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High Performance Academy

High Performance Academy. Not: Questioning your Business Questioning your Processes Give a full proof solution Tell you what and how to do it. High Performance Academy. High Performance Academy. It is: Assessment of your strategy Assessment of your focus

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High Performance Academy

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  1. High Performance Academy • Not: • Questioning your Business • Questioning your Processes • Give a full proof solution • Tell you what and how to do it

  2. High Performance Academy

  3. High Performance Academy • It is: • 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 • Show you opportunities and tools • Share experiences

  4. High Performance Organisations

  5. Basic criteria • Organisational environment • Organisational relationships • Competitive environment • Strategic challenges • Performance Improvement System EFQM

  6. Organisational environment 5 Forces Porter

  7. Suppliers Concentrated Able to integrate forwards Alternative markets Differentiated products Crucial to performance Organised Drivers of five forces New Entrants • Low barriers to entry • Limited retaliation expected • Visible business area • Expectation of profits Rivalry • Many competitors • Equally balanced • Strategic stakes • Low growth • Barriers to exit • High fixed costs • Commodity items • Substitutes • New technology • Redefinition of customer needs • Unrelated skills/processes • Change in customer values • Buyers • Concentrated • Low profit • High information • Influence in selling on • Low switching costs

  8. Stakeholder analysis Regulations Community Suppliers Customers . BPT . GTI Philips Lighting Lodz F&A Lamps Prof Plastic Dewit Bottom Kreutz Bimetal Dodoco Carton Kappa Capacitor Rica/ CGE Air Liquide Supply Group Init Purch Glass EMGO Lead Wires Deurne Lumin. Special Lighting Market groups HID BLT TL CFL.ni Starters ‘Pressure groups” Organisational relationships

  9. Organisational relationships

  10. Doing the right things Making choices Investing in strengths Seeking uniqueness Doing things right Solving problems Eliminating weaknesses Emulating best practice Success = robust strategy + effective operations Strategy Operations Ashridge

  11. Understanding strategic position: the Strategy Matrix High Moderate Low Attractiveness of the Business Weak Average Strong Competitive Position

  12. The Strategy Matrix: possible options Hire me Invest to sustain Well above Same Below Players’ average earnings relative to Cost of Capital Hmm… Restructure or exit Well done! Below Average High Relative Profitability of the Business

  13. Cost to them of our offering Value they place on it Valued customers (“who”): segmentation Cost-to-serve H Base costs Support costs Acquisition Retention Their net value to us L Value they bring One off Over time L H Our net value to them Ashridge

  14. Strategy development can start anywhere Aims Do we want to do this? Competitive Advantage Opportunities Is it possible to do this? Capabilities Is this something we can do?

  15. Value proposition Value chain Elements of a business model Valued customers How? What? Who?

  16. The full model of a value chain INFRASTRUCTURE ACTIVITIES: PLANNING, FINANCE, MIS, LEGAL SERVICES SUPPORTACTIVITIES TECHNOLOGY RESEARCH, DEVELOPMENT, DESIGN HUMAN RESOURCE MANAGEMENT AND DEVELOPMENT PRODUCTION SALES & MARKETING WAREHOUSING & DISTRIBUTION (“Outbound logistics”) PURCHASING, INVENTORY HOLDING, MATERIALS HANDLING, (“Inbound logistics”) DEALER SUPPORT & CUSTOMER SERVICE PRIMARY ACTIVITIES MARGIN (Porter, 1985)

  17. The right way C Enablers Processes Targets Your ultimate goal o m p e t e nce

  18. Benefit drivers • Perceived performance • Features • Reliability • Durability… • Perceived value creation • Responsiveness • Flexibility • Availability...

  19. Cost drivers • Scale • Design • Technology • Factor costs… • Recruitment costs • Staff turnover • Experience • Sales hit rate...

  20. Performance Improvement System • Difference between efficiency and effectiveness • 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

  21. Performance Improvement System • What are your critical to strategy processes? • Where can you win over your competition? • Where are your strengths?

  22. Performance Improvement System • 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

  23. Performance Improvement System Test Visualise Assumptions Soll Ist

  24. Executing Strategy Introduction Stephen Bungay Director, Ashridge Strategic Management Centre

  25. The strategy triangle Aims Do we want to do this? Competitive Advantage Capabilities Is this something we can do? Opportunities Is it possible to do this?

  26. 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

  27. 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?

  28. Personal challenges How do you set clear direction? Directing Leading Managing How do you lead while allowing others to do so? How do you allocate resources efficiently and effectively?

  29. In each case: enough, but not too much! Clarity about objectives, guidance on decision-making Directing Leading Managing Giving space and support Enough resources, manageable constraints

  30. Where would you like to be? Goals Alignment Operational Control Autonomy

  31. Think about these questions: • 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?

  32. Executing Strategy Directing through Intent Stephen Bungay Director, Ashridge Strategic Management Centre

  33. Operations: disciplined behaviour • Clarity about what and why • Ability to make trade-offs between priorities • Space and support • Willingness to use the space • Trust

  34. High alignment enables high autonomy Goals Alignment Operational Control Autonomy

  35. The problem: three critical gaps Outcomes Effects Gap: the difference between what we expect our actions to achieve and what they actually achieve Knowledge Gap: the difference between what wewould like to know and what we actually know Actions Plans Alignment Gap: the difference between what we want people to do and what they actually do

  36. Usual reactions Outcomes Knowledge Gap: more information Effects Gap: more control Actions Plans Alignment Gap: more detail

  37. The system of solutions Outcomes Knowledge Gap: restrict plan to essential outcomes by clarifying intent Effects Gap: encourage adaptation by giving freedom to act within boundaries Actions Plans Alignment Gap: build alignment by cascading ‘what’ and ‘why’

  38. The military have an operating model for achieving this Goals MISSION COMMAND Alignment Operational Control Delegation

  39. The original guru – and practitioner

  40. Von Moltke on the three gaps Outcomes Knowledge Gap: ‘do not command more than is necessary or plan beyond the circumstances you can foresee’ Effects Gap: ‘everyone retains freedom of decision and action within bounds’ Actions Plans Alignment Gap: ‘communicate to every unit as much of the higher intent as is necessary to achieve the purpose’

  41. Strategy: enough but not too much • ‘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

  42. 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 Why is it interesting?

  43. A simple operating model • Leaders explain the outcome the unit is to achieve in the context of • the overall strategic intention ‘2 levels up’ • what part the team will play • what resources are available • what constraints are imposed • This enables the team to act at speed • through clarity of purpose • with freedom to adapting to changing circumstances • ready to help others • Technique is based on very short written communications • based on a standard format

  44. Mission = task + purpose Task Purpose What? & Why? Clarity Alignment

  45. The mission sets you free Scope of the Purpose Mission Operating Boundaries

  46. Main Effort Strategy as a statement of intent Objectives as an end-state Decisive points defining main effort Capabilities and opportunities Time Analysis of the situation

  47. A core alignment tool: ‘mission analysis’ • 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

  48. 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?

  49. Mission analysis: a briefing structure • Statement of the mission • what and why • measures • Strategic intent • one and two levels above • Tasks • essential high level tasks • Defining the boundaries • freedoms and constraints • 5. Confirm the mission: has the situation changed?

  50. Being Clear and Simple • In articulating the mission you need to • 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

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