strategy development
TRANSCRIPT
© Chris Skinner. All rights reserved.
Chris Skinner
@FSClub and @Chris_Skinnerwww.thefinanser.com
© Chris Skinner. All rights reserved.
© Chris Skinner. All rights reserved.
© Chris Skinner. All rights reserved.
OLITICAL
CONOMIC
OCIETY
ECHNOLOGY
© Chris Skinner. All rights reserved.
POLITICAL FORCES FOR CHANGE
• What are the industry rules, regulations and governmentalcontrols that affect what you can an cannot do?
• How does our country and government's policies affect ourability to trade domestically, regionally, globally?
• How might governmental policy change in the future?…
• Can we build scenarios of the extremes?
© Chris Skinner. All rights reserved.
ECONOMIC FORCES FOR CHANGE
• Where are the growth markets for our products and services?Are we positioned well to serve these markets?
• Where are the contracting or weak markets for our productsand services? Are we too strategically positioned in thesemarkets?
• How do we leverage for demand and control supply?• What economic forces will potentially disrupt our value or
supply chains?…
• Can we build scenarios of the extremes?
© Chris Skinner. All rights reserved.
SOCIAL FORCES FOR CHANGE
• How are our customers changing?• Is our services or product viewed as a force for good oin
society?• Will people still want our product in five years from now and
who will these people be?…
• Can we model the extremes?
© Chris Skinner. All rights reserved.
TECHNOLOGICAL FORCES FOR CHANGE
• Are technologies going to assist our growth or decimate ourbusiness?
• Can we leverage these technologies in our value and supplychains?
• Can we find new technologies to innovate our offers orenhance our services?
…
• Can we model the extremes?
© Chris Skinner. All rights reserved.
EconomicAnother Asia Crisis?Industry imageGreenspan policyImpact of EMU - $, ¥, €Reducing MarginsGeographic Border Breakdown
PoliticalECNext US PresidentPensions exposureRegulatory Changes
SocialNew Generation of wireless kidsExtended family unit over timeLongevityGene therapyCustomer Sophistication
TechnologicalIntegration of alternative delivery systemseBusiness/eCommerceTechnology AdvancesWireless FinanceTV and Internet integration
CompetitionForeign PlayersNew EntrantsNew Brands/BrandingIndustry ConsolidationTime to Market
DirectionTaking into accountCulture (from sales culture to dealing with acquisitions)Organization (centralization vs. decentralization)Growth strategiesSales and Channel managementNew Products
Define the Business Issues …… then work on the Strategy
© Chris Skinner. All rights reserved.
© Chris Skinner. All rights reserved.
FINANCIAL STRATEGIC PLAN
Aim = maximise the return on investment for StakeholdersMISSION
– Defines the journey; destination and time frame, e.g. to be No. 1 in 3 yearsSTAKEHOLDERS
– For whom in business to serve, eg. Shareholders, Customers, Employees,Suppliers, Local Community
GOALS & OBJECTIVES– Major milestones for achieving the Mission, eg. 30% sales via new channel in
1 yearCRITICAL SUCCESS FACTORS
– What has to happen to achieve Objectives, eg. faster to market by 50%Measured by: FINANCIAL RESULTS
– Delivery of Financial Performance, eg. Expenses, Profit & Loss Account,Balance Sheet
Three Strategic Plans
FinancialCustomer
People
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Measured by: FINANCIAL RESULTSBottom-line performance: costs, income, profitability
Benchmarks against the Hotel Industry and other UniversitiesISO9002
Managing Monies for Stakeholders
DESTINATIONCreate the EducationalTheme Park by the year
2000
GOALS & OBJECTIVES- Outperforming every other University
Hospitality in the UK- Being Commercially Viable and Successful
- Leader of a Quality Environment- Providing a Great Quality of Life for Students
CRITICAL SUCCESS FACTORSContribute 17% minimum towards University’s overall income
Grow KUH’s business by 20% year on yearGain economies of scale
MONEY
STAKEHOLDERSThe University, Student Customers,
Commercial Customers, Staff, Suppliers
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CUSTOMER STRATEGIC PLANAim = optimising customer retentionRAISON D'ÊTRE
– Nature of and reason for business, eg. Richard Branson -“We fly People, notPlanes”
IDENTITY– A unique and compelling reason to want do business with you, eg.
Convenience, Corporate & Brand ImagORGANISATION
– How to organise to Implement the above , eg. Process Owners, Budgets,Resources, Structure
CAPABILITIES– Products, skills, technologies, that can be learnt or introduced and are
required to deliver the Identity through that Organisation, eg. TeleservicingTraining, Technical Knowledge, Programming,
Measured by: CLIMATE– Strengths, Weaknesses, Opportunities and Threats, eg. Competition,
Government, Press, European market, etc.
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CUSTOMERS
Exceeding Customer Expectations
RAISOND'ÊTRE
Providing ourcustomers with“A Lifetime Gain”
Measured by: BUSINESS CLIMATE (SWOT)
IDENTITYQuality of educational experience/Quality of life experience/ Safe and
secure/ The sixth most popular campusin the country/ A cashless society
CAPABILITIESAn Educational Theme Park/ Practical skills/
Facilities for the regular student and the corporatevisitor/ A year round Conference Park facility/Attractive, village atmosphere in an inviting
environment/ The opportunity to meet at a Universityin Quality surroundings/ An Educational Village
providing a range of facilities for a mixed community/Our raw material is beauty of surroundings andenvironment - the rural location/ Create a self-
selecting approach that caters for all markets/ Thebiggest campus in the UK
ORGANISATION
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PEOPLE STRATEGIC PLAN
Aim = motivating people to release their full potential)VISION
– A lasting picture inspiring hearts and mindsCHARACTER (Value Gap Analysis)
– Philosophies, Values and Beliefs required to support the Vision, eg. Trust is Vital(philosophy), We Trust our Staff (value), Our Staff are Trustworthy (belief)
COMPETENCIES– The innate qualities required in people to fulfill the Character, eg. Leadership,
Intuition, Initiative, Creativity, EmpathyRECOGNITION AND REWARD
– To support and nurture the Competencies - What gets measured and rewardedfirst gets done first, eg. Quality not Quantity
Measured by: INDIVIDUAL BEHAVIOURS– The culture that determines how people act and react eg. We are never too busy
for our Customers
© Chris Skinner. All rights reserved.
PEOPLE
Measured by: INDIVIDUAL BEHAVIOURSPerformance measurement
ISO9002Investors in people
Motivating People
CHARACTERFocus upon The Customer/Move frominstitutional to empowered/Ensure rightpeople are in the right job/Be involvedand participate/Manage through inner
strength/Look for the positives/Youmake the difference/Interact, talk,
communicate/ Say what you feel/Thereis no rule book/Have fun/Be a friend
firstCOMPETENCIESCommunicate/Seek opportunity/Common sense
Leadership/Creativity/Enterprise/Vision/Initiative/Dynamism
RECOGNITION AND REWARDReward by Profit Sharing
Recognise the TEAM EFFORT and the INDIVIDUAL EFFORT
INSPIRATIONI am
Extraordinary
© Chris Skinner. All rights reserved.
Measured by: FINANCIAL RESULTSBottom-line performance: costs, income, profitability
Benchmarks against the Hotel Industry and other UniversitiesISO9002
Managing Monies for Stakeholders
DESTINATIONCreate the Educational
Theme Park by theyear 2000
GOALS & OBJECTIVES- Outperforming every other University
Hospitality in the UK- Being Commercially Viable and Successful
- Leader of a Quality Environment- Providing a Great Quality of Life for Students
CRITICAL SUCCESS FACTORSContribute 17% minimum towards University’s overall income
Grow KUH’s business by 20% year on yearGain economies of scale
MONEY
STAKEHOLDERSThe University, Student Customers,
Commercial Customers, Staff, Suppliers
© Chris Skinner. All rights reserved.
Money(ROI)
People(Employees)
Customer(Channels)
Direction
Critical Success factorsKey Performance Indicators
Balanced Scorecard
Define the Strategy
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Maximise shareholder value by following thesestrategic themes:
leader in chosen marketsfirst choice for our customers
driving down day-to-day operational costs
cost-income ratio
operational standards index
activity migration index (measure ofmoving customer activity to appropriatemeans)
…
staff viewpoint measure
leadership index
empathy index at all levels
staff turnover
...
customer satisfaction indexgroupwide CARE index for allcomplaint monitoringsahre of wallet (average
product holdings)customer attrition...
Money People(Employees)
Customers
Lowest unit cost retaildistribution and branch
service delivery
Well-managed, stronglymotivated people. Createhighly- productive, customer-needs-focused, fully-compliant, salesforce
Continuously improvingquality customer servicecomparable with the bestretailers. Enhance lastingcustomer relationshipsthrough effectivesegmentation.
Direction
Critical Success factors & Key Performance Indicators
© Chris Skinner. All rights reserved.
© Chris Skinner. All rights reserved.
Commu- -nicating
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“Send three and four pence, we are going to a dance”
“Send reinforcements, we are going to advance”
© Chris Skinner. All rights reserved.
The Blunt Razor
“The ABC Mach 3 solution provides aninnovation in sharing through the addition of ahighly robust, tungsten steel third blade. Thisthree blades systems is integrated with thelatest technology to enable the user to bring tobear the utensil in such a way as to allowfewer strokes to achieve a close shave. Theresult of the three blades, fixed headintegration is truly innovating in that thereduction of strokes to the face ensures theuser has less irritation when applying thistechnology.”
© Chris Skinner. All rights reserved.
The Blunt Razor
“The ABC Mach 3 solution provides aninnovation in sharing through the addition of ahighly robust, tungsten steel third blade. Thisthree blades systems is integrated with thelatest technology to enable the user to bring tobear the utensil in such a way as to allowfewer strokes to achieve a close shave. Theresult of the three blades, fixed headintegration is truly innovating in that thereduction of strokes to the face ensures theuser has less irritation when applying thistechnology.”
© Chris Skinner. All rights reserved.
Razor Sharp Focus
Gillette Mach 3
“3 blades, fewerstrokes, lessirritation”
© Chris Skinner. All rights reserved.
BLAISE PASCAL 1623-1662 ,(1657), xvi
Why is this so difficult
“I didn’t have time to write ashort letter, so I wrote a longone instead.”Mark Twain
© Chris Skinner. All rights reserved.
Credibility StatementsCredibility Statements are statements that position corporate strength.They provide key information about the organisation, its size and breadth,the range of customers, the value of revenues, the excellence of itspeople and systems.The aim of these statements is to build trust in the company for investingin their products. These statements should answer the question, “Willthey be around in five years from now if I buy from them today?”Examples:• more than 20,000 clients in over 50 countries• 47 of the world’s 50 largest financial services institutions.• $15 trillion in investment assets worldwide are accounted for and
managed daily our systems
Capability StatementsCapability Statements are statements that position the product anddifferentiate the product from the competition. They tend to be product-centric, and focus upon highlighting the features, functionality, pricingand technical benefits of the product being offered.The aim of these statements is to attack the competitive offerings directand ensure that the product is clearly positioned as differentiated in thecustomer’s mind. These statements should answer the question, “Whyshould I buy this product rather than another one?”Examples:• First database to pass 15 industry standard security evaluations and
first Real Application Clustering• First native XML support in a relational database• First fully integrated relational and multidimensional database
Value StatementsValue Statements focus upon the business benefits of the productsoffered. These are often customer testimonial based and are the mostimportant statements for closing business. Typically, such statementsfocus upon how clients gained cost savings, revenue increases, customerrelationship and retention improvements, employee productivity hikes,and related benefits.The aim of these statements is to demonstrate that not only is theproduct technically superior (capability statements) but also practicallysuperior. These statements should answer the question, “What will thisdo for my business?”Examples:• 50% increase in responses to followed up leads, Advance Bank• Response rates of 38% to 50%, Banco Populare di Navara• 14 million contacts per year, with response rates up from 10% to in
excess of 25%, Royal Bank of Scotland
© Chris Skinner. All rights reserved.
Example use
“THE BEST A MAN CAN GET”– Credibility Statement– You can trust our brand because we’ve been around for over a cnetury and
we have a globally recognised brand• THREE BLADES
– Capability Statement– Three blades means that you get a 66% closer shave than with one blade– This gives the advantage of:
• FEWER STROKES– Capability and Value Statement– Fewer strokes is provided by the three blades, so you only need to run the
razor over the skin once, which leads to:• LESS IRRITATION
– Value Statement– Less irritation means much nicer skin and better look
Layers of communication
Headline• The Rationale: the Value Proposition and the
Capability, Credibility and Value Statements
Heartline• The Story: the Value Proposition and the
Capability, Credibility and Value Statements
© Chris Skinner. All rights reserved.
Summary
• Clear Direction – PEST and Competitive Landscape• Clear Internal Communication
– A Financial Mission (the Objective)– A Vision for the People (the Journey)– A Customer Raison D’Etre (the Difference)
• Clear External Communication– Razor sharp value propositions, supported by distinct and
demonstrable• Credibility (The Company),• Capability (The People), and• Value (The Customer) statements
© Chris Skinner. All rights reserved.
Chris Skinner
@FSClub and @Chris_Skinnerwww.thefinanser.com