Driving Business Value Through Strategic Process Management

Driving Business Value Through Strategic Process Management

Driving Business Value Through Strategic Process Management Sloan Global Holdings Tom Coleman Chief Information & Process Officer [email protected] 10500 Seymour Avenue Franklin Park, IL 60131 April 12, 2013 Step1 Strategic Planning Step2 BPM Step3 HCM & IT 1 Founded in Chicago, Illinois, USA in 1906 by William Elvis Sloan 9 Major locations IL, China (3), PA, MA, AR, Mexico, CA 4,300 distributors, 69 Rep offices, 60 countries Privately Held, U.S. Based Commercial Plumbing Products Manufacturer The leader in water and energy high efficiency solutions The most comprehensive line of commercial restroom solutions Proven reputation for innovative designs, sustainable business practices, commitment to quality, and devotion to serving our customers Global supply chain and wholesaler distribution network SAP Business Systems enabling breakthrough business processes 2 SLOAN Company Overview About Sloan

Product Offering Water & Energy Efficient Commercial Restroom Solutions Flushometers Vitreous China Toilets, Urinals and Lavatories Sink Systems Health & Hygiene Solutions Water Reuse Systems Water Monitoring & Control Systems High Efficiency | Hygienic Solutions | Trusted Performance 3 SLOAN Company Overview Sensor Faucets Sample Enterprise Toolkit Lean Waste elimination TOC Eliminate the constraint (bottleneck) Six Sigma Reduce variability, solve problems BPR Holistic redesign of end-to-end processes ADKAR Manage the human side of change BSC/Hoshin Connect strategy to action/KPIs 4DX (Four Disciplines of Execution) Create a few must do must succeed goals (WIGs) Act on the lead measures that impact goal achievement Create a compelling scoreboard

Create a cadence of accountability Engage IT and HR technologies 4 Conclusion Companies must take an end-to-end, holistic view of their strategy Corporate Strategy is a governance process Corporate Strategy is not the same as Business or Marketing Strategy The strategy framework must tie core ideology to the value prop, core processes, Human Capital Management, Information Capital Management, and Corporate Culture Improvement Transformation 5 How? eA ts sse Liq uid i ib l What? Cash A/R Inventory Equipment Property Goodwill ng Ta ty What Are We Trying To Do? Human Capital Information Capital Organization Capital ts sse

eA Adapted from: Kaplan and Norton 2004 l gib an Int Re ad ine ss Strategy and Process 6 Achieving Superior Performance Operational Effectiveness is Not Strategy Operational Effectiveness Assimilating, attaining, and extending best practices Run the same races faster (Efficiency) Source: Michael Porter Value Discipline Creating a unique and sustainable competitive position Choose to run a different race (Effectiveness) 7 Strategy is not about ways to get better strategy formulation is about finding ways to get different

Source: Michael Porter 8 Five Tests of a Good Strategy A unique value proposition compared to other organizations A different, tailored value chain Clear tradeoffs, and choosing what not to do [as well as what to do] Activities that fit together and reinforce each other Continuity of strategy with continual improvement in realizing the strategy Adapted from: Michael Porter (2006) 9 Translating the Mission/Vision into Desired Outcomes Mission Why we exist R E U LT U E R CU LT U C Core Values What we believe in Vision What we want to be Strategy Our game plan Goals Outcomes we need to accomplish Strategic Initiatives What we need to do Personal Objectives What I need to do

Strategic Outcomes Satisfied Shareholders Kaplan and Norton 2001 Delighted Customers Motivated and Prepared Workforce Effective Processes 10 2013Sloan Strategic Planning Process Core Ideology Discovery Value Plan Strategic Goals Realization 17.0 4.0 2.0 18.0 Market Needs Mission (Purpose) Financial Value Proposition 5.0

3.0 21.0 8.0 10.0 Competitive Analysis Vision Strategic Imperatives Develop Strategic WIGs & Key Initiatives Communication, Review, Feedback 6.0 1.0 SWOT Core Values What can we discover about the market, the competition, and ourselves? What is our vision of today and of the future? What do we value? Reconcilation Budget Process 17.0-N Employee Performance

Management Process 7.0 Customer Value Proposition & Discipline What must we achieve over the next 5 years? te 1: This is an example of a strategic planning process To achieve our vision, what must we deliver to our customers and stakeholders? What is wildly important this year? How shall we achieve our financial and customer goals? Note 2: WIG = Wildly Important 11 Goal How does the strategic plan reconcile with the budget? How can we communicate the strategic plan? How can we align the WIGs and initiatives to employee action? 2013Sloan Strategic Planning Process Core Ideology Discovery Value Plan Strategic Goals Realization 17.0

4.0 2.0 18.0 Market Needs Mission (Purpose) Financial Value Proposition 5.0 3.0 21.0 8.0 10.0 Competitive Analysis Vision Strategic Imperatives Develop Strategic WIGs & Key Initiatives Communication, Review, Feedback 6.0 1.0 SWOT Core Values

What can we discover about the market, the competition, and ourselves? What is our vision of today and of the future? What do we value? Reconcilation Budget Process Part 1 17.0-N Employee Performance Management Process 7.0 Customer Value Proposition & Discipline What must we achieve over the next 5 years? Note: This is an example of a strategic planning process To achieve our vision, what must we deliver to our customers and stakeholders? What is wildly important this year? How shall we achieve our financial and customer goals? 12 How does the strategic plan reconcile with the

budget? How can we communicate the strategic plan? How can we align the WIGs and initiatives to employee action? Sample Market Needs Analysis Fragment Value Attributes Vs. Products (Survey Sample) Value Attribute M A S E L P N O I T R O P OF T E K R A M S D E E N I S Y L A N

A Note: This analysis is done by product and also by value chain participant (customer) Sloan sample portion of a comprehensive market needs Analysis 13 S Sample Components of Competitive Analysis (Four-Phase Analysis) What drives the competitor? What the competitor is doing and can do Current Strategy How the business Is currently competing Future Goals Competitors Response Profile Assumptions Held about itself & the industry Is the competitor satisfied with their current position? What likely moves or strategy shifts will the competitor make? Where is the competitor vulnerable? What will provoke the greatest and Most effective retaliation by the competitor? Source: Michael E. Porter Competitive Strategy Capabilities Both weakness & strengths 14 Five-Forces Framework (Industry Structure)

New Entrants (Threat) Suppliers (Bargaining Power) Industry Competitors Buyers (Customers) (Bargaining Power) (Intensity of Rivalry) Substitutes (Substitution Threat) Source: Michael E. Porter (Competitive Strategy) 15 16 17 2013Sloan Strategic Planning Process Core Ideology Discovery Value Plan Strategic Goals Realization 17.0 4.0 2.0 18.0 Market Needs Mission

(Purpose) Financial Value Proposition 5.0 3.0 21.0 8.0 10.0 Competitive Analysis Vision Strategic Imperatives Develop Strategic WIGs & Key Initiatives Communication, Review, Feedback 6.0 1.0 SWOT Core Values What can we discover about the market, the competition, and ourselves? What is our vision of today and of the future? What do we value?

7.0 Customer Value Proposition & Discipline What must we achieve over the next 5 years? Note: This is an example of a strategic planning process To achieve our vision, what must we deliver to our customers and stakeholders? Reconcilation Budget Process Part 2 What is wildly important this year? How shall we achieve our financial and customer goals? 18 17.0-N Employee Performance Management Process How does the strategic plan reconcile with the budget? How can we communicate the strategic plan? How can we align the WIGs and initiatives to employee action? The Envisioned Future 1. Vision: What we need to become Vivid description of new tomorrow Vibrant and engaging yet tangible Paints a vivid picture into peoples minds

2. Strategic Imperatives (AKA BHAGs Big, hairy, audacious goals) Ambitious plans an audible gulp Reachable plans (unlike core purpose) Rev up the organization / source of motivation Will require 10 or more years to achieve 19 Inspired by Jim Collins Compelling Vision Questions What What does our organization look like in 5 years? How big? What are we famous for? Why does anyone care about what we do? How do our people feel about being part of our organization? Sloan Compelling Vision Bullets What Private Company Global Leader Manufacturing Company Serving the Commercial Market Innovation that saves $ for clients Innovation that benefits the environment by saving water X revenues (to $X billion) ex e l p m a 20 Compelling Vision What By 2017, Sloan will be a $X billion global manufacturing leader of innovative commercial plumbing solutions, enabling millions of people to preserve life by minimizing water consumption.

x e e l p am 21 Compelling Vision What Strategic Imperatives (BHAGs) What By 2017, Sloan will be a $X billion global manufacturing leader of Innovative commercial plumbing solutions, enabling millions of people to preserve life by minimizing water consumption. Values How should we behave while executing on our goals. [More here later] ex 22 e l p am 2013Sloan Strategic Planning Process Core Ideology Discovery Value Plan

Strategic Goals Realization 17.0 4.0 2.0 18.0 Market Needs Mission (Purpose) Financial Value Proposition 5.0 3.0 21.0 8.0 10.0 Competitive Analysis Vision Strategic Imperatives Develop Strategic WIGs & Key Initiatives Communication, Review, Feedback 6.0 1.0

SWOT Core Values What can we discover about the market, the competition, and ourselves? What is our vision of today and of the future? What do we value? Reconcilation Budget Process Part 3 17.0-N Employee Performance Management Process 7.0 Customer Value Proposition & Discipline What must we achieve over the next 5 years? Note: This is an example of a strategic planning process To achieve our vision, what must we deliver to our customers and stakeholders? What is wildly important this year? How shall we achieve our financial and customer goals?

23 How does the strategic plan reconcile with the budget? How can we communicate the strategic plan? How can we align the WIGs and initiatives to employee action? Financial Value Proposition 24 Value Discipline (Strategic Position) Best Total Cost Achieve the low cost position on product and service support Solve the customers broader problem and share in the benefit Build a better product for which customers will pay a premium Best Product Innovation Best Total Solution Lock-in Adapted from: Norton and Kaplan 2003/2004 Lock customer in to high switching costs 25 The Discipline of Best Total Cost Culture Disciplined teamwork Process focused Conformance to one size fits all mindset

Organization Centralized functions High skills at core Core Processes Mgt Systems Product delivery Basic service cycle Built on standards No frills fixed assets Command and control Compensation fixed to cost & quality Transaction profitability I.T. Wal-Mart Dell Southwest Airlines AMD FedEx Adapted from: Michael Treacy and Fred Wiersema Integrated Low-cost transaction sys Activity-based mgt (ABM) Fulfillment systems 26 The Discipline of Best Product Innovation Culture Concept, future driven Experimentation Out of the box mindset Attack, go for it, win Organization Organic, cellular Technical skills abound Loose-knit structures 3M Nike Mercedes

BMW Sony Intel Adapted from Michael Treacy and Fred Wiersema Core Processes Mgt Systems Invention Market exploitation Commercialization Life cycle mgt Decisive and risk oriented Reward individuals for innovation capacity Product life-cycle profits I.T. 1-to-1 systems 1-to-many systems Many-to many systems Knowledge mgt Technology enablement 27 The Discipline of Total Customer Solutions Culture Client and field driven Have it your way mindset Organization Entrepreneurial client teams High skills in the field Core Processes Client acquisition Client development Solution development Responsive procedures Mgt Systems Revenue/share of wallet Rewards based on feedback Lifetime value of client I.T.

IBM Nordstrom Home Depot HP Goldman-Sachs Empire Carpet Adapted from: Michael Treacy and Fred Wiersema Customer databases Link of internal/external info Knowledge/analytics sys Customer relationship mgt 28 Customer Value Proposition Attributes Value Discipline* Vs. Customer Value Attributes Product and Service Attributes Relationship Image Price Quality Time Selection Functionality Service Relationships Brand Best Total Cost n n n n

o o o n Smart Shopper Best Customer Solution o o o o o n n n Trusted Brand Best Product Innovation o o n o n o o n

Best Product n Differentiator Strategy o General Requirement Adapted from Kaplan and Norton 2001 * Value discipline is a term used by Treacy and Wiersema which parallels strategic positioning Michael Treacy and Fred Wiersema Chart Adapted from Kaplan and Norton 2001 29 Strategic Position Best Total Cost Best Product Innovation Best Total Solution System Lock-in Low total cost Speedy purchase Very high quality Best performance products First to market Best total solution Best solution Standards based Golden Rule Variety kills efficiency Cannibalize your success with new breakthroughs Solve the customer's

broader problems Cannibalize your success with new breakthroughs and extensions Core Processes End-to-end order fulfillement and supply chain Invention Product development Market exploitation Customer acquisition Invention and development Product development Solution development Market exploitation CRM processes Improvement Levers Fulfillemt process redesign Continuous Improvement Product technology R&D cycle time Product lifecycle mgt Problem expertise Product technology Service customization R&D cycle time Relationships Proprietary solutions Major Improvement Challenges Shifting to a new asset base Shift to new products

Jumping to new technology Change in the solution paradigm Value Proposition Jumping to new technology Standardization Adapted from: Treacy and Wiersema 30 Low Cost Niche Market Source: Michael E. Porter 31 Sloan Vision & Mission Financial Perspective "To sustain our mission, on what must we focus?" Customer Perspective To achieve our vision, how should we appear to our customers? Process Perspective To satisfy our customers which processes must we excel?

Resource Perspective "How will we sustain our ability to change & improve?" Mission, Vision, BHAGs, Core Ideology Productivity Strategy Improve Cost Structure Increase Asset Utilization Revenue Growth Strategies Enhance Customer Value Expand Revenue Opportunities Customer Value Proposition price quality Time selection functionality service Product/Service Attributes partnership Relationships brand Image

Supply Chain Processes Product Development Processes Customer Management Processes processes that produce and deliver products and services processes that create new products and services processes that support and enhance customer value keypositions positions/skills key & skills education/train education Knowledge & mgt training teams change management knowledge mgt Organization Financial Capital Capital Information Capital Human Capital + Processsystems mgmt

Systems mgmt databases Knowledge mgmt networks Database mgmt Network mgmt collaboration + 32 skills capital asset mgmt risk mgmt training fiduciary controls budgetknowledge controls financial planning teamwork Sloan Vision & Mission Financial Perspective "To sustain our mission, on what must we focus?" Customer Perspective To achieve our vision, how should we appear to our customers? Process Perspective To satisfy our customers which processes must we excel?

Resource Perspective "How will we sustain our ability to change & improve?" Mission, Vision, BHAGs, Core Ideology Productivity Strategy Improve Cost Structure Increase Asset Utilization Revenue Growth Strategies Enhance Customer Value Expand Revenue Opportunities Customer Value Proposition price quality Time selection functionality service Product/Service Attributes partnership Relationships brand Image

Supply Chain Processes Product Development Processes Customer Management Processes processes that produce and deliver products and services processes that create new products and services processes that support and enhance customer value keypositions positions/skills key & skills education/train education Knowledge & mgt training teams change management knowledge mgt Organization Financial Capital Capital Information Capital Human Capital + Processsystems mgmt

Systems mgmt databases Knowledge mgmt networks Database mgmt Network mgmt collaboration + 33 skills capital asset mgmt risk mgmt training fiduciary controls budgetknowledge controls financial planning teamwork SoWhat do we have so far? 1. 2. 3. 4. 5. 6. 7. 8. 9. Market Needs Competitive Analysis OTWS (aka SWOT) Mission Vision Strategic Imperatives (BHAGs) Core Values Financial Value proposition Customer Value Proposition 34 2013Sloan Strategic Planning Process Core Ideology

Discovery Value Plan Strategic Goals Realization 17.0 4.0 2.0 18.0 Market Needs Mission (Purpose) Financial Value Proposition 5.0 3.0 21.0 8.0 10.0 Competitive Analysis Vision Strategic Imperatives Develop Strategic WIGs & Key Initiatives Communication, Review, Feedback

6.0 1.0 SWOT Core Values What can we discover about the market, the competition, and ourselves? What is our vision of today and of the future? What do we value? Reconcilation Budget Process 17.0-N Employee Performance Management Process 7.0 Customer Value Proposition & Discipline What must we achieve over the next 5 years? Note: This is an example of a strategic planning process To achieve our vision, what must we deliver to our customers and stakeholders? Part 5

What is wildly important this year? How shall we achieve our financial and customer goals? 35 How does the strategic plan reconcile with the budget? How can we communicate the strategic plan? How can we align the WIGs and initiatives to employee action? Focus on the Wildly Important In addition to the whirlwind . . . 2-3 4-10 11-20 2-3 1-2 0 The Law of Diminishing Return Source: FranklinCovey 4DX 36 A WIG is a goal that makes all the difference. Failure to achieve this goal renders any other achievements secondary as it relates to the long Source: Rick Spencer (Franklin Covey) 37 Besides the whirlwind, what are you absolutely going to do?

and What are you absolutely going to 38 Compelling Vision What Strategic Imperatives What What does our organization look like in 5 years? How big? What are we famous for? Why does anyone care about what we do? How do our people feel about being part of our organization? Values Daily Operations Whirlwind Strategy Execution Operating System How should we behave while executing on our goals. The Day Job Wildly Important Goals (War & Battles) Source: FranklinCovey 4DX 39 Continuous Improvement Daily Operations Whirlwind Whirlwind To-Do List:

1. This is important 2. So it is 3. So is this, but 4. So is this but 5. This is important 6. So is this 7. So is this 8. Not as important as Source: FranklinCovey 4DX Transformational Change Strategy Execution Operating System Strategic War Plan 40 Transformational Change WAR Grow Profits from X to Y by 12/31/2013 BATTLE A Lower COGS from X to Y by 12/31/2013 OTC Proc. Team WIG Grow throughput from X to Y by 12/31/2013 Machining WIG Reduce scrap from X to Y by 12/31/2013 Mfg Eng WIG Reduce setup from X to Y by 12/31/2013

STP Mat. Team WIG Reduce material costs from X to Y by 12/31/2013 BATTLE B Grow gross margin from X to Y by 12/31/2013 OTC Proc. Team WIG Increase productivity from X to Y by 12/31/2013 OTC = Order-to-Cash Process STP = Source-to-Pay Process Inspired by : FranklinCovey 4DX 41 Wheels of Competitive Strategy 1980 X Mfg Goals Strategy Objectives Engineering ns o cti n Fu Mktg Finance Other 2007 Sales Service

HR 1980 Source: Michael E. Porter (Competitive Strategy) 2007 Source: T. Coleman Customer Support Process Fu nc tio ns Fu n Demand Generation Process Sloan Strategy and Goals New Product Development Process 42 cti o ns Order To Cash Process ns o cti n Fu Sample Old Functions Vs Processes Marketing

Sales Tech Support Mat Mgt Mfg QA Research Strategic Planning Demand Generation Order Acquisition Order-to-Cash New Product Development Cust Support Source-to-Pay Information Technology (IT) Finance Human Resources (HR) 43 Des Eng New Functions Vs Processes Business Development Product Development Supply Chain & Ops Strategic Planning Demand Generation Order Acquisition Order-to-Cash Product Development & Lifecycle Mgt (Domain Divided) Cust Support Procure-to-Pay Information Technology & Process Mgt Financial Capital Mgt Human Resource Mgt (HR) 44 APQC Process Classification Framework Source: APQC

45 Sloan Enterprise Process Model Master Governance Process Governance Processes Core Processes Enabling Processes (many more) SPP Strategic Planning Process EPM/OCM Employee Perf. Mgt. & Org. Chg. Mgt Process BPM Business Process Mgt Process AOP Annual Oper Plan Process QAP Quality Assurance Process S&OP Sales & Oper Planning Process DGP Demand Generation Process OAP

Order Acquisition Process OTC Order-to-Cash Process CSP Customer Support Process NPD New Product Development Process MDM Master Data Mgt Process ECM Engineering Change Mgt Process PCM Shop Process Change Mgt Process STP Source-to-Pay Process HCM Human Capital Processes 46 Sloan Vision & Mission Financial Perspective "To sustain our mission, on what must we focus?"

Customer Perspective To achieve our vision, how should we appear to our customers? Process Perspective To satisfy our customers which processes must we excel? Resource Perspective "How will we sustain our ability to change & improve?" Mission, Vision, BHAGs, Core Ideology Productivity Strategy Improve Cost Structure Increase Asset Utilization Where do strategic goals Flow to? PROCESSES! price quality Time Revenue Growth Strategies Enhance Customer Value

Expand Revenue Opportunities Customer Value Proposition selection functionality service Product/Service Attributes partnership Relationships brand Image Supply Chain Processes Product Development Processes Customer Management Processes processes that produce and deliver products and services processes that create new products and services processes that support and enhance customer value keypositions positions/skills key & skills education/train education

Knowledge & mgt training teams change management knowledge mgt Organization Financial Capital Capital Information Capital Human Capital + Processsystems mgmt Systems mgmt databases Knowledge mgmt networks Database mgmt Network mgmt collaboration + 47 skills capital asset mgmt risk mgmt training fiduciary controls budgetknowledge controls financial planning teamwork Strategic Theme Customer Solutions Theme (EPO= J. Aykroyd) Sloan Vision and Mission

Productivity Strategy Improve Cost Structure Increase Asset Utilization Revenue Growth Enhance Cust Value Expand Rev Opportunities Financial Improve S&M portion of SG&A Improve DSO Terms Analysis Customer Improve Receivables Improve or eliminate VAC Service S&M Inventory Improvement Marketing cost Improve Product Portfolio Analysis & Rationalization To SCM Theme

Time Partnership Improve Sales Revenue Improve NPDI Idea Mgt Sub Processes Reengineer Customer Support Process (CSP) Order Acquision Process Has Clean Orders Process Brand Implement Mkt Needs & Competitive Analysis Processes -N Mkt Needs Custom Solutions To NPDI Process Reengineer Order Acquisition Process (OAP) Resource Restructure S&M Assign and train SCM

and Finance analyst 2008 Sloan Strategic Planning Cycle Build IT's BI Support Implement IP Telephony (VoIP) Implement SAP CIC (IC) Develop call Centers Implem CRM Sales Lead Mgt System Launch BPR Team for OAP 48 Marketing Initiative Explore nontraditional ways to increase brand awareness & perception -N Reengineer Customer Communication Process (CCP) Assign BPR Team for CCP Sloan Business Process Mgt. (Process Lifecycle Mgt.) Engage Improvement

Program Yes Perform and Improve the Process Measure Performance and Understand Needs Does Process Meet Strategic Goals? No Set Targets; Understand Nature of Perf Gap; Develop Intervention Plan Strategic Planning Process LEVEL 0 DIAGRAM VERSION Version: April 7, 2008 Decide Approach to Change Re-Design Process 49 LEVEL 1 DIAGRAM Sloan Business Process Redesign Process

From BPM Process To BPM Process Gate 6 Gate 2 Gate 1 Gate 3 Gate 4 Gate 5 1.0 2.0 3.0 4.0 5.0 Stage 1 Mobilization Stage 2 Diagnosis Stage 3 Design Stage 4 Development Stage 5 Implementation Mobilization Deliverables Team Education Scope and Boundary Statement Vision Statement

Mission Statement Goal List Problem Statement Stakeholder List Communication Plan Proposed project plan Review with EPO/CPO Diagnosis Deliverables As-Is map Benchmark Summary Industry Trends Gap Analysis Barrier list Critical Success Factors Improvement Priorities Momentum for change Updated project plan Review with EPO/CPO Design Deliverables List of Brainstorm Results To-Be Design Business Case Updated project plan To-Be Design Preview with EPO CPO Development Deliverables Job Descriptions Org changes Process Prototype Policy Statement Procedures Test Results Training Scripts Updated project plan Development Preview with EPO & CPO Implementation Deliverables Production System Installed Process Education Delivered

System Training Performed Initial Process Performance Assessment Review with EPO/CPO Version: April 7, 2008 50 6.0 Stage 6 Post Implement Post-Implementation Deliverables Process Measurements Lessons Learned Action Plans Post Implementation Preview with EPO & CPO Strategic Levers of Transformation Integrated with Sloans Strategic Plan Process Redesign as well as Improvement Policies, Rules, Procedures Computing & Technology Organization Structure Change Management Roles & Job Changes Paradigm Shifts Communications Knowledge Facilities

51 Sample Methodology for Problem Solving and Improvement From PLMP Process Define Problem Measure Problem Analyze Problem Improve DMAIC LEVEL 1 DIAGRAM VERSION Note: There are many types of CI methods. DMAIC Is only one of the many methods in the toolkit that should be used depending on the objective and tool 52 Needed for change. Control Sample Enterprise Toolkit BPM IT CM: ADKAR PMO BS H / C in h os TOC

BPR Need a recipe??? Lean x i S 53 m g Si a BPM is a management discipline that treats Processes as assets that directly drive enterprise performance through (1) operational excellence, (2) business agility, and (3) strategic differentiation. 54 Sloan Vision & Mission Financial Perspective "To sustain our mission, on what must we focus?" Customer Perspective To achieve our vision, how should we appear to our customers? Process Perspective To satisfy our customers which processes

must we excel? Resource Perspective "How will we sustain our ability to change & improve?" Mission, Vision, BHAGs, Core Ideology Productivity Strategy Improve Cost Structure Increase Asset Utilization Revenue Growth Strategies Enhance Customer Value Expand Revenue Opportunities Customer Value Proposition price quality Time selection functionality service Product/Service Attributes partnership Relationships brand

Image Supply Chain Processes Product Development Processes Customer Management Processes processes that produce and deliver products and services processes that create new products and services processes that support and enhance customer value keypositions positions/skills key & skills education/train education Knowledge & mgt training teams change management knowledge mgt Organization Financial Capital Capital Information Capital Human Capital +

Processsystems mgmt Systems mgmt databases Knowledge mgmt networks Database mgmt Network mgmt collaboration + 55 skills capital asset mgmt risk mgmt training fiduciary controls budgetknowledge controls financial planning teamwork The hardest part of succeeding in the age of Process is not technical in nature; it revolves around people and organizational change. Source: Michael Hammer 56 57 CM Tools Vs. Phases of Change Source: Prosci 58 A word about HR Benefits, onboarding, functional OD, and related HR work is important but may do little to help the organization with transformation An HR organization can gain high credibility by linking HCM to both functions & process work HR is usually knowledgeable about whats possible regarding human capability Often HR and IT are the only functions that see

operationally across the entire enterprise The true value of HR is proportional to how they enable human beings and process teams to support the value proposition 59 Sloan Vision & Mission Financial Perspective "To sustain our mission, on what must we focus?" Customer Perspective To achieve our vision, how should we appear to our customers? Process Perspective To satisfy our customers which processes must we excel? Resource Perspective "How will we sustain our ability to change & improve?" Mission, Vision, BHAGs, Core Ideology Productivity Strategy Improve Cost Structure Increase Asset Utilization

Revenue Growth Strategies Enhance Customer Value Expand Revenue Opportunities Customer Value Proposition price quality Time selection functionality service Product/Service Attributes partnership Relationships brand Image Supply Chain Processes Product Development Processes Customer Management Processes processes that produce and deliver products and services processes that create new products and services

processes that support and enhance customer value keypositions positions/skills key & skills education/train education Knowledge & mgt training teams change management knowledge mgt Organization Financial Capital Capital Information Capital Human Capital + Processsystems mgmt Systems mgmt databases Knowledge mgmt networks Database mgmt Network mgmt collaboration + 60 skills capital asset mgmt risk mgmt training

fiduciary controls budgetknowledge controls financial planning teamwork Labor is the single biggest operating expense in most businesses IT Contribution U.S. Bureau of Labor Statistics 2000 to 2010 61 A word about IT There is a strong correlation between companies that view IT as a strategic enabler and those that outperform their competition financially An IT organization can gain high credibility by substituting technology with Process as THE major discussion point IT is usually knowledgeable about whats possible Often IT is the only function that sees operationally across the entire enterprise (add HR to the mix) The true value of IT is proportional to how integrated company systems are to core processes Core processes must support of the value proposition and strategic differentiation 62 2013Sloan Strategic Planning Process Core Ideology Discovery Value Plan Strategic Goals Realization 17.0 4.0 2.0 18.0

Market Needs Mission (Purpose) Financial Value Proposition 5.0 3.0 21.0 8.0 10.0 Competitive Analysis Vision Strategic Imperatives Develop Strategic WIGs & Key Initiatives Communication, Review, Feedback 6.0 1.0 SWOT Core Values What can we discover about the market, the competition, and ourselves?

What is our vision of today and of the future? What do we value? Reconcilation Budget Process 17.0-N Employee Performance Management Process 7.0 Customer Value Proposition & Discipline What must we achieve over the next 5 years? ote 1 : This is an example of a strategic planning process To achieve our vision, what must we deliver to our customers and stakeholders? What is wildly important this year? How shall we achieve our financial and customer goals? 63 Note 2: WIG = Wildly Important Goal How does the strategic plan reconcile with the budget? How can we communicate the strategic plan? How can we align the WIGs and initiatives to employee action? Conclusion

Companies must take an end-to-end, holistic view of their strategy Corporate Strategy is a governance process Corporate Strategy is not the same as Business or Marketing Strategy The strategy framework must tie core ideology to the value prop, core processes, Human Capital Management, Information Capital Management, and Corporate Culture Improvement Transformation 64 Any questions?

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