Promoting Good Strategy Execution:
-Allocating resources to the drive for good strategy execution.
-Instituting policies and procedures that facilitate strategy execution.
-Using process management tools to drive continuous improvement in how value chain activities are performed.
-Installi
Possible Adverse Resource Allocation Outcomes:
-Too little funding that slows progress and impedes the efforts of organizational units to execute their pieces of the strategic plan proficiently.
-Too much funding that wastes organizational resources and reduces financial performance.
The funding requi
Budgeting: Allocating Resources
-Screen resource requests carefully.
-Approve only those that contribute to strategy execution.
-Provide the level of resources necessary for the success of strategic initiatives.
-Shift resources to higher-priority activities where new execution initiati
Policies and operating procedures facilitate strategy execution by:
-Providing top-down guidance regarding how things need to be done.
-Helping ensure consistency in how execution-critical activities are performed.
-Promoting the creation of a work climate that facilitates good strategy execution.
Wisdom in a middle-ground approach:
Prescribe enough policies to give organization members clear direction and to place reasonable boundaries on their actions; then empower them to act within these boundaries in pursuit of company goals.
Managing for Continuous Improvement
Best Practices
Benchmarking
Process Reengineering
Six Sigma Quality Programs
Total Quality Management
Best practice
a method of performing an activity that consistently delivers superior results compared to other approaches
The more that organizational units use best practices in performing their work,
the closer a company moves toward performing its value-chain activities as effectively and efficiently as possible
Business Process Reengineering (BPR)
-Involves radically redesigning and streamlining work effort, flows and processes to achieve dramatic improvements in performance.
-Uses cross-functional teams, cutting-edge technology and information systems to reset and refocus the organization's strate
Total Quality Management
-Creating a total quality culture bent on continuously improving the performance of every task and value chain activity.
-Is a long-term race without a finish in which success comes slowly in small steps forward (Japanese principal of kaizen)
Six Sigma Programs
Utilize statistical methods to improve quality by reducing defects and variability in business processes.
Six Sigma Principles
-All work is a process.
-All processes have variability.
-All processes create data that explain variability.
Six Sigma and New Projects
Define-What are our project goals and customer requirements?
Measure-How do we measure and determine both our goals and the needs of our customers?
Analyze-What existing process options do we have for meeting customer needs?
Design-Should we use an old or
Existing Processes and Six Sigma
Define-Define what constitutes a defect or variation
Measure-Collect data to find out why, how, and how often this defect occurs
Analyze-Determine when, why and where the defect is occurring
Improve-Implement best practice to eliminate defect or variatio
Difference between Business Process Reengineering and Continuous Improvement
BPR-aims at one time quantum improvement
TQM/SS-aims at ongoing incremental improvements
The purpose of using benchmarking, best practices, business process reengineering, TQM, and Six Sigma programs is
to improve the performance of strategy-critical activities and thereby enhance strategy execution.
Integral to superior strategy execution and operating excellence
Having state-of-the-art operating systems, information systems, and real-time data
Benefits of Information Technologies
-Enable better strategy execution through data-based decisions
-Strengthen organizational capabilities
-Allow for real-time tracking of implementation initiatives and daily operations
-Provide monitoring of empowered employee performance (electronic score
Key Strategic Performance Indicators tracked by Information Systems
Customer Data
Operations Data
Employee Data
Supplier/partner Data
Financial Performance Data
Techniques for winning sustained, energetic commitment of employees to the strategy execution process
-Providing incentives and an engaging in motivational practices that facilitate good strategy execution
-Striking the right balance between rewards and punishment for individual performance
-Linking employee rewards to strategically relevant organizationa
A properly designed reward structure is
management's most powerful tool for mobilizing organizational commitment to successful strategy execution and aligning efforts throughout the organization with strategic priorities.
High-Powered Incentives
financial rewards when they are tied to specific outcome objectives
Incentives must be based on
accomplishing the right results
NONMONETARY APPROACHES TO ENHANCING MOTIVATION
-Provide attractive perks and fringe benefits.
-Give awards and other forms of public recognition.
-Rely on promotion from within whenever possible.
-Invite and act on ideas and suggestions.
-Create a work atmosphere of caring and mutual respect.
-State t
Linking Rewards to Strategically Relevant Performance Outcomes
Focus on and reward results, not effort.
Create a results-oriented work environment that focuses on what to achieve, not what to do.
Set strategically-relevant, specific, and measurable stretch performance goals that are difficult but achievable.
Link the
The key to creating a reward system that promotes good strategy execution is
to make measures of good business performance and good strategy execution the dominating basis for designing incentives, evaluating individual and group efforts, and handing out rewards.
The first principle in designing an effective incentive compensation system is to
tie rewards to performance outcomes directly linked to good strategy execution and the achievement of financial and strategic objectives
GUIDELINES FOR DESIGNING EFFECTIVE INCENTIVE COMPENSATION SYSTEMS
-Make financial incentives a major, not minor, piece of the total compensation package.
-Have incentives that extend to all managers and all workers, not just top management.
-Administer the reward system with scrupulous objectivity and fairness.
-Ensure