Breakfast Roundtable: Maximizing Strategic Value

1
Breakfast Roundtable Maximizing Strategic Value

• An enterprise-wide approach for sustainable
  strategic impact.
• Presented by iTest Quality Partners, Inc.

2
An enterprise maximizes its strategic value by
ensuring that all of its operating elements are
in harmony this is called strategic alignment.
3
An enterprise sustains this alignment through a
management process called strategic governance.
4
Strategic alignment and strategic governance are
the keys to ensuring that your enterprise is
fully exploiting your competencies, technologies,
and competitive advantages for maximum impact in
your target markets.
5
In any business, there are four important
operating elements or domains.
6
These four domains organize themselves along two
dimensions

• Viewpoint
• Strategy
• Execution
• Operational Context
• Business
• Technology

7
These domains provide a powerful framework for
strategic thinking, business transformation, and
process improvement.
STRATEGY
Business Strategy
Technology Strategy
EXECUTION
Business Processes
Technology Processes
BUSINESS
TECHNOLOGY
8
The goal is strategic alignment.
9
Strategic alignment exists when we have strategic
fit and functional integration across all domains.
STRATEGY
Business Strategy
Technology Strategy
EXECUTION
Business Processes
Technology Processes
FUNCTIONAL INTEGRATION
BUSINESS
TECHNOLOGY
10
Strategic Fit is the degree to which the strategy
and process, vertically within a domain, are
consistent and supportive.

• As strategies change, the underlying processes
  must keep pace
• And, as the processes evolve and improve, the
  strategies need to exploit these changes

11
Functional Integration is the degree to which the
business and technology components, horizontally
within a domain, are consistent and supportive.

• As the business changes, the related technology
  areas must keep pace
• And, as technology advances create new
  opportunities, the business domains must find
  ways to assess, capture, and leverage them

12
Strategic governance is the management tool used
to attain strategic alignment.
13
Moreover, strategic governance ensures that the
enterprise remains aligned so that you continue
to exploit the opportunities, risks, and return
potentials as they evolve in your industry and
markets.
14
Strategic Governance is a continuous process
comprising four steps all interacting with a
common Strategic Dashboard.
Set Strategy
Communicate
Execute, Feedback, and Learn
Strategic Dashboard
Link and Plan
15
The Strategic Dashboard provides a simple,
unifying analytical framework for strategic
governance.
Strategic Goal
Target
Actual
Trend
Goal A
2.5
2.0
Where are we going? What must we look like to
our shareholders to realize our vision?
Goal B
350
350
Goal C
1500
1200
Goal D
.009
.01
Strategy
Sponsor
Status
Strategy 1
TLH
How are we planning to get there?
Strategy 2
GAB
Strategy 3
WSD
Process
Owner
Metrics
Process M
AWC
A
C
Which operating model components have the
greatest impact on achieving our goals?
Goals, strategies, processes, and projects are
all tightly linked to facilitate root cause
analysis and learning.
Process N
MLK
B
D
Process O
WSD
E
Process P
HHS
E
Project
PM
Target
Status
Project ZX3
FRD
8/1/01
What strategic initiatives must we focus on?
Project DD4
KBM
12/15/01
Project TR3
RSS
10/5/01
Project CC8
JJM
11/22/01
16
The Strategic Action Plan monitors the key
projects that drive the business improvement and
transformation initiatives.
Project
PM
Target
Status
Q1 Q2 Q3
Q4
Project ZX3
FRD
8/1/01
Project DD4
KBM
12/15/01
Project TR3
RSS
10/5/01
Project CC8
JJM
11/22/01
The projects that comprise the Strategic Action
Plan represent the key steps the organization is
taking to close its performance gaps and
transform the business so that it can more
effectively achieve its goals .
17
The Set Strategy step ensures that the strategy
is relevant and focused on achieving your long
range goals.
Set Strategy
Assess performance Analyze gaps Revise
strategy Determine priorities Calibrate stretch
goals
Communicate
Execute, Feedback, and Learn
Strategic Dashboard
Link and Plan
18
The Communicate step focuses on broad
dissemination and internalization of the strategy.
Set Strategy
Publish strategy Dialogue with employees on
direction and rationale Conduct alignment
workshops Monitor listening posts
Communicate
Execute, Feedback, and Learn
Strategic Dashboard
An important objective of this step is to achieve
a sense of shared significance among the staff
regarding the key elements of the strategy.
Link and Plan
19
The Link and Plan step connects the strategy with
the operating plans, budgets, and project
portfolio.
Set Strategy
Set SBU and functional strategies Translate unit
strategy into specific operating targets and
budgets Set bonus objectives Define and plan
strategic projects Prioritize project portfolio
Multi-business enterprises can use this step to
launch separate Strategic Governance cycles at
the SBU and functional level. These are all
coordinated via their linkage to the corporate
strategy and goals.
Communicate
Execute, Feedback, and Learn
Strategic Dashboard
Link and Plan
20
The Execute, Feedback, and Learn step deploys
these plans for operating the business.
Set Strategy
Run the business Execute strategic
projects Update performance metrics Rationalize
operating variances Capture learning Continuously
improve operating processes
Communicate
Execute, Feedback, and Learn
Strategic Dashboard
Link and Plan
21
The cycle repeats annuallyrefining the goals,
strategies, processes, and projects to ensure
alignment and maximum impact.
Initial versions of strategies and processes
Refined strategies and processes
22
Strategic Governance relies on a set of critical
attributes.

• Strategic thinking energizes entire enterprise
• Strategy and vision owned by business units
• Assumptions always challenged
• Deep understanding of industry
• Strong sense of what customers really need
• Objective view of competition
• Cold, analytical assessment of internal
  capabilities
• Laser-like focus on strategic choices
• Talent and intellectual capital drives
  competitive advantage
• Information is a company asset to be shared and
  leveraged
• Learning and experimentation is embraced
• Best people in most demanding roles
• Ideas emerge from all levels of the organization
• Connectivity, dialogue, and inclusion is the norm
• Shared significance maintains eye on ball
• Merciless alignment on highest impact ideas
• Sincere commitment to each others success at all
  levels
• Frequent question How does this advance our
  strategic objectives?
• Pervasive understanding of strategy and how
  processes and projects impact them

• Stretched by aspirational, fact-based goals
• Targets pegged to best-in-class levels regardless
  of industry
• Simple, clear, balanced-scorecard style
  objectives
• Tightly connected to operating realities and
  compensation/recognition plans
• Goals, strategies, processes, and projects all
  clearly linked
• Strong localized accountabilities for fact-based
  performance and results
• Architectures drive decision making to optimize
  focus/leverage
• Business and technology architectures mutually
  supportive
• Reusability is a religion
• Bias towards assemble versus build
• Tactical choices always influenced by
  architectural direction
• Focus versus leverage balance continually
  scrutinized
• Capabilities that are not strategic, competencies
  that are not distinctive, and processes that are
  not unique are outsourcing candidates
• Enabled by reliable, high performance project
  delivery
• Absolute reverence for all commitments (target
  dates, costs)
• Expectation management is rigorous and
  customer-focused
• Frequent incremental delivery of small, tangible,
  and useful work products
• Project management skills are nurtured and
  esteemed
• No surprises, risks preëmptively managed

23
It is not the ability to solve problems that
makes an organization smart. It is the ability of
its members to enter into a world whose
significance is shared. Francisco Varela,
biologist