Bài giảng Crafting & Executing Strategy - Chapter 11 Managing internal operations: Actions That Promote Good Strategic Execution

CHAPTER 11MANAGING INTERNAL OPERATIONS:Actions That Promote Good Strategic ExecutionStudent VersionMcGraw-Hill/IrwinCopyright đ2012 The McGraw-Hill Companies, Inc.PROMOTING 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.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.USING PROCESS MANAGEMENT TOOLS TO STRIVE FOR CONTINUOUS IMPROVEMENTManaging for Continuous ImprovementBest PracticesBenchmarkingProcess ReengineeringTotal Quality Management (TQM)Six Sigma Quality ProgramsReengineering 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.Achieving 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.The 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 improvementsCapturing 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 InitiativesINSTALLING INFORMATION AND OPERATING SYSTEMSBenefits of Information TechnologiesEnable better strategy execution through data-based decisionsStrengthen organizational capabilitiesAllow for real-time tracking of implementation initiatives and daily operationsProvide monitoring of empowered employee performance (electronic scorecards)Build closer relationships with customersInstituting Adequate Information Systems,Performance Tracking, and ControlsEmployee dataFinancial performance dataCustomer dataOperations dataSupplier/partner/collaborative ally dataKey Strategic Performance Indicators Tracked by Information SystemsTYING REWARDS AND INCENTIVES TO 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.Striking the Right Balance between Rewards and PunishmentThe firm’s motivational approaches and reward structurePunishmentRewardsCommitment-generating incentives and rewardsAdverse employment consequencesPerformanceLinking Rewards to Strategically RelevantPerformance 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.Guidelines for Designing Effective Incentive Compensation SystemsMake financial incentives a major, not minor, piece of the total compensation package.Have incentives that extend to all managers and all workers, not just top management.Administer the reward system with scrupulous objectivity and fairness.Keep the time between achieving targeted performance outcome and payment of the reward as short as possible.Avoid rewarding effort rather than results.