIVITY
ILLUSTRATION: HIERARCHY OF BALANCED SCORECARD COMPONENTS
THE 9-STEP BSC BUILDING AND IMPLEMENTING PROCESS
PERFORMANCE MANAGEMENT (PM)
• Defining the fundamental concepts
• The need for PM
• Best Practice Criteria: PerformanceManagement
• The Performance Management process
• Refer to pages 28-29 in Learner Guide
• Critically evaluate your organization’s currentPerformance Management processes andsystems against the best practice criteria.
• Identify gaps and recommend improvementstrategies.
LEARNING ACTIVITY
PERFORMANCE MANAGEMENT CYCLE
PERFORMANCE PLANNING
• Clarifying expectations
• Setting of goal/objectives, performancestandards and criteria
• Action Planning
• Contracting Performance Agreements
PERFORMANCE REVIEW/APPRAISAL
• Monitoring, Measuring/Evaluating performanceagainst the pre-determined performancegoals/objectives and standards and criteria.
PERFORMANCE FEEDBACK/INTERVIEW
• Conducting of the 8 step, Human Touchinterview/discussion – formally/informally andimplementing Positive and Corrective performancefeedback.
8-STEP HUMAN TOUCH PERFORMANCE INTERVIEW
• Step 1: Control the environment
• Step 2: State the purpose of the discussion
• Step 3: Ask for the employee’s opinion
• Step 4: Present your assessment
• Step 5: Build on employee’s strengths
• Step 6: Ask for employee’s reaction to your assessment
• Step 7: Set specific goals
• Step 8: Close the discussion
PERFORMANCE DEVELOPMENT
• Implementing training and development and otherpeople performance improvement initiatives andthe adoption of the 5 pivotal roles of peopledevelopment-focused managers (peoplecapitalism).
PERFORMANCE MATRIX
PERFORMANCE REWARD
• Offering of host of customized and personalizedintrinsic and extrinsic performance reward optionsand recognition. Ensure compliance with bestpractice principles
• Refer to page 38 in Learner Guide
• Outline the performance managementprocess in your organization by discussing thekey managerial actions in the 5 stages.
• Identify gaps and recommend improvementstrategies.
LEARNING ACTIVITY
• Summary of the key learning points
• Questions
• Conclusion
• Good luck with the application of the bestpractice principles.
CONCLUSION
• CHARLES COTTER
• 084 562 9446
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• TWITTER: Charles_Cotter
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