1. Operations Value Chain Firm infrastructure Inbound logistics Outbound logistics Marketing & sales Service Procurement Technology development Human resource management Support Activities Margin Primary Activities

2. StrategyWhat should they do? Operational Managers and Staff “DOING” Gather and report information Incorporate plans into operations Understand/support the strategy Participate in implementation planning Contribute to development/review Chief Executive and Senior Managers “TARGETING” Own, articulate and “sell” strategy Plan and manage implementation Develop and recommend alternatives Maintain, amend, review strategic plans Identify and evaluate new directions The Board of Directors “POSITIONING” Consider, review and authorise Monitor implementation Set vision, values and key policies Assess alternatives and evaluate risk Suggest or initiate new directions

3. StrategyHow might they do that? Operational Managers and Staff “DOING” Routine reporting and analysis Routine operational management Maintain awareness, identify issues Help check relevance and feasibility Develop new ideas and proposals Chief Executive and Senior Managers “TARGETING” Apply their skills/experience Link strategy with business plans Analyse environment, set objectives Monitor and respond to progress Generate ideas internally/externally The Board of Directors “POSITIONING” Receive reports, debate, decide Agree on objectives and measures Workshop, test and challenge Apply broader context and experience Seek external views and reviews

4. StrategyResponsible for? Operational Managers and Staff “DOING” Info accuracy and completeness Achieving controllable goals Aligning activities with strategy Anticipating problems/opportunities Adding value in the agreed ways Chief Executive and Senior Managers “TARGETING” Clarity, coherence, relevance Defined goals/accountabilities Translation into effective tactics Tuning and tacking appropriately Leading creativity and innovation The Board of Directors “POSITIONING” Maximising “shareholder value” Strategic success or failure Making accountability effective Taking the wider and longer view Appropriate organisational culture

5. Board Functions Matrix Key Result Areas (KRAs) Suggested % of board time dedicated to Key Result Areas Strategy and Direction  40% Key Projects & Communication  20% Risk Management & Compliance  15% Key Performance / Predictive Indicator (KPI)  15% Knowledge, Skills & Experience Mix  10%

6. Political Government stability Taxation and trading policy Foreign trade regulations Social welfare policies regulatory bodies and processes Economic factors Business cycles GMP trends Interest rates Money supply Inflation Unemployment Disposable income Sociocultural factors Population demographics Income distribution Social mobility Lifestyle changes Attitudes to work and leisure Consumerism Levels of education The Organisation Technological Government spending on research and development Government and industry focus on technological effort New discoveries/developments Speed of technology transfer Intellectual property issues Environmental Environmental protection laws Waste disposal Energy consumption Carbon trading Legal Competition law Employment law Health and Safety Product safety

7. BCG Product Portfolio Matrix Reallocates Resources High Growth Low High Market Share Question Mark Dogs Stars Cash Cow Keep investing in thisHas high performance and high potentialStar Use the money generated for stars and question marks Cash cow has high current market share and usually cash flow associated with it but is not likely to grow in the future Cash Cow Exit this businessHas low current performance and low potential Pet Use resource to build into a starHas low current performance but high potential Question Mark How Resources Should be MovedDescriptionType of Business

8. Don’t forget strategic alignment The aim of any good strategy is to first set the strategic direction and then ensure that all the other nine dimensions are aligned so that they are pushing in the same direction. If any of the dimensions are not aligned they will become barriers. Process Structure Motivation Structure Organisational Culture Technology Structure Measurement Systems Political Power Organisational Structure Management Methods Individual Beliefs Strategic Direction More concrete, Easier to change More difficult to change, Less concrete

9. Balanced Scorecard Makes strategy operational Focuses organisation on breakthrough performance Integrates corporate programmes Can be broken down into lower levels Links KPIs to strategy Facilitates strategic feedback and learning

10. Balanced Scorecard - BSC Financial Processes Customer Learning Strategy

11. BSC example of common measures Financial EVA ROI Net income Internal Processes R & D expenditure Sales from new products Productivity Learning and Growth Employee satisfaction Dollars spent on training Voluntary turnover Customer Customer satisfaction survey Customer loyalty Customer retention

12. How to construct a balanced scorecard 1.Establish objectives 2.Decide who will be involved in the development process 3.Decide on the organisation unit to which the scorecard will apply 4.Decide on the structure Review existing measures to see if can be turned into KPIs Develop additional KPIs Relate all KPIs back to original objective 5.Finalise the scorecard

13. Three types of performance measures Key result indicators Tells you what you have done Performance Indicators Tell you what to do Key Performance Indicators Tell you what to do to increase performance dramatically