Part 1: Strategic Planning

Beyond Performance ManagementGroup MembersBrijan Anand Iyer 13077Nimisha Singh13078Davis.N.S13079Dheeraj Govind Sasi13080Farjadh Faiyaz Ahmed Khan13081Strategic PlanningMission StatementBusinesses and great relationships.Shareholder value.A Nobel purpose at wholesale foods.Actions taken for maximize potential of the practice.

Strategic PlanningTraditional planning and adaptive planning models.Discovery driven planning.

Stretch goalsAspirational goals.Action to maximize potential of the practice.Balanced ScorecardThe five common traits of a Balanced Scorecard.Its use as an inhibitor of innovation.Actions to maximize its potential of practice.

Dynamic resource management.A portfolio managements view of resources.Actions to maximize its potential of practice.

Enterprise risk managementUse of Management matrix to communicate risk.Actions taken to maximize its potential of practice.

Knowledge ManagementFour levels of knowledge.Impact of social networking in knowledge management.Actions to be taken to maximize potential of this practice.

BenchmarkingBenchmarking at Hilton hotels.Actions to be taken to maximize potential of this practice.

SustainabilityFocusing on social issues can be challenging and disruptive process.Actions to maximize potential of this practice.

Adding Shareholder value - Intangible Assets

The various types of intangible assets within a firm are broadlyStructural CapitalHuman CapitalInnovation CapitalMarket Capital

Adding Shareholder value - Intangible Assets

Actions to avoid to ensure that intangibles are valued appropriatelyStop justifying the value of intangibles in balance sheetAccounting professionals cannot value intangibles

Adding Shareholder value - Intangible Assets

Action to promote the value of intangible assetsIdentify your key intangiblesEducate ManagersBuild the value of intangibles Focus on key value driversWhat drives brand growth? What drives customer loyalty?What drives process excellence? Measure intangibles when possibleEconomic Value Added ModelsLimitation with EVA such as Encouraging focus too narrowly on increasing shareholder value and not on value adds for stakeholders,Encouraging focus on financial forecasts which are impreciseCan lead to the rejection of strategies and proposals that made sense if viewed from a more calm POV

Economic Value Added ModelsWhat are the benefits of implementing EVAEncourages managers to act like the owners and consider their decisions to increase shareholder valueEnabled manager to see which business or product segment add value and which dont Forces manager to look at the balance sheet and the income statementTo provide a reward mechanism that compensates managers for increasing shareholder value

Economic Value Added ModelsActions to takeUse EVA instead of financial targets on score cardsDevolve EVA to front line managersKeep the implementation of EVA simpleEducate your employeesAccurately measure the cost of capital

Key Value driversHow does identifying KVD help the organization?Focus everyone on the KVDDrive innovation Maximize shareholder wealthAction to takeTeach managers about free cash flowMake strategic decision that promote expected value at the risk of short term earningsEducate employees in KVD analysisIdentify and eliminate KVD that destroy value

Revenue Growth Analysis

What is the value of driving Revenue Growth Analysis?Drive Sales GrowthDiversify portfolioTo align rewards with real growthActions to takeLook at the company from a growth portfolio lensBuild plans for the key areas of growthSpread the riskBuild growth capabilities and operating capabilitiesMake growth through innovation your top priorityThink about how to grow within your existing customer and products

Customer Value Proposition

The Standard value propositions are Product LeadershipOperational ExcellenceCustomer IntimacyActions to takeDefine your core propositionAlign operating processesMeet industry standard in other dimensions of valueDominate your market by improving value year after yearEvolve the model continuouslyCustomer Relationship ManagementBenefits of implementing CSMBuild strong customer relationshipsProvide frontline teams with a full pic of the customer relationship so that an intelligent dialogue can be developedTo increase profitable sales

Customer Relationship ManagementActions to takeAlign CRM with a clear customer strategyRedesign sales and support processes from the customers perspectiveClarify who own the customerDevolve the responsibility to frontline workersSegment customers according to the needProvide the complete picture to contact people about a customers interactionsProvide channels to fee customer knowledge back to product design and customer support managersEnsure that agents can solve the customer query at the from line at the first point of contactMeasure End-to-End customer outcomesMake service a way of life and not just a service

Strategic and profitable customersFactors that add value to a relationshipThe cost of acquiring a customer,The base (or gross) profit from the goods or services provided to the customer,The profit from increased purchases arising from the additional spending of satisfied customersThe reduced operating costs of serving loyal customers,The profit from transactions with new customers who have been referred by loyal customers, andThe profit from the price premium charged to loyal customers who are less sensitive to price

Actions to takeSet up a customer reviewLook at each customer segments as an opportunity rather than a problemFire bad customersMonitor lifetime profitabilityMonitor discountsFocus on strategic and profitable customersFind way to handle unprofitable customers

Loyalty ManagementBenefits of building customer loyaltyTo build lasting relationships with the right customer sthose that are strategic and profitableand capture a larger share of their businessTo generate sales growth by increasing the number of referrals from customers and employees.To retain essential talentImprove long term financial performanceLoyalty ManagementActions to TakeAsk the right customer satisfaction surveyFocus on net promoter scoreUse a scale of one to tenUse a customer aggravation indexDemand fast resultsAnalyze defectionsTie recognition and reward net promoter scoresDevice way to turn customer from detractors to promotersDesign customer service and support round small teamsCustomer relate to people no corporationsAlign CRM with loyalty management

LEAN COST MANAGEMENTPERFORMANCE POTENTIAL OF THE METHODSACTIONS TO MAXIMIZE THE POTENTIAL OF METHODSACTIONS TO AVOIDACTIONS TO TAKE

LEAN COST MANAGEMENTTotal quality managementActivity based costingBusiness process reengineeringLean manufacturingLean servicesSix sigmaTarget costingLean accountingShared servicesOutsourcing and offshoringInvestment (portfolio) managementExpenses management PART IV30.ENTERPRISE RESOURCE PLANNING (ERP) SYSTEMPerformance potential of this practice:-To support business processesTo integrate financial information and provide more reliable informationTo integrate customer order informationTo standardize and speed up manufacturing processes31.BUSINESS INTELLIGENCEPerformance potential of this practice:-To deliver fast, relevant information to key decision makersTo provide more time for the finance team to add value to their business partnersTo reduce costs through fewer errors and less reworkingTo enable the organization to adapt to changeTo provide more effective compliance and controlTo enhance the effectiveness of decentralized decision making.

32. KEY PERFORMANCE INDICATORS (KPI)Performance potential of this practice:-To enable managers to continuously learn and improveTo provide managers with a radar screen to take fast, corrective actionTo enable process managers to measure progress toward strategic goals.33. ROLLING FORECASTPerformance potential of this practice:-To improve decision making. To support regular strategic performance reviews by identifying future performance gaps. To enable senior executives to manage performance expectations and avoid shock profit warnings.

BUSINESS ANALYTICSPerformance potential of this practice:-To enable managers to continuously learn and improveTo provide managers with a radar screen to take fast, corrective actionTo enable process managers to measure progress toward strategic goals.35. BEST PRACTICE REPORTINGPerformance potential of this practice:-To tell teams where they are today and where theyre going in the near term.To tell teams when to take action and what action to take.To communicate performance.36. OPEN BOOK MANAGEMENTPerformance potential of this practice:-To avoid reputational damageTo provide more confidence in decision making.To provide more controlTo improve employee satisfaction and engagementPerformance Evaluation

PERFORMANCE APPRAISALPeople dislike performance appraisal Many companies use forced rankingsFocusing performance on the individual rather than the system can lead to a poor understanding of problems and to the wrong solutionsBe immediate and specific in praising someoneManagers should tell the employee exactly how they feel about what he did wrong.Peer review system at HCL

RECOGNITION AND REWARDS

Most leaders believe in incentive compensation as a key driver of higher levels of performance. Performance-based pay plans share two attributes: they absorb vast amounts of management time and resources, and they make everybody unhappy.Raising rewards to the level of teams.

Many people agree with team-based rewards in principle but reject the idea because of whats known as the free-rider problem.

Persuade the executive team and the HR community to change the basis of recognition and rewards at every level to support relative improvement.EXECUTIVE COMPENSATION

A board that uses an executive compensation plan assumes that it can motivate senior executives.Arrive at compensation plan for executives through benchmarkingWhom you pay is much more important than how much you pay, and even how you pay.There was no evidence that executives long-term incentive plans had any positive impact on total shareholder returns.For fixed-price options executives could easily get a free ride when the market is improving and similarly suffer unfairly when the market is declining.There are no simple answers to the questions concerning executive pay for performance.PROFIT-SHARING SCHEMES:

Many organizations use profit sharing to provide a fairer approach to recognizing and rewarding managers and employees.Group wide profit sharing at Handelsbanken and Southwest AirlinesDuPonts incentive pay programs.The profit-sharing approach relies more on peer pressure than on direct incentives.How a company designs and implements profit sharing schemes is the most important part of a company.