Transcript High Performance Organisations

High Performance Academy
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Not:
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Questioning your Business
Questioning your Processes
Give a full proof solution
Tell you what and how to do it
High Performance Academy
Company
shape
Relative Slow
Improving
System
Relative Fast
Improving
System
Bad Condition
Good
Condition
High Performance Academy
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It is:
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Assessment of your strategy
Assessment of your focus
Assessment of your robustness of your
processes
In line with strategy?
 Will they deliver?
 Scenarios of how to improve
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Show you opportunities and tools
Share experiences
High Performance
Organisations
Basic criteria
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Organisational environment
Organisational relationships
Competitive environment
Strategic challenges
 Performance
System
Improvement
EFQM
Organisational environment
5 Forces Porter
Drivers of five forces
New Entrants
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Suppliers
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Concentrated
Able to integrate
forwards
Alternative markets
Differentiated products
Crucial to performance
Organised
Low barriers to entry
Limited retaliation expected
Visible business area
Expectation of profits
Rivalry
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Many competitors
Equally balanced
Strategic stakes
Low growth
Barriers to exit
High fixed costs
Commodity items
Buyers
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Concentrated
Low profit
High information
Influence in selling on
Low switching costs
Substitutes
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New technology
Redefinition of customer needs
Unrelated skills/processes
Change in customer values
7
Organisational relationships
Stakeholder
analysis
Regulations
Community
Suppliers
. GTI
Plastic Dewit
Bottom Kreutz
Bimetal Dodoco
Carton Kappa
Glass
Capacitor
EMGO
Rica/ CGE
Air Liquide
Customers
. BPT
Lodz
F&A
Lead
Wires
Deurne
Init
Purch
Philips
Lighting
Lamps
Prof
Supply Group
Starters
‘Pressure
groups”
BLT TL Market
CFL.ni groups
HID
Lumin.
Special
Lighting
Organisational
relationships
Success = robust strategy +
effective operations
Strategy
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Doing the right
things
Making choices
Investing in
strengths
Seeking
uniqueness
Operations
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Doing things right
Solving problems
Eliminating
weaknesses
Emulating best
practice
Ashridge
Understanding strategic position: the
Strategy Matrix
High
Attractiveness
of the Moderate
Business
Low
Weak
Average
Competitive Position
Strong
The Strategy Matrix: possible
options
Hire me
Players’
average
earnings
relative
to Cost
of
Capital
Well
above
Hmm…
Same
Below
Invest to
sustain
Restructure or exit
Below
Average
Well
done!
High
Relative Profitability of the Business
Valued customers (“who”):
segmentation
Cost-to-serve
H
Base costs
Support costs
Acquisition
Retention
Value they bring
Their net
value to
us
L
One off
Over time
L
H
Our net value to them
Cost to them of
our offering
Value they place
on it
Ashridge
Strategy development can start
anywhere
Aims
Do we want to do this?
Competitive
Advantage
Capabilities
Is this something we can do?
Opportunities
Is it possible to do this?
Elements of a business model
Value
chain
How?
Value
propositio
n
Valued
customers
What?
Who?
PRIMARY ACTIVITIES
SUPPORT ACTIVITIES
The full model of a value chain
INFRASTRUCTURE ACTIVITIES: PLANNING, FINANCE, MIS, LEGAL SERVICES
TECHNOLOGY RESEARCH, DEVELOPMENT, DESIGN
HUMAN RESOURCE MANAGEMENT AND DEVELOPMENT
PURCHASING,
INVENTORY
HOLDING,
MATERIALS
HANDLING,
(“Inbound
logistics”)
PRODUCTION
(Porter, 1985)
WAREHOUSING
&
DISTRIBUTION
(“Outbound
logistics”)
SALES
&
MARKETING
DEALER
SUPPORT
&
CUSTOMER
SERVICE
The right way
C
o
Enablers
Processes
m
p
e
t
e
nce
Targets
Your
ultimate
goal
Benefit drivers
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Perceived performance
Features
Reliability
Durability…
Perceived value creation
Responsiveness
Flexibility
Availability...
Cost drivers
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Scale
Design
Technology
Factor costs…
Recruitment costs
Staff turnover
Experience
Sales hit rate...
Performance Improvement System
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Difference between efficiency and
effectiveness
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If you are efficient but not effective,
you are driving very fast to bankruptcy.
If you are effective but not efficient,
you are not going to improve fast
enough and stay competitive.
So check effectivity before efficiency
Performance Improvement System
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What are your critical to strategy
processes?
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Where can you win over your
competition?
Where are your strengths?
Performance Improvement System
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How would the world look alike if
you are successful?
What would be different in the
process?
Map your process
Test the robustness of your process
Define the way to go
Performance Improvement System
Test
Visualise
Assumptions
Ist
Soll
Executing Strategy
Introduction
Stephen Bungay
Director, Ashridge Strategic Management Centre
The strategy triangle
Aims
Do we want to do this?
Competitive
Advantage
Capabilities
Opportunities
Is this something we can do?
Is it possible to do this?
Strategy is something you do!
Doing the right things
to
Shift the odds in your favour
which means
Making choices
Decisions
Doing strategy is thoughtful, purposive action
How can we help people to answer these questions?
1. What is my part in the plan?
2. How does that contribute to the
whole?
3. What do I have to do to be
successful?
Personal challenges
How do you set clear direction?
Directing
Leading
How do you lead while
allowing others to do so?
Managing
How do you allocate
resources efficiently and
effectively?
In each case: enough, but not too
much!
Clarity about objectives, guidance on decision-making
Directing
Leading
Giving space and support
Managing
Enough resources,
manageable constraints
Where would you like to be?
Goals
Alignment
Operational
Control
Autonomy
Think about these questions:
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Why is this a high performance organisation?
How is leadership exercised?
What behaviour standards are apparent?
What values are implied?
How does it reconcile autonomy and
alignment?
Executing Strategy
Directing through Intent
Stephen Bungay
Director, Ashridge Strategic Management Centre
Operations: disciplined behaviour
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Clarity about what and why
Ability to make trade-offs between priorities
Space and support
Willingness to use the space
Trust
High alignment enables high
autonomy
Goals
Alignment
Operational
Control
Autonomy
The problem: three critical gaps
Outcomes
Effects Gap:
the difference
between what we
expect our actions to
achieve and what
they actually achieve
Actions
Knowledge Gap:
the difference between
what we would like to
know and what we
actually know
Plans
Alignment Gap:
the difference between
what we want people to do
and what they actually do
Usual reactions
Outcomes
Knowledge Gap:
more information
Effects Gap:
more control
Actions
Plans
Alignment Gap:
more detail
The system of solutions
Outcomes
Effects Gap:
encourage adaptation
by giving freedom to
act within boundaries
Actions
Knowledge Gap:
restrict plan to
essential outcomes by
clarifying intent
Plans
Alignment Gap:
build alignment by
cascading ‘what’ and ‘why’
The military have an operating
model for achieving this
Goals
Alignment
MISSION
COMMAND
Operational
Control
Delegation
The original guru – and practitioner
Von Moltke on the three gaps
Outcomes
Effects Gap:
‘everyone retains
freedom of decision
and action within
bounds’
Actions
Knowledge Gap:
‘do not command more
than is necessary or plan
beyond the circumstances
you can foresee’
Plans
Alignment Gap:
‘communicate to every unit
as much of the higher
intent as is necessary to
achieve the purpose’
Strategy: enough but not too much
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‘The Prussian general staff, under the elder von
Moltke…did not expect a plan of operations to
survive beyond the first contact with the
enemy. They set only the broadest of
objectives and emphasised seizing unforeseen
opportunities as they arose…Strategy was not a
lengthy action plan. It was the evolution of a
central idea through continually changing
circumstances.’
Quoted by Jack Welch in Jack, p. 448
Why is it interesting?
It is:
 A set of practices
 With a 150 year
history
 An integrated system
 Scaleable
And not:
 A theory
 A new buzz word
 A list of initiatives
 Funky stuff for small
teams
A simple operating model
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Leaders explain the outcome the unit is to achieve in the
context of
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This enables the team to act at speed
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the overall strategic intention ‘2 levels up’
what part the team will play
what resources are available
what constraints are imposed
through clarity of purpose
with freedom to adapting to changing circumstances
ready to help others
Technique is based on very short written
communications
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based on a standard format
Mission = task + purpose
Task
What?
Clarity
Purpose
&
Why?
Alignment
The mission sets you free
Scope of the Purpose
Mission
Operating Boundaries
Strategy as a statement of intent
Objectives as
an end-state
Capabilities
and
opportunitie
s
Analysis of
the situation
Mai
n
Effo
rt
Time
Decisive
points
defining
main effort
A core alignment tool: ‘mission
analysis’
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A process for analysing higher level intent and the tasks
necessary to fulfil a mission
It places in context what effect is to be achieved within
the overall plan
It defines the boundaries within which there is freedom
to act and makes clear the focus of effort
The analysis allows leaders to think through what needs
to be done to fulfil a mission and affirm that it can be
achieved
It is a dynamic process which must be reviewed if the
situation changes
Defining ‘our part in the plan’
 What
do you need to specify in
order to give direction?
or
 What do you need to know in
order to receive direction?
Mission analysis: a briefing structure
1. Statement of the mission
– what and why
– measures
2. Strategic intent
– one and two levels above
3. Tasks
– essential high level tasks
4. Defining the boundaries
– freedoms and constraints
5. Confirm the mission: has the situation changed?
Being Clear and Simple
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In articulating the mission you need to
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Be clear about what really matters
Focus your effort on it
Leave out everything else
The mission answers the question: what does
the plan mean for us?
To do this, you need to simplify complexity,
which means mastering practical thinking
Ways of Thinking
Theoretical
Thinking
Practical
Thinking
Two Types of Thinking for two
Situations
Theoretical Thinking
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Its object is knowledge
Its goal is to understand
reality
Thinks backwards into
causality
Involves making
distinctions
Practical Thinking
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Its object is action
Its goal is to make choices
Thinks forward into
consequences
Involves simplification
Turning Shades of Grey into Black and
White
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Simplification is a demanding intellectual process
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The best simplifications are insights into the essentials
Deciding what is essential involves
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Structuring
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Selecting
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Turning lists into sets of relationships
What details matter?
What is merely detail and should be forgotten?
Summarising
 Articulating the meaning of a large number of facts
Reality is never black and white - actions always are
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Your people can only act when you have made reality
simple for them
Adapting: strategy is something you do - by
understanding what it means for operations
Strategy
Operations
The overall dynamic: a ‘do and
adapt’ cycle
Think
Do
The ‘do and adapt’ cycle: learning
and adapting
Think
(Learn)
(Observe
(Decide
Orient)
Act)
(Adapt)
Do
Example: mission statement – 1st
iteration
Our Mission Statement:
Significantly reduce time-to-market for development,
enhancements and support of high-quality products to
our customers in a cost-effective manner in order to
help aggressively grow our revenues and increase our
margins.
Mission Statement – 3rd iteration
To accelerate development, support and enhancement of
critical products in order to enable sales channels to
halt market share erosion by December 2003.
Successful mission analysis is:
 Clear
 Simple
 Concise
 Incisive
 Realistic
 Inspiring