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Why Good Strategies Fail: Creating Sustainable Performance in Turbulent Times

Learn how to create sustainable performance in turbulent times by understanding the context of sustainability, the value proposition, the role of measurement, social and human capital, and overcoming barriers to success.

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Why Good Strategies Fail: Creating Sustainable Performance in Turbulent Times

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  1. Why Good Strategies Fail:Creating Sustainable Performance in Turbulent Times William A. Schiemann, Ph.D. ASP – Metro New York Chapter April 2009

  2. Agenda • The Context of Sustainability • What’s the Value Proposition? • Role of Measurement • Social and Human Capital • Barriers to Success • Key Actions—Now!

  3. Context • Sustainability and the Bottom Line: • Planet • Societal • Organizations • Triple Bottom Line • Financial • Environmental • Social

  4. How Might Sustainability Be Important to Your Organization? Intentionally left blank

  5. Qualities of Most Sustainable Companies • Holistic integration • Broad stakeholder engagement • Metrics • Systems alignment • Strategic centrality • Senior management support • Deeply embedded values Wirtenberg, et. al. 2007 based on Alcoa, Band of America, BASF, Coca Cola, Eastman Kodak, Intel, Novartis, Royal Philips, Unilever

  6. Agenda • The Context of Sustainability • What’s the Value Proposition? • Role of Measurement • Social and Human Capital • Barriers to Success • Key Actions—Now!

  7. Six Perspectives (Schiemann & Lingle) • Financial • Market • Operational • People • Supplier • Environmental • Community • Environment • Regulatory Adaptability

  8. Value Map Environmental Product/ Service Value Creation Shareholder Equity People Customer Equity Suppliers

  9. Agenda • The Context of Sustainability • What’s the Value Proposition? • Role of Measurement • Social and Human Capital • Barriers to Success • Key Actions—Now!

  10. What is the Role of Measurement (e.g, Balanced Scorecards)? • Clarity of the goals • Targets (current, stretch) • Managing change (current vs. goal) • Accountability (visibility) • Focus on manageable • Resource focus • Evaluation of strategy execution • Guiding and testing strategic alignment

  11. Agenda • The Context of Sustainability • What’s the Value Proposition? • Role of Measurement • Social and Human Capital • Barriers to Success • Key Actions—Now!

  12. Social Factors to Consider • Labor practices (health & safety, training, diversity, employee well being) • Human Rights (discrimination, security, child labor) • Society (community, corruption, fair competition) • Product Responsibility (e.g, consumer health, privacy)

  13. People Equity is Key Driver of Shareholder Equity Shareholder Equity Customer Equity Productivity • People Equity • Alignment • Capabilities • Engagement Initiatives

  14. Connection to Human Capital Environment Community Shareholder Equity Regulatory Customer Equity Safety Productivity • People Equity • Alignment • Capabilities • Engagement Initiatives

  15. People Equity Alignment • Are we going in the same direction? Capabilities • Do we have what we need to succeed? Engagement • Are we committed?

  16. Industry Leaders

  17. TODAY TOMORROW Strategy Strategy Work Work Processes Processes Structure CHANGE Structure PROCESS Systems Systems Capabilities Capabilities Culture Culture Creating Alignment

  18. Alignment: Community Goal • Values statement (J&J Credo) • Success defined (image) • Scorecard (hours given) • Operating plan • Community outreach • Communications • Who? What? When? Where? How? • Tracking progress (pulse) • Validate linkage to goals

  19. Capabilities: Community Image • Attracting talent -- Employer brand: • Reputation: values, benefits, growth, communications, innovation • Google “Do no evil!” • Safety – DuPont –It’s a lifestyle and value at all levels • Attitudes, skills are learned • Improve community • Image conveyed through employee behaviors and communications

  20. Engagement & Sustainability at Sun • Flexibility an important value today; linked to Attraction, Engagement and Retention • More than 50% work at home; commuting 98% of employees carbon footprint • Saved $1700 annually on gas/vehicles • Home office equip less energy • Flex created 2.5 weeks of new time

  21. People Equity Scorecard A - Alignment C - Capabilities E - Engagement Red = Trouble Yellow = OK Green = Strength

  22. Turbulent Times • Sustainability is a long term agenda and value proposition • Implications during: • Weak economic period? • Strong economic period?

  23. Agenda • The Context of Sustainability • What’s the Value Proposition? • Role of Measurement • Social and Human Capital • Barriers to Success • Key Actions—Now!

  24. Critical Barriers to Overcome • Creating a broad inclusive and transparent process • Selling sr. management on longer horizon • The “right” measurement process • Accountability • Picking the critical few • Scenario planning & modeling • Benchmarking • Evaluation

  25. Potential Actions for the Strategic Planner • Education regarding sustainability, triple, CSR and value equation • Deepen the strategic review process: • Environmental scan (broad and long term) • Conduct more risk analysis (cradle to grave thinking) • Use broader frameworks (like 6 dimensions) • Build more holistic strategic measures that encompass sustainability goals

  26. Potential Actions for the Strategic Planner • Stronger modeling • Scenario testing of alternative futures (using broader assumptions) • Modeling of competitor, government, & other stakeholder actions • Create process and context to guide holistic solutions (across structural silos) • Test for resolve (visible communications, accountability, milestones, resources) • Ensure that sustainable plans are linked with HC systems, capabilities, & culture

  27. About Metrus • Metrus Group is an industry leader in strategic performance measurement, assessment, and organizational change. For nearly twenty years we have partnered with the most successful – and challenging – organizations in the world to help them achieve superior, sustainable business results through the development of their People Equity and the creation of a high performance, measurement-managed culture. • Our Services Include: • Human Capital ROI Assessment & Solutions • Strategy Mapping • Balanced Scorecard Design and Assessment • Development of Quantifiable Performance Metrics • Return on Training Investment • Employee and Customer Survey Research • Leadership Assessment and Development • Corporate Governance, Alignment, and Accountability Audits • Measurement-Driven Organizational Change • Functional (e.g. HR, IT, Security, Sales) Strategies, Measures and Execution www.metrus.com info@metrus.com 953 Route 202, Somerville, NJ 08876 908-231-1900

  28. Thank You! Dr. William Schiemann Metrus Group wschiemann@metrus.com 908-231-1900

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