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Linking Your Business Strategy to Your Technology Strategy Smart man learns from his mistakes Wise man learns from smart mans mistakes Chinese proverb.

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Presentation on theme: "Linking Your Business Strategy to Your Technology Strategy Smart man learns from his mistakes Wise man learns from smart mans mistakes Chinese proverb."— Presentation transcript:

1 Linking Your Business Strategy to Your Technology Strategy Smart man learns from his mistakes Wise man learns from smart mans mistakes Chinese proverb Webinar

2 © Growth Strategy Partners 1 Survey n What specifically do you want to learn today? n What are three key components in a good technology strategy?

3 © Growth Strategy Partners 2 Objectives for this Hour n Communicate proven growth disciplines n Define how to build a good business strategy n Identify how to link the technology strategy to the business strategy

4 © Growth Strategy Partners 3 An Introduction to Growth Strategy Partners Our Differentiators n Growth research based consulting firm n Has unique and proprietary diagnostic and rapid implementation tools n Accomplished Consultants n Partners with clients to develop long term, sustainable growth n Selected by Inc. magazine to be their growth strategy consulting practice Value Proposition: We can help you grow your business faster and more efficiently than you can on your own. Our Definition of Growth n Revenues n Profit n Talent

5 © Growth Strategy Partners 4 Research Drives Our Approach What winners do, and how they do it Experiences of Growth Strategy Partners Consultants who have been highly successful CEOs and business executives 3GrowthDisciplines Other growth lists Ten Years of Proprietary Research with over 500 CEOs of Americas Fastest Growing Private Companies Over 25 sources

6 © Growth Strategy Partners 5 Right Seats 1.Functional 2.Level Right People 1.Skills 2.Knowledge 3.Behaviors 4.Results 1.Limited Initiatives 2.Aligned Resources 3.Linked Incentives 4.Culture of Discipline Right People In the Right Seats Ability to Execute 1.Effective Growth Planning Process 2. Advanced Customer Management 3. Robust Processes 4. Differentiated Products and Services 5.Strong Core Values Implementing Right Practices Three Growth Disciplines Over 80% of most companies are not effectively implementing the Three Growth Disciplines. Those who do are growing faster and more efficiently. Christopher DiCenso

7 © Growth Strategy Partners 6 Developing An Effective Strategy Recent research published in the Harvard Business Review suggests that organizations on average deliver only 60% of what their strategies promise. More than one-third of these companies achieved less than 50%. …Companies are delivering only about two-thirds of their potential due to failures in planning and execution... Surveys show that 70% to 90% of organizations fail to successfully execute their strategies. In most cases, the failure is one of execution, not of the strategy itself. Our own research traces this failure to two causes. The first is that since there is no generally accepted way to describe a strategy, organizations are attempting to execute something that isnt even articulated. Balanced Scorecard Collaborative Strategies Fail to Deliver Due To Failures In Planning Strategies Fail To Deliver Due To Poor Articulation Are you failing to plan or planning to fail? 66% of fast growth companies have a strategic plan.…These companies are 40% larger and 45% more productive than comparison companies. PricewaterhouseCoopers Companies With An Effective And Articulated Strategy Grow

8 © Growth Strategy Partners 7 What Are the Keys to a Good Strategy? n Understanding of a companys core competence/method of competition n Product leader, Customer intimacy, Operational excellence n Understanding of operational strategy n Catalog orders n Custom orders n High volume n Low volume n Clearly defining and communicated objectives, tactics and activities n Financial, customer, process, people n Customer groups, markets, geographies, products, services n Owners of objectives n Leadership team n Incentives linked to objective n PROCESS to react to and implement strategic decisions n Large line item orders n Small line item orders n Mix

9 © Growth Strategy Partners 8 Method of Competition Definitions Product Leadership n Definition: Continuously introduce innovative products and services. Goal of obsoleting their own products or services (before the competition does). n Examples: Intel, Gillette, BMW, J&J Customer Intimacy n Definition: Providing unique and tailored products and services to specific segments of the market. Views lifetime value of customer experience. n Examples: Nordstrom, Disney World, USAA*, Charles Schwab Operational Excellence n Definition: Price and convenience leader. Strategic approach to the production and delivery of products and services. Always seeking ways to reduce inefficiencies and optimize cross function and organizational processes. n Examples: Amazon, Dell, Wal-Mart * also mastered operational excellence Be Great at One and Good at the Other Two (based on customer perspective)

10 © Growth Strategy Partners 9 Method of Competition Prioritized Where Should You Focus Your Strategies and Resources For Growth? Weighted gap = winning score – current score x weight Sum of weighted gap

11 © Growth Strategy Partners 10 How Compete Product Leadership Customer Intimacy Operational Excellence Product/service dev. Customer feedback Techy platforms dev. Customer intimacy Order processing Customer service Supply chain Order entry Order build Order delivery ERP ASP WMS CRM SFA CE DFMA PDM CAE Transaction volume high / low Order Type Large orders Small orders Mixed Product Type Custom Catalog Mixed Customers Markets Geography Custom Catalog Fast follower Early adopter Centralized Disruptive techy M&A vs internal growth Core competencies Linking MOC to Strategy to Technology StrategyProduct/Service ProfileKey ProcessesTools/Techy

12 © Growth Strategy Partners 11 Sample Strategy Map and Balanced Scorecard

13 © Growth Strategy Partners 12 Dashboard Performance View

14 © Growth Strategy Partners Growth Disciplines Scorecard GROWTH PRACTICE NON PERFORMINGBEGINNERINDUSTRY AVERAGEADVANCEDEXPERT Effective Strategy Design and Execution No strategic objectives or resemblance of goals. No formal budgeting CEO driven objectives, mostly undocumented, with little input from team. Some financial metrics summarized. Informal yearly review process. Budgeting exists. Strategic objectives defined, semi-effective annual review process, Objectives partially linked to rewards. Team involved in planning. Summary metrics reviewed. Strategic objectives set by team with bi-annual review and adjustment process. Objectives linked to incentives of top layer. Key metrics published. Strategic objectives set and reviewed/adjusted quarterly. Over 80% of objectives completed yearly. Incentives linked to objectives 2 layers down. KPIs in dashboard format. Advanced Customer Management Target customers and value proposition not clearly defined. Selling everything to everyone. Target customers defined. Weak value proposition. Customer rationalization not clearly defined. No specific customer channels. Customer profitability not well defined. Some custom solutions to targeted customers. Customer segments managed. Some rationalization. Some customer feedback mechanisms. Top customer and product profitability. Targeting and managing customer segments with custom solutions. Customer and product profitability managed well. Some direct customer feedback. Unique customer channels defined. Custom solutions developed for targeted customers. Value proposition defined and known by customers. Customer profitability managed very well. Great customer feedback processes. Very discrete customer channels. Robust Processes Core processes not defined. Have not improved any processes in over 1 year. Core processes understood yet not defined or measured. Some process mapping. Improved a process or two in last year (focused effort). Core processes defined, documented (flowcharted) and measured. Some continuous improvement efforts. Processes are semi-effective or efficient. Core processes defined, documented, measured. Tools such as kaizen, six sigma or reengineering have been specifically applied. Continuous improvement efforts defined. Core processes very effective and efficient. Good measurements. Process improvement tools instituted (six sigma, etc). Technology applied to core processes. Core processes reviewed yearly for robustness. Innovative Products & Services Products or services not differentiated. Value proposition not effectively defined. Product & service value proposition understood yet not clearly communicated. Profitability known yet not managed effectively. Weak product development process. Products & Services differentiated with unique value proposition. Profitability managed. Some rationalization exists. Product development process exists. Clear product/service differentiation and value proposition. Profitability managed well. Robust product development process. Pipeline of new product ideas exists Superior products & services. Strong product development process. Maximization of product & service profitability. Technology leveraged. Steady stream of new products being introduced. Strong Core Values Core values not defined. Little interest from leadership Core values are communicated but not consistently. Not defined or documented. Core values documented defined, and communicated by leadership. Partial communication by employees. Partially living values. Core values defined, documented and communicated by employees. Living some of the values. Majority of employees can recite values and believe company is living them. Strong self-eject mechanism. Right Seats with Right People Roles and responsibilities undefined. No organizational structure. No performance reviews. High turnover. Difficulty finding talent to fill openings Organizational design driven by existing talent availability. Ad hoc talent selection. Poorly defined roles and responsibilities. Ad hoc performance reviews. Difficulty competing for key talent Organizational design influenced by strategy. Formal talent selection. Job descriptions. Formal performance reviews measured against specific goals. Competes for key talent Organizational design and talent aligned with strategy. Formal performance management system. Ad hoc leadership development programs. Employer of choice for key positions Continuous process for identifying, recruiting and developing high performance leaders. Active robust succession planning. Talent bank. Employer of choice for all positions Ability to Execute With no plans and no priorities, daily requirements are not always achieved. No performance standards. No performance incentives. Focus on a long list of daily to dos. Few incentives. None linked to performance. No tracking or discipline. Focus on a many initiatives, most with objectives and milestones but resources are not allocated. Incentives not linked to performance. Limited tracking and discipline Focus on a few initiatives, with objectives, milestones and resources allocated. Incentives informally influenced by performance. Informal review of process. Developing culture of discipline Focus on a few initiatives, each with objectives, milestones and allocated resources. Incentives linked to performance, process of review and change, culture of discipline

15 © Growth Strategy Partners 14 Thank You!! For more information, please contact: Marcia Nita Doron Altico Advisors 508-485-5588 x107 Do what you can, with what you have, where you are. Theodore Roosevelt

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