4. Trying to execute a strategy that conflicts with the existing power structure. 5.
Inability to generate ... Covey Model. Four “Disciplines” in Execution (4DX). - 7 - ...
Effective Strategy Execution Firdaus Alamsjah, Ph.D. Executive Dean
Welcome to BBS Knowledge Sharing…, Firdaus Alamsjah (Feri) • •
– Degree • Ph.D. and MSIE in Industrial Engineering (Houston, USA) • Insinyur in Mechanical Engineering (ITB, Indonesia) – Non Degree • Certified Strategy Execution Professional – GML & QPR • Implementing Strategy ‐ The Wharton School • Indonesia Executive Program ‐ GE Management Development Program (Crotonville, USA) • Project Management ‐ Sundridge Management Development Program (London, UK)
Professional Experience Executive Dean, BINUS Business School Managing Partner, BINUS Consulting Director, BiNus International Faculty Members at IPMI, UI, Unud Teaching, facilitating, and consulting in Operations Management for more than 15 yrs to universities and corporations – Industrial Analyst at the Presidential Office and BPPT – Exxon Natuna Ltd – – – – –
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Professional Memberships – Indonesian Production and Operations Management Society (IPOMS) – APICS – Alpha Pi Mu (Industrial Engineering Honor Society, USA)
Education
Research Interests: Strategy Execution, Supply Chain Management, and Business Process Improvement ‐ 2 ‐ • Hobby: Reading, Sports, Travel, and Music
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The Importance of Integrating Strategy Vision, Mission & Values Business Objectives
PPIC
FUNCTIONAL STRATEGY
Logistics
Human Resources Finance
Operation
Distribution
LINK & ALIGN
Marketing & Sales
CUSTOMRES
BUSINESS STRATEGY
Information Technology
INDIVIDUAL SCORECARD
People
click ‐ 3 ‐
Major Obstacles in Implementing Strategy* 1. 2. 3. 4.
5. 6. 7.
Poor or vague strategy Not having guidelines or a model to guide strategy execution efforts Insufficient financial resources to execute the strategy Trying to execute a strategy that conflicts with the existing power structure Inability to generate “buy‐in” on critical steps or actions Lack of upper management support of strategy execution Lack of feelings of “ownership” of a strategy or execution plans among key employees
*Source: Hrebiniak (2005), Making Strategy Work, Wharton School Publishing
8.
9.
10.
11.
12.
Lack of incentives or inappropriate incentives to support execution objectives Poor or inadequate information sharing between individual or business units responsible for strategy execution Unclear communication of responsibility and/or accountability for execution decisions or actions Lack of understanding of the role of organizational structure an design in the execution process Inability to manage change effectively or to overcome internal resistance to change
Top 5 Killers in Implementing Strategy* 11
Unclear communication of responsibility and/or accountability for execution decisions or actions
22
Poor or inadequate information sharing between individual or business units responsible for strategy execution
33
Poor or vague strategy
44
Inability to manage change effectively or to overcome internal resistance to change
55
Lack of feelings of “ownership” of a strategy or execution plans among key employees
*Source: Alamsjah (2007), Survey on Strategy Execution ‐ 5 ‐
Indonesian vs. American Managers Major Obstacles in Implementing Strategy
BBS
WBS
GR
Unclear communication on accountability/ responsibility
1
4
5
Poor information sharing
2
2
4
Poor or vague strategy
3
5
2
Inability to manage change
4
1
1
Lack of ownership on execution plan
5
5
8
Insufficient financial resources to execute the strategy
12
11
12
Similar but in a different order… Similar but in a different order… * Based on surveys by BBS, WBS, & GR) ** BBS = BINUS Business School, WBS = Wharton Business School, GR = Gartner Research ‐ 6 ‐
Covey Model
Four “Disciplines” in Execution (4DX)
‐ 7 ‐
FRAMEWORK IN EXECUTING STRATEGY (STRATEX)* RESOURCES RESOURCES 8. 8. People People 9. Allocation 9. Allocation of of resources resources
INPUT INPUT 2.Uncertain 2.Uncertain Environment Environment 3.Clear 3.Clear Strategy Strategy
SYSTEMATIC SYSTEMATIC EXECUTION EXECUTION PROCESS PROCESS 4. 4. Managing Managing Integration Integration 5. 5. Managing Managing Culture Culture 6. 6. Managing Managing Change Change 7. 7. Managing Managing Performance Performance
ENABLER: ENABLER: *Source: Alamsjah (2010), to appear in Text and Cases in Business, Salemba Empat.
10. 10. Organization Organization Structure Structure 11. 11. CEO CEO && Leadership Leadership ‐ 8 ‐
OUTPUT OUTPUT 1. 1. Successful Successful Strategy Strategy Execution Execution
12. 12. Knowledge Knowledge Management Management on on Execution Execution
Understanding Your Business Using Balanced Scorecard (BSC)* • BSC is a performance management tool to assist a company in translating its vision and mission into strategic actions • It is done by incorporating and connecting financial and non‐financial indicators and using cause‐and‐effect relationships *) Source: Kaplan and Norton, “The Strategy-Focused Organization, HBS Press, 2001 9
Linking Strategy to Operations* 1
Develop Developthe theStrategy Strategy • •Mission, Mission,Vision, Vision,Values, Values, • •Strategic analysis Strategic analysis • •Strategy Strategyformulation formulation
6
Test Test&&Adapt Adapt • •Profitability Profitabilityanalysis analysis • •Strategy correlations Strategy correlations • •Emerging Emergingstrategies strategies
5 Monitor Monitorand andLearn Learn
2
Plan Planthe theStrategy Strategy • •Strategy Strategymap/themes map/themes • •Measures/targets Measures/targets • •Initiative Initiativeportfolio portfolio • •Funding Funding Strategic StrategicPlan Plan • •Strategy StrategyMap Map • •Balanced Scorecard Balanced Scorecard • •STRATEX STRATEX
Operating OperatingPlan Plan • •Dashboards Dashboards • •Resource Resourcerequirements requirements • •Budgets Budgets
• •Strategy Strategyreviews reviews • •Operations Operationsreviews reviews *) Source: Kaplan & Norton’s Execution Premium Framework
‐ 10 ‐
3 Align Alignthe theOrganization Organization • •Business Businessunits units • •Support units Support units • •Employees Employees 4 Plan PlanOperations Operations • •Key Keyprocess process improvement improvement • •Sales Salesplanning planning • Resource capacity plan • Resource capacity plan • •Budgeting Budgeting
Four Perspectives in BSC
11
Strategy Map • It is a logical and comprehensive architecture for describing a strategy • A map that describes how value creation is created from intangible assets (learning and growth and internal process) into tangible assets (financial, customer) outcomes using cause‐and‐effect relationships 12
Exercise: Strategy Map • Develop a Strategy Map of a Restaurant based on these “Strategic Objectives” Customer Learn & Growth Internal Process Finance
Increase Profit
Increase Revenue
Improve Customer Loyalty
Create Conducive Environment
Improve Staff Competency
Purchase Cooking Equipment
Do SOP consistently 13
Reduce Cost
Provide Fast Service
Provide Quality Food
Key Takeaways • List three important lessons that you have learned from this session • #1 • #2 • #3 ‐14 ‐
Coffee Break
‐ 15 ‐
