business management system: structures, processes and decisions by design
DESCRIPTION
Decision processes mostly evolve as continuous reorganizations happen. Over time, decision structures and process happen by default, and often those are not well understood by the organization. This slows down decision, prevents processes to support good decisions and in general result in inefficient execution and operations.TRANSCRIPT
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Structures, Processes and DECISIONS by Design
Business Management Systems
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Business Management System
Objective: To design the system by which the senior leadership team will make the business level decisions that are required to run the business.
• What is being optimized: – Required decisions and meetings to run the business – Minimize the number of meetings that are required – Manage the conversations around a topic
• Key questions: – What are the set of business level decisions that need to be made to run the
business? – In what forums are those decisions made? – What processes are needed to support those decisions?
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Decisions and Processes Systems View
It looks complicated but it can be broken down into discrete pieces
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Decisions and Processes
INNOVATION Decisions - Plan of Record Process - Plan of Record - Portfolio Process - Pre Funnel Process - NPD Gate Process - IP Portfolio Process
PLANNING Decisions - Annual Operating Plan
Processes - Strategic Planning Process - Annual Operating Plan Process - Financial Planning Process - Quota Setting Process - Corporate Budgeting Alignment Process
OPERATIONS Decisions - Monthly S&OP Processes - Forecast accuracy process - Manufacturing Planning Process - Customer Input Planning Process
REPORTING Decisions Processes - Financial Reporting Process - Financial Close Process - TCE Measurement Process
MANAGEMENT Decisions - AOP evaluation and adjustment - Pricing
Processes - Monthly Fundamental Review Process - Pricing Review Process - AOP Review Process - Internal Communication Process
EXECUTIVE STAFF Decisions - Ad Hoc
Processes
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Timing of processes and meetings
Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec
Innovation
Planning
Management
Portfolio
Pre Funnel
IP Portfolio
Stage Gate
Operational
Financial
Annual AOP
AOP Review
Pricing
Annual
Quarterly
Staff Meeting
Plan of Record
Strategic
Monthly Dashboard
Quota
Communication (I)
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Innovation Review Meeting
Lead: VP, R&D Accountable: Plan of Record VP, R&D
Portfolio VP, Finance NPD Gate VP, R&D Pre Funnel VP, Marketing IP Portfolio VP, R&D
Participants: President and Staff Process Teams
Outcome: Plan of Record. Product, Supplies, Service, Platform Investment Decisions. Inputs: NPD gate Process, Pre Funnel Process, IP Strategy Process, Portfolio process, Outputs: Decisions documented, CER Capital Committee Requests, Plan of Record Timing: Quarterly, Portfolio review semi-annual, IP review annual
INNOVATION Decisions - Plan of Record Process - Plan of Record - Portfolio Process - Pre Funnel Process - NPD Gate Process - IP Portfolio Process
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Annual Operating Plan Review Meeting
Lead: VP, Finance Accountable: Strategic Planning VP, Marketing
Operational Planning VP, Finance Financial Planning VP, Finance Quota Setting VP, Marketing Corporate Budgeting VP, Finance
Participants: President and Staff Outcome: Strategic Framework, 3 year Strategic Plan, Annual Operating Plans, Regional Quotas, Annual budgets, Organizational Alignment Inputs: Market Sizing, Strategic Themes, Opportunity identification, Competitive Analysis, Financial Planning Process, Functional Plans and Initiatives Outputs: Approved Annual Operating Plan, Strategies by Function, Initiatives by function Timing: Annual, at the conclusion of the annual planning process
PLANNING Decisions - Annual Operating Plan
Processes - Strategic Planning Process - Annual Operating Plan Process - Financial Planning Process - Quota Setting Process - Corporate Budgeting Alignment Process
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Management Review Meetings
Lead: VP, Finance Accountable: Monthly dashboard VP, Finance
AOP Review VP, Finance Pricing Planning VP, Marketing Int. Communication VP, Marketing
Participants: President
Staff members Outcome: Functional review of prior quarter performance. Financial and Operational. Monthly review of key metrics. Approved pricing plans Inputs: Financial Reporting Output, Operational Metrics. Financial Projections, Current Pricing by Channel, Product introductions and obsolescence Outputs: Ongoing business review. Feedback from President to staff. Approved Pricing by segment by channel. Internal Communication. Timing: Monthly (Dashboard), Quarterly (AOP review, Pricing review, Internal Communications).
MANAGEMENT Decisions - AOP evaluation and adjustment - Pricing
Processes - Monthly Fundamental Review Process - Pricing Review Process - AOP Review Process - Internal Communication Process
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S&OP Monthly Review Meeting
Owner: Supply Chain Manager Accountable: VP marketing
VP Sales VP Operations
Participants: Channel Managers, Sales Force Representative, Finance. VP marketing, VP Sales and VP Ops for escalations. Outcome: Alignment of Sales Outlook, Manu forecast and Customer Input Inputs: Manu, Sales forecast, Demand Plan Forecast Outputs: Manu plan, Forecast accuracy report Timing: Monthly
OPERATIONS Decisions - Monthly S&OP Processes - Forecast accuracy process - Manufacturing Planning Process - Customer Input Planning Process
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Innovation Processes
Process: Plan of Record Process
Purpose: The maintain an ongoing plan that is approved by the management staff and is used to make operational decisions. Process: Portfolio Process
Purpose: To integrate investment opportunities and create multiple perspectives and analytics to optimize overall investments in people, time and money. Process: Pre Funnel Process
Purpose: To explore technology, consumers and markets to identify new product, service, business opportunities. Process: NPD Gate Process
Purpose: To manage the flow of new products through the funnel. Process: IP Strategy Process
Purpose: To proactively manage IP development and commercialization.
INNOVATION Decisions - Plan of Record Process - Plan of Record - Portfolio Process - Pre Funnel Process - NPD Gate Process - IP Portfolio Process
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Planning Processes
Process: Strategic Planning Process
Purpose: To lead and facilitate the development of business level and functional objectives, strategies, tactics and initiatives. Create the annual operating plan. Process: Annual Operating Plan Process
Purpose: To leverage the strategic plan and establish the detailed plan for the next year. Process: Financial Planning Process
Purpose: To lead the process of developing financial targets that link corporate objectives and annual operating plans Process: Quota Process
Purpose: To bring together Sales, Marketing and Finance to negotiate top line revenue for the next year. Process: Corporate Budgeting Alignment Process
Purpose: To negotiate budgets between BU and Corporate
PLANNING Decisions - Annual Operating Plan
Processes - Strategic Planning Process - Annual Operating Plan Process - Financial Planning Process - Quota Setting Process - Corporate Budgeting Alignment Process
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Reporting Processes
Process: Financial Reporting Process Purpose: To analyze the monthly financial performance and help BU stakeholders understand that performance. Process: Financial Close Process Purpose: To create a legal and management financial view of BU income statements and balance sheets that meets US GAAP, using systematic and non systematic approaches. Process: TCE Measurement Process Purpose: To measure customer experience performance at all customer touch points over time. TBD.
REPORTING Decisions Processes - Financial Reporting Process - Financial Close Process - TCE Measurement Process
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Management Processes
Process: Monthly Fundamentals Review
Purpose: To review key metrics on a regular basis for potential corrective action. Process: Pricing Review Process
Purpose: To analyze and evaluate pricing strategically to balance profit and market share. Process: AOP Review
Purpose: To review performance to planned initiatives and gain alignment on next quarter’s actions. Process: Internal Communication
Purpose: To create a forum to communicate from the staff to the management team and from the staff directly to all employees.
MANAGEMENT Decisions - AOP evaluation and adjustment - Pricing
Processes - Monthly Fundamental Review Process - Pricing Review Process - AOP Review Process - Internal Communication Process
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Operations Processes
Process: Forecast Accuracy Process
Purpose: Understand demand and supply mismatches and variations. Process: Manufacturing Planning Process
Purpose: Keep the Supply Chain system optimized. Process: Customer Input Planning Process
Purpose: Alignment between sales and procurement.
OPERATIONS Decisions - Monthly S&OP Processes - Forecast accuracy process - Manufacturing Planning Process - Customer Input Planning Process