The document outlines Mats Westerberg's agenda for discussing strategic planning and implementation theory and practice. The morning session will provide a theoretical outline on strategy, implementation, and management control frameworks. The afternoon will involve small group discussions on applying the frameworks in different organizational contexts.
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Lecture strategic management control
1. Today's agenda: From Strategy to Action Strategic Planning and Implementation Theory & Practice Mats Westerberg Luleå University, SE-971 87 Luleå [email_address]
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7. Mats Westerberg How Strategy is developed (according to Henry Mintzberg) Intended Strategy Not Realized Emergent Planned Realized Strategy Strategy Strategy Strategy Strategy Not Realized
8. Mats Westerberg How to Choose Strategy (according to Contingency Theory) Context, Environment Structure, Culture, Practices, etc Strategy Management Control ” Fit” ” Fit” ” Fit” Good Performance
9. Mats Westerberg But how do we make sure that the strategy that we find fitting is put into action in the organization?
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13. Mats Westerberg So, is there a way to implement that works better? Well, lets see
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15. Mats Westerberg Balancing dynamic tensions Value adding dynamics Human behavior dynamics Strategy making dynamics Opportunities Focus Organization Intended strategies Emergent strategies Self-interest Desire to contribute
16. Mats Westerberg Organizational ”blocks” and human behavior The desire to do right The desire to achieve and contribute The desire to create Behavior Organizational ”blocks” Opportunities for individuals to make decisions that conflict with codes of personal conduct Uncertain expectations, too many tasks and lack of resources Limited resources or room to act, fear of failure and lack of guidance
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18. Mats Westerberg Robert Simons’ ”Levers of Control” that are designed to balance the tensions Business strategy Belief systems Boundary systems Diagnostic control systems Interactive control systems Core values Risks to be avoided Critical performance variables Strategic uncertainties
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20. Mats Westerberg Interactive and Diagnostic Control Systems These are systems to formulate and implement business strategy Interactive Control Systems … stimulate search and learning, allowing new strategies to emerge as participants throughout the organization respond to perceived opportunities and threats Diagnostic Control Systems … are the formal information systems that managers use to monitor organizational outcomes and correct deviations from preset standards of performance
21. Mats Westerberg At the same time… are systems to expand opportunity-seeking and learning Belief Systems & Interactive Control Systems Boundary Systems & Diagnostic Control Systems are systems to focus search and attention while
22. Mats Westerberg Simons’ Levers of Control Strategy Opportunity and Attention Systems to frame the strategic domain Systems to expand opportunity-seeking and learning Systems to focus search and attention Systems to formulate and implement business strategy Core values Risks to be avoided Critical performance variables Strategic uncertainties Business strategy Belief systems Boundary systems Diagnostic Control systems Interactive control systems
23. Mats Westerberg What should be measured? We measure important aspects in the organization What gets measured gets done What gets done right gets rewarded What gets rewarded is what really counts Individual level
24. Mats Westerberg Traditionally measurements have been focusing on financial aspects Financial performance measures can at the best give a picture of the mean activity of a company and the results of that activity from a historical perspective (Wallander, 1999). Financial ratios can indicate how the organization did in the past – non-financial measures can indicate the present (and even future) state of the organization
25. Mats Westerberg Balanced Scorecard 1990 Nolan Norton Institute 1992 The Balanced Scorecard – Measures That Drive Performance. H BR 1993 Putting the Balanced Scorecard to Work . HBR 1996 Using the balanced scorecard as a strategic management system . HBR The Balanced Scorecard : Translating Strategy into Actions Robert S. Kaplan & David P. Norton
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27. Mats Westerberg Balanced Scorecard The financial (owner/principal) perspective The process perspective The learning and growth perspective The customer perspective Vision & Strategy Yesterday Today Tomorrow Strategisk Framgångs- Mått Handlings- mål faktor plan Strategy Success Mea- sures Plan of Goals factors action Strategisk Framgångs- Mått Handlings- mål faktor plan Strategisk Framgångs- Mått Handlings- mål faktor plan
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29. Mats Westerberg Balanced Scorecard Questions to answer for finding success factors in the different perspectives: Financial (owner) perspective: Customer (client) perspective: Learning and growth perspective: Internal process perspective: Employee perspective: (used in Sweden) To reach (financial) success, how do we want to be perceived by our owners To reach our vision, how do we want to be perceived by our customers/clients To reach our vision, how should we work to maintain our ability to improve and change To satisfy our customers/clients and our owners, which processes are key for success To satisfy our customers/clients and our owners, how should we treat our employees
30. Mats Westerberg Balanced Scorecard An example of a cause/effect relationship Learning and Growth Internal Customer Financial Innovativ Organisation Innovative organization Dissemination of knowledge internally Competence development Investments in R&D Recruitment of right employees Newness in products Quality Reliability Make good business Full order books High profit margin Stabil Vinsttillväxt Stable growth in profits Nöjda kunder Satisfied Customers Effektiva Processer Effective processes Motivated employees Effective production Technological competence Success factor PERSPECTIVE
31. Mats Westerberg Balanced Scorecard Example of measures linked to success factors Financial (owner) : Customer/client: Learning and growth: Internal process: Employee: Effective resource utilization Satisfied customers/clients Reduce non value-adding activities Product/process development Productive personnel Profit margin, ROI, etc. Customer retention, Customer satisfaction, new customers, etc. Quality level, on-time delivery, etc. No of new products, new developments, etc. Turnover of employees, employee satisfaction, etc. Perspective : Success factor: Measure:
32. Mats Westerberg Now you have been introduced to Simons Levers of Control and Kaplan & Nortons Balanced Scorecard Do they work? It’s up to you to find out!
33. Mats Westerberg ABBs Model for Implementing Change Goal Vision Competence Resources Engagement Commitment Leadership Coordination
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35. Mats Westerberg History matters ” [T]he past shapes the present and constrains the future” Kimberly & Bouchikhi (1995, p. 9) “ Transformation cannot simply be mandated. To be effective, it must be undertaken in a way which builds on rather than runs over the past“. Kimberly & Bouchikhi (1995, p. 9)
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39. Mats Westerberg Goal Vision Competence Resources Leadership Coordination Goal Vision Engagement Commitment Leadership Coordination Goal Vision Competence Resources Engagement Commitment Coordination Competence Resources Engagement Commitment Leadership Coordination Goal Vision Competence Resources Engagement Commitment Leadership What happens when a part is missing? Confusion Agony No intrinsic drive Frustration False starts
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Editor's Notes
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…
Det står i principschemat att det ska vara 3-5 ´men jag valde att ta med kap 6 också…