Business Alignment

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• Business Alignment

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Linking Strategy to Operations
Strategy
Operations

• The struggle to integrate corporate strategy to
  execution
• Typical comments
• My organization lacks focus on critical
  activities
• We spend too much time and effort fighting
  fires
• We have a lot of initiatives in our
  organization, but we are not sure what they
  improve or what they are intended to improve
• My managers and workers dont understand the
  strategy of our business

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Business Alignment Defined

• Business alignment is an ongoing initiative
• That aligns corporate strategy
• And tactical processes
• Through integrated reporting metrics

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A Business Problem
CREDIT
CONTRACT
PRICING
MOD

OK
SALE!
ADMIN
READY
FINANCING REQUEST
6 TO 14 DAYS LATER!
Awww!
Processing time was only 90 minutes!
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Business Alignment
90 Reduction in Cycle Time!
Speed Improved by 100x
SALE!
HOORAY!
Credit
Contracts
Pricing
Admin
SUPPORTED GENERALIST
Start to Finish In 4 hours!
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Re-engineering defined

• Reengineering is the fundamental rethinking and
  radical redesign of business processes to achieve
  dramatic improvements in critical, contemporary
  measures of performance, such as cost, quality,
  service and speed

• fundamental

radical
dramatic
processes
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The Business System Diamond
Business Processes
Values Beliefs
Jobs Structures
Information Technology
Management Measurement Systems
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Misalignment results in poor execution

• There is no substitute for effective execution!
• The reality of the challenge
• Less than 10 of strategies effectively created
  are effectively implemented
• 70 of all strategic failures are the result of
  bad execution, not bad strategies
• Key success factors that overcome these
  challenges
• Leaderships ability to clearly articulate the
  vision, the business goals, and the key
  indicators of success
• A strong culture of change, open communications
  and individual leadership development
• Strategic planning and alignment are executed as
  a process, not an event
• A compelling vision that often has a higher
  purpose

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Strategy is useless without business alignment
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Strategy Formulation Cycle
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Business alignment concepts
Everyone Has The Same Message
Alignment Communication
Measuring the Right Data
Performance Measurement
Improving Your Processes
Process and Operational Improvement

• Alignment of Strategy and Business Objectives
• Feedback on Objectives

• Identification of Metrics
• Systematic Measurement and Reporting

• Process management
• Controlled execution

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Business alignment tools
Strategy and Objectives
Strategy dictates the business imperatives and
critical corporate performance metrics
Strategy/ Articulation
Strategic PMO/ Initiative Mgt
Business Planning Budgeting
Business Intelligence
Corporate performance metrics align the operation
with focus and priorities
Strategic Scorecards/ KPIs
Executive Dashboards
Organizational Design/ Incentives
Process Management
Strategic Performance View
Process Dashboards
Process Management
Strategy Maps
Process Improvement
Operational Reporting
Performance Measurement View
Six-Sigma/ Lean
Goal/Target Setting
BPA/BPM automation
Operational Performance View
ETE Integrated View
Measured Execution
Accurate feedback allows for strategy and
operational realignment as required
Corporate and process measures track execution of
strategy at the operational level
Controlled Execution
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Benefits of Business Alignment

• Develops and synchronizes the leadership team
• Educates the organization
• Accelerates behavioral and cultural change
• Distributes ownership and accountability
• Provides individual initiatives, performance
  indicators, and incentives
• Effectively translates strategy into operational
  terms
• Facilitates a common set of strategic objectives
• Aligns strategic programs and investments and
  daily operations
• Provides operational feedback
• Creates a flexible vehicle for implementing
  strategy

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From data to wisdom

• Data consists of isolated facts
• Data organized into meaningful groups is
  information
• Information collected with dimensions (time,
  rate, level) is a measurement
• Measurements compared to goals or standards are
  metrics
• Information and metrics about strategies and
  processes become knowledge
• Knowledge applied over time leads to wisdom

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Dashboards and Score Cards
Strategic Scorecard
Divisional Core Process Level 1
Divisional Core Process Dashboards
Macro Process Level 2
Macro
Micro Process Level 3
How we are doing? Cause and Effect Linkages
Key Process Measures provide cause and effect
linkages and can be combined to develop dashboard
information at various levels of the organization
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Operational Performance Measurement Improvement
DMAIC DMADV
Define
Measure
Analyze
Design or Improve
Control Verify
Six Sigma Process Improvement Redesign

• Identify link critical process measures
• Draft measures

• Identify root cause of variation rework
• Determine BPI or BPR needs

• Ongoing management of process controls
• Monitor ongoing performance

• Map core processes
• Prioritize to customer requirements

Core Process
Root Cause Analysis Change in Process or Approach
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Lessons Learned

• Youre not keeping score until you use your
  scorecard to set plans, drive incentive plans and
  prioritize initiatives
• Process management and improvement will become
  important AFTER you start measuring
• Define your measures broadly, at first refine
  and set targets later
• There can be only one version of the truth
• Use manual scorecards first then apply
  technology
• Be prepared for increased anxiety

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Key Success Factors

• The boss has to lead from the front otherwise
  its a fad
• Involve everybody in the design or prepare for
  war
• Clean your data and one point is not a trend
• Tailor the scorecard to the business unit
  something for them, not just for those _at_ in
  the central office
• Link a measure to a process
• Handle routine things in a routine manner you
  dont need 600 standard reports

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What questions or comments do you have?