the strategy making, strategy executing process implementi ng and executing the strategy crafting a...
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Slide 2 The strategy making, strategy executing process Implementi ng and Executing the strategy Crafting a strategy to achieve the objectives and vision Setting Objective Developing a Strategic Vision Monitoring developments, evaluating performance and making corrective adjustments. Revise as needed in light of actual performance, changing conditions, new opportunities and new ideas Slide 3 Strategic Vision The route acompany intends to take in developing and strengthening its business. It lays out the companys strategic course in preparing for the future Developing a Strategic Vision Slide 4 Internal Consideration What are the companys ambitions? What industry standing should the company have? Will the companys present business generate sufficient growth and profitability in the years ahead to please shareholders? What organizational strengths ought to be leveraged in terms of adding new products or services and getting into business Is the company stretching its resources too thin by trying to compete in too many markets or segments, some of which are unprofitable? Is the companys technological focus too board or too narrow? Are any changes needed? Slide 5 Strategic vision as a managerial tool Must provide understanding of what management wants its business looklike Must provide managers with a reference point in making strategic decisions and preparing the company for the future Must say something definitive about how the companys leaders intend to position the company beyond where it is today Slide 6 Characteristic of an effective worded strategic vision Graphic Directional Focused Flexible Feasible Desirable Easy to communicate Slide 7 What covers compare to mission statement Strategic Vision is the companys future strategic course, the direction we are headed and what our future product/market/ customer/technology focus will be (where we are going) Mission statements provide a brief overview of the companys present business purpose and raison detre (who we are, what we do and why we are here) Slide 8 Communication the strategic vision An effectively communicated vision is a valuable management tool for enlisting the commitment of the companys personnel to actions that get company moving in the intended direction Expressing the essence of the vision in a slogan Breaking down the resistance to a new strategic vision Recognizing Strategic Inflection Point Understanding the payoffs of a clear vision statement Slide 9 Setting Objective Slide 10 Objectives are an organizations performance targets the result and outcomes management wants to achieve. The function as a yardsticks for measuring how well the organization is doing Setting stretch objectives to avoid ho-hum result Need for a balanced score card Slide 11 Strategic performance foster better financial performance Financial performance are lagging indicators where strategic performance signs of leading indicators Expressed Strategic intent as the contract of the management Objective setting needs to be top-down rather than bottom-up Slide 12 Crafting a strategy to achieve the objectives and vision Slide 13 Strategy crafting Masterful strategies come mostly by doing thing differently from competitors where it counts out innovating them, being more efficient, being more imaginative, adapting faster In most company crafting and executing strategy is a team effort in which every manager has a role for the area he or she heads. Giving people an influential stake in crafting the strategy they must later help implement and execute not only builds motivation and commitment but also means those people can be held accountable for putting the strategy into place and making it work the excuse of it wasnt my idea to do this wont fly Slide 14 Start at the top Mid-level and front-line managers cannot craft unified strategic moves without understanding the companys long-term direction and knowing the major components of the overall and business strategies that their strategy making efforts are supposed to support and enhance Slide 15 Companys Strategy Making Hierarchy The companywide game plan for managing asset of business Corporate Strategy How to strengthen market position and built competitive advantage Action to build competitive capabilies Business Strategy Add relevant detail to the hows of overall business strategy Game plan for managing a particular activity Functional area Strategy Operating Strategy Add detail and completeness to business and functional strategy Managng specific lower echelon CEO & other senior executive General managers, different line business Major functional activities Operating managers Slide 16 Cause of disarray strategies Weak leadership Too few strategy guidelines coming from top Less unified collection strategies Less communicated vision, personnel doesnt buy in the companys longterm direction and overall strategy Less review (due-dilligence) of lower level strategies for consistency supported of higher level strategy (synchronization, adjustment on both direction may needed) Slide 17 Strategic Plan Consists of Companys future direction (strategic vision), performance targets and Stragegy to achieved Slide 18 Implementi ng and Executing the strategy Slide 19 Strategy Execution is an Operations oriented The activities that make-things-happen The most demanding and time consuming part of the strategy management process Each manager has to answer to, what has to be done in my area to execute my piece of the strategic plan, and what actions should I take to get the process underway Can take several months to several years Slide 20 Principal aspect s of strategy execution Staffing with needed skill and expertise Allocation of resources, esp. at the critical point to success Policies and procedures Best practises, continuous improvement, reassess Installing information and operating system foe enabling better carry out Motivating people, modifying duties if needed Rewards and incentives Culture and conducive work climate Exerting the internal leadership Slide 21 Monitoring developments, evaluating performance and making corrective adjustments. Revise as needed in light of actual performance, changing conditions, new opportunities and new ideas Slide 22 Strategy monitoring issues Managing strategy is an ongoing process, not an every now and then task. A companys vision, objectives, strategy and approach to strategy execution are never final If downturn in performance, whether related to poor strategy or to poor execution or both? All have to be revisited antime Slide 23 Role of board directors (komisaris, Ind) Be inquiring, critics and ovesee the companys direction, strategy, and business approaches Evaluate the caliber of the executives strategy making and strategy executing skills Institue a compensation plan for top executives that rewards them for actions and results that serve stakeholder interests, and most especially those of shareholders Oversee the companys financial accounting and financial practices Slide 24 Equipped with strong independent directors Well informed about companys performance Guides and judges the CEO and other executives Has the courage to curb inappropriate or unduly risky management actions Certifies to shareholders that the CEO is doing what the board expects Intensely involved in debating the pros and cons of key decisions and actions Do not being a rubber-stamp of the CEO