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Achieving Business Excellence

While at a beautiful Caribbean resort… in the middle of winter… at 9 am… the morning after the Super Bowl!!!

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Most people are so busy working IN

their business that they do not take any time to work ON their business.

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…chaos brings opportunity

For those that are prepared…

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Learning Objectives:

• Understand what it takes to be an effective “Strategic Thinker.”

• Discuss common mistakes in writing strategic business plans.

• Look at all of the major elements of creating a robust strategic business plan.

• Identify guidelines on how often to review your strategy, adjust and change or be flexible.

• Provide each participant with numerous tools, ideas and skills to apply when creating a detailed and realistic strategic business plan.

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Do NOT freak out!

• I have a ton to cover and I will go pretty fast.• Please take notes and ask questions.• I am happy to answer any of your questions, offer

advice and recommend books at any time.

The slides and a full strategic planning workbook are already posted at:

www.SlideShare.net/johnspence

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For the past 21 years…

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What does this mean to me?

How can I use this idea?

What can I do right away?

I am NOT a guru…

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Most people think of:S.W.O.T.

Competitive PositioningCustomer Intimacy / CRM

Industry trendsGlobal trends

Regulatory / Political IssuesM.E.C.E.KRA’s

Strategic ThrustsCorporate Objectives

SMART GoalsMBO

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What strategy is not…• More, better, faster is not a strategy.• Effectiveness and efficiency are

necessary… but not sufficient.• Superb execution of fundamental

business processes… is expected.• Being extremely good at what you are

supposed to be good at… gets you no extra credit at all.

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“Simplicity is the ultimate sophistication” Leonardo da Vinci

TCIA WMC 2011Do you have a clearly focused and well-communicated strategy for success?

Effective Strategy =

Valued Differentiation x Execution

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Key Point: Strategy is INTERNAL

as well as EXTERNAL

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Five Foundations of Effective Strategic Thinking

Business Acumen

Personal Experience

Pattern Recognition

Strategic Insight

Disciplined Execution 2

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The Four – I’s

• Ignorance

• Inflexibility

• Indifference

• Inconsistency2

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How to avoid the Four I’s

• Aggressive external market focus.

• Aggressive customer focus.

• Keep the “Main Things” the main things.

• Bullish on knowledge sharing and learning.

• Passion and commitment at all levels.

• Foster a healthy paranoia.

• Revel in change.2

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From the CEO of a little 182 billion dollar company…

“Look, what is strategy but resource allocation?

When you strip away all the noise, that’s what it

comes down to. Strategy means making clear-cut

choices about how to compete. You cannot be

everything to everybody, no matter what the size your

business or how deep its pockets. You have to figure

out what to say “NO” to.”Jeffrey Immelt

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To get the most from our session together…

It is absolutely critical that you be brutally honest with yourself today.

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So let's get started with

a little self-test…

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A short diatribe before we get to the business models…

• I don’t like benchmarking.• I think copying other businesses is stupid!• Typically, by the time people start benchmarking a

company five years has past since they initiated their strategies.

• There is no way to guarantee that what worked for them will work for you…

• But what I absolutely can guarantee is… you will not come up with any innovative, effective or remarkable strategies completely on your own. You must look around you to find good ideas… then take those ideas and make them better as you apply them to your specific challenges and opportunities.

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Charlie Trotter’s 4

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Lessons from seven top CEOs

• Have an outside-in perspective

• Be deeply passionate about your job

• Understand the importance of culture

• Create or adapt next generation products, processes and solutions

• Implement the best ideas regardless of origin

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From: What the Best CEOs Know by Krames

Dell, Welch, Gerstner, Grove, Gates, Kelleher, Walton = 696 B

1-10

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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.

• 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.

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In-depth study of 25 top companies renowned for building winning corporate cultures…

• GE• Dell• Wal-Mart• Toyota• Nordstrom• Starbucks

• Southwest Airlines• IBM• P&G• Whole Foods• Ritz Carlton• Intel

The pattern of six common traits for all of these firms…

From Results Rule by Randy Pennington

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They understand that: Results Rule!

1. Tell themselves the truth and value candor and honesty.

2. Pursue the best over the easiest in every situation.

3. Leverage the power of partnerships both internally and externally.

4. Focus the energy to make the main things the main thing.

5. Show the courage of accountability.

6. Learn, grow and improve every single day.

From Results Rule by Randy Pennington

51-10

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Fast Company June 2003

Pages 6 - 7

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Good to Great:1,483 to 11400 – 700%15+ years

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Twice weekly surveys for five years of 2,000+ senior managers and executives at:

• IBM• GE• Morgan Stanley• Merck• 3M• Microsoft• CIGNA• Heineken• MasterCard

• Fidelity• Motorola• Ikon• American Express• Progressive• Bank of America• AT&T• SAP• Borders 8

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Keys to effective management…

• Communicate clearly

• Force the hard decisions

• Focus on results

• Remain flexible to change

• Prove your value to the customer

• Force collaboration

• Rigorous but not ruthless

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From: Think Big – Act Small by Jennings

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The Evergreen Project

10 year study of 160 top companies

40 distinct industries

200 management practices

Winners, climbers, tumblers, losers

Winners had an average Total Return to Shareholders of 945%... The

Losers only averaged a TRS of 62%

From: What (really) Works by Joyce, Nohria, Roberson 9

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The Four Primary Practices:1. A sharply focused, clearly communicated and

well-understood strategy for growth.

2. Flawless operational execution that consistently delivers the value proposition.

3. A performance-oriented culture that does not tolerate mediocrity.

4. A fast, flexible, flat organization that reduces bureaucracy and simplifies work.

From: What (really) Works by Joyce, Nohria, Roberson

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The Secondary Management Practices:

• Talent = find and keep the best people.

• Key leaders show commitment and enthusiasm for the business.

• Embrace strategic innovation.

• Master the power of partnerships.

From: What (really) Works by Joyce, Nohria, Roberson

Score yourself on the 1–10 scale for all eight practices on page 9

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Individual Workshop• Go back and look at all of your audits.• Where were your low scores, where were your high

scores – what is the pattern?• Look over your notes – what were the key themes?

What are the most important ideas?• Answers all the questions on pages 10 – 12.• Put in as much detail as possible.• Be very honest with yourself.• Think in terms of Actions and Outcomes.

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Thinking to Planning

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What Business Planning is Not !• Business planning does not attempt to make

future decisions.

• Business planning is not forecasting.

• Business planning is not an attempt to blueprint the future.

• Business planning is not necessarily the preparation of massive plans and reports.

• Business planning is not an effort to replace good management judgment.

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Why Planning Pays OffAsks & answers questions of importance.

Simulates the future.

Forces the setting of objectives.

Gives a framework for decisions.

Develops performance measurements.

Improves communications.

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NITB

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The Key: a VERY honest and thorough SWOT analysis

Workshop24 - 27

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83%

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What makes a winning strategy?

Unique Coherent Deliverable Evolving

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Common Problems• Putting It Off• Idea inflation• Diluted priorities• Vague goals• No execution plan!!!

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The Organizational Framework for Effective Execution

WHO WHAT HOW

Cross-FunctionalTeams

Senior Leadership

Departments

Adapted from: Six Disciplines Execution Revolution

Individuals

Planning RetreatQuarterly Workshops

GoalsTracking

Dashboard

Status ReportsStatus Meetings

Workshops

Status ReportsRegular Meetings

Coaching

IndividualsTactical PlansAction ItemsTo-do Lists

NITB

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Review of the plan?

• Twice yearly Strategic Planning Retreat – 1 to 2 days

• Monthly “quick check” meetings 2 – 3 hours

• Weekly Senior team alignment review – 1 hour or less

• Carry plan to every strategic meeting

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Assessing the Strategic Situation

Simplicity Complexity

Certainty Uncertainty

Knowing Forecasting

Proactive Adaptive

Strategic Planning

Scenario Planning

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Scenario Planning…Scenario Planning…

Is a process that stimulates imaginative and creative thinking to better prepare an organization by rehearsing for the future to avoid surprises and break

through the illusion of certainty.

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The Harvard Scenario Planning

Model:

• Key Focal Issue

• Driving Forces

• Critical Uncertainties

• Scenario Framework

• Scenarios

• Narratives

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Critical Uncertainties

• BEGIN with the top two most relevant uncertainties that impact your scenario.

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Example: Boat Company

Critical Uncertainties:

Gas Prices / Recession 36

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Scenario Framework: 2 Critical Uncertainties / 4 Scenarios

Short

Short

Long

Long

How long will gas prices stay high in US?

How long willthe US

recession last? Hold on -stay domestic -slow production

Invest in electric engine

R&D

Close factories

Focus on international

business-move production offshore

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Possible Scenarios1. Short / Short = Hold on

2. Short / Long = New engines

3. Long / Short = Close factories

4. Long / Long = Go international

Now for each you would create a Narrative Story… and remember, there may be multiple critical uncertainties that generate multiple scenarios!

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• Probability

• Impact

• Trigger Points

Then for each scenario…

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10 – 15 %

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What Inhibits Execution?National Survey of 4,000 Senior Executives

4. Inability to work together (21%)

3. Company culture (23%)

2. Economic climate (29%)

1. Holding onto the past / unwillingness to CHANGE (35%)

TCIA WMC 2011Where are we going + how will we behave on the way?

FocusDifferentiation“No”

Stakeholders + guiding collation

Vision + ValuesStrategyPlansGoals ObjectivesTactics / Actions

Procedures / ProtocolsRepeatable Process

Clear / consistent / relentless All available channels

Training +time / money /

supplies / people

Measure / TrackCommunicate

Transparency Renewal

Praise + Celebration and

Eliminate Mediocrity

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Disciplined Execution Clear Vision

Detailed Strategy

Guiding Coalition

Alignment

Systems

Communication

Support

Adjust

Reward / Punish

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Summary of Key Ideas• Major elements: thinking, planning, execution, review

• Strategic thinking = study + experience + pattern recognition

• Strategy = bold bets on resource allocation.

• What you say “No” to is a big part of strategy.

• Planning is a process.

• Analysis is critical – but it is not strategy.

• More, better, faster is not a strategy.

• This is not blueprinting the future.

• Keep it simple, focused and extremely well communicated.

• A plan for execution MUST be part of the Strategic Plan.

• Alignment + support + measurement + tracking + reward / punishment

• Contingency planning = probability & impact / trigger points

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If you have any questions at all please do not hesitate to send a note or call. My email address is: john@johnspence.com

My twitter address is: @awesomelysimple

Also, you might find value in the ideas I share in my blog. You can sign up for it at:

www.blog.johnspence.com

Lastly, these slides have already been uploaded to:

www.slideshare.net/johnspence