5/30/2012

1

Pursuing

Execution Excellence Goal Setting and Cascading

Challenges in a Matrix

Organisation

William Malek

Strategy Execution Practice Leader

17 years of management experience in Fortune 500’s

14 years in organizational and strategic leadership consulting

Former Program Director for Stanford University Executive Education Program

Co-author of Executing Your Strategy and the Strategic Execution Framework

B.S. Mechanical Engineering and MBA

Email: william.malek@gmail.com +66-83-250-0043

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The Strategic Execution Framework

The 7 Key Components of Execution Excellence

Drive Strategic Clarity through the Organization

Apply a Framework to Assess Execution Capabilities & Create an Execution Roadmap

Establish an Enterprise Portfolio Management System led by a Strategy Execution Office (SEO)

Rapid Integrated Execution Planning to Address Cross-functional Interdependencies and Change Management

Develop the Organization’s Strategic Leadership & Execution Competencies and Skills

Implement a Disciplined Execution Process of Continuous Improvement

Link Performance Measurement to Strategy and Execution

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Building Capability in General

Level 5

Innovating

Implement continual proactive improvements to achieve business targets

Capable processes Perpetual innovation Change management

Level 4

Predictable

Manage process and results quantitatively and exploit benefits of standardization

Predictable results Reuse/knowledge mgt. Reduced variation

Level 3

Standardized

Develop standard processes, measures, and training for product & service offerings

Productivity growth Effective automation Economies of scale

Level 2

Managed

Build disciplined work unit management to stabilize work and control commitments

Reduced rework Repeatable practices Satisfied schedules

Level 1

Initial

Motivate people to overcome problems and just “get the job done”

Mistakes, bottlenecks Ad hoc methods Hero worship

Business

strategy

Initiation Planning Execution Control Closure

Project management Project

Portfolio

Program management

Strategic performance management

Operations

and

support

Strategic Performance Management

via the “SEO”

• Strategy Execution Office Key Roles:

– Translator of strategy – organizational clarity to build engagement and coherence

– Project/Initiative portfolio planning, goal setting and execution management

– Facilitating effective integrated program planning and goal setting

– Interdependency and interface management role

– Enabling better strategic decision-making and issue management during implementation

– Builds the quality and continuous improvement process for the enterprise

– Provides foundation for more effective strategic performance management

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Customer

Product/

Service Vision

Product/

Services

Mission

(why)

Vision

(where)

Goal-Metric

(what, target)

Strategy

(how)

Program

Portfolio

(projects)

Defined

Stakeholders

Outcomes

Value Creating

Processes/Activities

Execution

Capabilities

Critical Issues &

Assumptions

Decision Quality

Guiding

Principles

(values)

Strategy Execution

Office (who)

Policy

Process

Sub-Process

Tasks

(how, when)

Outcomes

Objectives

for In and On

Metrics &

KPIs

IDPs & Dash

Market

View

Organizational

View

Process

View

Performance

View

Identified

in

Driven

by

Targeted by

Drives

Identifies

Defines Reason for

Supported

by

Drives

Achieved

thru

Implemented

via

Responsibility

of

Facilitates

Described

in

Drives

Described

in

Are Made up

of

Define Supported

by

Made up

of

Informs

Improves

Constrained

by

Controls

Influenced

by

Influenced

by

Contain

Work

(outputs)

Produces

Driven by

Product Line/

Service

Business

Area Goals

Process System Hierarchy

Geo-Political Regulatory/Legal Economy Natural Environment Culture Resources

Capital Market

Labor Market

Suppliers

Technology Providers

Management System

Businesses

Management System

Value Chain

Enabling Processes

Competition

-BUSINESS ENVIORMENT-

Product/ Service

Launched

Product/ Service Sold

Product/ Service

Delivered Product/Service

Financial Stakeholders

Investment

Returns

Product/ Service

Order for Product/Service

Product/ Service

Resources

Enterprise/ Business Model

Markets Customers

P/S Developed & Launched

P/S Portfolio Mgnt. P/S Order Close

P/S Shipped/ Delivered/ Installed

P/S Order Fed P/S Order Processed

P/S Ready for Delivery

Customer Service P/S Supported

Demand Developed

Order Obtained

Customer Relationship Maintained

Opportunities Generated

Opportunities Qualified

Proposal Prepared & Communicated

Sale Closed Order Captured &

Communicated

Opportunities Developed &

Proposal Requested

Information Gathered • Relevant Data Sources Identified • Interview Scheduled • Interview Conducted • Conclusions Reached & Recorded

Opportunities Developed & Proposal Requested • Information

Gathered • Needs Identified

• Deciders & Users Identified

• Constraints Determined

• Credibility Established

Programs & Applications

Value Chain High Level Process View Level 1

Primary Processing System Process Flow Map Level 2

Process (Functional & Cross-functional R&Rs) Level 3

Level 4 – SIPOC Plus Job Model Sub-Process/ Task/ Sub-Task

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Strategic Process

Management Objectives

Level 2

Biz Unit

Objectives

Level 3

Process

Objectives

Projects

Processes

R&R Tasks

Strategic

Outcomes

Outputs

Deliverables

Inputs

Resources

Level 1

Org

Objectives

Effectiveness Indicators

Process Indicators

Performance Indicators

Cost and Human Capital

Indicators

Progress Indicators

Strategic layer

Operational layer

The Matrix Missing

Link

BU MKT CS OPE

Strategic

Outcomes

Organization

Goals

Operational

Objectives

Project

Objectives

Process

Objectives

Goal

Management

PM

360

Calibration

Stack Ranker

Individual KPIs

Individual Performance Management

Key Roles + Collaboration

Brand Realization

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The Linkage Process

1. Define Market Metrics with Brand by Product Line

2. Translate to Organizational Goals

3. Define Functional Objectives Required to Achieve Goals

4. Determine Projects Required Along with Project Objectives

5. Link Project Objectives to Process Performance Criteria

6. Design the Process Metrics to Achieve Strategic Outcomes

7. Reconcile Functional Objectives and Process Metrics

8. Cascade Laterally to Set Individual R&R Performance

Criteria

Why Scorecards Fail

• No clear business strategy to link measures to

– Strategy is not clearly understood

– The original annual goals and objectives are not valid

– Incomplete metrics - those that are not monitoring the uncertainty of the

external environment on key things

– End state success not defined well - lack of goal clarity

• Too many measures obstruct good judgment

– Some non-financial measures do not have quantitative linkages to the

financial results

– Measures that you have no control over

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Why Scorecards Fail

• Measures don't reflect value drivers

– Strategy mapping is not used to create coherence and causal

linkages

– Measures tied to individual compensation may be mis-aligned

culturally

– Many organizations do not have business models that simulate

for causality let alone have core process maps

– Must understand the value creating set of activities that

produce some competitive edge

Why Scorecards Fail

• Reliance on control features which are not rooted in the organization – Non-financial measures can't be rolled up

– There is no realignment process/resources in place to adjust when it is necessary

– Accountability process does not include the metrics or the systems they require

– How are metrics tagged to variances in performance

– Getting buy-in and ownership is sometime ignored as part of the change process

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Why Scorecards Fail

• Metric definition does not equal metric

execution/implementation into the system

– How to achieve a metric "the means" may not be known at the

time the target is set

– Even when causality exist, there in an unknown or un-

quantifiable time lag between actions and impact

– Numerical targets may be counter-productive for sustainable

performance due to compliance mentality

Why Scorecards Fail

• Too many org changes – Changes in key personnel/management team

– Short-term financials vs long-term changes

– Planning cycles not in sync with rate of flux

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Key Learnings about Objectives,

"Targets" and Metrics

– What does each of my customer’s want?

– How can we design systems and processes that can respond quickly

to what they want?

– Measures must help understand and improve the performance of the

system

– Measures must relate to what the customer values

– Measures must be in the hands of the people that are doing the work

– Cascading vertical and lateral in a matrix organization is

effective

Dream what you dare to dream.

Go where you want to go.

Be what you want to be.

Ralph Waldo Emerson