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Strategy Execution Failure
Research by Kaplan and Norton is that “9 out 10 companies fail to implement their strategies.”
 
Key Principles of Corporate Performance Management, by Bob Paladino
  
This book encapsulates best practice research from globally recognized enterprises and provides a comprehensive, lean, simplified and proven approach to development and use of integrated corporate performance management (CPM) for strategy implementation and management.
 
Key Principles of Corporate Performance Management
How will you optimize the many moving parts in your organization? One tool or process is not sufficient; your organization has many interrelated issues and pressures and may require a CPM executive to facilitate an integrated toolbox and provide guidance and direction to vital CPM processes.
 
Research shows that CEOs and enterprises benefit from a CPM Office, Officer, and integrated processes based on five key principles more than ever to enable higher organizational performance:
  1. Establish and deploy a CPM Office and Officer
  2. Refresh and communicate strategy
  3. Cascade and manage strategy
  4. Improve performance
  5. Manage and leverage knowledge

 

Case studies include winners of these awards:
  • Kaplan and Norton Global Balanced Scorecard Hall of Fame Award
  • U.S. President’s National Malcolm Baldrige Quality Award
  • Deming Quality Award
  • American Quality and Productivity Center (APQC) Best Practice Partner Award
  • Governor’s Sterling Award (based on Baldrige Criteria)
  • Wall Street Journal “Top 20 Mot Improved Companies in Shareholder Creation”
  • Fortune “100 Best Companies to Work For”
  • Forbes Best Managed Companies

Research by Kaplan and Norton is that “9 out 10 companies fail to implement their strategies.” Four barriers explain the failure rate:

  • Vision barrier – only 5% of the workforce understands the strategy – strategy is rarely communicated in terms that relate to people’s everyday objectives, roles, and responsibilities.
  • Management barrier – 85% of executive teams spend less than one hour per month discussing strategy. Traditional measurement and management tools do not account for intangible assets, such as customer relationships, employee skills, knowledge, and innovativeness that are increasingly the source of corporate value and competitive advantage. The Strategy Map does. Move that dial. Meetings with focused issue and strategic solutions-based meetings.
  • Resource barrier – 60 % of organizations don’t link budgets to strategy. Most companies do not link budgets to strategy. Companies may be pursuing financial strategies that differ from or, worse, may be in conflict with their operational and customer strategies. Robust initiative scoring approach.
  • People barrier – only 25 % of managers have their incentives linked to strategy. Are needed preventive. Most companies are rewarding management for activities not linked to company strategic and operational plans.
The successful evolution of projects to processes is essential to the establishment of an integrated set of CPM processes in an organization. There can be five barriers:
  • Executive and management attention spans – this means that short, high-impact projects or proofs of concept projects are more accepted. CPM processes or methods themselves should be streamlined and used in a smarter manner to demonstrate traction far sooner than when they were conceived. Move that dial! Calibrate CPM processes to the Clock Speed of the organization and the focus of the leadership team. The CPM office should be neutral or independent.
  • Stovepipes and Islands – islands of competencies and processes consist of local experts who fail to integrate across the organization with their counterparts or those with complimentary methods. The CPM office here would assist or facilitate project selection and scope, and assist with cross-organizational executive management oversight.
  • Type A Personality, Expert or Apprentice? – Beware of the A (or triple A) personality player who has been successful most of his or her career and views CPM as just another challenge or trophy for the wall. Secure help form a true CPM professional.
  • Scope creep
  • Misplaced sponsorship of a low-level project manager or of a leader lacking executive visibility of influence.
Principle 1: Establish and deploy a CPM Office and Officer
 
Best Practice
Description
Executive sponsorship
CEO or direct report actively sponsors CPM Office and CPL projects for sustained period and with the right visibility to enable maturity to process state.
Organizational level and reporting relationship
CPM Office executive reports to the CEO or a CEO direct report.
CPM Office staff
Small senior team (three to eight people) experienced in change programs, full-time role in CPM Office.
Leadership, influence factors
Able to organize large-scale virtual teams to drive results in one or more CPM methods.
Ownership of CPM Processes and methods (Principles 2 through 5)
The office owns or substantially influences the portfolio of CPM processes enterprise-wide, with each Office CPM practitioner possessing deep expertise in at least one methodology.
CPM, industry and company knowledge
One or more team members have deep industry and company specific knowledge to help guide resolution of project issues.
Collaborative maturity
Experienced in working horizontally and vertically through the organization.
Ability to learn
Open to new ideas, methods, and approaches; able to streamline, integrate, and adapt methods; able to think concurrently
Principle: 2: Refresh and communicate strategy
 
Best Practice
Description
Strategic planning
Leverage the strategic planning process as either owner or partner to understand changing market conditions including competitor, supplier, rival, and potential entrants and substitutes in the marketplace.
Core and adjacent products and services
Define and determine core and adjacent products and services to focus on highest probabilities for success.
Strategic plan
Develop a strategy map containing objectives along at least four perspectives: financial, customer/constituent, process and people. Observe strategy map design parameters of 20- 25 objectives.
Link strategic planning an budgeting processes
Link strategic planning to the budgeting process, partner with finance to provide for a seamless continuum. Ideally, provide a rolling forecast or a flexible, lean, budget linked to strategy.
Communications plan
Communicate strategy throughout the organization using a comprehensive communications plan.

Principle: 3: Cascade and manage strategy

Best Practice
Description
Partner with business owners
Partner with line and staff leadership team members to gain support and influence as partners to help them achieve results.
Develop level 1 balanced scorecard (BSC)
Translate strategy into level 1 BSC measures, and measure targets at the highest organizational level.
Leverage proven BSC of comparable methods
Observe BSC or comparable design parameters, assigning one to two measures to each strategy map objective.
Cascade BSC to lower levels
Cascade and align level 1 BSC to levels 2, 3, 4 and so on, depending on organizational and accountability structures.
Align support services
Identify and define measures for all support services that align with levels 1 and below.
Align teams an individual employees
Define personal BSCs for teams and/or individuals that align with higher-level and support services balanced scorecards.
Link compensation
Align rewards, recognition, and compensation programs to the balanced scorecard.
Manage using measures
Manage BSC meetings to address the appropriate mix of strategic and operational issues; link these issues with Principle 4: Business improvement.
Automate measurement
Implement CPM software to manage BSC program with links to other principles.

Principle 4: Improve performance
 
Best Practice
Description
Prioritize improvement projects
Identify and prioritize strategic and operational initiatives to improve organization’s performance along financial, customer or constituent, process, and people dimensions.
Leverage customer-facing processes
Develop and exercise customer and constituent processes to understand and recalibrate processes around changing customer needs. Gather customer and competitor intelligence using regular customer surveys, focus groups, call centers, quality function deployment, and related methods and approaches.
Leverage process improvement methods
Design and maintain an ongoing process improvement and problem solving-program based on Six Sigma black belt or green belt, or Lean methods and tools to identify and eliminate root causes of issues.
Realize value form benchmarking processes
Leverage benchmarking and comparative methods to identify and regularly improve core and support processes. APQC has developed a process classification framework with standard process definitions and benchmarking (www.apqc.org)
Create a performance improvement culture
Create a virtual community of practitioners to coordinate and optimize improvement efforts enterprise wide.
Principle 5: Manage and leverage knowledge

Best Practice

Description

Develop KM processes

Establish and leverage best practice identification, gathering and sharing processes and technology solutions. (APQC has compiled an impressive list of KM best practices case studies; www.apqc.org)

Leverage technology

Partner with the information technology function to launch and maintain KM systems.

Develop expert locator systems

Design and use expert locator systems to capture employee skills inventory within the enterprise to accelerate problem solving in Principle 4 and to optimize human capital.

Link KM with improve performance process

Link best practice or knowledge management processes with Principle 4 processes to capture solutions and innovations.

Share best practices with strategic planning

Share best practices with strategic planning processes to better understand core competencies and possible strategic advantages.

Maintain a virtual KM network

Establish and maintain virtual network of KM experts throughout the enterprise to optimize knowledge and to keep processes evergreen.

 
Clipper Performance Solutions
It's All About Alignment.®