why good strategies fail: creating sustainable performance in turbulent times

Copyright © 2009 Metrus Group, Inc.

Why Good Strategies Fail:Why Good Strategies Fail:Creating Sustainable Performance in Creating Sustainable Performance in

Turbulent TimesTurbulent Times

William A. Schiemann, Ph.D.ASP – Metro New York Chapter

April 2009


AgendaAgenda

• The Context of Sustainability

• What’s the Value Proposition?

• Role of Measurement

• Social and Human Capital

• Barriers to Success

• Key Actions—Now!


ContextContext

• Sustainability and the Bottom Line: – Planet– Societal – Organizations

• Triple Bottom Line– Financial– Environmental– Social


How Might Sustainability Be Important to How Might Sustainability Be Important to Your Organization?Your Organization?

Intentionally left blank


Qualities of Most Sustainable CompaniesQualities of Most Sustainable Companies

• Holistic integration• Broad stakeholder engagement• Metrics• Systems alignment• Strategic centrality• Senior management support• Deeply embedded values

Wirtenberg, et. al. 2007 based on Alcoa, Band of America, BASF, Coca Cola, Eastman Kodak, Intel, Novartis, Royal Philips, Unilever


AgendaAgenda








Six Perspectives (Schiemann & Lingle)Six Perspectives (Schiemann & Lingle)

• Financial• Market• Operational• People• Supplier• Environmental

– Community– Environment– Regulatory

Adaptability


Value MapValue Map

CustomerEquity

ShareholderEquity

People

Suppliers

Environmental

Product/Service

Value Creation


AgendaAgenda








What is the Role of Measurement (e.g, What is the Role of Measurement (e.g, Balanced Scorecards)? Balanced Scorecards)?

• Clarity of the goals• Targets (current, stretch)• Managing change (current vs. goal)• Accountability (visibility)• Focus on manageable• Resource focus• Evaluation of strategy execution• Guiding and testing strategic alignment


AgendaAgenda








Social Factors to ConsiderSocial Factors to Consider

• Labor practices (health & safety, training, diversity, employee well being)

• Human Rights (discrimination, security, child labor)

• Society (community, corruption, fair competition)

• Product Responsibility (e.g, consumer health, privacy)


People Equity is Key Driver of People Equity is Key Driver of Shareholder EquityShareholder Equity

ShareholderEquity

People Equity• Alignment

• Capabilities• Engagement

CustomerEquity

Initiatives

Productivity


Connection to Human CapitalConnection to Human Capital

ShareholderEquity

People Equity• Alignment

• Capabilities• Engagement

CustomerEquity

Initiatives

Productivity

Environment

Safety

Community

Regulatory


Alignment• Are we going in the same direction?

Capabilities• Do we have what we need to succeed?

Engagement• Are we committed?

People EquityPeople Equity


Industry LeadersIndustry Leaders

71%

18%

65%

37%

0%10%20%30%40%50%60%70%80%90%

100%

Quality Performance Financial Performance

High People Equity Low People Equity


CHANGE PROCESS

Structure

Capabilities

Systems

Culture

TOMORROW

Strategy

WorkProcesses

WorkProcesses

Structure

Capabilities

Systems

Culture

TODAY

Strategy

Creating AlignmentCreating Alignment


Alignment: Community GoalAlignment: Community Goal

• Values statement (J&J Credo)• Success defined (image)• Scorecard (hours given)• Operating plan

– Community outreach

– Communications

– Who? What? When? Where? How?

• Tracking progress (pulse)• Validate linkage to goals


Capabilities: Community ImageCapabilities: Community Image

• Attracting talent -- Employer brand:– Reputation: values, benefits, growth, communications,

innovation– Google “Do no evil!”

• Safety – DuPont –It’s a lifestyle and value at all levels– Attitudes, skills are learned

• Improve community– Image conveyed through employee behaviors and

communications


Engagement & Sustainability at SunEngagement & Sustainability at Sun

• Flexibility an important value today; linked to Attraction, Engagement and Retention

• More than 50% work at home; commuting 98% of employees carbon footprint

• Saved $1700 annually on gas/vehicles

• Home office equip less energy

• Flex created 2.5 weeks of new time


AQ 1

A C E

49 53 53

A C E

56 52 63

A C E

29 56 53

BUYER

A C E

61 84 76

A C E

37 51 45

A C E

43 28 76

A C E

54 26 54

A C E

34 25 40

A C E

66 84 83

A C E

49 61 69

A C E

58 87 80

AQ 2

A C E

44 27 51

A - Alignment C - Capabilities E - Engagement

Red = Trouble Yellow = OK Green = Strength

People Equity Scorecard People Equity Scorecard

A C E

48 52 61


Turbulent TimesTurbulent Times

• Sustainability is a long term agenda and value proposition

• Implications during:– Weak economic period?– Strong economic period?


AgendaAgenda








Critical Barriers to OvercomeCritical Barriers to Overcome

• Creating a broad inclusive and transparent process• Selling sr. management on longer horizon• The “right” measurement process• Accountability• Picking the critical few• Scenario planning & modeling• Benchmarking• Evaluation


Potential Actions for the Strategic PlannerPotential Actions for the Strategic Planner

• Education regarding sustainability, triple, CSR and value equation

• Deepen the strategic review process:

– Environmental scan (broad and long term)

– Conduct more risk analysis (cradle to grave thinking)

– Use broader frameworks (like 6 dimensions)

• Build more holistic strategic measures that encompass sustainability goals


Potential Actions for the Strategic PlannerPotential Actions for the Strategic Planner

• Stronger modeling– Scenario testing of alternative futures (using broader assumptions)

– Modeling of competitor, government, & other stakeholder actions

• Create process and context to guide holistic solutions (across structural silos)

• Test for resolve (visible communications, accountability, milestones, resources)

• Ensure that sustainable plans are linked with HC systems, capabilities, & culture


[email protected]

953 Route 202, Somerville, NJ 08876908-231-1900

Metrus Group is an industry leader in strategic performance measurement, assessment, and organizational change. For nearly twenty years we have partnered with the most successful – and challenging – organizations in the world to help them achieve superior, sustainable business results through the development of their People Equity and the creation of a high performance, measurement-managed culture.

Our Services Include: Human Capital ROI Assessment & Solutions Strategy Mapping Balanced Scorecard Design and Assessment Development of Quantifiable Performance Metrics Return on Training Investment Employee and Customer Survey Research Leadership Assessment and Development Corporate Governance, Alignment, and Accountability Audits Measurement-Driven Organizational Change Functional (e.g. HR, IT, Security, Sales) Strategies, Measures and Execution

About MetrusAbout Metrus


Thank You!Dr. William Schiemann

Metrus [email protected]

908-231-1900

why good strategies fail: creating sustainable performance in turbulent times

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