Transcript BBBP15 Strategy Risk..

Making strategy and risk real
….or maybe unreal!
IMD Building Better Business Professionals Program
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Agenda
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Introductions
An intro to strategic planning
Living the ‘OneTMR’
Strategy into action in TMR
Risk wrap
Introductions
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Introductions
• Bill Lansbury
 General Manager (RoadTek)
• Ian Sturdy
 Executive Director (Program Management
and Delivery), PD&O
• John Oppes
 Acting Deputy Chief Engineer (Road
Operations), E&T
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Where we live in TMR
John
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Ian
Bill
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Bill @ RoadTek
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Ian @ Program Management & Delivery
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John @ Road Operations
John Oppes
Deputy Chief Engineer
(Road Operations)
Joanna Robinson
Director (Traffic Systems
and Road Use)
Kelvin Marrett
Director (Network
Operations and
Performance)
Noel Peters
Director (ITS and
Electrical Technology)
Jon Douglas
Director (Traffic
Engineering and Data)
Traffic System Management
Systems Integration
Standards and Practice
Traffic Engineering Practice
Traffic Information
Road Operations
Traffic Systems and Technology
Traffic Surveys and Data Management
Incident Management
Network and Performance
Road Lighting
Traffic Management Registration
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What is strategic planning?
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Some definitions
• Strategy: Strategos (Greek) = ‘The art of the General’
• Historical origins in warfare - a General’s design to win a
war
• Characteristics: thinking big, considering the
environment, devising goals and tactics
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Some definitions
• Strategic Planning: An ongoing organisational process
that helps agencies identify their objectives, the
strategies they can implement to achieve them and the
performance indicators to measure how well their
outcomes achieved their objectives.
Strategy informs the set of complex tactics and
activities that leads to victory (success).
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Rationale
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Some context
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PDO
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How?
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Tools
• SWOT analysis
• PEST analysis (strategic
scanning)
• Scenarios analysis
• Strategic planning questions
• Enterprise architecture
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SWOT Analysis – Internal focus
Capitalise
External
Strengths
Weaknesses
Opportunities
Threats
Internal
Manage
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PEST Analysis – External focus
Political
• Laws
• Politics
Economic
• Economic performance
• Trends, changes and forecasts
Socio-Cultural
• Demographics
• Values
Technological
• Maturity and adoption
• Advancements and opportunities
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Strategic Scanning in TMR
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Environmental Scanning
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Sharing Economy
The Internet of
Things (IoT)
Peer2Peer (P2P)
Driverless Vehicles
Demographic Shifts
Citizen Engagement
Driver Safety Data
Crowdfunding
Transport
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Data-Driven
Active Transport
Behaviour Change
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Mega trends
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Scenario analysis
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Strategic planning questions
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Where are we now?
Where do we want to be?
How will we get there?
Who is going to do what and
when?
• How will we know if we are
there?
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Strategic management framework
Analyse
Evaluate
Plan
Report
Implement
and monitor
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Allocate
resources
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Strategic planning is a team sport
• We all have a role in
‘casting and carrying the
vision’
• ‘It’s not my job’ – can’t be
words we speak
• We all represent TMR,
casting vision is part of our
responsibility
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OneTMR
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One TMR group session
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Strategy into action in TMR
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Long Term 30 yr Transport Strategy
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Strategy pyramid
Corporate
Strategy
Business Strategies
Functional Strategies
Operating Strategies
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Investment
Planning
Policy
Strategy into action
Long-Term Transport
Strategy
30 years
Regional Transport
Plans
10 years
QTRIP
4 years
Delivery
District Program Plans
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2 years (1+1)
Personal Achievement
Plans
1 year
Policy
Strategy into action
Long Term
Transport Strategy
30 years
Planning
Long Term
Strategy
10 years
Roadmaps
TMR Strategic Plan
Road Operations
Delivery
Investment
Action Plan
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QTRIP
Road Operations
Delivery Plan
4-5 years
4 years (2+2)
Business Plans
1 year
Personal
Achievement
Plans
1 year
Group work task on strategy gaps
What are our gaps looking at these plans across IMD?
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Risk
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Word Origins
• Risk: mid 17th century: from French risque (noun),
risquer (verb), from Italian risco 'danger' and rischiare
'run into danger'.
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Risk
• Noun: A situation involving exposure to
danger: flouting the law was too much
of a risk
• Verb: Act in such a way as to bring
about the possibility of (an unpleasant
or unwelcome event): coal producers
must sharpen up or risk losing half
their business
• ISO 31000:2009 defines risk as …
“ effect of uncertainty on objectives”
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Strategy - Risk
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Strategy is the science and art of using the
organisation's resources to achieve a
specific outcome, commensurate with the
board’s appetite for risk.
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Risk is part of the business and you cant
separate it from anything else that you
do….Every discussion incorporates risk
Philip Twyman FAIDC
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Risk management is the creation of
processes to identify, report and manage
risks and their consequences within the
organisation
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The risk/reward trade-off
• Clearly risk and reward go
together…….Any business enterprise
takes some form of calculated risk
every day
Dr Eileen Doyle FAIDC
• Managed risk taking is where
decisions are taken based on clearly
articulated risks, backed up by plans
to:
 Maximise the benefit of upside risk
 Minimise the consequences of
downside risk
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Risk- real or perceived?
• What are some of our
Business risks?
• Should we own them?
• Are they controllable?
• How would you manage
them ?
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Types of Risks
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Natural disasters
Pandemic
Legal
Global events
Regulatory & Govt policy
changes
Environmental
WH&S
Property & equipment
Service reliability
Security
Theft / fraud
Economic & Financial
Staffing
Loss of skills
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Suppliers
Supply chain failure
Technology
Failure to innovate
Reputational
Political
Road Users
Can you add more?
Nearly ?
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Rockhampton 2011 Flooding
Structures Response- Rocky
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Neerkol Creek Bridge
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Line Marking
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Turkey Beach
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Mount Morgan Range
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Mount Morgan Range
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Jessamine Creek
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Double Creek Bridge
Why integrating risk and strategy is important
• Integrating risk into the strategic planning
process may help to make strategic
planning more robust
• But not all risk is bad; organizations need
to take risks to build value
• The trick is to know which risks will have
the biggest effect on strategy
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If we already do both, why integrate?
• There are factors that drive strategic
risk, such as political and regulatory
change
• An organisation that fails to consider
its key risks when developing
strategy is using a scattergun
approach to strategy
• When strategy and risk are
integrated, there is a better basis for
setting both strategic objectives and
concrete operational goals
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Exercise
• How do you think IMD is
at managing risk?
• What risks don't we
manage well?
• What is our level of Risk
maturity
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How to manage Risk
• Risk management is a process in which we measure or
assess risk and then developing different risk
management strategies for different situations that can
help us to control, anticipate, simply reduce or directly
prevent risks .
• As a general rule, the strategies usually employed
include:
 transferring the risk to a third party;
 avoiding the risk;
 reducing the negative effect;
 and eventually accepting some or all of the
consequences of a specific risk.
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The risk maturity continuum
Informal risk
processes
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Risk journey in
progress
Fully
embedded risk
management
processes
Establishing a Risk profile
• An organisations risk profile
is a snapshot at a given
point in time
• It informs the board and
management about material
business risks, both
financial and non financial,
relevant to the organisation
• Top down risk assessment
process allows for more
strategic consideration of
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Some final words
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Quote…….
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Why does strategy fail ?
• A Fortune Magazine study suggested that 70% of 10
CEOs who fail do so not because of bad strategy, but
because of bad execution. (Source: Why CEOs Fail - R
Charan & G Colvin, Fortune Magazine, 21 Jun 1999.)
• In another study of 200 companies in the Times 1000,
80% of directors said they had the right strategies but
only 14% thought they were implementing them well, no
doubt linked to the finding that despite 97% of directors
having a 'strategic vision', only 33% reported achieving
'significant strategic success'. (Source: Why do only one
third of UK companies achieve strategic success? - I
Cobbold & G Lawrie, 2GC Ltd., May 2001.)
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strategy realisation essential elements
• motivational leadership - concentrates on achieving
sustained performance through personal growth, valuesbased leadership and planning that recognises human
dynamics
• turning strategy into action - entails a phased
approach, linking identified performance factors with
strategic initiatives and projects designed to develop and
optimise departmental and individual activities
• performance management - involving the construction
of organizational processes and capabilities necessary
to achieve performance through people delivering results
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Strategic planning is a team sport
• Visioning and strategic planning is a team sport
• Can’t look at it as an individual game – vision isn’t
relegated to one person
• Only so much one person can do to carry the vision
forward – need other people to carry the vision.
• We all have a role therefore in casting the vision
• ‘It’s not my job’ – can’t be words we speak. It is
everyone’s job to move the vision forward.
• We all represent TMR, casting vision is part of our
responsibility
• OneTMR
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Thank you
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