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Conclusion. Best Practice Business Planning Methodologies: Use of the Strategy Map & Balanced Scorecard 25 th April 2006. OSNI and the Balanced Scorecard (BSC). What is this tool and why do we need it? The need to strategically manage change at OSNI The role of the Strategy Map and BSC

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slide1

Conclusion

Best Practice

Business Planning Methodologies:

Use of the Strategy Map &

Balanced Scorecard

25th April 2006

slide2

OSNI and the Balanced Scorecard (BSC)

  • What is this tool and why do we need it?
  • The need to strategically manage change at OSNI
  • The role of the Strategy Map and BSC
  • How they have been developed at OSNI
  • Organisational alignment
  • Linkage to individual performance planning
  • Implementation and Business Planning
  • Issues and lessons learnt
  • Q&A
strategy map balanced scorecard
Strategy Map & Balanced Scorecard
  • Internationally recognised; developed by Kaplan & Norton at Harvard
  • Used internationally in large and small private and public organisations
    • Tesco
    • UK MOD
    • Norwegian Air force
    • Royal Canadian Mounted Police
  • Key management tool used by OSNI to set objectives, measures and targets, and link organisational and personal performance to our Corporate Strategy.
  • Continuing to evolve our implementation of the BSC and to learn from best practice in its use
  • BSC links naturally to European Foundation for Quality Management (EFQM) and Investors in People (IiP).
strategic planning implementation
Strategic Planning & Implementation

Integrating Strategy & Tactics?

most organisations don t know how to execute strategy
Most Organisations don’t know how to Execute Strategy

“Less than 10% of strategieseffectively formulated areeffectively executed”-Fortune

“In the majority of cases – weestimate 70% - the realproblem isn’t bad strategy …it’s bad execution”-Fortune

WHY?

They can’tDESCRIBE theirstrategy

They don’tMANAGE theirstrategy

They haven’tmade strategyexecution a CORECOMPETENCY

slide6

Strategy without tactics is the slowest route to victory. Tactics without strategy is the noise before defeat.

Sun Tzŭ c. 490 BC, Chinese military strategist

Tactics is efficiency in climbing the ladder of success; strategy determines whether the ladder is leaning against the right wall.

Adapted fromStephen Covey, American leadership consultant and writer

slide7

Strategy - what has that to do with me?

An empowered organisation is one in which individuals have the knowledge, skill, desire, and opportunity to personally succeed in a way that leads to collective organisational success.

Stephen R. Covey

No institution can possibly survive if it needs geniuses or supermen to manage it. It must be organised in such a way as to be able to get along under a leadership composed of average human beings.

Peter F. Drucker

slide8

Some Strategic questions for any organisation

Who are we? What do we do? Why are we here?

What kind of organisation are we and do we want to / must we become?

What is the current strategy, implicit or explicit?

What assumptions have to hold for the current strategy to be viable?

What is happening in the larger, social, technological, political, competitive and educational environments?

In which markets/areas will we be active?

What are our financial and/or public good goals?

What products and services will we offer to what customers at what price level?

How will we deliver our products and services and what technologies will we employ?

What skills, capabilities and capacities will we require and which ones are core?

slide9

Organisations fail because of poor choice and/or implementation of strategy

  • Examples: Ryanair Versus BA, Tesco Versus W.H.Smith
osni s role
OSNI’s Role
  • Supplier of mapping to:
    • National, regional and local government
    • Private industry
    • Value-added resellers
    • General public
  • OSNI mapping:
    • Underpins much of the Northern Ireland economy
      • Recent PA Consulting report estimates £7bn/yr
    • Acts as a base reference for all N.I. Spatial data
mapping surveying historically
Mapping & Surveying historically ……
  • Surveying was based on triangulation
    • Measure base line by chains, rods, or tapes
    • Measure angles by theodolite
    • Very time consuming exercises
    • Needed people on the ground
  • Cartography was fine draftsmanship
    • Required extreme patience/attention to detail
    • Was based on wax etching, later Letraset
    • Took months for a single sheet
mapping today is firmly in the digital era
Mapping Today is firmly in the Digital Era
  • Surveying uses electronic theodolites, laser range finders, satellite positioning, pen computers,aerial photography, (ground radar and satellite imagery)
  • Cartography is derived from digital databases, some updated daily
    • Data is built up in layers
    • Data can be manipulated using special software known as GIS
    • External data easily linked through the map
    • Map is built on “intelligent” points, lines and polygons, which are “attributed” and can be “interrogated”
market context
Market Context

One certainty: Change will continue – in the GI industry and in NICS

  • Reform & efficiency
  • Citizen-centric government
  • Joined up government
  • EU Directives on GI, PSI, environment, etc.
  • Formation of new Land & Property Services Agency
  • New technologies
    • Falling barriers to competitor entry
    • New market opportunities
    • Rising customer expectations
  • New skills needed
  • OSNI wish to lead change, not react to it
  • Every OSNI staff member is affected by and must be involved in that change
slide15

OSNI’s organisation and culture?

2000: New Chief Executive Mick Cory asked the questions:

What type of organisation was the OSNI of 2000?

What values and behaviours did it expect and get?

What type of organisation should the OSNI of 2005 be?

What values and behaviours would it need to ensure?

What strategic management models would it need to effect the change?

slide16

The OSNI culture pre 2000 was a mixture

POWER CULTUREPower derives from top person with little or no empowerment of others

Key behaviours:

Discipline, wariness, risk-aversion, conformity, politicking, passivity, one man’s vision, strained external relationships

BureaucracyControlled by procedures, role descriptions and authority

Job position & grades are central

Standardised product/output

Key behaviours:

Predictability, consistency, stability, structured, methodical, conservative, rigid, empire building, paper shuffling, impersonal, buck-passing, slow, unresponsive.

slide17

Culture needed in a fast-moving ICT environment

TASK CULTUREThe network organisation

Multidisciplined teams co-operating together to deliver projects.

Emphasis on results and getting things done.

Key behaviours:

Empowerment, discretion, self-managing,

flexibility, adaptability, talent, teamwork,

problem-solving, innovation, challenging

re-modelling.

how to drive the strategic change
How to drive the strategic change?
  • Effect change through Executive Leadership
  • Conceptualise the Strategy
  • Translate the Strategy to Operational terms
  • Align the Organisation to the Strategy
  • Make Strategy everyone’s job
  • Maintain the momentum
  • Review
new organisational structure put in place

Business

Development

Corporate

Services

Finance

Operations

Business Planning

Large Scales

Revision

Sales &

Customer Services

Accounts

Human Resources

Small Scales

Revision &

Publishing

Marketing & (Technical

/Commercial) Training

Finance

Management

Training

Product Management

/R&D

Pointer

Admin

GIS Application

Support

Database

enhancement

ICT

Geodesy

Intellectual Property

Rights

Technical (Process)

Development

Premises

New organisational structure put in place

Chief Executive

governance and organisation
Governance and Organisation
  • CE instigated two boards
    • Strategic Board (SB) & Operational Board (OB)
    • Separate terms of reference & separate meetings
    • SB members plus next management layer constitute OB
    • Balanced Scorecard chosen as the management tool for OSNI
  • Board members trained in BSC theory
  • Strategy Map (SM) developed
  • Methodology cascaded
osni mission and vision
OSNI Mission and Vision

Mission is what we do:

OSNI contributes to the public good by supplying the mapping information for Northern Ireland

Vision is what we want to become:

We intend to be a leading, financially self-sustainable, public service, maximising the commercial potential of our information to minimise cost to the taxpayer.

In this way we will enhance our public good role further, providing expertise, support, consultancy and advice on geographic information and geographic information systems, supporting Government and the wider Public Services in delivering on their objectives.

from strategy to individual jobs
From Strategy to Individual jobs

Mission

  • To contribute to the public good by supplying the mapping information for Northern Ireland

Vision

  • To enhance our Public Good Role

Corporate Goal

  • To achieve financial self sustainability

Strategy Map

  • Focuses OSNI on delivering Mission, Vision and Corporate Goal

Balanced Scorecard

  • Uses mixture of lead and lag indicators/targets for every box
  • Detailed work done on selecting and defining

PPA & PDP

  • Individuals’ work plans for all staff targeted specifically at relevant BSC
  • Personal Development Plan supports current and potential work
strategy map v balanced scorecard
Strategy Map V Balanced Scorecard
  • Strategy Map often overlooked in Balanced Scorecard discussions and preparations, but is essential
  • Captures on one page the organisation’s strategy
  • Permits minds to see the entire strategy in one conceptual model
  • Stimulates debate while ensuring focus
  • Illustrates what success will look like for the organisation
  • Takes four different perspectives:
    • Financial (or other public good perspective)
    • Customer
    • Key Business Processes
    • Organisational Learning and Growth.
  • These are not hierarchical in importance but flow logically
  • Alignment of the four perspectives is key to focused, internally consistent development and implementation of strategy
strategy map balanced scorecard1
Strategy Map & Balanced Scorecard
  • Vision, Mission and especially Corporate Goal are translated into these four quadrants
  • Each box in each quadrant demands specific measures and indicators of success captured on the balanced scorecard
  • Targets SMART if possible
  • Mixture of lead and lag indicators
  • Lag indicators only verifiable at end of process
  • Lead indicators useful for monthly monitoring
  • The BSC forms the basis for the Operation Board Report
  • Debate at the OB is focused on reds/ambers in RAG
slide25

Customer Perspective:

“To achieve our vision,how must we look toour customers?”

Financial or Public Good Perspective:

“If we succeed, how

will we look to ourtaxpayers/ratepayers/stakeholders?”

Internal Perspective:

“To satisfy our customers/stakeholderswhich business processesmust we excel at?”

Learning & Growth Perspective:

“To achieve our vision,how must our organisationlearn and improve?”

The Mission,

Vision and Goal

slide26

Mission: To contribute to the public good by supplying the mapping information for Northern Ireland

Vision: To enhance our Public Good Role

To achieve financial self sustainability

Costs/Income

Financial Perspective

Productivity

Growth

Corporate Goal

Manage Costs

Asset Management

Sustain Income

New Income

Customer Perspective

Quality

Function/Choice

Service

Relationship

Key Business Processes

SIAM

Product

Management

Channel

Management

Data Update

& Supply

Managing our Customer Relations

Organisational Learning and Growth Perspective

Strategic Competencies

Key Job

Key Competences

Strategic Information

Technologies

Information Needs

ICT Systems, Infrastructure

Climate for Action

Leadership, Teamwork

Alignment Structure

Culture

slide29

Mission: To contribute to the public good by supplying the mapping information for Northern Ireland

Vision: To enhance our Public Good Role

To achieve financial self sustainability

Costs/Income

Financial Perspective

Productivity

Growth

Corporate Goal

Manage Costs

Asset Management

Sustain Income

New Income

Customer Perspective

Quality

Function/Choice

Service

Relationship

Key Business Processes

SIAM

Product

Management

Channel

Management

Data Update

& Supply

Managing our Customer Relations

Organisational Learning and Growth Perspective

Strategic Competencies

Key Job

Key Competences

Strategic Information

Technologies

Information Needs

ICT Systems, Infrastructure

Climate for Action

Leadership, Teamwork

Alignment Structure

Culture

implementation of the sm bsc
Implementation of the SM/BSC
  • Set up Strategy Map Implementation Team (SMIT)
  • ‘Best practice’ recommendation, following Strategy Map and Balanced Scorecard training.
  • Strategy Board selection of team – Cross Divisional representation (4 Members, 4 Divisions)
  • SMIT Role
  • To develop a process to effectively implement the 2005-06 Strategy Map through the Business Planning process and to embed it within the culture of the Agency
business planning hierarchy
Business Planning Hierarchy

Link between

- Strategy Map

- Corporate BSC

- Divisional BSC

- Branch BSC

- PPA & PDP

embedding the strategy map benefits
Embedding the Strategy Map – Benefits:
  • Understanding corporate strategy across organisation
  • Understanding the Strategy Map/BSC as tools
  • Ownership / buy-in through involvement
  • Close alignment of resources (capital, DRC and manpower) to targets
  • Basis for resource negotiations
  • Basis for prioritisation decisions in-year
  • Redesign of Personal Performance Agreements re Personal Strategy Map
  • Better alignment of Personal Development Plans
  • Teambuilding
  • Cross-Divisional working
strategy map implementation learning points
Strategy Map Implementation: Learning Points
  • Process is not intellectually over-complex but needs full involvement and dedicated time across the organisation.
  • Supportive sponsorship by senior management is essential
  • The Strategy Map and BSC will evolve as experience grows
  • Choice and Definition of targets & measurements are critical and difficult but engender useful debate
  • Cross-Divisional team membership of SMIT
  • Appropriate BSC Training for Strategy Board and SMIT members
  • SMIT dedicated time to develop the process
  • SMIT must drive the process
strategy map implementation key issues
Strategy Map Implementation: Key Issues
  • Clear and unambiguous communication – ensuring correct levels of expectation
  • Early development of a Flowline
  • Early booking of diary dates and appropriate venues (Allocate dedicated time for managers and staff around milestones)
  • Timely delivery of documentation for milestones
  • Strictly adhered to flowline timescales – NO exceptions
  • Involvement of all managers and staff – NO exceptions
  • Review the Strategy Map each year but stick to it in-year
summary strategy map balanced scorecard
Summary: Strategy Map & Balanced Scorecard
  • A tool that needs involvement and clear leadership
  • Keep it simple
  • Hone it
  • Explain it
  • Integrate it into day-to-day activities
  • Review it
  • Adapt it