1. Achieving Business ExcellenceACHIEVING BUSINESS EXCELLENCEUNDERSTANDING THE PATTERN OF BUSINESS SUCCESS www.johnspence.com 1

2. Achieving Business ExcellenceWHEN MOST PEOPLE THINK OF STRATEGY THEY THINK OF:S.W.O.T. AnalysisBusiness ScopeCompetitive Positioning MatrixM.E.C.E.5 Forces / 5 FactorsValue Chain AnalysisBusiness Attractiveness / Business StrengthsKey Result AreasStrategic ThrustsBusiness InitiativesManagement by ObjectiveBut the items on this list are actually elements of Strategic Planning. It is important to realize thatthe planning part is simply a process, and that without putting superior thinking and strategiesinto the process you will yield a very well written, but unsustainable plan. The key here is: onlywith quality inputs can you get superior outputs.The Five Foundations of Strategy THE 4 IS1.2.3.4.5.www.johnspence.com2 3. Achieving Business ExcellenceORGANIZATIONAL EFFECTIVENESS AUDITAnswer the following questions as honestly as possible using this 1-10 point scale:1 = Strongly Disagree3 = Disagree Somewhat5 = Not Sure7 = Agree Somewhat10 = Strongly Agree1. We have a clear and detailed vision for the direction of our company that is very well communicatedthroughout the entire organization: ________2. Every employee has clear / quantifiable / observable performance objectives: ________3. There is a high level of very open and honest communication throughout the organization: ________4. I have a high level of trust in the skills, abilities, and integrity of my co-workers: ________5. There is a high sense of urgency within the organization to get things done: ________6. We have only the best, highly competent people in all areas of the organization: ________7. We focus very intently on the needs of our customers: ________8. There is no politics, rumor-mongering or finger-pointing within our organization: ________9. Our key leaders operate as a highly-effective team: ________10. There is a high level of both personal and mutual accountability within the organization: _______11. People display a positive, enthusiastic attitude throughout the organization: _______12. We are superb at collecting and using feedback from our customers: _______13. Our organization displays great discipline in pursuing our focused business objectives: _______14. I am very pleased with where our organization is in the marketplace today: _______ www.johnspence.com3 4. Achieving Business ExcellenceSOUTHWEST AIRLINESDELLWALMART **** For the rest of the workshops here is how to score yourself and your company ****1 to 2 = very poor3 to 4= mediocre5 to 6= good 7 to 8 = superior 9 to 10 = world class WHAT THE BEST CEOS KNOW: KEY LESSONS FROM THE TOP 7 CEOS IN AMERICA(Grove, Dell, Gerstner, Welch, Kellerher, Walton, Gates)1. We have an Outside-In perspective and place the customer at the center of the business ______2. The majority of our people are committed and passionate about working in our company ______3. We have a strong corporate culture that supports our people and focuses on our customers ______4. We are highly innovative at creating next generation products, processes, or solutions ______5. We study best practices and implement the best ideas, regardless of their origin ______ Based on: What the Best COE Know by Krameswww.johnspence.com 4 5. Achieving Business Excellence THE TOYOTA WAY Challenging Vision _______ We form a long-term vision, meeting challenges with courage and creativity to realize our dreams Kaizen _______ We improve our business operations continuously, always driving for innovation and evolution (1% better every day) Genchi Genbutsu _______ We go to the source to find the facts to make correct decisions, build consensus, and achieve our goals at our best speed. Respect, Challenge and Help your People and Suppliers _______ We respect others, make every effort to understand each other, take responsibility and do our best to build mutual trust. Teamwork _______ We stimulate personal and professional growth, share the opportunities of development, and maximize individual and team performance. From a new study of 25 top companies that are renowned for being number one at what they do: GE, Dell, Toyota, Nordstroms, Wal-Mart, Starbucks, Southwest Airlines, IBM, P&G, Whole Foods, Ritz Carlton, Intel THEY UNDERSTAND THAT RESULTS RULE! SCORE YOURSELF ONTHE 1-10 SCALETell themselves the truth and value candor and honesty _____Pursue the best over the easiest in every situation _____Leverage the power or partnerships both internally and externally _____Focus the energy to make the main things the main thing _____Show the courage of accountability _____Learn, grow and improve every single day _____Based on: Results Rule! by Pennington www.johnspence.com 5 6. Achieving Business ExcellenceELEMENTS OF A HIGH PERFORMANCE TEAMDMCCMD10 Key Team Competencies1. Setting clear, specific and measurable goals. _______2. Making assignments extremely clear and ensuring required competence. _______3. Establishing 100% accountability for high performance across the entire team. _______4. Running effective team meetings. _______5. Building very strong levels of trust. _______6. Establishing open, honest, frank and safe communications. _______7. Managing conflict effectively. _______8. Creating mutual respect and collaboration. _______9. Encouraging prudent risk-taking, creativity and innovation. _______10. Engaging in ongoing team building activities. _______www.johnspence.com 6 7. Achieving Business ExcellenceWHAT DO ENGAGED EMPLOYEES LOOK LIKE?They give more discretionary effort _______They consistently exceed expectations _______They take more responsibility and initiative _______They receive better customer service ratings _______They offer more ideas for improvement _______They promote and model teamwork _______They volunteer more for extra assignments _______They anticipate and adapt better to change _______They persist at difficult work over time _______They speak well of the organization _______THE ELEMENTS OF A WINNING CULTUREFFFFFPPMAwww.johnspence.com 7 8. Achieving Business ExcellenceIS YOUR COMPANY UP TO SPEED? ADAPTED FROM FAST COMPANY MAGAZINEScore your company from 1 to 10: 1 = Strongly Disagree 3 = Disagree Somewhat5 = Not Sure7 = Agree Somewhat10 = Strongly AgreeWE HAVE A STRONG EMOTIONAL BOND WITH OUR CUSTOMERS: ________Competing strictly on price, quality, and features is the road that most companies traveland itis the road to disaster. In a world of overcapacity, endless choice, and savvy buyersthere willalways be some company that can do it a little faster, a little cheaper, or a little better than youcan. Companies that prosper over the long haul dont just offer good deals, they exude genuineaffection and concern for their customers. They build strong, customer intimate relationships astrusted advisors and true business partners.WE HAVE A UNIQUE STRATEGY THAT CLEARLY STANDS OUT: ________You cant do great things if you are satisfied doing things just a little better than your rivals.If you want to win big, you have to think differently. You must pursue strategic ideas thatchallenge the status quo in the industry. You must create a position that is unique, highlyvaluable in the marketplace, and defendable from your competition.OUR ORGANIZATION IS A FUN PLACE TO WORKAND A FUN ORGANIZATION TO DO BUSINESS WITH: ________The most productive companies have an atmosphere of fun and excitement that permeatestheir entire culture. This does not mean people sit around and play video games and tell jokesall day long, it simply means that people smile and have fun while at work. They enjoy theirwork and the people they work withand especially serving their customers.WE ARE BUILT TO CHANGE: ________The only certainty in business today is that some crucial elements of your strategy, thecompetitive landscape, your customers expectations, the underlying economics of your industrywill be different tomorrow. That is why change itself has become a core capability inorganizations that prosper over the long run. Companies that succeedembrace, even revel inchange. www.johnspence.com8 9. Achieving Business ExcellenceWE STRONGLY EMBRACE THE VALUE OF VALUES: ________Today, more than ever, customers dont just ask What products do you make? or Whatservices do you offer? they also ask What values does your company stand for? The companywith the clearest sense of purpose, bolstered by honesty and integrity wins.WE ARE AS DISCIPLINEDAS WE ARE CREATIVE: ________(AND AS CREATIVE AS WE ARE DISCIPLINED)Creating long-term value means delivering short-term resultsevery quarter, every week, everyday. There is no contradiction between creativity and execution. The most innovative companiestend to be the most disciplined when it comes to making their numbers. Think outside the box,but build a strong box to stand on while doing it.WE USE TECHNOLOGY TO CHANGE EXPECTATIONS AND RESHAPE OUR BUSINESS: ________Every business is a technology business. Regardless of your product, service or industryeverycompany that hopes to survive, let alone win, must embrace technology as a fundamental driverof their business strategy. Fundamental values and core business excellence is powered byrelevant (to the customer) technology.WE ARE BUILT FOR SPEED: ________Being fast does not mean reckless. But fast companies do understand the cost of hesitation anddelaywhether responding to a customers complaint or launching a new product. Successfulcompanies know that time is as valuable a resource as money or talent and treat it accordingly.WE HAVE BUILT A COMPANY OF LEADERS: ________There is much more to leadership than the vision and charisma of the CEO. The most effectiveform of leadership is grassroots leadership; the companies with the most confident andcommitted leaders, in all levels of the organization, are companies that win.www.johnspence.com 9 10. Achieving Business ExcellenceGOOD TO GREATHEDGEHOG CONCEPTLevel Five LeadershipFirst Who then WhatConfront the Brutal FactsCulture of DisciplineTechnology AcceleratorsFlywheelDoom LoopBased on: Good to Great by CollinsFrom a twice weekly survey for five years of 2,000+ senior managers and executives at: IBMMicrosoft Motorola GE CIGNA Ikon Morgan Stanley HeinekenAmerican Express MerckMaster Card Progressive Insurance 3M Fidelity InvestmentsBank of America AT&T SAP Borders BooksKeys to Effective ManagementCommunicate Clearlyinternally and externally _____Force the Hard Decisions core values drive fast, effective decision making _____Focus Relentlessly on Key Results - outcomes not effort _____Remain Flexible to Change be agile and adaptable _____Prove Your Value to the Customer every day, in every interaction _____Force Collaboration teamwork is mandatory, not optional _____Rigorous but Not Ruthless set high standards and hold people accountable _____Based on: Tough Management by Martinwww.johnspence.com 10 11. Achieving Business ExcellenceTHE 4 + 2 FORMULAThe Four Primary Management Practices1 = Not at all 3 = Poor 5 = Fair7 = Good 10 = Superior /Excellent1. Strategy: Devise and maintain a clearly stated, focused strategy: ________Whatever your strategy, it will only work if it is sharply defined, clearly communicated, and wellunderstood by employees, customers, partners, and investors.2. Execution: Develop and maintain flawless operational execution: ________You might not always delight every customer, but make sure that you never disappoint them.Winners consistently meet the expectations of their customers by delivering on their valueproposition. Bad quality surely will hurt.3. Culture: Develop and maintain a performance-oriented culture: ________One of the best indicators of being performance-oriented is the way you deal with your own poorperformers. It is easy to reward good performers. What matters is whether you have thecourage to get rid of poor performers.4. Structure: Build and maintain a fast, flexible, flat organization: ________What really counts is whether structure reduces bureaucracy and simplifies work. Simpler andfaster - such are the best goals for all organizations.The Four Secondary Management Practices1. Talent: Hold on to talented employees and find more: ________Winning organizations pay great attention to finding, growing, developing, and rewarding verytalented people.2. Leadership: Key leaders are truly committed to the business: ________The research data clearly showed that the leadership effectiveness of the top executives, onaverage, influenced 15% of the variance in corporate performance, for better or for worse.3. Innovation: Make innovations that are industry transforming: ________Agile companies that were highly innovative and able to anticipate rather than react to disruptiveevents in the marketplace, were always the winner.4. Mergers and Partnerships:Make growth happen with mergers, alliances, and partnerships: _________Internally generated growth is essential, but companies that can also master mergers andpartnerships are much more likely to be winners.Based on: What (Really) Works by Joycewww.johnspence.com 11 12. Achieving Business ExcellenceWHY IS IT SO IMPORTANT TO DELIVER SUPERIOR CUSTOMER SERVICE?It is a proven business fact: The combination of quality products and services, with very highlevels of customer satisfaction directly drives significantly higher profitability. In other words, it should be spelled Customer $ervice with a big capital $.What this chart shows: FinancialAccording to this massive research study, by Performancegoing from an average of Somewhat Agreeto Agree on the Quality and CustomerRelationship scores (in the eyes of theCR=104.12staff) the average company would more thandouble (104%) its financial performance!T Highest Quality Products / ServicesAs another example:&NExcellentIf you improve the average rating on Customer RelationshipsEmployee Satisfaction by 10 15%(again going from Somewhat Agree toLAgree) it will cause a 42% improvement inCR= .404financial performance, including bothprofitability and growth.Employee CR=.277 SatisfactionCR=.275CR=.249CR=.334CR=.280Empowerment Coaching High StandardsCR=.285CR=.371CR=.365 CR=.191 CR=.247 Long-termEnthusiasm,Training & Fair OrientationCommitment, Development CompensationRespect CR = Causal Relationship Based on: Practice What You Preach by Maisterwww.johnspence.com12 13. Achieving Business ExcellenceHERE IS THE LIST OF THE TOP FACTORS THAT DROVE THESE COMPANIES TO BRING IN FINANCIALRETURNS THAT WERE OFTEN 20 TIMES LARGER THAN THEIR COMPETITORS...1 = Strongly Disagree 3 = Disagree Somewhat 5= Not Sure 7= Agree Somewhat 10 = Strongly AgreeWe have an uncompromising determination to achieve excellence in everything we do: ________We have a real commitment to high-quality work, and tolerate nothing less: ________We have a real commitment to high levels of customer service, and tolerate nothing else: ________In this company we set and enforce very high standards for performance: ________Management gets the best work out of everybody in the company: ________The quality of the work performed by our group is consistently high: ________We keep customers informed on issues affecting their business: ________We make our customers feel as though they are very important to us: ________Customer satisfaction is a top priority in our company: ________We listen well to what the customer has to say: ________We are extremely good at building long-term customer relationships: ________The people in our company do whatever it takes to do a good job for the customer: ________We do a good job of resolving customer problems when they occur: _________We always place the customers interests first, ahead of those of the company: _________The level of quality service delivered by my group / team is consistently high: ________READ THATLIST AGAIN AND AGAIN!!!!!THIS IS CRITICAL TO YOUR SUCCESS www.johnspence.com13 14. Achieving Business ExcellenceDISCIPLINED EXECUTION1 = Strongly Disagree 3 = Disagree Somewhat 5= Not Sure 7= Agree Somewhat 10 = Strongly AgreeWe have a clear vision for exactly where we are trying to take our organization _______We have a detailed and specific plan to accomplish the key objectives we are trying to execute _______Our senior leaders are all 100% committed to executing the key objectives _______The key leaders/employees in our organization are all superb at execution ______All of the major objectives we are pursuing are fully aligned and mutually reinforcing _______We have excellent systems and processes in place to ensure consistently superb execution ______There is continuous and transparent communication throughout he entire organization about exactlywhere we stand on executing on our key objectives _______Every employee has all of the training, support, equipment and resources they need to deliver theresults required of them _______We are superb at adjusting and adapting our strategy and objectives when truly necessary _____We do a great job of celebrating both small and big wins and praising great performance _______We refuse to tolerate mediocrity or lack of accountability and deal decisively with people who arenot able to meet the clear standards of performance in our organization _______www.johnspence.com14 15. Achieving Business ExcellenceIBM Philly GearKiss Theory GoodbyeCollaborative partnerships with customers. Best people Superior leadershipDrive unique value and growth throughTransparencySales effectivenessinnovation that matters.Customer focusFlawless operational executionInvest in people.Sell valueSuperb financial managementLeverage talent and knowledge throughHave FUNCustomer loyaltytrust and communication.Skinner NurseriesRam Charan: Know HowCharlie Trotter Own the word servicePosition / Reposition the business toOnly the best people (passion) Best people make moneyLots of communicationLots of communication Pinpoint patterns and change - then takeHighest standardsKnow your businessactionInnovation Have a plan Build a strong culture of excellenceTruly delight the customer Sell valueHire the best people - build them intoGood to Great Small Giants leadersBest peopleIndependent visionBuild a TEAM of leadersEffective (Level 5) leadersStrong RelationshipsSet the right goals - then FOCUS on keyDeal with difficult issues -employees prioritiesFocus on the main things -customers The Six Secrets of ChangePatience + discipline-community 1. Love your employeesResults RuleCaring workplace2. Connect meaning to the workTell the truth Flexible structure3. Invest in your peoplePursue the best over the easiest Passionate4. Learning/innovation IS the workLeverage the power of partnerships Think Big - Act Small5. Transparency rulesFocus on the main things Stewardship 6. Create learning systemsAccountability TransparencyFirms of EndearmentConstant improvement Accessibility Meaningful workMicrosoft Stand for something Partnerships with all stakeholdersBest peopleErase superficial distinctionsRespect for individualsBet the companyIn Search of ExcellenceTransparencyRequire failureA bias for action TeambuildingManagers are qualified Close to customer EmpowermentPerformance is what counts Intra-preneurship Fun work environmentMoney where it is importantValues driven Support for life balanceStop the insanityFocus on core competenciesTraining and development are highSpence: 6 Ways to Run or Ruin Simple structurepriorities1. Clear Vision Minimal bureaucracy Recognition and celebration have a high2. Robust Communication Top 7 CEOs priority3. Culture of Urgency Customer focusMavericks at Work4. Disciplined ExecutionPassion for the job Value-based differentiation5. Best PeopleCulture countsTransparency + knowledge sharing6. Focus on the CustomerConstant innovation Bond with customers4+2 Formula Learn from the best Talent + cultureClear, focused strategyTough Management Mastering the Rockefeller HabitsFlawless execution Communicate clearly Right people doing the right things rightPerformance-oriented culture Force the hard decisionsClear focused one-page strategic planFast, flexible, fl at organization Focus on resultsStrong core values.-Best peopleRemain flexible Organizational alignment and focus-Committed leadersProve your value to the company Relentless and consistent communication-Innovation Force collaboration of the theme.-Growth through partnershipsBe a tough manager / not a toughTransparency and openness to employeeTop Concerns of 700 CEOsguyfeedback.1. Have not communicated my visionToyota Way Key executives highly aware of the2. Do not discuss the tough stuff Clear and compelling vision business.3. Do not have the best people in key Constant improvement (Kiazen) Deliver the brand promise and trulypositions Go to the source (Genchi Genbutsu)delight customers.4. Lack of disciplined executionRespect and mutual accountabilityTeamworkwww.johnspence.com 15 16. Achieving Business Excellencewww.johnspence.com 16 17. Achieving Business ExcellenceWORKSHOP: IDEAS INTO ACTIONGo back page-by-page and carefully look through the book. Compare and contrast your scores onthe various audits and re-read any notes you wrote. What are the themes that emerge thepatterns? Look for any scores below a 7 as an area that needs improvement and anything in the1-5 range as a serious problem that needs attention.The goal here is to really dig into these topics so you can take an honest look at the actualcurrent state of your organization. This is a rare opportunity to take a critical look at how wellyour organization is truly operating and specifically what must be done to improve it. Take thisexercise very seriously and push yourself to really understand what these scores and everythingyou learned today about world-class organizations could mean to your business. Here are threemajor questions to keep in mind:What does this mean to our business?How can I make these ideas work in our company?What can I do right away to improve our success?1. StrengthsWhat was the pattern of high scores? In what major areas did you seem to have as strengths,where you scored an 8 or higher across all of the workshops?2. WeaknessesWhat was the pattern of low scores? In what major areas did you seem to have as weaknesses,where you scored a 6 or lower across all of the workshops?www.johnspence.com17 18. Achieving Business Excellence3. Key Strategies for SuccessBased on everything you have learned here today and your own personal business experience,what do you believe are the top strategies your company must focus on to build and sustainsuccess? What are the 46 most important ideas that will drive your companys future?(Please describe these in detail. You might lead off with a single word or short phrase, but then youll needto give a definition and description to exactly what you mean. It must be clear precisely what each ideasmeans and how you will pursue it.)www.johnspence.com 18 19. Achieving Business Excellence4. Action StepsPlease list at least 6 specific, measurable, and observable action steps that your organization cantake to implement the ideas you learned today. Based on the list you just created, as well as thestrengths and weaknesses you identified, what can be done right away to take the lessons of thisclass and put them into positive action for your organization?1.2.3.4.5.6. www.johnspence.com19 20. Achieving Business ExcellenceNOTES: www.johnspence.com20 21. Achieving Business ExcellenceSMALL GROUP WORKSHOPIn your teams, share what you wrote on pages 1416. Make sure that each person takes time toexplain their findings and recommendations. Then, combine all of your answers in order to createa group answer to the following questions:1. What does your team feel are the major weaknesses of your organization at this point in time?2. What does you team think should be the key strategies for success that your organizationneeds to focus on ?3. What are your teams top 4 recommended action steps that the organization should take imme-diately?EACH TEAM WILL HAVE 5 MINUTES TO PRESENT THEIR FINDINGS AND RECOMMENDATIONS. www.johnspence.com 21 22. Achieving Business ExcellenceNOTES: www.johnspence.com22 23. Achieving Business ExcellenceNOTES: www.johnspence.com23 24. Achieving Business ExcellenceNOTES: www.johnspence.com24