Bài giảng Crafting & Executing Strategy - Ch 11: Managing internal operations: actions that promote good strategy execution

CHAPTER 11MANAGING INTERNAL OPERATIONS: ACTIONS THAT PROMOTE GOOD STRATEGY EXECUTIONSTUDENT VERSIONPROMOTING GOOD STRATEGY EXECUTIONAllocating resources to the drive for good strategy execution.Instituting policies and procedures that facilitate strategy execution.Using process management tools to drive continuous improvement in how value chain activities are performed.Installing information and operating systems that enable personnel to carry out their strategic roles proficiently.Using rewards and incentives to promote better strategy execution and the achievement of strategic and financial targets.ALLOCATING RESOURCES TO THE STRATEGY EXECUTION EFFORTPossible Adverse Resource Allocation Outcomes:Too little funding that slows progress and impedes the efforts of organizational units to execute their pieces of the strategic plan proficiently.Too much funding that wastes organizational resources and reduces financial performance.STRATEGY-DRIVEN BUDGETING: ALLOCATING RESOURCESScreen resource requests carefully.Approve only those that contribute to strategy execution.Provide the level of resources necessary for the success of strategic initiatives.Shift resources to higher-priority activities where new execution initiatives are needed.INSTITUTING POLICIES AND PROCEDURES THAT FACILITATE STRATEGY EXECUTIONPolicies and operating procedures facilitate strategy execution by:Providing top-down guidance regarding how things need to be done.Helping ensure consistency in how execution-critical activities are performed.Promoting the creation of a work climate that facilitates good strategy execution.11–5INSTITUTING BEST PRACTICES AND EMPLOYING PROCESS MANAGEMENT TOOLSManaging for Continuous ImprovementBest PracticesBenchmarkingProcess ReengineeringTotal Quality Management (TQM)Six Sigma Quality Programs11–6REENGINEERING THE ORGANIZATIONBusiness Process ReengineeringInvolves radically redesigning and streamlining work effort, flows and processes to achieve dramatic improvements in performance.Uses cross-functional teams, cutting-edge technology and information systems to reset and refocus the organization’s strategy.11–7ACHIEVING CONTINUOUS IMPROVEMENTTotal Quality Management (TQM )Creating a total quality culture bent on continuously improving the performance of every task and value chain activity.Is a long-term race without a finish in which success comes slowly in small steps forward (kaizen).A STATISTICAL APPROACH TO ACHIEVING CONTINUOUS IMPROVEMENTSix Sigma ProgramsUtilize statistical methods to improve quality by reducing defects and variability in business processes.Six Sigma PrinciplesAll work is a process.All processes have variability.All processes create data that explain variability.11–9THE DIFFERENCE BETWEEN BUSINESS PROCESS REENGINEERING AND CONTINUOUS IMPROVEMENTTop-notch Strategy Execution and Operating ExcellenceContinuous Improvement (TQM, Six Sigma)Business Process ReengineeringAims at one-time quantum improvementAims at ongoing incremental improvements11–10CAPTURING THE BENEFITS OF INITIATIVES TO IMPROVE OPERATIONSEmpowering all employees to improve qualityEmphasizing the necessity for improved performanceCommitting to total quality and continuous improvementFostering quality-supportive behaviorsUsing online systems to speed the adoption of best practices Action Steps to Realize the Value of TQM and Six Sigma Initiatives11–11INSTITUTING ADEQUATE INFORMATION SYSTEMS, PERFORMANCE TRACKING, AND CONTROLSEmployee dataFinancial performance dataCustomer dataOperations dataSupplier/partner/collaborative ally dataKey Strategic Performance Indicators Tracked by Information Systems11–12USING REWARDS AND INCENTIVES TO PROMOTE BETTER STRATEGY EXECUTIONTechniques for winning sustained, energetic commitment of employees to the strategy execution processProviding incentives and an engaging in motivational practices that facilitate good strategy execution.Striking the right balance between rewards and punishment for individual performance.Linking employee rewards to strategically relevant organizational performance outcomes.11–13STRIKING THE RIGHT BALANCE BETWEEN REWARDS AND PUNISHMENTThe firm’s motivational approaches and reward structurePunishmentRewardsCommitment-generating incentives and rewardsAdverse employment consequencesPerformance11–14LINKING REWARDS TO STRATEGICALLY RELEVANT PERFORMANCE OUTCOMESFocus on and reward results, not effort.Create a results-oriented work environment that focuses on what to achieve, not what to do.Set strategically-relevant, specific, and measurable stretch performance goals that are difficult but achievable.Link the performance goals of each individual in an organizational unit to the unit’s goals.Reward and recognize as success superior performance in accomplishing the goals.