strategy - from porter to kaplan
DESCRIPTION
Porter was right, when he said: "A Sustainable Strategic Position Requires Trade-off". Kaplan & Norton were right, when they said: "A strategy is a set of hypotheses about cause and effect. Cause and effect relationships can be expressed by a sequence of if-then statements. A properly constructed Scorecard should tell the story of the business unit´s strategy. The measurement system should make the relationships (hypotheses) among objectives (and measures) in the various perspectives explicit so that they can be managed and validated." However, at the end of the day it is all about leadership, alignment, accountability, engagement and adaptability.TRANSCRIPT
Zurich, November 2013
Strategy - from Porter to Kaplan
Some key ideas about strategy execution
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The STRIM group of companies STRIM management sphere system (strategy execution framework)
Source: http://www.strimgroup.com/en/management-sphere-system
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The STRIM group of companies Three business units
Source: http://www.strimgroup.com/en/structure
STRIMconsult translates strategies into actions and
aligns the organization as well as leadership- and
incentive systems with the strategy.
STRIMacademy guides and provides support to
employees during the implementation of strategies and
measures. Obtaining acceptance and addressing
hesitation are both addressed through effective
communication.
STRIMservices aims to have companies focussing on
value added activities. Analyses lay the groundwork for
monitoring and, if required, adjusting the strategy.
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Strategy Execution Journey
2010: Companies loose millions due to poor Strategy Execution
Did you know that companies loose between 40 to 60% of their strategy during implementation?
Harvard Business Review
Do I know exactly where my company, department or team is losing performance?
What can I do to close the execution gap?
2020: Become a Strategy Execution hero!
“Strategy Execution isn’t something others are doing while you are working on something more
important.”
“Your Strategy Execution role is part of your overall leadership role.”
“A good leader is a strategist as well as an implementer. It’s not a question of either/or.”
“Most managers find it easier to define a new strategy than it is to implement the existing one.”
“Execution is part of your management job. It may sound boring, but nevertheless it is your job.”
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Strategy Execution Barometer
Source: www.strategy-execution-heroes.com
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ANALYSIS & DEVELOPMENT
Source: http://www.strimgroup.com/en/management-sphere-system
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Template to visualise the link between objectives and the next level up
Source: www.strategy-execution-heroes.com
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Future Capabilities Description of impact levels
Source: www.strategy-execution-heroes.com
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Strategy Execution Process Self Assessment
Source: www.strategy-execution-heroes.com
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PLANNING & LEADERSHIP
Source: http://www.strimgroup.com/en/management-sphere-system
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Balanced Scorecard Approach Checklist
Source: www.strategy-execution-heroes.com
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Balanced Scorecard Approach beginner mistakes
Senior management is not convinced and shows little commitment
BSC = developed by ‘the happy few’
he internal/external project members have limited or only theoretical knowledge
BSC = only used by top management
The scorecard stays too long in the development stage before it’s launched and used
There are not enough links to the strategy and planning processes
The content of the BSC is unrealistic
BSC = only used for remuneration purposes
Source: www.strategy-execution-heroes.com
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Balanced Scorecard Approach Mapping Strategic Themes
Source: Kaplan/Norton, HBR, Mastering the Management System
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The Strategy Practitioner Activity Continuum
The top three most frequently occurring activity groupings in order of frequency were Communicating
& Engageing, Analysing & Planning and Directing.
Increasing Emphasis on Relationship and Reflective Practice
Source: HRZONE, Dev Mookherjee, Trudi West, So how do you enhance your impact on your firm´s strategy?
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Strategy Communication The Approach
Source: www.strategy-execution-heroes.com
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EXECUTION & ANALYTICS
Source: http://www.strimgroup.com/en/management-sphere-system
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Effective Use of KPIs Characteristics (1/2)
Aligned: KPIs are alway aligned with corporate strategy and objectives.
Owned: Every KPIs is „owned“ by an individual or group on the business side who is accountable for
this outcome.
Predictive: KPIs measure drivers of business value. Thus, they are „leading“ indicators of performance
desired by the organization.
Actionable: KPIs are populated with timely, actionable data so users can intervene to improve
performance before it is too late.
Few in number: KPIs should focus users on a few high-value tasks, not scatter their attention and
energy on too many things.
Easy to unterstand: KPIs should be straightforward and easy to understand, not based on complex
indexes that users do not know how to influence directly.
Balanced and linked: KPIs should balance and reinforce each other, not undermine each other and
suboptimize processes.
Trigger changes: The act of measuring a KPI should trigger a chain reaction of positive changes in the
organization, especially when it is monitored by the CEO.
Source: Effective Strategy Execution. Improving Performance with Business Intelligence, p. 71-72
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Effective Use of KPIs Characteristics (2/2)
Standardized: KPIs are based on standard definitions, rules, and calculations so they can be
integrated across dashboards throughout the organization.
Context driven: KPIs put performance in context by applying targets and thresholds to performance so
users can gauge their progress over time.
Reinforces with incentives: Organizations can magnify the impact of KPIs by attaching compensation
or incentives to them. However, they should do this cautiously, applying incentives only to well-
understood and stable KPIs.
Relevant: KPIs gradually lose their impact over time, so they must be periodically reviewed and
refreshed.
Source: Effective Strategy Execution. Improving Performance with Business Intelligence, p. 71-72
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Management Meetings
Source: Kaplan/Norton, HBR, Mastering the Management System
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Contact Person
President and CEO at
STRIMgroup AG in Zurich
Senior Fellow Human Capital at
The Conference Board in New
York
Lecturer in the Master degree
course Human Capital
Management at the Constance
University of Applied Sciences
845 Third Avenue
New York, NY 10022-6600
Phone: +49 (0)172 7590 688
Gütschstrasse 22
CH-8122 Binz (Zürich)
Phone: +41 (0)43 366 05 58