the executive roundtable series: the executive roundtable
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The Executive Roundtable Series: The Executive Roundtable Series: Business Strategy Planning Business Strategy Planning Business Strategy Planning Business Strategy Planning TechniquesTechniques
featuring Metrics Reporting, Inc.
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AGENDAAGENDAAGENDAAGENDA
Brief Intro and OverviewBlue Ocean StrategyHaving Trouble with Your Strategy? Having Trouble with Your Strategy? …Then Map It!E lExampleWrap-Up and Next Steps
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IntroductionIntroductionIntroductionIntroduction
Metrics Reporting, Inc.p g
Two tools that create business value:◦ Strategy Canvas [Blue Ocean Strategy]◦ Strategy Canvas [Blue Ocean Strategy]◦ Strategy Map [Norton and Kaplan]
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BackgroundBackgroundBackgroundBackground
Why Measure?Why Measure?
BetterMargins?
BetterExecution?
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For each: 4 Questions
that drive ACTION!
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Blue Ocean StrategyBlue Ocean StrategyH C U d M k S d M k How to Create Uncontested Market Space and Make the Competition Irrelevant
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Blue Ocean StrategyBlue Ocean Strategy
Do we know how to “Create UncontestedCreate Uncontested Market Space and Make the Competition Irrelevant?”Irrelevant?
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Blue Ocean StrategyBlue Ocean StrategygygyRed Ocean
Compete in crowded markets
Blue OceanCreate and captureCreate and capture
new space
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Source: Blue Ocean Strategy, Kim and Mauborgne
Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean Strategy
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Source: HBR: Value Innovation Logic, Kim and Mauborgne
Results of Results of FormuleFormule 1’s Strategy1’s Strategy
Cost per room 100 000 FF ↔ 270 000 FF
From Formule 1’s perspective:
Cost per room 100,000 FF ↔ 270,000 FFCost of staff 20-23% of sales vs. 23-25% Profit Margins > 2x industry averageOccupancy rates > 3x industry averageOccupancy rates > 3x industry average
From customers’ perspective:From customers perspective:
Hygiene > average 2* hotelBed quality > average 2* hotelBed quality > average 2 hotelSilence > average 2* hotelPrice 100 FF ↔ 200 FF of industry
Source: HBR: Value Innovation Logic, Kim and Mauborgne
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Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean Strategy
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Blue Ocean StrategyBlue Ocean Strategygygy
Source: Blue Ocean Strategy, Kim and Mauborgne 13
Blue Ocean StrategyBlue Ocean StrategygygyThe Four Actions Framework
ReduceWhich factors should
be reduced wellbelow the industry’s
standard?
The 4 Qs
standard?
Eliminate CreateNWhich of the factors
that the industrytakes for granted
should be eliminated?
Which factors should be created that the industry hasnever offered?
NewValueCurve
RaiseWhich factors should
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be raised wellabove the industry’s
standard? Source: Blue Ocean Strategy, Kim and Mauborgne
Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyEliminate-Reduce-Raise-Create Grid:The Case of [yellow tail]The Case of [yellow tail]
Eliminate RaiseEnological terminology and distinctions
Aging qualities
Price versus budget wines
Retail store involvement
Above-the-line marketing
Reduce CreateWine complexity
Wine range
Vineyard prestige
Easy drinking
Ease of selection
Fun and adventure
15Source: Blue Ocean Strategy, Kim and Mauborgne
Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean Strategy
16Source: Blue Ocean Strategy, Kim and Mauborgne
Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyStrategy Canvas
CostsEliminate
Enological terminology and
RaisePrice versus budget wines
Value Innovation
Buyer Value
distinctions
Aging qualities
Above-the-line marketing
Retail store involvement
Reduce CreateWine complexity
Wine range
Vineyard prestige
Easy drinking
Ease of selection
Fun and adventure
Four Actions FrameworkERRC Grid
17Source: Blue Ocean Strategy, Kim and Mauborgne
Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean Strategy3. Draw the Strategy Canvas: 1 on left, 4 on right
Factors of Competition / Value Factors:
Blue Ocean Strategy1. List 8 to 12 important Factors of Competition2. Enter top 2 or 3 in each ERRC Grid Quadrant
Tool 11. List Factors of
Competition
1. Eliminate: 3. Raise:
2. Top 2 or 3 in ERRC Grid Quadrants
2. Reduce: 4. Create:
18Rev: 2006.02.21
Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean Strategy
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Project Name:
Very High
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9Tool 27
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5
4
Medium
High
1. Write on Worksheet:E
3
2
1
0
Low
Very Low
left, C right
2. Draw “As Is”
3 Draw “To Be”
Valu
e Fa
ctor
s
3. Draw “To Be”
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Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean Strategy
Examples
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Blue Ocean StrategyBlue Ocean StrategyBlue Ocean StrategyBlue Ocean Strategy
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Blue Ocean StrategyBlue Ocean Strategygygy
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Having Trouble with Your Strategy? Then Map It!
Strategy Maps
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Strategy MapsStrategy MapsAlignment and LearningStrategy Maps Help Organizations Get Better Faster
Strategy MapsStrategy Maps
Strategy Maps Help Organizations Get Better Faster
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Strategy MapsStrategy Mapsgy pgy pFocus on What Matters Most
G t t tGreat strategy enables everyone to set accurate priorities
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Strategy MapsStrategy MapsActions Drive Financial Results
gy pgy p
Theme:
Objectives Metrics Initiatives
FinancialPerspective
CustomerPerspective
InternalInternal ProcessesPerspective
Employee Learning &
GrowthPerspective
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Strategy MapsStrategy Mapsgy pgy pScorecards Drive Strategy Execution
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Strategy MapsStrategy Mapsgy pgy pStrategy Maps Add Causality (if-then)
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Strategy MapsStrategy Mapsgy pgy pSteps for Creating Your Strategy Map
Determine:
Y Th ( )• Your Theme(s).
• Your Perspectives.
• The Strategic Objectives in each perspective.
• Metrics (Measures) and targets for each Metrics (Measures) and targets for each objective. Assign an owner to each metric.
• Initiatives to drive each metric
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Initiatives to drive each metric.
Strategy MapsStrategy Mapsgy pgy pFinancialP tiPerspective: What financial steps are needed pto ensure the execution of our strategy?strategy?
The 4 Qs
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Employee Learning andGrowth Perspective Internal Perspective Customer Perspective Financial Perspective
Crew Scheduling System Fast Ground Turnaround On Time Service Profits and RONAGround Crew Alignment Lower Prices More Revenue
Train Ramp Agents Attract and Retain Customers Fewer Planes
Strategy MapsStrategy Mapsgy pgy pCustomerP tiPerspective: Who are our targeted gcustomers, and what is our value proposition inproposition in serving them?
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Employee Learning andGrowth Perspective Internal Perspective Customer Perspective Financial Perspective
Crew Scheduling System Fast Ground Turnaround On Time Service Profits and RONAGround Crew Alignment Lower Prices More Revenue
Train Ramp Agents Attract and Retain Customers Fewer Planes
Strategy MapsStrategy Mapsgy pgy p
Internal Processes(Operations)(Operations) Perspective: To satisfy our
t t h tcustomers, at what processes must we excel?
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Employee Learning andGrowth Perspective Internal Perspective Customer Perspective Financial Perspective
Crew Scheduling System Fast Ground Turnaround On Time Service Profits and RONAGround Crew Alignment Lower Prices More Revenue
Train Ramp Agents Attract and Retain Customers Fewer Planes
Strategy MapsStrategy Mapsgy pgy p
Employee Learning and GrowthGrowthPerspective: What capabilities and tools do o rand tools do our employees need to help them execute our strategy?
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Employee Learning andGrowth Perspective Internal Perspective Customer Perspective Financial Perspective
Crew Scheduling System Fast Ground Turnaround On Time Service Profits and RONAGround Crew Alignment Lower Prices More Revenue
Train Ramp Agents Attract and Retain Customers Fewer Planes
Strategy MapsStrategy Mapsgy pgy pObjectives Metrics Initiatives
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Strategy MapsStrategy Mapsgy pgy pMetrics: Accountability, not Blame
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Strategy MapsStrategy Mapsgy pgy pTeam Exercise: Determining ObjectivesDDetermine:
• Your Theme(s).
• Your Perspectives.
• Strategic Objectives in each perspectiveStrategic Objectives in each perspective.
• Metrics (Measures) and targets for each objective Assign an owner to each metricobjective. Assign an owner to each metric.
• Initiatives to drive each metric.
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Strategy MapsStrategy MapsStrategy MapsStrategy MapsCase Study
• You are the CFO for an NFL team. The owner wants you to focus on increasing y gstadium and licensing revenues.
• Your I T director suggests building a website • Your I.T. director suggests building a website to let season ticket holders sell their tickets for games that they cannot attend for games that they cannot attend.
• Should you approve her project?
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Strategy MapsStrategy Maps –– Case StudyCase StudyStrategy Maps Strategy Maps Case StudyCase StudyBuilding Revenue for an NFL team• Background on your team’s operations
– Home games are sold out for many years g y yinto the future.
– Your team loses more than it wins, so a ,significant number of season ticket holders do not show up for home games.
– An important source of revenue comes from people who spend money on parking
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and concessions.
Strategy MapsStrategy Maps -- Case StudyCase StudyStrategy Maps Strategy Maps Case StudyCase Study
Theme: NFL Team: Increase Stadium and Licensing Revenue
Task: Identify Objectives Across Perspectives
Objectives Metrics Initiatives Owner
(Financial)
(Financial)Perspective
Fan(Customer)
Internal
(Customer)Perspective
ProcessesPerspective
Employee L i &
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Learning & Growth
Perspective
Identify Perspectives, then Initiatives within each perspective
Financial(Owner)
CustomerCustomer(Fan)
Operations
EmployeeandSupplier
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Should This Project Be Funded?
Financial(Owner)
CustomerCustomer(Fan)
Operations Build TicketWebsite
EmployeeandSupplier
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Where is Our Financial Focus (Revenue, Margin, ROE)?
Financial(Owner) Increase
Stadium RevenueIncrease
Licensing Revenue
CustomerCustomer(Fan)
Operations
EmployeeandSupplier
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What Customer Initiatives Are We Going to Focus on?
Financial(Owner) Increase
Stadium RevenueIncrease
Licensing Revenue
CustomerCustomer(Fan) Increase Fan Loyalty Grow Fan BaseReduce No Shows
Operations
EmployeeandSupplier
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Does this Operational Initiative Support these Customer Initiatives?
Financial(Owner) Increase
Stadium RevenueIncrease
Licensing Revenue
CustomerCustomer(Fan) Increase Fan Loyalty Grow Fan BaseReduce No Shows
Operations Build TicketWebsite
EmployeeandSupplier
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Decide How to Build The Ticket Website
Financial(Owner) Increase
Stadium RevenueIncrease
Licensing Revenue
CustomerCustomer(Fan) Increase Fan Loyalty Grow Fan BaseReduce No Shows
Operations Build TicketWebsite
Employee Identify Train I T teamandSupplier
Ticket WebsiteVendors
Train I.T. teamto Build Website
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Understand Linkages: If I do this, then that happens
Financial(Owner) Increase
Stadium RevenueIncrease
Licensing Revenue
CustomerCustomer(Fan) Increase Fan Loyalty Grow Fan BaseReduce No Shows
Operations Build TicketWebsite
Employee Identify Train I T teamandSupplier
Ticket WebsiteVendors
Train I.T. teamto Build Website
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Metrics – Putting it all gTogetherg
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http://www.michigancrc.org
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MetricsMetricsMetricsMetrics
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MetricsMetricsMetricsMetrics
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MetricsMetricsMetricsMetrics
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MetricsMetricsMetricsMetrics
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Questions?
Eric HellerMetrics Reporting, Inc.(616) 644-3190eric.heller@metricsreporting.com@ p g
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