Pursuing Execution Excellence
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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 william.malek@gmail.com
2 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 a Strategy Execution Office (SEO) Rapid Integrated Execution Planning to Address Crossfunctional Interdependencies and Change Management Develop the Organization s Strategic Leadership & Execution Competencies and Skills Implement a Disciplined Execution of Continuous Improvement Link Performance Measurement to Strategy and Execution 2
3 Building Capability in General Level 5 Innovating Implement continual proactive improvements to achieve business targets Capable processes Perpetual innovation Change management Level 4 Predictable Level 3 Standardized Level 2 Managed Level 1 Initial Manage process and results quantitatively and exploit benefits of standardization Develop standard processes, measures, and training for product & service offerings Build disciplined work unit management to stabilize work and control commitments Motivate people to overcome problems and just get the job done Predictable results Reuse/knowledge mgt. Reduced variation Productivity growth Effective automation Economies of scale Reduced rework Repeatable practices Satisfied schedules Mistakes, bottlenecks Ad hoc methods Hero worship Strategic Performance Management via the SEO Strategic performance management Business strategy Project Portfolio Program management Project management Initiation Planning Execution Control Closure Operations and support 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 3
4 Influenced 5/30/2012 Market View Customer Vision s Identified in Targeted Drives Product Line/ Identifies Driven Organizational View Drives Mission (why) Vision (where) Goal-Metric (what, target) Strategy (how) Supported Achieved thru Implemented via Program Portfolio (projects) Responsibility of Influenced Constrained Defines Reason for Defined Stakeholders Outcomes Value Creating es/activities Execution Capabilities Guiding Principles (values) Critical Issues & Assumptions Decision Quality Improves Policy Strategy Execution Office (who) Informs Facilitates View Driven Business Area Goals Supported Contain Made up of Sub- Described in Tasks (how, when) Controls Produces Performance View Outcomes for In and On Drives Define Are Made up of Metrics & KPIs Described in IDPs & Dash Work (outputs) Resources System Hierarchy -BUSINESS ENVIORMENT- Geo-Political Regulatory/Legal Economy Natural Environment Culture Enterprise/ Business Model Capital Market Labor Market Suppliers Businesses Management System Management System Value Chain Investment Financial Returns Stakeholders Markets Customers Technology Providers Enabling es Order for Resources Competition Value Chain High Level View Level 1 Launched Sold Delivered Primary ing System Flow Map Level 2 P/S Developed & Launched P/S Portfolio Mgnt. Demand Developed Order Obtained Customer Relationship Maintained P/S Order ed P/S Ready for Delivery P/S Order Fed Customer P/S Shipped/ Delivered/ Installed P/S Order Close P/S Supported (Functional & Cross-functional R&Rs) Level 3 Opportunities Generated Opportunities Qualified Opportunities Developed & Proposal Requested Proposal Prepared & Communicated Sale Closed Order Captured & Communicated Level 4 SIPOC Plus Job Model Sub-/ Task/ Sub-Task Information Gathered Relevant Data Sources Identified Interview Scheduled Interview Conducted Conclusions Reached & Recorded Opportunities Deciders & Users Developed & Proposal Identified Requested Constraints Information Determined Gathered Credibility Needs Identified Established Programs & Applications 4
5 Strategic Management Strategic layer Operational layer Level 1 Org Level 2 Biz Unit Progress Indicators The Matrix Missing Link Level 3 Inputs Resources Projects es R&R Tasks Outputs Deliverables Strategic Outcomes Cost and Human Capital Indicators Indicators Performance Indicators Effectiveness Indicators Brand Realization Strategic Outcomes Organization Goals Goal Management BU MKT CS OPE Operational Individual Performance Management Key Roles + Collaboration Project Individual KPIs PM 360 Calibration Stack Ranker 5
6 The Linkage 1. Define Market Metrics with Brand Product Line 2. Translate to Organizational Goals 3. Define Functional Required to Achieve Goals 4. Determine Projects Required Along with Project 5. Link Project to Performance Criteria 6. Design the Metrics to Achieve Strategic Outcomes 7. Reconcile Functional and Metrics 8. Cascade Laterally to Set Individual R&R Performance Criteria 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 6
7 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 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 7
8 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 unquantifiable time lag between actions and impact Numerical targets may be counter-productive for sustainable performance due to compliance mentality 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 8
9 Key Learnings about, "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 9
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