1. Crafting and Executing Strategy:Management by Objectives AygunSuleymanova, May 2010

2. Starting point: Defining Value Proposition

3. Exercise/ Discussion: Current Value Proposition Analysis

4. Key Questions: IS THIS VALUE WHAT YOU EXACTLY MEAN TO DELIVER? IS IT WHAT YOU DO DELIVER? IS IT WHAT YOUR EMPLOYEES BELIEVE THEY DELIVER? ARE YOU WELL-POSITIONED INTERNALLY TO DELIVER IT? IS IT FULLY CONGRUENT WITH YOUR STRATEGY AND GUIDING PHILOSOPHY AND IS WHAT YOU BELIEVE TO BE(COME) YOUR COMPETITIVE ADVANTAGE?* DEFINITELY NOT EXACTLY *The one that would be hard for your competitors to imitate

5. DEFINITELY! Articulate it well through forming a MISSION statement around customer-centricity Together with the Team create the longer-run VISION statement to tie your activities to Again, with the Team, create key strategic priorities (no more than 5) for the year to focus on Immediately after, have the Direct Reports (Division heads) come up with the objectives/projects for their Division that would go under each strategic priority and a KPI for each Have them continue the process down to individual level

6. NOT EXACTLY… Identify, considering competition, the industry and the customers what you stand for and where you are going Together with the Team create the longer-run MISSION statement to tie your activities to Again, with the Team, create key strategic priorities (no more than 5) for the year to focus on Immediately after, have the Direct Reports (Division heads) come up with the objectives/projects for their Division that would go under each strategic priority and a KPI for each Have them continue the process down to individual level

7. INPUTS FOR STRATEGY FORMULATION SWOT Analysis. Industry-wise, opportunities and threats should capture multiple industries that the company operates in: SaaS, HSE solutions, Sustainability Vendors Congruence of values analysis Industry Success Factors and the ways to leverage them: BRAND STRENGTH CUSTOMER SERVICE/SATISFACTION PARTNERSHIP & TRUST

8. EXECUTION

9. Steps to Strategy Formulation Vision & Mission Formulation 1 Company CEO, Direct reports & Key contributors Up to 5 Company Strategic Priorities 2 Related Division Objectives [year] Target deployment 3 Direct reports to middle managers; middle managers to their teams and so forth down to individual level Unit Objectives 4 Individual Objectives 5

10. Example (A technology consulting firm): Vision - Enabling freedom: We will lead by providing our clients with insights and capabilities that boost their freedom to achieve superior results. Mission - Enabling transformation:We enable our clients to transform and perform through technologies.

11. We will lead by providing our clients with insights and capabilities that boost their freedom to achieve superior results. Increase Presence in The Market Cutting Edge Solutions Superior Quality B. Dev-t: 1) Bring in X new Customers 2) Launch CRM, Etc. Client Services: 1); 2); 3) etc. Technology: Increase capacity of existing … etc. 1) Upgrade the Corporate Website Company Vision Strategic Priorities Corporate Level Division Level Team or Individual Level* *Depending on the depth of hierarchy the objectives will be cascaded down

12. Nature of Objectives & KPIs

13. Competency Integration into Performance Evaluation is important 3-4 Core Competencies that are specific to the company depending on its vision, like: Adaptability to Changes, Quality, Customer Care, etc. Job Family Competences: STRATEGIC LEADERS; PEOPLE LEADER; PROFESSIONAL KNOWLEDGE WORKERS; CUSTOMER CONTACT; ADMINISTRATIVE SUPPORT

14. Competences in Force Competence-based STARs/ARs that employees give one another will reinforce the development of competences Defined competences will make the 360 degree evaluation well-defined as well Allows you to tie development activities to

15. 4 Strategy Review Meeting Target Deploy-ment Individual Development Plans Perfor-mance Appraisal (Mass) Communication of New Strategy to Employees Target Review 2 360 Review 7 Target Review 1 Target Review 3 Bonuses Jan Dec Nov Feb 3 5 Annual Operational Budget Approval Oct Mar 6 2 1 8 Sep Apr Aug May 6 Ideal Timeline for PM Process Jul Jun 6 6

16. CHALLENGES Geographical dispersion: time and cultural differences KPI determination: the un-tested targets to be set (for e.g. in customer service, there might be set a target to close the customer issues in 24 hours, however, it might be either unrealistic or the gauges could be biased as to what is considered to be ‘closed’) It is imperative that all the processes running in the company are clearly designed and documented (in MS Visio map format) and the job responsibilities and reporting structure are as well clearly defined Lack of incentive structure to complement the “Management by Objectives” framework could significantly impede the implementation of the concept

17. SOLUTIONS Research: corporate value analysis, defining the differences in beliefs and values between the two teams for tailoring the implementation and communication strategy accordingly Leadership commitment and intensive communication through different media Development: creating a competence framework consistent with the strategy to develop certain set of competences in employees to reach their (and ultimately corporate) objectives Middle management development and commitment: This is the most important communication channel for nurturing company values and implementing strategy; Creation of Succession planning Creation of a consistent STRATEGIC incentive structure (not just monetary, but also career and recognition rewards)

19. What they value most in their job?

20. What values they see/show most in their work?

21. Is their vision and view of the company same with the leadership’s?----------------------------------------------------------------------------------- - Provide recommendations on how to tailor communication and implementation strategy within the company

22. LEADERSHIP COMMITMENT In realizing its vision through the employees it is important that the leadership show their commitment in each step of strategy formulation and execution by: Getting the Team together for strategy formulation meeting, opening the meeting with a speech and demonstrating initiative ownership Underlining the importance of the execution to Direct reports and instilling belief in them in the vision Following through with the Target deployment Using the company Intranet and e-mail to announce ‘the Company’s Way Ahead’ in a text and video format Monitoring the implementation throughout the year

24. Presenting industry, company and customer analysis for:

25. Formulating Mission, key priorities and Division objectives

26. Presenting competence framework for the strategy

27. Conducting Employee Survey (on corp. culture & values)

28. Company-wide communication of strategy to employees

29. Facilitating Objectives Deployment & integration of competences into individual development objectives