Presentation Title Here MAN302 Strategic Management Monitoring and evaluating strategy Workshop 11 1 Copyright Notice COPYRIGHT COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969 WARNING This...

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Presentation Title Here MAN302 Strategic Management Monitoring and evaluating strategy Workshop 11 1 Copyright Notice COPYRIGHT COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by or on behalf of Kaplan Higher Education pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice 2 This Week’s Objectives Describe strategy evaluation Identify key result areas (KRAs) that can be used to improve business performance Explain the difference between Scenario Planning, the Balanced Scorecard and the McKinsey 7-S Model 3 Strategy Implementation Jack Welch In real life, strategy is actually very straightforward. You pick a general direction and implement like hell. 4 Why didn’t we succeed? Implementation and performance • Did we implement the plans effectively? • Did we perform to the required level? Plan • Was the plan right? • IF we had implemented the plan, would we have succeeded? Strategy • Was the overall strategy right? • If we could have developed and implemented the right plan to achieve this strategy, would we have succeeded? Organisational Purpose • Should we be doing this anyway? • Should we be trying something else? 5 Strategy Reviewed • Define organisational purpose3-5 years? • Set or refine goals6-24 months? • Analyse internal and external environments6-24 months? • Set or refine the strategy6-12 months? • Develop or refine the plan3-6 months? • Implement the strategy & monitor performanceMonthly? 6 Strategy Implementation • Putting a chosen alternative into place, carrying it out proficiently and producing desired outcomes • Continuous, hands-on, action-oriented process 7 Resources Policies and procedures Responsibilities Targets / KPIs Information, communication and operating systems Culture Rewards and incentive Workshop Activity Strategy Implementation 8 Legge, B. 10 April 2013. What is Strategy Implementation? A Quick Overview. ONLINE: https://youtu.be/EBZgXM--dKA Watch the video. • What are the other 4 key parts to strategy implementation? https://youtu.be/EBZgXM--dKA Strategy only matters if it is properly implemented. 9 Strategy Evaluation • The appraisal of plans and results of plans that centrally concern or affect the basic mission of the enterprise • Provides answers to: – Are the objectives of the business appropriate? – Are the major policies and plan appropriate? – Do the results obtained to date confirm or refute critical assumptions on which the strategy rests? 10Grant, R., Butler, B., Orr, S., & Murray, P. A. (2014). Contemporary Strategic Management: An Australian Perspective. 2 nd edition. Chapter 12, page 400. Strategic Alternatives • Four criteria when selecting strategic alternatives: 11 Rumelt, RP, “Evaluating business strategy,” in Minzberg et al. The strategy process, London: Prentice Hall Europe, 1998, 91-100. • strategy must not present mutually inconsistent goals and policiesConsistency • strategy must be in agreement with external trendsConsonance • strategy must help to create or maintain a competitive advantageAdvantage • strategy must be possible with realistic targets - neither overtaxing available resources nor creating unsolvable problemsFeasibility Evaluation and Monitoring • Evaluation should be made after the strategy is implemented • Evaluation & monitoring must be on-going – Monitoring checks if strategy that is being implemented is on the right track – Must have flexibility in a dynamic environment 12 KRAs and KPIs Key result areas and key performance indicators 13 Basis for comparison KRA KPI Definition A set of objectives that the organisation focuses on A quantifiable metric for a defined objective. What is it Strategic factor Metric or measure Nature Qualitative Quantitative Use Outlines the scope of the factor or issue Evaluates the success or progress towards goals Focus Results / outcomes Performance (inputs) and results / outcomes Example Sales performance Sales reps must meet 120 sales per quarter at an average profit of at least 20% Key Results Areas (KRAs) • A set of objectives that the organisation focuses on to ensure that it is improving its operations in a way that will increase business performance in the desired areas • Developing KRAs – Focus on outcomes and results – What resources, knowledge, skills, technology, methods and tools are required? 14 Key Performance Indicators (KPIs) • Measurable value that demonstrates how effectively a company is achieving key business objectives • Organisations use key performance indicators at multiple levels to evaluate their success at reaching targets 15 Activity Watch the video. Explain the types of Key Performance Indicators Key performance indicators Albert Einstein Not everything that can be counted counts, and not everything that counts can be counted. 16 Scenario Planning • Structural use of management judgement to construct multiple script-like characteristics of possible futures 17 FFFatMIT. 15 December 2011. Introduction to Scenario Planning Video. ONLINE: https://youtu.be/yVgxZnRT54E Watch the video for a further explanation of scenario planning. https://youtu.be/yVgxZnRT54E • Needs to meet the following criteria – Transparency – Ease of judgement – Versatility – Flexibility 18 Scenario Planning McKinsey 7-S Model 19 Culture and strategy 20 Peter Drucker, might or might not have said: “Culture eats strategy for breakfast” Do you agree? Workshop Activity 21 Are shared values important in implementing strategy? Why? • Case Study: New Balance 22 McManus, P. 27 November 2016. New Balance & McKinsey's 7S Framework. ONLINE: https://youtu.be/fdPEyNilkYI McKinsey 7-S Model https://youtu.be/fdPEyNilkYI Balanced Scorecard • Integrated framework that adds strategic non- financial performance measures to traditional financial metrics to give a more 'balanced' view of organisational performance IntrafocusUK. 9 August 2012. Balanced Scorecard. ONLINE: https://youtu.be/M_IlOlywryw Watch the video for a further explanation of the Balanced Scorecard. https://youtu.be/M_IlOlywryw •Employee satisfaction •Employee turnover •Employee skills •Inventory •Orders •Resource allocation •Customer satisfaction •Customer retention •Market share •Revenue •Expenses •Net income •Cash flow Financial Perspective Customer Perspective Learning/ Growth Perspective Internal Process Perspective Balanced Scorecard Balanced Scorecard • Tells you if you likely to achieve your goal • e.g. Website visits Lead indicators • Tells you if you have achieved a goal • e.g. Website sales Lag indicators • An Example BSC Designer. 25 Nov 2012. Example of a Detailed Balanced Scorecard Implementation Strategy. ONLINE: https://youtu.be/2Kp3syt753U Balanced Scorecard https://youtu.be/2Kp3syt753U Workshop Activity • Review the balanced scorecard of Kaplan Business School. • Explain how the mission statement is articulated in each of the four perspectives of the balanced scorecard. • Each team will be expected to present their answers to the class. 27 Workshop Activity What are some of the risks, downsides and challenges of KPIs and performance measurement / monitoring? 28 Performance monitoring/ challenges 29 Difficulty developing hard / objective measures Lack of control / dependencies Leader bias / prejudice Gaining employee buy-in and acceptance Limits individual autonomy Detracts from broader objectives (teamworking / CX) Need to prioritise Motivation / Recognition / Consequences Stress Targets too high / low Summary • Strategy implementation involves putting a chosen alternative into place, carrying it out proficiently and producing desired outcomes. • KRAs and KPIs can help organisations monitor how successfully a strategy is being implemented • The Balanced Scorecard and the McKinsey 7-S Model are common models for both guiding implementation and then evaluating a company's strategy. 30 Any Questions? 31 MAN302 Strategic Management Copyright Notice This Week’s Objectives Strategy Implementation Why didn’t we succeed? Strategy Reviewed Strategy Implementation Workshop Activity�Strategy Implementation Strategy only matters if it is properly implemented. Strategy Evaluation Strategic Alternatives Evaluation and Monitoring KRAs and KPIs�Key result areas and key performance indicators Key Results Areas (KRAs) Key Performance Indicators (KPIs) Key performance indicators Scenario Planning Scenario Planning McKinsey 7-S Model Culture and strategy Workshop Activity McKinsey 7-S Model Balanced Scorecard Balanced Scorecard Balanced Scorecard Balanced Scorecard Workshop Activity Workshop Activity Performance monitoring/ challenges Summary Any Questions? Presentation Title Here MAN302 Strategic Management Global/International Strategy Workshop 12 1 Copyright Notice COPYRIGHT COMMONWEALTH OF AUSTRALIA Copyright Regulations 1969 WARNING This material has been reproduced and communicated to you by or on behalf of Kaplan Higher Education pursuant to Part VB of the Copyright Act 1968 (the Act). The material in this communication may be subject to copyright under the Act. Any further reproduction or communication of this material by you may be the subject of copyright protection under the Act. Do not remove this notice 2 This Week’s Objectives Explain incentives that can influence a company to use an international strategy Explain the benefits companies can achieve by using an international strategy Discuss the five modes companies can use to enter international markets 3 Global & International Strategy • Can be a source of strategic competitiveness • A strategy through which the firm sells its goods or services outside the domestic market 4• Reference: Morris, Shad. 31 August 2017. International Strategy. ONLINE: https://youtu.be/z7M1vQTvkx• Last accessed 07 February 2020 https://youtu.be/z7M1vQTvkx International Strategy Benefits & incentives 5 Increased market size Economies of scale and learning Location advantages Extend product’s life cycle Gain easier access to raw materials Opportunities to integrate operations on a global scale Opportunities to better use rapidly development technologies Gain access to consumers in emerging markets Hanson, D., Hitt, M. A., Ireland, R. D., & Hoskisson, R. E., 2017. Strategic Management: Competitiveness and Globalisation. 6th ed. South Melbourne: Cengage. Chapter 8, p 225; 227-229. International Strategy Summary 6 Global Subsidiaries subject to central strategy and control Transnational Interdependence between centre and subsidiaries, united by shared vision International Subsidiaries operationally decentralised but strategy directed from centre Multi-domestic Nationally autonomous, able to exploit local opportunities Strategy Pressure for local responsiveness C os t p re ss ur es (g lo ba l i nt eg ra tio n) Bartlett, C.A. & Ghoshal, S. (1989). Managing Across Borders. The Transnational Solution. Boston: Harvard Business School Press. International Strategy Summary 7Bartlett, C.A. & Ghoshal, S. (1989). Managing Across Borders. The Transnational Solution. Boston: Harvard Business School Press. International Strategy • Little pressure for either local adaption or cost-cutting through global integration • Also known as exporting strategy • Local branches likely to: – implement central decisions – act as retail outlets for overseas producers 8