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20 Cards in this Set
- Front
- Back
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Allocating Resources To the Strategy Execution Effort |
Organizational units must have the operating budgets and resources for executing their respective parts of the strategic plan effectively and efficiently
Resources should be based on strategic priorities
The funding of different organizational units and divisions require a balanced funding where each department is funded efficiently and effectively. Underfunded can result in slowed processes and impede the efforts of organizational units
Overfunding can cause a waste in resources and reduce financial performance
Change in strategy always requires a new allocation of resources to fit new strategy
Even small changes to an existing strategy can cause drastic changes in its allocation of resources |
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Instituting Policies & Procedures That Facilitate Strategy Execution In Three Ways |
A company's policies and procedures can either support or hinder good strategy elements in place or improve its strategy execution capabilities, some changes in work practices are usually required
1. They provide top-down guidance regarding how things need to be done. Policies and procedures represent a store of organizational or managerial knowledge about efficient and effective ways of doing things
2. They help ensure consistentcy in how execution critical activities are performed. It helps align and coordinate the strategy execution efforts of individuals and groups throughout the organization
3. They promote the creation of a work climate that facilitates good strategy execution. They help to set the tone of a company's work climate and contribute to a common understanding of "how we do things around here"
The Middle Approach - prescribe enough policies to give organization members clear direction and to place reasonable boundaries on their actions; then empower them to act within these boundaries in pursuit of company goals |
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Instituting Best Practices & Employing Process Management Tools |
Company managers can significantly advance the cause of superior strategy execution by employing best practices and process management tools to drive continuous improvement in how internal operations are conducted
One of the most widely used methods for guaging how well a company is executing its strategy entails benchmarking the company's performance of particular activities and business processes against "best in industry" and "best in world performers. It can also be useful to look at "best in company" performers of an activity if a company has a number of different organizational units performing much the same function at different |
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How the Process of Identifying & Incorporating Best Practices Works |
A method of performing an activity or business process that consistently delivers support results compared to other approaches
Must have been employed by at least one enterprise and shown to be unusually effective in lowering costs, improving quality or performance, shortening time requirements, enhancing safety, or achieving some other highly positive operating outcome
The more that organizational units use best practices in performing their work, the closer a company comes to achieving effective and efficient strategy execution
The more than organizational units use best practices in performing their work, the closer a company moves toward performing its value chain activities more effectively and efficiently |
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Benchmarking |
The backbone of the process of identifying, studying, and implementing best practices
Role is to look outward to find best practices and then to develop the data for measuring how well a company's own performance of an activity stacks up against the best practice standard |
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Three Tools for Promoting Operating Excellence |
Business Process Reengineering Six Sigma Quality Control Technique Total Quality Mangement |
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Business Process Reengineering |
Involves radically redesigning and streamlining how an activity is performed, with the intent of achieving quantum improvements in performance |
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Total Quality Management |
A philosophy of managaing a set of business practices that emphasizes continuous improvement in all phases of operations, 100% accuracy in performing tasts, invovlement and empoowerment of employees at all levels, team based word design, benchmarking and total consumer satisfaction
Aims at instilling enthusiasm and commitment to doing things right from the top to the bottom of the organization |
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Six Sigma Quality Control Programs |
Utilizes advanced statistical methods to improve quality by reducing defects and variability in the performance of business processes |
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Two important types of Six Sigma Programs |
Process of define, measure, analyze, improve and control (DMAIC) - an improvement system for existing processes failling below specification and needed incremental improvement
Process of define, measure, analyze, design and verify (DMADV) - used to develop new processes or products at Six Sigma quality levels |
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Difference between Total Quality Management & Business Process Reengineering |
Both aim at improved productivity and reduced costs, better product quality, and greater customer satisfaction
BPR aims at quantum gains on the order of 30 to 50% or more, whereas TQM and Six Sigma stress incremental progress, striving for inch by inch gains again and again, in a never ending stream
BPR can be used first to product a good basic design that yields quick, dramatic improvements in performing a business process
TQM or Six Sigma programs can then be used as a follow on to reengineering and best practice implementation to deliver continuing improvements over a longer period of time |
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Capturing the Benefits of Initiatives to Improve Operations |
Business process management tools need to be linked to a company's strategic priorities to contribute effectively to improving the strategy's execution |
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Action Steps Managers can take to realize full value from TQM or Six Sigma Initiatives & Promote A Culture of Operating Excellence |
1. Demonstrating visible, unequivocal and unyielding commitment to total quality and continuous improvement, including specifying measurable objectives for increasing quality and making continual progress
2. Nudging people toward quality supportive behaviors by: a. Screening job applicants rigorously and hiring only those with attitudes and aptitudes right for quality based performance b. Providing quality for most employees c. Using teams and team building exercises to reinforce and nurture individual effort (the creation of a quality culture is facilitated when teams become more cross functional, multitask oriented and increasingly self managed d. Recognizing and rewarding individual and team efforts to improve quality regularly and systematically e. Stressing prevention (doing it right the first time), not correction (instituting ways to undo or overcome mistakes)
3. Empowering employees so that authority for delivering great service or improving products is in the hands of the doers rather than the overseers - improving quality has to be seen as part of everyone's job
4. Using online systems to provide all relevant parties with the latest best practices, thereby speeding the diffusion and adoption of best practices throughout the organization. Online systems can also allow company personnel to exchange data and opinions about how to upgrade the prevailing best in company practices
5. Emphasizing that performance can and must be improved, because competitors are not resting on their laurels and customers are always looking for someting better |
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Installing Information & Operating Systems |
Well conceived state of the art operating systems not only enable better strategy execution but also strengthen organizational capabilities - enought at times to provide a competitive edge over rivals |
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Instituting Adequate Information Systems, Performance Tracking & Controls |
Accurate and timely information about daily operations is essential if managers are to guage how well the strategy execution process is proceeding
Information Systems need to cover five broad areas: - Customer Data - Operations Data - Employee Data - Supplier/Strategic Partner Data - Financial Performance Data
Having state of the art operating systems, information systems and real time data is integral to superior strategy execution, monitoring employee performance and operating excellence |
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High Powered Incentives |
When rewards are tied to specific outcome objectives
Using rewards & incentives to promote better strategy execution |
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Nonmonetary Approaches To Enhance Motivation |
Providing attractive perks and fringe benefits - health insurance premiums, college tuition reimbursement, generous paid vacation time, daycares, health centers, etc.
Giving awards and other forms of public recognition to high performers and celebrating the achievement of organizational goals
Relying on promotion from within whenever possible
Inviting and acting on ideas and suggestions from employees
Creating a work atmosphere in which there is genuine caring and mutual respect among workers and between management and employees
Stating the strategic vision in inspirational terms that make employees feel they are a part of something very worthwhile in a larger social sense
Sharing information with employees about financial performance, strategy, operational measures, market conditions, and compeitors' actions
Providing a comfortable and attractive working environment |
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Balance Between Rewards & Punishment |
The key to creating a reward system that promotes good strategy execution is to make measures of good business performance and good strategy execution the dominating basis for designing incentives, evaluating individual and group efforts and handing out rewards |
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Linking Rewards to Achieving the Right Outcomes |
Incentives must be based on accomplishing the right results, not on dutifully performing assigned tasks
The key to creating a reward system that promotes good strategy execution is to make measures of good business performance and good strategy execution the dominating basis for designing incentives, evaluating individual and group efforts, and handing out rewards |
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Guidelines for Designing Incentive Compensation |
First principle in designing an effective incentive compensation system is to tie rewards to performance outcomes directly linked to good strategy execution and the achievement of financial and strategic objectives
Make the performance payoff a major, not minor, piece of the total compensation package
Have incentives that extend to all managers and all workers, not just top management
Administer the reward system with scrupulous objectivity and fairness
Ensure that the performance targets set for each individual or team involve outcomes that the individiual or team can personal affect
Keep the time between achieving the performace target and receiving the reward as short as possible
Avoid rewarding effort rather than results |
