《STRATEGIC PLANNING AND BUDGETING Part 2 Alignment, Budgeting and Resources.ppt》由会员分享，可在线阅读，更多相关《STRATEGIC PLANNING AND BUDGETING Part 2 Alignment, Budgeting and Resources.ppt（64页珍藏版）》请在三一办公上搜索。
1、STRATEGIC PLANNING AND BUDGETING Part 2:Alignment,Budgeting and ResourcesCase Study,Concepts and Debatable IdeasKenny OngCNI Holdings Berhad,Summary:Todays presentation,1.Business Model,Done,2.Strategy,3.Alignment,4.Resources,Done,3.Align the business to the strategy,Dangers of Benchmarking,BSC,KPIs
2、 and other evils sold by Consultants,“in the past 18 months,we have heard that profit is more important than revenue,quality is more important that profit,people are more important than profit,customers are more important than our people,big customers are more important than small customers,and that
3、 growth is the key to our success.No wonder our performance is inconsistent,CEO,Anonymous,Before we start,In the old days of HRAverage training hours per staff%of staff attending training#of training programs%of training programs conductedTraining needs analysis conductedCompetency models developedT
4、raining budget as%of payroll,Whats wrong with this picture?,Before we start,Moral of the storyInnovation:Business modelsProductsServices Market LeadershipCompetitive differentiation,Get the picture?,Wrong KPIs,“What is the moral of the story?”,Dangers of Best Practice and Benchmarking,“Abraham Walds
5、 Work on Aircraft Survivability”,M.Mangel and F.J.Samaniego,Where would you focus reinforcement?,www.myCNI.com.my,www.OOBEY.com,Dangers of Best Practice and Benchmarking,www.myCNI.com.my,www.OOBEY.com,Company Performance,high,low,Best Practice theories,low,high,zero Performance,“Selection Bias and t
6、he Perils of Benchmarking”,Jerker Denrell,Harvard Business Review 2005,Dangers of Best Practice and Benchmarking,www.myCNI.com.my,www.OOBEY.com,Company Performance,high,low,Best Practice theories,low,high,zero Performance,“Selection Bias and the Perils of Benchmarking”,Jerker Denrell,Harvard Busines
7、s Review 2005,Dangers of Best Practice and Benchmarking,Selection Bias:Success Traits=Failure TraitsSuccessful Cases+Failure CasesWorst effects in Old industriesOvervalue best practice theoriesCurrent accomplishments unfairly magnified by past achievementsReverse Causal,Dangers of Best Practice and
8、Benchmarking,Also known as Beware of Consultants:Selection BiasBig vs.Small companySelective success storiesCorrelation vs.CausalSurvey problemsPractical vs.Glamour-to-haveLeaders who benchmark,www.myCNI.com.my,www.OOBEY.com,Survey Problems,“In business after business,60%to 80%of lost customers repo
9、rted on a survey just prior to defecting that they were satisfied or very satisfied.”,HBR March/April 1996,www.myCNI.com.my,www.OOBEY.com,Why BSC?,Reason 1:BalancedReason 2:Cause-and-Effect,www.myCNI.com.my,www.OOBEY.com,Financial“To satisfy our stakeholders,what Financial objectives must we accompl
10、ish?”,Focus:Corporate Alignment,Revenue Growth,Base Retention,Share Gain,Positioning,Adjacent Market,New Business,Operational Excellence,Product Leadership,Customer Intimacy,Competencies,Information Systems,Motivation,empowerment,alignment,Financial,Learning&Growth,Internal Process,Customers,Investm
11、ent Strategy,Productivity,Market Value,Linking BSC to Strategy,Financial,Learning&Growth,Internal Process,Customers/Distributors,Focus:Corporate Alignment,Example:Selection of KPIs for BSC,Customer satisfactionCustomer loyaltyMarket shareCustomer complaintsComplaints resolved on first contactReturn
12、ratesResponse time per customer requestPrice relative to competitionTotal cost to customerAverage duration of customer relationshipCustomers lostCustomer retentionCustomer acquisition ratesPercentage of revenue form new customersNumber of customersAnnual sales per turnover,Win rate(sales closed/sale
13、s contact)Customer visits to the companyHours spent with customersMarketing cost as a percentage of salesNumber of ads placedNumber of proposals madeBrand recognitionResponse rateNumber of trade shows attendedSales volumeShare of target customer spendingSales per channelAverage customer sizeCustomer
14、s per employeeCustomer service expense per customerCustomer profitabilityFrequency(number of sales transactions),Financial,Learning&Growth,Internal Process,Customers/Distributors,Example:1st Level BSC&KPIs,Profit after Tax.Revenue.Cash-to-cash cycle.Operating cash flow,Customer Complaints.Customer A
15、cquisition Rate.Product Availability.Product Quality&Service.Renewal Annual Subscription.No.of Active Customers.No.Retail Shops.,Customer Database Availability.Accuracy of Forecast Planning.Continuous Improvement.Response Time to Customer Needs.Perfect Order Fulfillment.Inventory Turnover.Number of
16、Effective Sponsoring Program.On Time Delivery.No.of Effective Training.Number of Effective A&P,%of staff evaluated on Core Competency Framework.%of staff with Career Development Plans.No.of training hours completed per staff.%of staff with access to strategic information.Q12 Index.%staff evaluated o
17、n Culture alignment,Sample:Other 1st Level KPIs across industries,Lagging and Leading KPIs,Historical,Outcome,Results,1st Level,Usually Financial or tangible,Quarterly and Annually,Current,Indicators,Drivers,2nd Level onwards,usually non-financial or intangible,Weekly,Monthly and Quarterly,Developin
18、g Driver KPIs,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Disciplines,Priorities,and KPIs,Operational ExcellenceCompetitive priceError free,reliableFast(on demand)S
19、impleResponsiveConsistent information for allTransactionalOnce and Done,Customer IntimacyManagement by FactEasy to do business withHave it your way(customization)Market segments of oneProactive,flexibleRelationship and consultative sellingCross selling,Product LeadershipNew,state of the art products
20、 or servicesRisk takersMeet volatile customer needsFast concept-to-counterNever satisfied-obsolete own and competitors productsLearning organization,Strategy:Disciplines,Priorities,and KPIs,Operational ExcellenceMove know-how from top performing units to othersBenchmark against best in classEnsure o
21、perations training for all employeesUse disciplines like TQM for continuous learning to reduce costs and improve quality,Strategy:Value Disciplines,Strategy:Value Disciplines,Customer IntimacyCapture knowledge about customersUnderstand customer needsEmpower front line employeesEnsure that everyone k
22、nows the customerMake company knowledge available to customers,Product LeadershipReduce time to marketCommercialize new products fastEnsure that ideas flowReuse what other parts of the company have already learnedEnsure there are multiple sources of funding,Strategy:Value Disciplines,Operational Exc
23、ellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Value Disciplines,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership
24、(best product),Customer Intimacy(best total solution),Strategy:Value Disciplines,Sample KPIs for Each Discipline,Operational ExcellencePriceSelectionConvenienceZero DefectsGrowth,Customer IntimacyCustomer KnowledgeSolutions OfferedPenetrationCustomer DataCustomer-success focus,Product LeadershipMark
25、etingFunctionality#of Successes#of FailuresLearn from key usersInterdisciplinary teamsPipeline,E3 Department BSC,Financial Perspective,Budgeting,Summary:Todays presentation,1.Business Model,Done,2.Strategy,3.Alignment,4.Budgeting,Done,Done,4.Budgeting,The art and science of allocating and aligning R
26、esources to strategic plans,Budgeting:Some thoughts,Two major roles of Budgeting:Provide real-life CONSTRAINTS to strategic planningProvide RESOURCES to realize strategic plans,Why Constraints?Over aggressive unrealistic planning,usually by Marketing/Sales need to be grounded to real lifeCreative en
27、trepreneurial thinking when resources are limitedEnforce the need for Accountability i.e.ROI thinking for all Managers,Alignment:4-Wheels Model,Culture,Business Model,Strategic Planning,Alignment:Framework,Focus pointAlignmentQualityInnovation&DifferentiationRisk takingPerformance ManagementCorporat
28、e obsessionDecision making,Culture,Alignment:Framework,Org StructureJob DesignC&BPolicies&proceduresDecision makingJob fitManagement SystemsBSC and KPIsDecentralized&Empower,Strategy:Framework,Role modelingVision/Mission/PhilosophyLeadership StyleDelegation&EmpowermentC&B,PromotionsSense of UrgencyS
29、peak regularly about Performance,Strategy:Framework,RecognitionRecruitmentTrainingProfit sharingValuesMotivationSelf EfficacyAwarenessUseful CompetenciesCareer aspirationsAttribution(control),Strategy:Framework,EnablersTechnologyEquipmentMaterialsHumanIntellectual PropertyPartnersProperty,Funding CA
30、PEXOPEX,Alignment:4-Wheels Model,Culture,Business Model,Strategic Planning,Operational Excellence,Customer Intimacy,Product Leadership,Organization,jobs,skills,Management systems,Information and systems,Culture,values,norms,Each Discipline Requires Different Priorities&Resources,Operational Excellen
31、ceCentral authority,low level of empowermentHigh skills at the core of the organizationDisciplined TeamworkProcess,product-drivenConformance,one size fits all mindsetIntegrated,low cost transaction systemsThe system is the processCommand and controlQuality management,Organization,jobs,skills,Managem
32、ent systems,Information and systems,Culture,values,norms,Each Discipline Requires Different Priorities&Resources,Organization,jobs,skills,Management systems,Information and systems,Culture,values,norms,Product LeadershipAd hoc,organic and cellularHigh skills abound in loose-knit structuresConcept,fu
33、ture-drivenExperimentation and out of the box mindsetPerson-to-person communications systemsTechnologies enabling cooperationRewarding individuals innovative capacityRisk and exposure managementProduct Life Cycle profitability,Each Discipline Requires Different Priorities&Resources,Organization,jobs
34、,skills,Management systems,Information and systems,Culture,values,norms,Customer IntimacyEmpowerment close to point of customer contactHigh skills in the field and front-lineCustomer-drivenVariation and have it your way mindsetStrong customer databases,linking internal and external informationStrong
35、 analytical toolsCustomer equity measures like life time valueSatisfaction and share managementFocus on Share of Wallet,Each Discipline Requires Different Priorities&Resources,Managing Gaps between actual and planned budgets,Budgeting vs.PrioritiesBasic Budgeting policiesActivity Grid to determine b
36、udget prioritiesBudgeting for Investments based on the BCG Matrix principles,Budgeting vs.Priorities,Priority=Time+Money,Budgeting vs.Priorities,Upturn,Flat,Downturn,Fight ComplacencySharpen EdgeKeep MomentumConquer,NPD Cycle TimeImprove EdgeExtensionsCounter Competitor,InnovationAcquireProfitsBuild
37、 momentum,SalesCash Flow,Focused on BreakthroughJV,In-source,Out-sourceEliminate bottom 20%,Improve Top 15%revenue-generating products R&D,Sales,Example:Business Situation vs.R&D Priorities,Basic Budgeting policies,Flexibility to switch between line itemsReserve FundsLoans/External Funding,Activity
38、Grid to determine budget priorities,Manage conflicts where limited resources should goSolve problem of compounding activities&resources,Budgeting for Investments based on the BCG Matrix principles,Business Performance,Market Potential,How to maximize Budget?,Align budget to prioritiesIntegration of
39、businesses and functions for teamworkDo practical,implementable stuff that bring real results(hard work),Budgeting in a Downturn,Budgeting in a Downturn,Budgeting in a Downturn,Budgeting in a Downturn,Budgeting in a Downturn,StratExCoREx,Planning,Budgeting,Schedules,Processes,Tying it all up,The Pla
40、nning&Budgeting Process,Review processes,Result Planning schedule inc.BSC,BudgetQuarterly Performance AppraisalsSales performanceNon-sales performanceDivisional meetingsAnnual AppraisalsSpecialized KPI committeesCAR,PAR,SCAR KPI improvementsInternal Audit process problemsHRM&TND people problemsSuper
41、visor Induction PM trainingTalent Management,Problems,problems and more problems,Problems,problems and more problems,No serious budget to tackle key risksToo much optimism or pessimismInnovation vs.Results vs.BaselineInvestment Portfolio ManagementTop down vs.Bottom upGood to have vs.Need to haveLine Manager not thinking like InvestorsToo focused on KPI and BSCBudget allocation seen as popularity votePublic Listing-pressure for short-term budgets and results vs.long-term innovation,Alignment:4-Wheels Model,Culture,Business Model,Strategic Planning,Thank You.,soft copy of slides:,
