Kế hoạch kinh doanh - Allocating resources to support strategy execution

Managing Internal OperationsScreen graphics created by:Jana F. Kuzmicki, Ph.D.Troy University-Florida Region Allocating Resources toSupport Strategy Execution Allocating resources in ways to support effective strategy execution involves Funding strategic initiatives that can makea contribution to strategy implementationFunding efforts to strengthen competenciesand capabilities or to create new onesShifting resources — downsizing some areas,upsizing others, killing activities no longer justified,and funding new activities with a critical strategy roleFig. 12.1: How Prescribed Policies andProcedures Facilitate Strategy Execution Role of new policiesChannel behaviors and decisionsto promote strategy executionCounteract tendencies ofpeople to resist chosen strategyToo much policy can be as stifling as Wrong policy or as Chaotic as no policyOften, the best policy is empowering employees, letting them operate between the “white lines” anyway they think bestCreating Strategy-SupportivePolicies and ProceduresInstituting Best Practicesand Continuous ImprovementSearching out and adopting best practicesis integral to effective implementationBenchmarking is the backbone of theprocess of identifying, studying, andimplementing best practicesKey tools to promote continuous improvementSix Sigma quality controlBusiness process reengineeringTQMWhat Is a Best Practice?An activity that at leastone company has provedworks particularly wellA path to operating excellenceBest PracticesThe best practice must have a proven record inSignificantly lowering costsImproving quality or performanceShortening time requirementsEnhancing safety orDelivering some other highly positive operating outcomeTo be valuable and transferable, a best practice mustDemonstrate success over timeDeliver quantifiable and highly positive results andBe repeatableCharacteristics of Best PracticesInvolves determining how well a firm performs particular activities and processes when compared against“Best in industry” or “Best in world” performersGoal – Promote achievement of operating excellence in performing strategy-critical activitiesCaution – Exact duplication of best practicesof other firms is not feasible due to differencesin implementation situationsBest approach – Best practices of otherfirms need to be modified or adaptedto fit a firm’s own specific situationCharacteristics of BenchmarkingFig. 12.2: From Benchmarking and Best-PracticeImplementation to Operating ExcellenceBusiness Process Reengineering:A Contributor to Operating ExcellenceOften the performance of strategicallyrelevant activities is scattered acrossseveral functional departmentsCreates inefficiencies and often impedes performanceResults in lack of accountability since no one functional manager is responsible for optimum performance of an entire activitySolution  Business process reengineeringInvolves pulling strategy-critical processes from functional silos to create process departments or cross-functional work groupsUnifies performance of the activity  improves howwell the activity is performed and often lowers costsPromotes operating excellenceWhat Is Total Quality Management?A philosophy of managing a set of business practices that emphasizesContinuous improvement in all phases of operations100 percent accuracy in performing activitiesInvolvement and empowermentof employees at all levelsTeam-based work designBenchmarking andTotal customer satisfaction Popular TQM Approaches Deming’s 14 PointsBaldridge AwardCriteria The Juran Trilogy Crosby’s 14 Quality StepsImplementing a Philosophyof Continuous ImprovementReform the corporate cultureInstill enthusiasm to do thingsright throughout companyStrive to achieve little steps forwardeach day (what the Japanese call kaizen)Ignite creativity in employees to improveperformance of value-chain activitiesPreach there is no such thing as good enoughSix Sigma is a disciplined, statistics-basedsystem aimed at having not more than 3.4 defects per million iterations for any business practice – from manufacturing to customer transactionsTwo approaches to Six SigmaDMAIC process (Design, Measure, Analyze, Improve, Control)An improvement system for existing processes fallingbelow specification and needing incremental improvementA great tool for improving performance when there are wide variations in how well an activity is performedDMADV process (Define, Measure, Analyze, Design, Verify)An improvement system used to develop new processes or products at Six Sigma quality levelsSix Sigma Quality Control — A Tool for Promoting Operating ExcellenceCharacteristics ofSix Sigma Quality ProgramsSix Sigma is based on three principles1. All work is a process2. All processes have variability3. All processes create data to explain variabilityA company systematically applying Six Sigma to its value chain activities can significantly improve the proficiency of strategy implementationThree challenges in implementing Six Sigma quality programs1. Obtain managerial commitment2. Establish a quality culture3. Full involvement of employeesApproach of the DMAIC ProcessDefineWhat constitutes a defect?MeasureCollect data to find out why, how,and how often the defect occursAnalyze – InvolvesStatistical analysis of the metricsIdentification of a “best practice”ImproveImplementation of the documented “best practice”ControlEmployees are trained on the “best practice”Over time, significant improvement in quality occursInstalling Strategy-SupportiveInformation and Operating SystemsGood information and operating systems areessential for first-rate strategy executionSupport systems can relate toOn-line data capabilitiesSpeedy delivery or repair Inventory managementE-commerce capabilities Mobilizing information and creating systemsto use knowledge effectively can yieldCompetitive advantageWhat Areas ShouldInformation Systems Address?Customer dataOperations dataEmployee dataSupplier/partner/collaborative ally dataFinancial performance dataTrends for Information SystemsOn-line technologyDaily statistical updatesUp-to-the minute performance monitoringRetail companies have up-to-the minute inventory and sales records for each itemElectronic scorecards for senior managersGather daily or weekly statistics from different databases about inventory, sales, costs, and sales trendsEnables managers to make betterdecisions on a real-time basisChallengeHow to ensure actions of employeesstay within acceptable boundsControl approachesManagerial control Establish boundaries on what not todo, allowing freedom to act with limitsTrack and review daily operating performancePeer-based controlExercising Adequate ControlOver Empowered EmployeesMonetary IncentivesBase pay increasesPerformance bonusesProfit sharing plans Stock optionsRetirement packagesPiecework incentivesNon-monetary IncentivesPraiseConstructive criticismSpecial recognitionMore, or less, job securityStimulating assignmentsMore, or less, autonomyRapid promotion Gaining Commitment: Componentsof an Effective Reward SystemProvide attractive perks and fringe benefitsRely on promotion from within when possibleMake sure ideas and suggestions ofemployees are valued and respectedCreate a work atmosphere where there is genuine sincerity and mutual respect among all employeesState strategic vision in inspirational terms to make employees feel they are part of something worthwhileShare financial and strategic information with employeesHave knockout facilitiesBe flexible in how company approaches peoplemanagement in multicultural environmentsApproaches: Motivating Peopleto Execute the Strategy WellElements of both are necessaryChallenge and competition arenecessary for self-satisfactionPrevailing viewPositive approaches work betterthan negative ones in terms of EnthusiasmDedicationCreativityInitiativeBalancing Positive vs. Negative RewardsTying rewards to the achievement of strategic and financial performance targets is management’s single most powerful tool to win the commitment of company personnel to effective strategy executionObjectives in designing the reward systemGenerously reward thoseachieving objectivesDeny rewards to those who don’tMake the desired strategic and financial outcomes the dominant basis for designing incentives, evaluating efforts, and handing out rewards Linking the Reward Systemto Performance OutcomesCreate a results-oriented systemReward people for results, not for activityDefine jobs in terms of what to achieve Incorporate several performance measuresTie incentive compensation to relevant outcomesTop executives – Incentives tied tooverall firm performanceDepartment heads, teams, andindividuals – Incentives tied toachieving performance targetsin their areas of responsibility Key Considerations inDesigning Reward Systems