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Strategy Planning & Execution From A to Z PDF Free Download

Strategy Planning & Execution From A to Z PDF free Download. Think more deeply and widely.

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Certified Strategy Professional (CSP)

STRATEGY PLANNING & EXECUTION

FROM A TO Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Dr. Rachad Baroudi - Introduction

▪In MENA region, he worked as MENA strategy advisory

executive director at Ernst and Young. He assisted 100+

public and private organizations in developing their

strategy and performance management. He worked as a

Sr. advisor for central governments’ visions including KSA

2030, Oman 2040, Abu Dhabi 2030 and Ajman 2021. Also,

he worked at ADNOC in organization development field.

▪In Canada, he worked with Honda of Canada

Manufacturing for 8 years by refining their planning and

performance capabilities. Also, he helped developing

short- and long-term strategic plans for Honda of North

America.

▪In USA, he worked in the private sector as a consultant for

Small Business and Entrepreneurship Institute and as a

head auditor for Holiday Inn Corporation, followed by

aerospace industry, where he worked for world-leaders in

this field, Aeroquip Corp. & Array Systems.

✓CEO & Strategy and Performance

Advisory Leader - KPI Mega Library

✓Executive Director, Strategy Advisory

Services MENA - Ernst & Young

✓Corporate Planning Strategist -

Honda of Canada Mfg. - Canada

✓Consultant - Small Business and

Entrepreneurship Institute - USA

✓Head Auditor - Holiday Inn

Corporation - USA

International

consultant offering 29

years experience in

strategy, performance,

and KPI management

Introduction

17,000 KPIs

Main Publications

36,000 KPIs

36,000 KPIs Practical Book

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Critical Success Factors

Start Finish

Build

Practice

Focus Commitment

Take what you have

learned to your teams

This is an advanced &

comprehensice course Do the practical

exercises Build your strategy cloud

system on your own

Introduction

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Certified Strategy Professional (CSP) Exam & Certificate

Introduction

1. Exam Time is 60 Minutes for 34 questions

Need to answer min. of 24 questions

correctly to pass this exam (or 70%)

2. If you pass the test, please click the

button after the test to download your

certificate first for you in PDF format, save

it to your computer, and print it later. (We

will send it to you too)

3. If your score is below the 70%, it is

possible to take the test again (two more

attempts are allowed) within only 7 days. SAMPLE

Certification Exam:

1. Take “Certified Strategy Professional” course

3. Take the examination online

Certification Process: The exam is designed to test your strategy, KPI,

targets and strategy management knowledge

Adam Larry Jones

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Course FREE Gifts Introduction

Kippy

www.kippy.cloud

Strategy, KPIs,

Appraisal & Projects

system Kippy.cloud

BSC, KPI & Projects

Appraisals … etc

Excel Templates

36,000 KPIs

and more

Phone APP

31 2

Strategy Planning

& Execution from

A to Z Book

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Course Map

Strategy Planning & Execution From A to Z

KPIs AligningStrategy Leading

31 2 4

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Strategy Development

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategy First?

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategy (Private Sector)

“A strategy is an integrated set

of choices that position a firm,

in an industry, to earn superior

returns over the long run.”

Source: Jan Rivkin, “Where do great strategies come from?” Harvard Business School Faculty Seminar Series Lecture

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategy Yearly Timeline

▪All processes that impact strategy work together to support and execute strategy

This Year

Corporate Strategy Development

Link to Planning & Budgeting

Human Capital Alignment

Scorecard Management

Initiative Management

Strategy Review Process

Best Practice Sharing

Strategy Communications

Organization Alignment

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Honda N.A. Strategy Yearly Timeline (Example) Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

What is the purpose of a

strategic planning process?

There is a natural cycle to the Strategy Development process

Degree

of work /

Instability

Year

TRANSFORMATIVE INCREMENTAL

▪Innovation

▪Radical Change

Lo 1 2 3

▪Prepared Minds

▪Emergent Strategy

Strategy Planning Cycle

Typical Triggers

▪“Burning Platform”

▪New Leader

▪Technological Change

▪External Event

▪Competitive Moves

▪Planning Calendar

▪Acquisition

More Stable KPIs

Many New KPIs

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Planning Horizon & KPI Management

✓Industry/environmental volatility is the key factor

▪New product introduction frequency

▪Product lifecycle considerations

▪Changes in customer/competitor set

▪Business model shifts

✓Typically the horizon is in a number of years

▪Rapidly changing industries can have very short horizons - 1 to 2 years

▪Highly mature, stable industries might have very long horizons - 8-10 years

▪The average is about 3-5 years

Before goals and KPIs are set and planning is started, organizations must

consider the timeframe or ‘horizon’ for which the strategy is created

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Industry Velocity via Clockspeed

Some industries in terms of clockspeed

Industry Product

Technology Process

Technology Organization

Personal Computers < 6 months 2-4 years 2-4 years

Toys and Games < 1 year 5-15 years 5-15 years

Automobiles 4-6 years 4-6 years 10-15 years

Pharmaceuticals 7-15 years 10-20 years 5-10 years

Steel 20-40 years 10-20 years 50-100 years

Paper 10-20 years 20-40 years 20-40 years

FAST

MEDIUM

SLOW

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Environmental Scanning

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Environmental Scanning & KPIs

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Environmental Scanning

▪Environmental scanning is a methodology for coping with the external

competitive, social, economic and technical issues that may be difficult to

observe or diagnose but that cannot be ignored and will not go away

▪Scanning:

✓Is important to aid in framing strategy formulation activities

✓Can be done to various depths and at various levels

✓Ideally should be issues-based to avoid wasting time and energy

✓Effectiveness is dependent upon choosing the right tool for the job

✓Can provide the context for scenario development

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

The internal environment consists of all inside factors shaping the organization

ORGANIZATION

Human Capital

Organizational Culture

Business Processes

Technology

Management Capabilities

Financial Resources

Innovation Capacity

Business/

Brand Equity

Internal Environment … More complex then before

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Macro-Environment

Micro-Environment

Company

Societal

Trends

General

Economics

Disruptive

Technology

Emerging

Policy and

Regulation

Competitors

Substitutes

Suppliers

Customers

The external environment

consists of all outside

influences impacting an

organization

External Environment … An Important Piece

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

One of the most widely used and basic

tools in strategy development. Key tool

from the Design School.

▪Tool used to match:

–internal firm capabilities (Strengths and

Weaknesses) with

–external environment (Opportunities and Threats)

▪Can be improved by adding additional levels of

analysis (e.g. comparing your organization to other

organizations)

▪Can be used to weight issues by adding + or –values

▪Is an effective way to prioritize key issues that affect

strategy development

Strengths Weaknesses

Opportunities Threats

Internal

External

SWOT Analysis … Before Setting KPIs

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Good Strategy - Three Tests

INTERNAL CONSISTENCY

EXTERNAL CONSISTENCY

DYNAMIC CONSISTENCY

1) Does the strategy capitalize on the

opportunities and neutralize the

threats in a unique way?

2) Do the parts fit together so

the whole is the greater that

the sum of the parts?

3) Does the strategy accurately

anticipate competitive responses

and handle these before they

become problems?

Good

Strategy is

pre-requisite for

Good KPI Management

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Strategy Management

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

How is Strategy Typically Managed

Time

1. Corporate Strategy With

Corporate KPIs

2. Units Creates

Strategy with Unit KPIs

3. Units Submit

Budget for

Following Year

4. Finance Coordinates Final

Budget for Next Year

5. HR Performance

Management with

Employee KPIs …….

6. Executive

Review of

Performance to

Budget

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Office of Strategy Management

Strategy management function needs “a place at the table”

to oversee execution of strategy

Formulate &

Communicate The

Strategy Enterprise

Marketing Finance HR Sales IT Ops

Oversee

Execution of The

Strategy

Office of Strategy

Management

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

OSM

Office of Strategy Management Roles

The custodian of cross-business processes required to execute strategy

Strategy Management Process

•Best Practices –Facilitate process to identify and share best practices

•Initiative Management –Identify and oversee management of strategic initiatives

•Strategy Reviews –Work with senior management to shape the agenda for strategy

review and learning

•Strategy Communications –Communication to and educate the organization with a

focus on strategy

•Human Capital Alignment –Ensure alignment of each individual with the strategy

•Planning/Budgeting –Link planning and budgeting to strategy

•Organization Alignment –Ensure alignment of all organization levels with the strategy

•Scorecard Management –Design and report on the KPIs

•Strategy Development –Formulate and update strategy

OTHER

OSM

OTHER

CFO

OSM

Role

OSM

and/or

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategy & Performance Teams

Strategy &

Performance

1. Leadership Team

Role:

•Champion process

•Make strategic decisions

•Sponsor workshops & events

•Provide resources

2. Support Team (OSM)

Role:

•Lead the execution of the process

•Lead Measurement Teams

•Develop implementation plan

•Provide performance report

3. Measurement Teams

Role:

•Define KPIs

•Set baselines & targets

•Identifies data sources

•Gather & report KPIs

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategy & Performance Framework

Projects & Initiatives

Department Objectives

Division Objectives

Corporate

Objectives

Vision

Mission

Corporate Strategy

Target

Actual

Target

Actual

KPIs

(~300)

KPIs

(~100)

Progress

& Budget

Actual

KPIs

(~100)

Target

Actual

KPIs

(~14)

Business Plans

Corporate

Scorecard

Divisions

Scorecards

Depts.

Scorecards

~Initiative

Charters

Common Corporate Objectives were

used (L1-L3) to strengthen alignment,

strategy execution, and simplification

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Output/Outcome Framework (Logic Model)

Initiatives

(~2000)

Output

(~300)

Outcomes

(~66)

Goals

(~14)

Vision

Central Government

Policy Agenda

Ministries & Authorities

Strategic Plans

Target

Actual

Target

Actual

KPI

(~600)

Measure

(~100)

Target

Actual

Progress

(~2000)

Target

Actual

Index

(~14)

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategy Map

Strategy

Financial

Customers

Int. Processes

People

Attract, retain & develop

capable talent Enhance

Performance culture

Build effective

organization governance Improve & automate

efficient processes

HONESTY * RESPECT * RESPONSIBILITY * EXCELLENCE * CREATIVITY

Honoring our past

by creating a future characterized by stimulated growth,

development and the incessant practice of excellence in everything we do

Delivering exceptional value to our customers through the engagement of our

talented people, the application of best practice thinking in everything we do, the emphasis

on quality and excellence and the focus on delivering superior performance that preserves our future

Industrial

Maximize revenues & returns

from core & new businesses

Increase customer base

& products and services

Provide quality & innovative

customer services

Optimize capital &

operating expenditure

Investment

Real Estate

Hospitality

Strategy Map illustrates

how internal objectives of

the strategy are linked to

the customer, financial

objectives.

Strategy map ensures

that the key outcomes

and drivers of value

remain at the center of

what gets managed.

Strategy map provides

a context to organize

KPIs. A properly

constructed map

contains strategic

objectives.

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategy Stage

Not sure what skills does the organization needs to execute the strategy.

Strategy total cost is not clear, unknown strategy cost to implement.

Not enough testing and understanding of the current situation.

Transparency and openness identified as a restrictive issue.

Selecting and funding the wrong strategic initiatives.

No senior management adequately secured buy-in.

Measures and KPIs were not properly defined.

Lock out strategy team and withhold information.

Not adequate framework for developing strategy.

The strategy development process not effective.

Common Challenges 

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Balanced Scorecard

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategy Cause/Effect

Internal Process KPIs

Customers KPIs

Financial KPIs

Objective Reached

Financial

Results

Customer

Benefits

Internal

Processes

Human Knowledge & Skills

Human Development KPIs

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Management Frameworks

Or Logic Model - Government

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

At the highest conceptual level, the Balanced Scorecard is a

framework that helps organizations translate strategy

into operational objectives that drive both behaviorand

performance.

What Is a Balanced Scorecard?

Objectives

Seamless Cross-

Group Delivery of

Services

Targets

97%

(first time) Service Dispatch

Automation

InitiativesMeasures

Promised

Delivery %

Objectives

Statement of what

strategy must

achieve and what’s

critical to its

success

Targets

The level of

performance or rate

of improvement

needed

Initiatives

Key action

programs

required to

achieve

objectives

Measures

How success in

achieving the

strategy will be

measured and

tracked

Terminology

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Four Business Perspectives

Financial Financial Perspective

Objectives Measures Targets Initiatives

“To satisfy our shareholders, what financial

objectives must we accomplish?”

Profitability

Growth

Shareholder Value

Customer Customer Perspective

Objectives Measures Targets Initiatives

“To achieve our financial objectives,

what customer needs must we serve?”

Image

Service

Price/Cost

Internal Internal Perspective

Objectives Measures Targets Initiatives

“To satisfy our customers, and shareholders, in which

internal business processes must we excel?”

Cycle Time

Quality

Productivity

Learning & Growth Learning & Growth Perspective

Objectives Measures Targets Initiatives

"To achieve our goals, how must our organization learn and

innovate?”

Market Innovation

Continuous

Learning

Intellectual

Assets

The Balanced Scorecard converts strategy into an integrated

system defined across four business perspectives.

The Strategy

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

"To satisfy our

stakeholders, what

financial objectives

must we

accomplish?”

Financial Perspective

Objectives Measures Targets

Profitability

Growth

Shareholder

Value

“To achieve our

financial objectives,

what customer needs

must we serve?”

Customer Perspective

Objectives Measures Targets

Image

Service

Price/Cost

“To satisfy our

customers, and

shareholders, in

which internal

business processes

must we excel?”

Internal Perspective

Objectives Measures Targets

Cycle Time

Quality

Productivity

“To achieve our

goals, how must our

organization learn

and innovate?”

Learning Perspective

Objectives Measures Targets

Market

Innovation

Continuous

Learning

Intellectual

Assets

EVA

ROI

(CRM) Customer

Relationship

Management

(ECC)

Experience

Co-Creation

Six Sigma / LEAN

Change

Management

Strategy

BSC & Best Management Practices

TQM/

Quality / ABC

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

✓Is unique for each manager or executive

✓Is not just a collection of unrelated KPIs

✓It should “tell the story” of a business strategy

✓Helps create the line of sight from strategy to staff actions

✓Can answer staff question: “How do I support the strategy?”

A Good Scorecard...

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

SAMPLE BSC Form

Strategy

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

KPI Introduction

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs Needed to Manage!

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPI Definition

This is the essence of measurement. Let’s make sure

the concept of Key Performance Indicator is

understood.

✓“KEY” means that this measure has been pinpointed

so carefully that management knows precisely what

to do to succeed.

✓“PERFORMANCE” is the result or activity we are

looking for that fits in to strategic goals.

✓An “INDICATORS” is a gauge or a measure that

reports information.

a KPI leads to action!

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Why People Dislike KPIs?

✓KPIs takes time & effort

✓Poor performance may be found

✓People don't know how to use KPIs

✓It places accountability on individuals

✓KPIs management cost money and funds

✓The value of measurement is not understood

✓KPIs has typically been used as a means of punishment

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Cycle

KPI Cycle

Select

KPIs

Approve &

Document

KPIs

Gather &

Analyze

Data

Report

KPIs

Keep or

Remove

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

The “Perfect” World

In a perfect world … a measurement system will actively

promote performance improvement by:

✓Measuring what matters.

✓Don’t just measure things done according to the

organizational chart but …measure things done to

satisfy stakeholders.

✓Providing corrective feedback and positive

reinforcement to enthusiastic people who enjoy being

measured and take improvement on as a challenge.

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

The “Real” World (Not Recommended!)

We will discuss

WHAT TO DO!

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Bottom-Line …

“What Gets Measured &

Rewarded Gets DONE!”

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs Benefits

✓Encourage accountability

✓KPIs give individuals direction

✓Good KPIs serve as risk triggers

✓Good KPIs serve as early warning signs

✓Provide a way to see if strategy is working

✓KPIs function as tools to drive desired behavior

✓Provide a common language for communication

✓Help managers understand strategic performance

✓Focus employees' attention on what matters most to success

People respond to what’s inspected, not what’s expected

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Sources of KPIs

Workshop

Benchmarking

Historical

Management

Websites

www.kpimegalibrary.com

External lists

Industry

Standards

Competitors

KPI

SOURCES

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs

FREE

iPhone:

▪Go to Apple Store

▪Type “KPI Mega Library”

▪Download (16 MB Required)

Instructions

FREE Gift… 36,000 KPIs in a Phone APP

Android:

▪Go to Google Store

▪Type “KPI Mega Library”

▪Download (6 MB Required)

Instructions

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Process of Setting KPIs

✓Identify the problem situation (or goal) you are trying to address

✓Develop a view for how you would like the results to look like

✓Develop a process for how you want things to be achieved

✓Develop financial KPIs before other KPIs (private sector)

✓Develop effectiveness KPIs before efficiency KPIs

✓Develop output KPIs before input KPIs for each goal

✓Select best-fit KPIs, share, approve, and document them

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

KPIs Selection

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs Tell The Story!

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Proposed KPIs

Strategic

Relevance

Practicality

Frequency

Ease to

Understand

Providing

Insight

1 3 5

2 4

Selected KPIs

KPIs Workshop

KPIs Selection Criteria KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPI Selection Matrix

Selection Criteria

Reducing the potential list of KPIs

to manageable proportions …

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Selection Criteria

Strategic

Relevance

Practicality Frequency

Ease to

Understand

Providing

Insight

Scoring

H / M / L

(=3,2,1 )

Quality Index 2 1 1 2 3 9

Quality awards 1 2 3 3 1 10

Productivity 3 3 3 3 3 15

Timeliness 1 2 3 3 1 10

IT performance 2 3 3 3 2 13

Internal service levels 3 2 3 3 3 14

Time to market 1 1 1 1 1 5

Error / reject rates 2 2 2 3 2 11

Safety / Health / Environ. 2 2 2 2 2 10

Capacity / asset Utilisation 2 2 3 3 2 12

Communication 3 1 2 2 2 10

Supplier management 3 3 3 3 3 15

Inventory / sales 3 3 3 3 3 15

Order lead time 2 2 3 3 2 12

30 29 35 37 30

5 out of 14 selected …

KPI Selection Matrix - Example

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPI Distribution - Example

STRATEGY

PLANNING TARGETS AND

OBJECTIVES RISK

MANAGEMENT STEWARDSHIP INCIDENT

HANDLING PERFORMANCE

MONITORING &

REVIEW

MANAGEMENT

OF CHANGE

Managing and Control Process

FORECASTINGSALES SALES

PLANNING PRODUCTION

AND COST

ALLOCATION DELIVERY CONTROL OF

RECEIVABLES

Commercial Business Processes

ESTABLISH TDS PRODUCTION

PLANNING PRODUCTION

AND EXPORT PRODUCTION

1PRODUCTION

2PRODUCT

HANDLING

CUSTOMER

SUPPORT

EXPORT

Product Flow Processes

MARKETING

Business Support Processes

PROCUREMENT HUMAN

RESOURCES

General

Services

PLANT

AVAILABILITY

ASSET

INTEGRITY

AVAILABILITY PRODUCE

UTILITIES LABORATORY

SERVICES FINANCE

SUPPORT

CUSTOMER CUSTOMER

MKPI

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Selecting KPIs: Using Company Goals

KPIs

On Time

Delivery

Increase

Internal and

External

Quality

Reduce

Rework

Reduce time to release a Shop Order?

Reduce Shop Throughput Time?

Reduce time to place a purchase order

Reduce time to release shipping documentation?

Reduce outgoing defect rates /Final Inspection?

Reduce Scrap?

Improve Supplier Quality?

Reduce defect rate?

Faster

Service

Higher

Quality

Lower

Costs Reduce

Waste

Reduce Costs due to Shop Order Errors

Reduce Non Value Added Process Steps?

Reduce Material Usage?

Reduce Rework Costs?

Reduce time to create a CAD Drawing

Division

Objective Key Performance

Indicators

Company

Goals

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

The value chain is the primary vehicle through which an organization competes

Product

Design

Selecting KPIs: Using Value Chain

Technology Manufacturing Marketing Distribution Service

•Source

•Sophistication

•Patents

•Product process

choices

•Function

•Physical

attributes

•Aesthetics

•Quality

•Integration

•Raw Materials

•Capacity

•Location

•Procurement

•Parts production

•Assembly

•Prices

•Advertising,

promotion

•Sales force

•Package

•Brand

•Channels

•Integration

•Inventory

•Warehousing

•Transport

•Warranty

•Speed

•Captive vs.

Independent service

providers

•Prices

KPIs KPIs KPIs KPIs KPIs KPIs

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Selecting KPIs: Using S.I.P.O.C. Diagram

KPIs KPIs KPIs KPIs KPIs

Supplier ProcessInput Output Customer

•Use a flip chart with headings (S-I-P-O-C) written on it, or.

•Use post-it notes posted to a wall.

•Create an area that will allow the team to post on the SIPOC diagram

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Selecting KPIs: Using S.A.V.I. Method

KPIs KPIs KPIs KPIs

Speed VolumeAccuracy Investment

•Response time

•Turn around time

•Cycle time

•Project completion time

•Delivery Time

•Maintenance down time

•Passing inspection

•Defected product

•Customer returns

•Warranty claims

•Opinion surveys

•Focus groups

•# of units produced

•# of completed items

•% market share

•Back order statistics

•# of failed sales

•% of out of stock items

•Return on Investment

•Unit total cost

•Operating costs per unit

•Capital costs per unit

•Cost per customer

•Profit per unit

Examples Examples Examples Examples

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Adam & His Doctor –KPI (A)

•Adam visits his Doctor and tells him to lose 30 kg

Before After

•Doctor wants a chart filled out measuring his weight every week for 8 weeks.

Plan : Use a Scorecard having one weekly KPI (A) = Weight (# of Kg)

117 kg3

118 kg2

120 kg1

WeightWeek

Result: Limited Success

(-3 Kg)



KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Adam & His Doctor –KPI (B) & (C)

•Adam visits his Doctor and tells him to lose 30 kg

Before After

•Doctor wants a chart filled out measuring his activity + calorie intake every DAY for 8 weeks.

Plan : Use a Scorecard having 2 KPIs that drive his weight (daily)

KPI (B) = # Minutes of Exercise KPI (C) = # Calorie Intake

Result: Real Success

(-30 Kg)

Day Min. of

Exercise Calorie

Intake

130 1700

225 1800

… etc

✓

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

✓One lag KPI for each strategic objective

✓Average 10-15 KPIs per manager (approx. 2-3 KPIs per objective)

✓Cover the breadth and indicate the health of the organization

✓Lead KPIs are assigned primarily to the Internal and Learning &

Growth perspectives (occasionally to the Customer perspective)

✓If more than one KPI is applicable, use the one that best

communicates the meaning of the objective

How Many KPIs?

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

•Suppose that you will be taken to an island

•Where you will live for one year in isolation

•What are the ONLY 3 things that you would

take with you? Why is that?

The goal is to survive!

Exercise 1: Prioritization KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

KPIs Quality

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs Give Clarity!

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Good KPIs Starts With …

Value of

Number of

Average of

Total of

Percentage of

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Company KPIs - Example

FINANCIAL

•% OPEX budget variance

•Total EBITDA *

•Total revenues *

CUSTOMERS

•% Customers satisfaction *

•% Market share *

PROCESSES

•% of Timely closure of audit observations

•# of key business processes automated

•% Projects progress as per plan

•% Projects within planned budget

Common KPIs

PEOPLE

•Average employee satisfaction rating

•# of innovation ideas submitted

•Average training hours per FTE

•% of FTE got min. training hours

•% Employees Turnover

* Business Unit Only

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Good KPIs …

✓Agreed and decided by managers

✓Creates meaning on all levels

✓Echoes organizational goals

✓Based on legitimate data

✓Has trend over time

✓Easy to understand

✓Provides context

✓Leads to action

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Quality of KPIs

Performance Area Clearly Defined

Updated Frequently

Financial Performance

92% 88%

Operating Efficiency

68% 69%

Customer Satisfaction

48% 48%

Community

& Environmental 25% 23%

Employee Performance

17% 27%

Innovation

13% 23%

Source: W. Schiemann & Associates Inc

How executives see “Quality of KPIs” of 6 performance areas:

Quality

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Qualities of a Good KPI –C.R.E.A.M.

✓Clear - Precise and unambiguous

✓Relevant - Appropriate to the subject at hand

✓Economic - Available at a reasonable cost

✓Adequate - Provide a sufficient basis to assess performance

✓Monitor - Open to independent validation

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

SMART Method

Specific: Concrete and well defined

Measurable: Allows tracking progress toward goals

Actionable: Links to specific actions of employees

to monitor their performance

Result Oriented: Focuses on the desired outcomes

Time Bound: Tied to a near-term deadline to ensure

timely completion

Objectives

KPIs

Targets

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

We know

That we know

We know

That we don’t know

We don’t know

That we know We don’t know

That we don’t know

We know we have a gap

We don’t realise we have

some information We have a gap but don’t realise

Categories of Information

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

We know … That we don’t know

We know

That we don’t know

We know we have a gap

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

MEASURE AVAILABILITY

ROE Yes

Capital adequacy ratio Yes

Asset quality Yes

% income outside XXXX No

% profit outside XXXX No

Market share - XXXX Yes

% income from new products No

New delivery channel profitability No

Competitive product pricing No

Product development cycle No

Cross sell No

Customer service standards No

Customer satisfaction No

Customer retention No

Regional & local XXXX No

BEM score No

IT systems performance Yes

% income off-balance sheet Yes

Net interest margin Yes

CI Ratio Yes

Internal co-operation No

Skills & competencies No

Teamwork No

Motivation No

Retention of star performers No

In this example:

Only 8 out of 25 KPIs

were measured

6 of these 8 KPIs

were financials

Categories of Information - Example

KPIs

We don’t know

That we know

We don’t realise we have

some information

Measured!

KPI

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPI Name “Too long”

Decreasing “Product A” production cost by 5% by 2011

though re-engineering production process and buying new

machines to beat our competitor price

KPI Name:

How WhyWhat WhenHow Much

KPI Name After:

“Product A” production cost

2011

Target Schedule Initiative Strategy

Need to

transfer

“Life Story”

to other

spots

Etc …

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Measuring Wrong Things

“you cannot control something you cannot measure.”

“Management measuring the wrong things.”

Source: Peter Drucker

“You cannot manage something you cannot control”

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Wrong KPIs … Conclusion

Developing the wrong KPI will create more harm than good

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Measuring Too Much

“Managers seek to measure performance start by

measuring too much.”

“They are left trying to translate data from a host of

disconnected or misleading indicators.”

“This can lead to poor decisions or wasted effort trying to improve

indicators that have marginal or no impact on business improvement”

Source: James Nesbitt

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

The Need for Effective KPIs

The larger and more complex the organization.

The greater the difficulty in measuring true progress.

The greater the need for effective KPIs management.

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs –Key For Success

✓Involve appropriate people

✓Measure what is important

✓Support decision making

✓Provide quality feedback

✓Use to communicate policy

✓Assign roles and responsibilities

✓KPIs show trends over time

✓Help to understand the organization

✓Better view and gauge performance

✓Provide a focused view of the future

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Exercise 2: Which of the below are NOT good KPIs Names?

1. % Employee satisfaction

2. $ Turnover

3. # New clients from referrals

4. # Employees on sick leave

5. % Projects on time

6. Finalize project by 31 December

7. Superior quality services

8. # of defects and returned products

9. $ Budget

10. Increase current market share by 20%



KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

KPIs Forms & Types

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Understand The Relationship … Between KPIs

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

There are strengths and weaknesses in using each

Percentages

Ratios

Indices

Ratings

Rankings

Absolute

Numbers

KPIs Can Take Many Forms

KPI

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPI Form Strength Weakness

Absolute

Numbers Clear and simple One dimensional

Indices Allow multi-variable analysis Masks individual variables

Percentages Good indicators of change Sometimes misunderstood

Rankings Easy to understand Category definitions inconsistent

Ratings Good for nominal data Can be biased

Ratios Show relationship Difficult to understand

KPIs Can Take Many Forms

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs –Ratings

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs Types –The Balance

✓Lagging & Leading

✓Strategic & Operational

✓Effectiveness & Efficiency

✓Quantitative & Qualitative

✓Short-term & Long-term

✓Financial & Non-financial

✓Business & Project-Based

✓Output & Outcome (Government)

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs Types –The Balance

•Lagging

•Strategic

•Effectiveness

•Qualitative

•Short-term

•Financial

•Project-Based

•Output

•Leading

•Operational

•Efficiency

•Quantitative

•Long-term

•Non-financial

•Business

•Outcome

Organizational Indicators

Maturity Model

Usually Organization Move

From Left to Right

“Less” Mature

KPIs Types “More” Mature

KPIs Types

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Purpose

•Measure performance results

at the end of process, activity,

or time

KPI Examples

•“Customer retention”

•“Strategic skill coverage”

Lag KPIs

Lead KPIs

Purpose

•Measure intermediate

processes, activities, or

behaviors

KPI Examples

•“Hours spent with customers”

•“Hours spent cross-training”

Lead & Lag KPIs

Process Results

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

•Revenue Growth

•Revenue Mix

•Customer Satisfaction

•Customer Retention

•Share of Segment

•New Product Revenue

•Cross-Sell Ratio

•Employee Satisfaction

•Strategic Skills Coverage

Financial

Customer

Internal

Learning

& Growth

Cross-Sell the

Bank’s

Product Line

Increase

Revenues

Broaden

Revenue

Mix

Increase Customer

Confidence in

Bank’s Financial

Advice

Develop

Bank

Services

Understand

Customer

Segments

Broaden

Financial

Planning

Skills

Reward

Employee

Performance

Improve

Customer

Information

Improve

Employee

Satisfaction

•Time Spent with

Customer

•Number of Employees

who Achieve Bonus

•Personal Goal Alignment

Lag KPIsLead KPIs

Lead & Lag KPIs –BSC Example

•Number of Key

Customers Contacted

•Product Cost

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Operational KPIs

Are we doing things right?

Are we doing the right thing?

Strategic & Operational KPIs KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategic & Operational KPIs

Strategic

Strategic &Operational

Operational

& Personal

Corporate

Division

Unit

Person

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Effectiveness & Efficiency KPIs

Process Results

Purpose

•Measure how well the process

meets the required results

KPI Examples:

•% Defects

•# of Complaints

•% Billing Accuracy

•% of Completion

Effectiveness KPIs

Efficiency KPIs

Purpose

•Measure of resource

utilization in the process

KPI Examples:

•Total Cost per Transaction

•Total Time per Process Step

•# of Staff per Process Step

•Total Cost per Bed

Efficiency Effectiveness

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Qualitative & Quantitative KPIs

Purpose

•Assess the significance of a

results by using a specific

number

KPI Examples:

•Number of

•Proportion of

•Percentage of

•Amount of

•Area of

Quantitative KPIs

Qualitative KPIs

Purpose

•Measure qualitative

statements, perceptions,

attitude, and behavior

KPI Examples:

•Level of

•Presence of

•Evidence of

•Availability of

•Quality of

! #

Convert

•Ratio of

•Length of

•Weight of

•Size of

•Value of

•Existence of

•Sustainability of

•Improvement of

•Ability of

•Potential of

100

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Business & Project-Based KPIs

Purpose

•KPIs can change for each

project and each life-cycle

phase. They may be restricted

by the project’s funding

limitations

KPI Examples:

•% Project Completion

•% Project Budget Variance

•# of Days Behind/On Schedule

Project-Based KPIs

Business KPIs

Purpose

•KPIs are linked to long-term

strategic and business

objectives and usually do not

change much once they are

identified

KPI Examples:

•% of Market Share

•# of Cars Produced / Year

•% of Customer Satisfaction

Linked to Business Linked to Project Life

101

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Output & Outcome KPIs (Government)

Output Outcome

% exams passed

% of death from cancer

# of arrests made

National competitiveness Index

Average Life Expectation

Safer Streets Index

Don’t lose sight of what you’re trying to achieve

102

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

OUTPUT

What are the required

output (results)?

INTERNAL

PROCESSES

How can we use the

available resources

to deliver maximum

benefit to the

nation or citizens?

FINANCE RESOURCES

What are the financial

resources available?

PEOPLE & LEARNING

What people and learning

capabilities do we need?

Improving Citizen Health

% of death from cancer &

circulatory problems

# of infant mortality

Avg. waiting time for

serious operations

% level of re-infection

# of qualified doctor/capita

# of improved procedures

Avg. cost per bed per day

# of new equipment

Example:

Output & Internal KPIs (Government Entity)

103

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

EXERCISE # 3

1. Lagging

2. Leading

3. Strategic

4. Operational

5. Short-term

6. Long-term

7. Financial

8. Non-financial

9. Quantitative

10. Qualitative

11. Effectiveness

12. Efficiency

13. Output

14. Outcome

Create 14 KPIs based on the following criteria:

Number

Index

Percentage

Ranking

Rating

Ratio

Number

Type Form KPI

▪

104

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

1. Lagging

2. Leading

3. Strategic

4. Operational

5. Short-term

6. Long-term

7. Financial

8. Non-financial

9. Quantitative

10. Qualitative

11. Effectiveness

12. Efficiency

13. Output

14. Outcome

Number

Index

Percentage

Ranking

Rating

Ratio

Number

Type Form KPI

▪

Total New Revenues ($)

# of hours spent with customers

Human Development Index (UN)

Defects Index

% of projects on time

% of International markets penetrated

Fortune 500 List (Top Companies)

Corrupt Countries Ranking (UN)

# in top quartile performer (Industry)

Moody’s Ranking (i.e. AAA)

Project Delivery Ratio

Teacher/Student Ratio

# of new businesses opened

GDP (Gross Domestic Product)

EXERCISE # 3

105

KPIs

Create 14 KPIs based on the following criteria:

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

KPIs Polarity, Status, & Documentation

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Decreasing or Increasing is Better!

107

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPI Polarity

108

KPI Polarity Examples

KPI with Positive PolarityKPI with Negative Polarity

Description

◼Example: # of graduates

◼The high number of graduates leads to a higher

level of educational mission achievement

Color Status

Description

◼Example: dropout rate

◼Low dropout rate leads to a high percentage of

graduates

Color Status

Formula

Negative

Polarity Actual

Target = % Results -+

Increase is BetterDecrease is Better Better Worse

Worse Better

=Positive

Polarity Target

Actual = % Results=

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

109

IMPROVE

✓Quality

✓Process

✓Savings

✓Safety

✓Staff Satisfaction

✓Customer Service

✓Resource Utilization

REDUCE

✓Time

✓Cost

✓Errors

✓Inventory

✓Space

✓Waste

✓Efforts

Measuring Right Things! - Ideas

KPIs

+ -

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Determine Performance Status

✓Determine and/or reference a “rules-based” system to define status

✓Select and justify a red/yellow/green judgment for:

−Goals

−Strategies

−KPIs

The red, yellow, green convention is organizationally determined

Green –Performance meets or exceed targets (>=100%)

Yellow –Performance failing below expected targets (70~99%)

Red –Performance falls significantly short of targets (<=69%)

110

✓Convert all KPI figures to “Percentages” before applying G/Y/R rule

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Company KPI Menu

111

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

✓KPIs definition sheet ensure consistency

✓To be established and completed by the KPI Owner

▪Agreed calculation method

▪Baseline & measure unit

▪Weighting of KPIs

▪Agreed data source

▪KPI definition

▪Agreed frequency

▪Agreed targets

KPIs Definition Sheet

Advice

Consider

measure owner

who is well versed

in the process or

system that is

being measured

112

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Measure Definition Sheet –OGSM Example

113

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Strategic Objective: Names the objective

KPI: Names the KPI

Measurement Intent: Describes the KPI and the reasoning behind its selection as

an indicator of progress against this strategic objective

Measurement Definition/Formula:

Provides a detailed formula for the calculation of a numerical value for the KPI

Source for and Approach to Setting Targets: Identifies the report, document, system, or individual from which the

information will be obtained

Target Setting

Responsibility: Tracking / Reporting

Responsibility: KPI

Availability: date

Target: date

Frequency of Update: Identifies how

often it is calculated

Units of Measure: Identifies the units in

which the KPI will be reported

Accountability for

Meeting Target:

Notes/Assumptions:

Clarifies terms in the formula

Highlights key assumptions underlying the formula

Measurement Information Is:

Currently available

Available with minor changes

Data Elements and Sources: The data elements required to calculate this KPI and

the source systems, databases, documents, etc., of those data elements

Past Year Actual Current Year Proj. Year 2 Year 3

Full Year

Target

Next Steps:

Examples of next steps could include:

Data collection procedure

Develop/approve KPIs formula

114

KPIs Definition Sheet –BSC Example KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

115

✓Documentation

Refresh

✓Conserve/Suspend

KPI Process

Establishment

Stage 1 Maintenance

Stage 2 Evolution

Stage 3

✓Needs identification

✓Selection

✓Documentation

✓Visualization

✓Activation

✓Reporting

✓Analysis

✓Decision making

✓Communication

✓Data gathering

✓Reporting

✓Analysis

✓Decision making

✓Communication

✓Documentation refresh

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

How to Improve Your KPIs?

116

✓Check appropriate balance of KPIs

✓Focus on KPIs measured frequently

✓Acted upon by CEO and top team

✓All staff understands the KPI and why it

was chosen

✓Responsibility is assigned to one

✓Significant impact on more than one

perspectives / area

✓Impacts other performance measures in a

positive way

without real and good KPI’s

an organisation will not

perform to its maximum

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Setting KPIs

117

Data quality is an issue

Use measurement to control

Not aligned to strategy objectives

Lack of agreement on right KPIs

The cost and complexity of the KPI is high

Focus only on effectiveness not efficiencies

Not verifiable to ensure data collection accuracy

KPI not communicating intent behind the objective

KPI does not fit well with the organizational process

Fail to use measurement to make strategic, fact-based decisions

Not well defined in terms of calculation, unit, frequency, source…etc



Common Challenges

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Exercise 4: KPI Clustering

Scenario:

•You are part of the Management team of a business that produces fruit juices.

•The owner of the company asks you to present him 5 KPIs you will be using to

track the performance of the company.

Task:

•Write down 5 KPIs you would recommend to the owner.

118

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Target Setting

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

“Personal” Targets

122

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Purpose of Setting Targets

✓Individuals focus more clearly when given a quantifiable target

✓Serve as a link between the individual & organizational goal

✓Sets and communicates the expected level of performance

✓Motivate the organization, not to control or constrain it

✓Ensure the success of the organization’s strategy

✓Focus the organization on improvement

✓Test the strategy

123

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Setting Targets Process

✓Start top-down

✓Consult data

✓Consult staff

✓Consult management

✓Recalibrate vertically and horizontally

✓Do not link immediately to financial rewards

✓Review upon KPI activation

✓Refresh with managerial approval

124

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Setting Targets Myth –A Discussion Item

▪If set too high, they create stress and de-motivation.

▪If set too low, they encourage complacency.

▪If imposed, they are unlikely to be owned by those who

have to deliver them.

▪If negotiated, there is an incentive to press for lower

targets that are easier to meet, thereby creating

tension and suspicion between managers.

125

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Stretch Targets

✓It communicates to the organization the need for change

✓Keep an organization focused on the long-term strategy

✓Identify areas that require dramatic improvement

✓Not recommended at the beginning stage

Example: Increase revenue by 20% over baseline

Targets

Quarter

% Increase

Stretch

Target

Q2 Q3 Q4

7% 12%17%20%

126

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Setting Targets Criteria

✓Show relationship between target and corresponding KPI

✓Ensure that the target communicates expected performance

✓The magnitude is appropriate to close the performance gap

✓Set targets for the financial perspective KPIs first

✓Targets should be defined as a comprehensive set

✓Set one target per KPI for a certain time

✓Ensure that targets are quantifiable S.M.A.R.T Targets

•Specific

•Measurable

•Aligned

•Realistic

•Time-based

127

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

✓Demotivating

✓A frequent error

✓Theoretically ideal

✓No room for recovery

✓May never be achieved

✓May requires infinite resource to achieve

100% Safety / Accuracy / Customer Satisfaction

Setting Targets - Beware of 100% …

128

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

In the past part you were challenged to find KPIs and see the

resulting behavior ….. How about target and caused behavior!

✓So how about the 30-minute pizza delivery guarantee.

✓Pizza delivery people are offered a cash bonus for every

delivery made within 30 minutes?

✓Promotes speeding and if a delivery person has an order at

28 minutes and another at 10, which does he deliver first?

✓What does this do to drivers and road safety?

✓What does this do to pizza quality?

Setting Targets & Caused Behavior

129

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Target Setting Methods & Examples

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

“SMART” Targets

131

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

The Strategy

The “Value Gap” & Setting Targets

▪The vision establishes the long-term

aspiration.

▪The value gap defines the difference

between an organization’s aspiration

and its current reality

How to close the value gap

is the essence of a strategy

VISION

“To be the biggest, best

and most profitable”

THE VALUE GAP

“value gap”

132

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

“We will double our market value within five years.”

Value ($)

Time (Years)

Year 1 Year 2 Year 3 Year 4 Year 5

$ 2 Billion

“value gap”

The “Value Gap” & Setting Targets - Example

133

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

$ 750 Million $ 500 Million $ 500 Million$ 250 Million

Productivity Revenue Growth

Improve Cost

Structure Improve Asset

Utilization

Expand

Revenue

Opportunities

Increase

Customer

Value

Improve Financials

$ 2 Billion

134

The “Value Gap” & Setting Targets - Example

New Customers

New Products

COGS

SG&A

Taxes

PP&E

Inventory

Receivables

Payables

Existing Customers

Existing Products

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Setting Targets

135

Autonomy for developing targets rest only with top leadership

Target not balanced between being realistic and challenging

Reward and compensation aspects can pose a challenge

Data can not be collected and reported against target

Stakeholders do not regard the target as appropriate

Fear and anxiety of targets is an emotional barrier

It’s not achievable within the approved resources

It’s not expressed in a clear and simple way

It is not aligned with strategic objectives



Common Challenges

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Best Practice Benchmarks #1 in top quartile performer

Productivity 10,000 inbound calls per FTE

Cost Effectiveness $ 6 per inbound call

Internal Benchmarks #1 in top quartile of all regional units

Improvement Target Reduce cost by the same % as sale price cut

Fixed Resource Volume Headcount of 22 FTE

Fixed Budget vs. Last Year $ 20 million

Method Target Motivation

•Competitive culture

•Empowerment

•Focus on performance

•Rewards for innovation

•Bureaucratic culture

•Command and control

•Focus on financials

•Rewards are defined

History Benchmarks Last Year Sales + 5%

Customer Expectations 90% Customer Satisfaction

Motivation Level

HIGH

LOW

Target Setting Methods

136

KPIs

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Best Practice Benchmarks

Productivity

Cost Effectiveness

Improvement Target

Fixed Budget vs. Last Year

Method Target

History Benchmarks

Customer Expectations

EXERCISE # 6

Create 7 Targets based to the following methods:

137

KPIs

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KPIs AligningStrategy Leading

31 2 4

Vertical Alignment

Course Map

Strategy Planning & Execution From A to Z

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139

KPIs ... Misalignment! Aligning

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

▪“I wish the top team really

were a team!”

▪“Managers could be an

obstacle to change!”

▪“Too much competition /

issues among staff”

Organisations are successful when a clear management cascading method exists

Strategy ... Misalignment!

140

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Vertical Alignment - Typical Timing(Medium Size Company)

Corporate

BU Pilot

Support

Unit Pilot

BU 2

2 weeks 1 week 1 to 2 weeks 1 week 2 to 3 weeks

BU 3

BU 4

Support

Unit 2

Support

Unit 3

Support

Unit 4

time

Each cascade follows

same general process

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Customer

Internal

Learning

& Growth

Financial

BSC Strategic Themes Articulate the Strategy

BSC Strategic Themes:

•Focus the organization on arriving at its destination

•Are usually limited to 3–5 major business thrusts

•Include a stream of linked objectives

•May slice across all four business perspectives

Regulatory & Societal Processes

Innovation Processes

Customer Management Processes

Operation Management Processes

4 Strategic Themes

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Strategic Theme:

Operational Excellence

Financial

Learning

& Growth

Lowest

Prices

Flights On

Time

Align

Ground Crew

Add More

Customers

Use Fewer

Planes

Increase

Profitability

Provide Fast

Ground

Turnaround

Example: Operational Excellence Theme

Customer

What will drive operating efficiency?

More customers on fewer planes

How will we do that?

Attract targeted customer segments that value

price and on-time arrivals

What must the internal focus be?

Fast ground turnaround

Will our people do that?

Educate and compensate ground crew regarding how

they contribute to the firm’s success

Employee stockholder program

Internal

143

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Identical

Same Objective

Corporate Business Unit

Objectives Cascade Methods

Contributory

Translated Objective

New

Unique Objective

144

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Company Identical Objectives - Example

145

FINANCIAL

1) Optimize capital & operating expenditure

2) Maximize revenues & returns from core & new businesses

CUSTOMERS

3) Provide quality & innovative customer service

4) Increase customer base & products and services

PROCESSES

5) Build effective organization governance

6) Improve & automate efficient processes

PEOPLE

7) Attract, retain & develop capable talent

8) Enhance Performance culture

Common Identical Objectives

Aligning

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Cascading Method & Company Type

TATA

Berkshire

Hathaway General

Electric

National Army

Washington Mutual

Exxon Mobil

Wendy’s

Department of

Commerce

Home Depot

McDonalds

IdenticalContributory

Passive Role

(Holding Company) Active Role

(Operating Company)

Cascading Method

New

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Company Type

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KPIs AligningStrategy Leading

31 2 4

Horizontal Alignment

Course Map

Strategy Planning & Execution From A to Z

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Strategic External Partners

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Horizontal Alignment & External Partners

Why Cascade to External Partners?

Define how the third party

contributes to

organizational objectives

and KPIs

Educate the third party

about organizational

objectives

Third Party alignment is generally reflected in an SLA.

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External Partner Alignment

CORPORATE

BUSINESS UNITS

SBU

xxx

SBU

xxx

SBU

xxx

CORPORATE SCORECARD

(Shared Strategic Agenda)

Objective KPI

1. Aggressive Growth xxx

2. Customer Loyalty xxx

3. Speed and Flexibility xxx

4. Customer Intimacy xxx

5. Operational Excellence xxx

6. Right Skills xxx

7. Accountability Culture xxx

Board of Directors External cascade

coordinates strategic

activities

SUPPORT UNITS

Finance

HRIT

Marketing

EXTERNAL

Distributor

Joint Venture

Vendor

Investor

Objective

xxx

Objective

xxx

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Output/Outcome Framework - Horizontal Alignment

Central Government

Edu. Water

Police

EcoHealth

Ministries & Authorities

PMO

Cabinet

Committee

President

Private Sector

Local Gov. Entities

Gov. Contractors

Gov. Suppliers

Horizontal Partners:

Foreign Investors

Special Interest Groups

Other Countries

Executive Committees

Horizontal alignment results from cascading

the government policy agenda from PMO

level, to external partners in leadership and

other stakeholders.

External partners are generally considered

to be organizations that support the

strategic execution

A cascaded strategy ensures that by

supporting stakeholders and external

partners actively supports government

strategy.

Enhance horizontal alignments

among Ministries & Authorities

PMO could play an important

role as well in coordinating

common issues among Ministries

& Authorities

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Government Entities

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•Rev X X

•GM X X

•Exp X X

•Project X X

•EBITDA X X

•Rev X X

•GM X X

•Exp X X

•Project X X

•EBITDA X X

Integrated Management Framework

•Balanced Scorecard

•KPIs

•Targets

•Accountability

•Strategy Maps

•Themes

•Objectives

Enterprise Strategy

Theme 3

KPI Target Initiatives Budget

Theme 2

Financial Forecast (Budget)

•Revenue $ X X X

•Gross Margin X X X

•Expenses X X X

•Projects X X X

•EBITDA $ X X X

HR IT FINANCE

Functional Organization Strategies

IT FINANCE

•Rev X X

•GM X X

•Exp X X

•Project X X

•EBITDA X X

Project Budget

FINANCE

IT FINANCE

Functional Strategic Service Portfolios

Annual Dept Budget/Rolling Forecast

Project Budget (each initiative)

Strategy

Management

Financial

Management

Functional ManagementEnterprise Management

BudgetInitiatives BudgetInitiatives BudgetInitiatives

Initiatives

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KPIs AligningStrategy Leading

31 2 4

Employee Alignment

Course Map

Strategy Planning & Execution From A to Z

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Personal Scorecard Performance

154

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Corporate & Personal Scorecards: Translation Gap

Corporate

Scorecard

Personal

Scorecard

Cost Effective

Production

Innovative

Brand Mutually Profitable

Relationship

(Wholesaler)

Easy to Work

With

Products Delivered

on Time/on

Spec/as Ordered

Financial

Customer

Leader in ROCE

Improve

Integrated

Margins

Realize Premium

Prices Through Differentiated

Products and Services

Maintain Cost Level

Appropriate to Support

Differentiation

Internal Achieve Perfect

Order

Fulfillment

Develop and Maintain

Strategic Supply

Alliances

Proactive Product

Development

Cost Effective

Supplier

Translation GAP

•

There may be a translation gap between what employee do and corporate strategy

155

Human

Development

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Corporate & Personal Scorecards: Translation Gap

Corporate Parent

(CEO)

Division (Pres.)

Operations (VP)

Corporate

Scorecard

Plant Manager

Shift Supervisor

Machine Operator

Personal

Scorecard

156

Translation

GAP

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Personal Scorecard Components

Personal

Scorecard

Personal

Objectives Competencies

Individual contribution to corporate strategy

•Financial

•Customer

•Internal

•L. & Growth

•Knowledge

•Skills

•Value

Results required Enablers to results

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•Reduce cost of downtime

•On-time transfer to next process

•Reduce turnarounds

•Perform maintenance

Machine Operator #452

Personal Scorecard

•Total reduction cost of downtime

•% on-time transfer to next process

•Avg. maintenance Turnaround Time

•% adherence to Regularly Scheduled

Maintenance

L-G

Objectives KPIs

158

•Obtain certification in

machine maintenance •# of certification in machine

maintenance

Link Personal Scorecard to Corporate Scorecard Aligning

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Personal Scorecard Components - Competencies

Personal

Scorecard

Personal

Objectives Competencies

Individual contribution to corporate strategy

Results required Enablers to results

159

•Financial

•Customer

•Internal

•L. & Growth

•Knowledge

•Skills

•Value

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Competency Definition

Knowledge

“Understanding gained through experience or education”

e.i.: Fields of study; areas of expertise, etc.

What you know!

Skill

“Knowledge of how to do something smoothly and efficiently”

e.i.: Run machinery; do an audit, etc.

How you do it!

Values

“Behaviors, traits and motivations people bring to the tasks required”

e.i.: Customer orientation; goal oriented

Why you do it!

Competency: The knowledge, skills, and values needed to excel at a job

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Employee Appraisal Form (Recommended)

161

1Aligning

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Employee Appraisal Form (Recommended)

162

2Aligning

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Employee Appraisal Form (Recommended)

163

3Aligning

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Employee Appraisal Form (Recommended)

164

4Aligning

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KPIs AligningStrategy Leading

31 2 4

OGSM Method

Course Map

Strategy Planning & Execution From A to Z

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OGSM Format

✓Objective

What is the purpose of your goal?

✓Goals

What do you want to accomplish?

✓Strategies

How are you going to achieve your goals?

✓Measures

How will you measure the success or failure?

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OGSM Form (Recommended)

167

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Honda Of Canada Mfg. Strategy OGSM Deployment

Done By N.A. Done by Canada

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OGSM Strategy Deployment Model

From one Level Up Done by You

3 Years Targets3 Years Targets

IMPLEMENTATION

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Strategy Deployment - OGSM

CORPORATE SCORECARD

BUSINESS UNIT SCORECARD

DIVISION SCORECARD

Strategy at Corporate Level

are cascaded down as

Goals at Bus. Unit Level

Strategies at Unit Level

are cascaded down as

Goals at Division Level

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CORPORATE SCORECARD

BUSINESS UNIT SCORECARD

DIVISION SCORECARD

Strategy:

Increase

Revenue

Strategy: Increase

Revenues from

New Regions

Strategy at Corporate Level

are cascaded down as

Goals at Bus. Unit Level

Strategies at Unit Level

are cascaded down as

Goals at Division Level

Strategy: Implement

New Charges

Goal: Increase

Revenues from

New Regions

Goal:

Increase

Revenue

Strategy Deployment - OGSM

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CORPORATE SCORECARD

BUSINESS UNIT SCORECARD

DIVISION SCORECARD

KPI:

Total Revenues

Target:

327 Mill. US$ (2011)

KPI: Revenues

from New Profit

Centers

Target: 15 Mill. US$ (2011)

Strategy at Corporate Level

are cascaded down as

Goals at Bus. Unit Level

Strategies at Unit Level

are cascaded down as

Goals at Division Level

KPI: New Revenues Generated

from New Charges

Target: 10 Mill. US$ (2011)

KPI: Revenues from

New Profit Centers

Target: 15 Mill. US$

(2011)

KPI:

Total Revenues

Target:

327 Mill. US$ (2011)

KPIs Deployment - OGSM

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Strategy OGSM Deployment + Perf. Reporting

CORP

Business Unit 1

UNIT

DIVISIONS

Business Unit 2 Business Unit 3

PLANNING PERFORMANCE

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KPIs AligningStrategy Leading

31 2 4

Cascading in Public Sector

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Output/Outcome Framework Deployment (Gov.)

Vertical alignment results

from cascading the strategy

from the government policy

agenda level downward to

Ministries & Authorities.

Ministries/Authorities provide

everyone an understanding of

his/her role in executing the

organization’s strategy

Edu. Water

Police

EcoHealth

Ministries & Authorities

Management & Staff

PMO

Cabinet

Committee

President

The vertical cascade

upward allows the Prime

Minister to make effective

decisions.

Ministries/Authorities

provide everyone in the

organization a clear

feedback tool and

approved KPIs to report

on executing initiatives.

Central Government

Ministries & Authorities

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Output/Outcome Framework Deployment (Gov.)

Initiatives

(~2000)

Output

(~300)

Outcomes

(~66)

Goals

(~14)

Vision Economic

Development

Infrastructure

Justice

& Safety

Government Sector Development

Social

Development

Central Government Scorecard

Ministries & Authorities Scorecard

Central Government

Policy Agenda

Ministries & Authorities

Strategic Plans

Internal Process

Financial

Resources

Learning

& Growth

Output to Citizens

Vertical Alignment

Better Health with

Less death and illness

Provide access to

affordable healthcare

to everyone

Establish new

hospital

Longer life for Citizen

Example

176

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177

ECONOMIC DEVELOPMENT

JUSTICE & SAFETY

SOCIAL DEVELOPMENT

INFRASTUCTURE DEVELOPMENT

GOVERNMENT SECTOR DEVELOPMENT

Ministry of Foreign Affairs

Ministry of Foreign Trade

Ministry of Energy

Ministry of Economy

Central Bank

Real Estate Bank

Federal Customs Authority

Real Estate Corporation

Securities and Commodities Authority

Ministry of Higher Education and Scientific Research

Ministry of Social Affairs

Ministry of Education

Ministry of Health

Ministry of Culture, Youth & Community development

Ministry of Labour

National Media Council

General Authority of Islamic Affairs

General Authority of Youth and Sports Welfare

Marriage Fund

General Post

Red Crescent

General Pensions and Social Security Authority

National HR Development and Employment Authority

Ministry of Finance

Ministry of Presidential Affairs

Ministry of Public Works

Ministry of Environment and Water

Electricity and Water Authority

Ministry Interior

Ministry of Justice

Ministry of Defense

Institute of Training and

Judicial Studies

Identity Authority

Ministries & Authorities

Environmental Agency

General Civil Aviation Authority

General Transport Authority

Telecommunications Regulatory Authority

Housing Programme

General Secretariat of Municipalities

Authority for Standardization and Metrology

Ministry of State of Federal National Council Affairs Civil Service Council

Ministry of Cabinet Affairs

Central Government Sectors

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Output/Outcome Framework Deployment (Gov.)

178

ECONOMIC DEVELOPMENT

JUSTICE & SAFETY

SOCIAL DEVELOPMENT

INFRASTRUCTURE

GOVERNMENT SECTOR DEVELOPMENT

Central Government Goals & Indices

Pre-University Education

Higher Education and

Scientific Research

Better Health for Citizen

Population and Labor Force

Social Welfare

Culture, Youth and

Community Development

Economic Development

Government Sector Development

Housing and Roads

Environment

Water & Electricity

Judicial System

National Emergency System

Rural Areas Development

Real non-oil GDP per

capita growth

Proportion of Emiratis

in private sector

World Economic Forum global

competitiveness index

World Bank Knowledge

Economy Index

UNDP Human

Development Index

Develop an UAE culture

& values survey

Develop a social

inclusion index

WEF Competitiveness index

Security, justice elements

Environmental

performance index

IMD Competitiveness index

Govt effectiveness rank

WEF Networked Readiness

Index

WEF Competitiveness index

Infrastructure rank

Transparency International

Corruption perceptions index

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Output/Outcome Framework Deployment (Gov.)

5 Public Policy Areas

4 BSC Perspectives

Central Government Scorecard

Ministries & Authorities Scorecard

Internal Process

Financial

Resources

Learning

& Growth

Output To Citizens

Economic

Development

Infrastructure

Justice

& Safety

Government Sector Development

Social

Development

Government Scorecard reflects all 5

areas of Policy Agenda.

“Government Sector Development” area

is linked to the following 3 perspectives

at the entity level:

1. Internal Process

2. Learning & Growth

3. Financial Resources

This BSC scorecard could be easily

adapted since it has the 4 traditional

perspectives

“Government Output” could be

different in each entity based on

sector/business that this entity is

operating in. Aligned to one or more

of 4 areas above.

Outcomes

Goals

Initiatives

Output

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Strategy Alignment

180

The cascade process has not been effective.

Individual performance plans not linked to strategy.

The communication between departments is not strong.

Business units can’t see how they contribute to corporate strategy.

Support units do not understand how they contribute to business unit.

Weak synergy between the corporate KPIs and business unit /Div. KPIs.

Weak link between manpower plans / organization structure and strategy.

No common set of tools identified to facilitate the planning alignment process.

Corporate objectives not used to develop business unit/divisional objectives.



Common Challenges

Aligning

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Strategy Execution

Course Map

Strategy Planning & Execution From A to Z

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Strategy Execution

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Strategy Execution…. Common Challenges!

•Personal agendas

•No agreed route map

•No consistent measures

•No good targets

•Shop floor disengaged

TQM

Continuous

Improvement

Customer

Focus Productivity

Empowerment

Too many

Independent Initiatives

Just in time EFQM

sales force

effectiveness

EDI

No Clear

Direction

Disillusioned

Management





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✓Executing strategy is more difficult than

formulating strategy

✓Planning and execution are interdependent

✓Strategy implementation takes longer than

strategy formulation

✓Execution includes more people than strategy

formulation

Executing vs. Formulating Strategy

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Four Common Barriers to Strategy Execution

Only 5% of the workforce

understand the strategy

Only 25% of managers have

incentives linked to overall strategy

The People Barrier

The Vision Barrier

85% of executive teams spend less

than one hour month discussing

strategy

The Management Barrier

You can not manage strategy without a strong & dynamic

Strategy Management Framework

9of 10 companies

fail to execute strategy

60% of organizations do not link

budgets to strategy

The Resource Barrier

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Criteria for Strategic Initiatives

A “Good” Strategic Initiative Should Have:

✓Accountability at the Leadership Team level

✓Clearly defined start and stop dates and progress milestones

✓Clearly defined deliverables

✓A budget

✓Committed resource allocation (e.g., Real employee hours)

Business as usual

For Example: “Meet Quarterly Sales Targets”

“Preventative Maintenance Agreement”

“Implement Firewall Security Upgrades”

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Government Performance Constraints

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Strategy Execution

188

No dedicated internal unit to handle and track strategic planning process.

Senior managers step out of the picture once implementation begins.

Individual responsibilities for implementing the change are not clear.

Unrealistic objectives that can’t be translated onto real action plans.

Over-engineered strategic plans which are complex to understand.

Employees achieve much activities and effort but little end results.

Work overlaps and redundancies that lead to conflicts and waste.

Lack of leadership involvement in the strategic planning process.

People are not clear how the strategy will be implemented.

Lack of communication and confidentiality issues.

The strategy is not worth implementing.



Common Challenges

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Review Meeting

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Review Meeting

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THOMSON CONFIDENTIAL -DO NOT DISTRIBUTE 53

DRAFT

Comments

Project Description

Mr. YDescriptionNot Started

Q?0?

•Comments text 1

•Comments text 2

•Comments text 1

•Comments text 2

Mr. YDescriptionNot Started

Q?0?

Ms. NDescriptionIn process

Q?0?

Ms. ZDescriptionComplete

Q?0?

OwnershipMilestonesStatus

Date

DateExpected Completion:

NameInitiative Owner:

NameTheme Owner:

K_ –Initiative Name

Q1 Q2 Q3

Payback

IRR

P&L Break-Even

Cash Break-Even

Q4Financial Criteria

Actual vs. Projected Spend ($ millions)

Q1 03 Q2 03 Q3 03 Q4 03

Projected

Actual

THOMSON CONFIDENTIAL -DO NOT DISTRIBUTE 12

DRAFT

M3 –Revenue from Targeted Prospects

All new company revenue is booked in tracking mechanism. Only includes TS-integrated companies (I.e.

excluding Current Drugs). Prospects are small and medium enterprises in the biotech field.

Key

Assumptions:

Total revenue from listed companies in period and number of companies

Calculation

Method:

Quarterly

Frequency:

Global system, sales analysis and non-renewable report. Source also includes the prospects lists from

Current Drugs ID db and Geneseq who don’t take any TS products

Data Source:

To be determined

Target Basis:

To track how well CLS can convert targeted prospects to customers

Measure Purpose:

M3 –Revenue from Targeted Prospects

CLS will define the specific targeted companies and geographies that represent opportunities and track growth in these defined

spaces.

F2. Increase Revenue and Share in Targeted Market Segments

Next Steps:

•Define the tracking mechanism of listed companies (Q1 03). Reliant on

ISI providing Sales Analysis equivalent as part of larger Finance

project. Q1 03 likely to include only Derwent data. ISI data likely to be

available in Q2 03 (dependent on Finance resource/Oracle project

progress)

•Set targets, Gather data, Report performance

Next Steps:

•Define the tracking mechanism of listed companies (Q1 03). Reliant on

ISI providing Sales Analysis equivalent as part of larger Finance

project. Q1 03 likely to include only Derwent data. ISI data likely to be

available in Q2 03 (dependent on Finance resource/Oracle project

progress)

•Set targets, Gather data, Report performance

2q03Expected Completion:

Susie LewingtonMeasure Leader:

Sarah HamerTheme Owner:

How are we performing

against our KPIs? How are we performing

against our initiatives?

How are we performing against our strategy?

Objectives

KPIs

Targets

Projects

Milestones

THOMSON CONFIDENTIAL -DO NOT DISTRIBUTE 11

DRAFT

Conversion of Prospects to New Sales

$0.35

$0.40

$0.25

$0.10

1Q03 2Q03 3Q03 4Q03

Number of Prospects and New Sales

$0.00

$0.05

$0.10

$0.15

$0.20

$0.25

$0.30

$0.35

$0.40

$0.45

Revenue Generated to Date

($ millions)

Prospects New sales Revenue

F2 –Increase Revenue and Share in Targeted Market

Segments (1 of 2)

M3 –Revenue from Targeted Prospects Performance Analysis

•Comments text 1

•Comments text 2

Recommendations

•Comments text 1

•Comments text 2

Strategic Initiatives

Milestones

Initiative Name 1

Initiative Name$ TargetsBudget

S HamerTheme Owner:

ILLUSTRATIVE DATA

Discussion topics in the meeting should include:

Key Issues, Implications, Risks, & Actions

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Review

Strategic

Issues

(30%)

PRESENT

(Event-Driven Learning)

Discuss

Implications

(30%)

Review

Performance

(40%)

•Provide input to strategic issues

currently being worked on

•Dialogue about performance

–explain anomalies

–suggest solutions

–identify issues

–communicate

•Identify strategic issues for

discussion at next group meeting

•Review performance data (available

online)

Review

Strategic

Issues

(60%)

Discuss

Implications

(30%)

Review Performance

(10%)

THE QUARTERLY

REVIEW MEETING BETWEEN THE MEETINGS THE QUARTERLY

STRATEGIC REVIEW

MEETING

Focus Review Meeting on Strategic Issues

FUTURE

(Continuous Learning)

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Having Monthly Operational Meetings Means Quarterly Meetings Will Have Greater Impact

Identify issues Develop solutions to issues

Strategy Management Process

(ensure execution of the long-range strategy)

Time Allocation

Refine Strategic Issues

Discuss Implications

Review Performance

Feedback

Operational Management Process

(ensure execution of short term plan/budget)

Time Allocation

Actions

Discuss Implications

Review Performance

1 2 3 4 5 6 7 8 9 10 11 12

Q1 Q2 Q3 Q4

Monthly Operating Review

Quarterly Strategic Review

60%

10%

30%

10%

40%

50%

193

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QSR Planned Meeting Agenda

194

Quarterly Strategy Review

Planned Meeting Agenda Q1 29 April

Q2 29 July

Q3 25 Oct.

Q4 24 Jan.

(9-11 AM)

CEO

Introduction 5 minutes

Corporate

Scorecards

15 minutes

Projects Scorecards & Initiatives

20 minutes

Corporate Support Scorecards & Initiatives

15 minutes

Strategy

& Corp. Affairs Scorecards & Initiatives

15 minutes

HSSE & Quality Scorecards & Initiatives

15 minutes

CEO Feedback

& Conclusion 5 minutes

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Review Meetings & Committees

Monthly

IT Steering

Committee

Quarterly

Human

Resources

Committee

Monthly Quarterly

MonthlyMonthlyMonthlyQuarterly

Credit Risk

Mgmt

Committee

Bankwide

Risk Mgmt

Committee

Compliance

Committee

Human Capital

Operations

Control

Committee

Monthly

Profit

Review

Improve Productivity

Manage Risk

Grow Revenues

Customer

Financial

Business

Strategy

Committee

Theme Committee

Monthly

IT Steering

Committee

Quarterly

Human

Resources

Committee

Monthly Quarterly

MonthlyMonthlyMonthlyQuarterly

Credit Risk

Mgmt

Committee

Bankwide

Risk Mgmt

Committee

Compliance

Committee

Human Capital

Operations

Control

Committee

Monthly

Profit

Review

Improve Productivity

Manage Risk

Grow Revenues

Customer

Financial

Business

Strategy

Committee

Theme CommitteeCommittee

195

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Leadership & Communication

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Leadership Capabilities!

197

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Leaders Build Good Performance Culture

THE FACT IS …

✓We are not similar human beings

✓We bring our own personal values to the job

✓We react differently to control systems

✓We are motivated by different things

THE CHANLLENGE …

✓A performance measurement system is a uniform set of KPIs that is

trying to motivate mostly un-uniform set of people.

198

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Leaders Build Good Performance Culture

✓Good performance systems need good people.

✓There is no sense in examining a process unless at the same time you examine

the people who govern the process.

✓Improvement does not take place on paper.

✓Improvement happens when people employ enthusiasm, dedication, commitment,

leadership and morale in their daily routine.

✓A good performance system on paper is a healthy beginning but if you want

results you need to follow up a paper system with a people system.

199

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Align Audience, Media & Message

Audio

Electronic

Face To

Face

Media

Video

Message

Strategy Framework

Our Strategy

Progress to Strategy

Individual

Contribution to

Strategy

Audience

Teams And

Individuals

Sites And

Functions

Corporate

Board

Business Unit

Management

Telephone

Electronic/

Face-to

-face

Stakeholders

200

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Communication Plan

AIntroduction

[Marketing] BWhat is a BSC? / What is our strategy?

[Information] CHow are we performing against our Strategy?

[Feedback}

Audience Message Channel Messenger

Timing

1Q 2Q 3Q 4Q 1Q

J F M A M J J A S O N D J F M

Executive

Team

Leadership

Team

Middle

Managers

Employees

AEmail / Mail A

Regional Executive

BLaunch Meeting B

Executive Team, Core

Team

CStrategy Meeting C C C

Core Team

CStaff Meetings C

Middle Managers

AEmail A

Leadership Team

AQtrly. Management

Meeting A

CEO

CQtrly. Management

Meeting C C C

CEO

BLaunch Meeting B

Leadership Team

CMonthly Meetings C C

Leadership Team

BStrategy Workshop B

Core Team

BRegional Meetings B

Middle Managers

201

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Establish “Company Club” ….Today

202

CLUB OBJECTIVE:

In line with company corporate objective of making our organization an attractive place to

work, ”Company Club’ was established to contribute to the welfare of our employees and

their families by organizing various social, sports, and educational programs.

2020 ACTIVITIES:

Club President

Social

Coordinator Sports

Coordinator Educational

Coordinator

Club Secretary

CEO

▪Sports Health Club Memberships bought

▪Water Park discounted tickets

▪Book Fair Partnership

▪Spring Camp in Intercontinental Hotel

▪Traffic Awareness Lecture (Police)

▪Social Club “Kids Theatre Day”

▪Film Festival Tickets for Staff

▪Blood Donation by Staff

▪Circus Show Discounted tickets

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Leadership

203

Not ensuring all players has access to strategy, particularly the uncommitted.

Fostering collaboration and cooperation among key staff is not enough.

Not making strategy the central agenda in all reviews and meetings.

Not creating a platform to challenge and agree corporate priorities.

Not empowering key individuals and trusting them to lead change.

Not ensuring clear roles and responsibilities in owning initiatives.

Not nurturing future leaders and future visionaries.

Not being consistent in methodology & approach.

Not able to manage issues at appropriate levels.

Not able to anticipate change in behaviors.

Not encouraging transparency.



Common Challenges

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

EXERCISE # 7

204

Exercise: Participation in building a balanced scorecard

Building a Balanced Scorecard for the CEO

◼Part 1: Developing 4 strategic objectives related to the nature

of your company's work for each of the four perspectives.

◼Part 2: Developing 2 KPIs

to measure the level of performance

for each strategic objective.

Leading

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Terminology

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Terminology ..... No Clear Unified Standards

208

TARGET STATEMENT

Terminology

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Make sure that you have a clear and unified

terminology in your organization by using them in:

209

Terminology In Your Organization

✓Strategic Plans

✓Used Templates

✓Performance Reports

✓Company Newsletters

✓Email Announcements

✓Posters & Banners

✓Top Management

✓New Staff Brief

Terminology

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Terms & Abbreviations

210

# Term / Abbreviation Description

1 Strategy The method chosen by company to identify and reach specific objectives. Strategy is a declaration of how

company will go about accomplishing its mandate and vision.

Strategy

Development

Process

company's OSM formulates the strategic plan as a routine project every year. This work may be organized in the

form of a strategy development project and use a team structure. At the departmental level, the operational

plans are revised every year to account for short-term changes in the internal or external environment of

company.

3 Vision

Is a statement of aspirations, describing the desired future state, outcomes and position of company, which will

inspire, energize, motivate and stimulate creativity throughout the organization.

4 Mission Is a clear and concise statement that embodies the purpose of company and a summary of what company

required to accomplish for stakeholders.

5 Values There are the important behavioral attributes and boundaries required of company staff in order to deliver

vision and mission.

6 Strategic Objectives The high level aspirations that company targets to achieve from its strategy in line with Balance Scorecard.

Objectives are supported by KPI’s and initiatives.

7 Key Risk and Challenges This is defined as the key risk identified through the risk management system to executing the overall key

strategic objectives of company strategic plan.

8 Key Success Factors The most important strategic enablers that are necessary for company to realize a strategic objective

Key Performance Indicator

(KPI)

These are numeric measurements of outcomes that assess the progress being made towards achieving a

strategic objective.

10 Programs Group of related initiatives that is formulated by company to deliver a specific strategic objective.

11 Initiatives

An initiative is a grouping of milestones that is formulated by company to deliver a specific strategic objective.

The initiative measurement can be an output that contributes to the fulfilment of a specific strategic objective.

12 Milestones Are tasks which, when grouped together, constitute an initiative.

Terminology

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Terms & Abbreviations

211

# Term / Abbreviation Description

13 PMO Projects management office. Currently part of OSM function. A function that represents how well programs,

initiatives, and milestones are being performed.

14 Budget & Financial Plan The detailed budget by department (and resulting financial plan) that sets in the allocation of funding to

company costs centers.

15 Organization Chart The organization chart that shows the structure and departments of company in a tree like structure with

reporting lines and key positions listed.

16 Operational Plans Mandatory plan outlining information associated with each strategic objectives. This includes all related

initiatives and KPI’s at SBUs and departments levels.

17 Cascade

An effective approach towards strategic management that entails linking company strategy and vision down to

operations, functional and SBU areas and organizing the strategy review accordingly. Effective cascading

creates synergy in the organization.

18 Scorecard Structured Objectives, KPIs, and Targets grouped under four perspectives –Customer, Finance, Internal

Processes, People needs to be developed and derived directly from Objectives.

19 Perspective

The conceptual foundation of the Balance Scorecard that translate company vision into a set of holding and

operational objectives that drive behavior and performance of the corporation and its workforce. There are 4

Perspectives used at company: Customer, Finance, Internal Processes, People

20 Target The current estimate of future result to be achieved by a given date. Target is developed for each of KPI for

each quarter.

21 SWOT Analysis

Assessment to develop a clear sense of an organization’s strengths (internal resources or capabilities),

weaknesses (internal deficiencies in resources or capabilities), opportunities (external factors or situations that

can favorably impact the organization), and threats (external factors or situations that can negatively impact

the organization).

22 Mandate

Written authorization and/or command by a person, group, or organization to another to take a certain course

of action.

23 Internal Assessment

It is arguably one of the most analytical step of Holding Strategic Planning. It will entail the review of

organizations internal competitive strengths and potential deficiency areas. The outcome is to take advantage

of organization’s strengths and also to resolve weaknesses.

24 External Assessment

It is arguably one of the most analytical step of Holding Strategic Planning. It helps to identify organization’s

external factors and trends that need to be synthesized and categorized into opportunities and threats which

will be used as input to subsequent planning activities.

Terminology

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Terms & Abbreviations

212

# Term / Abbreviation Description

25 OSM

Office of Strategy Management is established partly to champion company's holding strategic plan formulation

and reporting activities. OSM team is a cross-functional team because each holding objective touches on many

aspects of the corporation.

26 Employee alignment This process will ensure that all employees are fully aligned with the Holding Strategic Plan.

27 Horizontal Alignment

Horizontal alignment results from aligning external partners to holding strategy. External partners are generally

considered to be third parties that support organization in its operations and ultimately the achievement of

holding strategy.

28 Vertical Alignment

Having a common agreement about Holding Objectives. On the

largest scale, alignment is the achievement of Objective congruency where all parts and functions of an

organization’s value chain work toward the same purpose.

29 Personal Scorecard Structured Objectives, KPIs, and Targets. Scorecard needs to be developed and derived directly from Personal

Objectives.

30 Service Level Agreement

(SLA)

Negotiated agreement between two parties where one is the customer and the other is the service provider. This

can be a legally binding formal or informal 'contract'. The SLA records a common understanding about services,

priorities, responsibilities, guarantees and warranties.

31 Stakeholder

A person, group or organization to which an entity is accountable, or a person, group or organization affected by

the actions of an entity. Stakeholders can affect or be affected by the organization's actions, objectives &

policies. Some examples of key stakeholders are creditors, directors, employees, government (agencies), owners

(shareholders / SH), suppliers, community from which the business draws its resources.

32 Mitigation The elimination or reduction of the frequency, magnitude, or severity of exposure to risks, or minimization of

the potential impact of a threat.

33 Risk Management

The identification, analysis, assessment, control, and avoidance, minimization, or elimination of unacceptable

risks. An organization may use risk assumption, risk avoidance, risk retention, risk transfer, or any other strategy

(or combination of strategies) in proper management of future events.

Monthly Performance Review

(MPR)

Process which monitors execution of department operations plans on a monthly basis (managed

internally by the

department)

35 Quarterly Performance

Review (QPR) Process which monitors execution of holding and SBU plans on a quarterly basis

36 Policies

Are a definite course or method of action selected from among alternatives to guide and determine present and

future decisions.

Terminology

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

KPIs AligningStrategy Leading

31 2 4

Certified Strategy Professional (CSP) & Bonus Book

Course Map

Strategy Planning & Execution From A to Z

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Certified Strategy Professional (CSP) Exam & Certificate

214

1. Exam Time is 60 Minutes for 34 questions

Need to answer min. of 24 questions

correctly to pass this exam (or 70%)

2. If you pass the test, please click the

button after the test to download your

certificate first for you in PDF format, save

it to your computer, and print it later. (We

will send it to you too)

3. If your score is below the 70%, it is

possible to take the test again (two more

attempts are allowed) within only 7 days. SAMPLE

Certification Exam:

1. Take “Certified Strategy Professional” course

3. Take the examination online

Certification Process: The exam is designed to test your strategy, KPI,

targets and strategy management knowledge

Adam Larry Jones

Conclusion

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

215

Our Strategy Contributions to The Body of Knowledge

Feel free to download a softcopy of this book in this section

for further details about strategy planning and execution.

Conclusion

TABLE OF CONTENTS

CHAPTER 1: INTRODUCTION

CHAPTER 2: STRATEGIC PLAN DEVELOPMENT

CHAPTER 3: STRATEGY MANAGEMENT & MONITORING METHODS

CHAPTER 4: STRATEGIC PLAN IMPLEMENTATION

CHAPTER 5: STRATEGY MANAGEMENT AUTOMATION

CHAPTER 6 CONCLUSION

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

216

Conclusion

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Certified Strategy Professional (CSP) Dr. Rachad Baroudi

217

KPI Mega library Consulting Service Offerings

KML Strategy & Performance Management Approach and Service Offerings

Operational

Strategy

Quarterly

Performance

Report

The following KML performance management service offerings could be delivered to your organization in approximately 4 –6 months period.

You could select PHASE 1 OR PHASE 2 OR PHASE 3 or select any or all service offerings .You Can Customize The Scope “As Per Your Need/Budget”

Current

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Assessment

Thorough advanced

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workshop, agenda

development and

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meeting and

interview with key

stakeholders to

understand

perspectives and

issues

Corporate

Strategy

Refinement

Performance &

KPI Workshops &

Training

KPI & Projects

Management

& Scorecards

Performance

Monitoring

& Reporting

Strategy &

Performance

Governance

Provide a change

agenda and

enhance coherent

strategy with

refined Vision,

Mission, Values ,

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strategic plan

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Management &

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Alignment, KML can

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Monitoring system

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PHASE 3

Conclusion

Certified Strategy Professional (CSP) Dr. Rachad Baroudi

Wishing You All The Best

THANK YOU

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