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MASTERCLASS WORSHOP W/ ROBERT S. KAPLAN

Hotel Mulia Jakarta 18 Januari 2013

Executing Strategy: Senior Executives #1 Issue

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Most organizations have difficulty executing their strategies

Our Research Identified Four Barriers to Strategy Execution

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The Kaplan-Norton six-stage closed loop management system for Strategy Execution

A Strategy Map and Balanced Scorecard provides the foundation for a new strategy execution system

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Balanced Scorecard Terminology

Initiatives Are Selected to Help Close the Performance Gap

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Initiative Mapping Grid Example

Alignment Framework

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A Cascading Approach Needs to Be Established Before Aligning Individuals to the Balanced Scorecard

Align employees to the strategy: Four HR processes

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Communicate seven times seven different ways to make strategy everyones job
Personal relevance brings the strategy to life Sustained communication uses different channels to get

the message across

Leadership meetings CEO random visits to employees Quarterly Letter Learning lunches & informal discussions Intranet Working groups facilitated by HR Staff briefings

Dashboards articulate the critical link between strategy management and operations management

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Operational Review Meetings: Role for KPI Dashboards

Frequent (daily, twice weekly, weekly) Departmental and functional
personnel Identify and solve operational problems (late deliveries, equipment downtime, supplier problems) Promote continuous improvement (better, faster, cheaper)

Convene a Separate (Monthly) Strategy Review Meeting

Role for Balanced Scorecard and Time-Driven

ABC Reports Focus on the performance of objectives NOT measures

Why

did we miss the target? What correcting actions should we consider? Are initiatives on schedule? Do you need more resources? Would an multi-functional task force help?

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Executives Monitor and Adapt the Strategy at Monthly and Annual Strategy Review Meetings

Why do organizations fail to get results from their Balanced Scorecard programs?

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BSC at VW Do Brasil

A Continous Processes

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Strategy Map: 15 Objectives

KPI : 44 Measures

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Broad approach for strategy execution

Act to Win Program Mascot Media Learning Map -Rally Act to Win Recognition Program

Strategy execution focus:

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Mascot to communicate the strategy

Several medias to achieve all levels

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The monitor plays a 70 second tutorial about some aspect of the VW do Brasil strategy

Learning Map Rally act to win

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Input Process Ouput OUTCOME

Recognition Program

@Video

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Palladium Balanced Scorecard Hall of Fame for Executing Strategy By Industry 2000-2011

Strategy-Focused (Hall of Fame) Organizations Use Five Strategy Execution Principles

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2012 David Norton and Palladium Group, Inc.

Managing strategy is managing change

Principle 1: Mobilize Change Through Executive Leadership
1.1 Leaders drive strategy execution 1.2 Executives make the case for change 1.3 Well articulated strategy exists 1.4 Leaders reinforce strategic priorities 1.5 Office of Strategy Management established

Execution is the most unappreciated skill of an effective business leader

Lou Gerstner , Former CEO, IBM

You cant manage what you cant describe.

Management Best Practice

Principle 2: Translate Strategy to Operational Terms

2.1 Strategy translated to strategy map 2.2 Strategy described in Balanced Scorecard 2.3 Targets identified for all measures 2.4 Strategic initiatives rationalized 2.5 Accountability assigned

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2012 David Norton and Palladium Group, Inc.

Making the whole greater than the sum of the parts. Management Best Practice
Principle 3: Align the Organization to the Strategy
3.1 Corporate role defined 3.2 Enterprise scorecard guides business units 3.3 Business unit scorecards guide support units 3.4 Scorecards align suppliers and/or customers 3.5 Scorecards align Board of Directors

2012 David Norton and Palladium Group, Inc.

Strategy is formulated at the top and executed from the bottom.

Principle 4: Make Strategy Everyones Job
4.1 Strategic awareness created 4.2 Personal goals aligned 4.3 Personal incentives aligned 4.4 Competency development aligned

A real and revolutionary opportunity lies in studying and assessing how well-prepared a companys people, systems and culture are to carry out its strategy. Tom Stewart, Editor, Harvard Business Review

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2012 David Norton and Palladium Group, Inc.

To make strategy management sustainable, strategy must be imbedded in the governance process
Principle 5: Make Strategy a Continual Process
Resource Management 5.1 Budget is linked to the strategy 5.2 Planning for HR/IT linked to strategy 5.3 Portfolio of strategic initiatives linked to themes Key Process Management 5.4 Process improvement linked to strategy 5.5 Best practice sharing in place Learning and Control 5.6 Strategy reviewed and adapted on a regular basis 5.7 Data and analytics guide strategy

THE EXECUTION PREMIUM

Upps

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