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Realizing Operational Efficiency . In partnership with. Queen’s School of Business. Dr. Elspeth Murray Associate Professor & Managing Director, Queen’s Centre for Business Venturing Queen’s School of Business. Why Are You Here?.

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realizing operational efficiency

Realizing Operational Efficiency

In partnership with

Queen’s School of Business

Dr. Elspeth Murray

Associate Professor & Managing Director,

Queen’s Centre for Business Venturing

Queen’s School of Business

why are you here
Why Are You Here?

“Many more individuals of each species are born than can possibly survive. Consequently, there is a frequently recurring struggle for existence, and it follows that any being, if it varies however slightly in any manner profitable to itself under the complex conditions of life, will have abetter chance of surviving, and thus be naturally selected.”

Charles Darwin, The Origin of the Species

EM-506

the simple message
The Simple Message?

Change before you have to!

agenda
Agenda
  • Great Organizations – Long term success
  • Your Radar Screen: Key Trends
    • Know when & what to change….
  • Your Edge: Critical Implications
    • ….and in what ways
what was darwin really saying
What Was Darwin Really Saying?

Visionary leaders

Establishdirection

Raise thebar

Ability toinvent thefuture

Innovativeapproaches

Create newrules

Outwit thecompetition

Defined &

forward looking

strategy

Expect changes

Adjust

along the

way

Ability tomake ithappen

Dynamicculture

Pride, passion

Energy

PR-103

the executive balancing act
The Executive "Balancing Act"

Create and build for the future

Manage today's business efficiently and effectively

EM-507

slide8
If you don't know what to do with many of the papers piled on your desk, stick a dozen colleagues initials on them and pass them along. When in doubt, route.

~ Malcolm S. Forbes ~

forward thinkers their radar screen
Forward Thinkers: Their Radar Screen
  • Increasing expectations from all stakeholder groups
  • Post-911 fallout
  • Post-corporate scandal fallout
  • Technological shifts
  • Demographic shifts
  • Globalization

PR-604

your radar screen stakeholder expectations
Your “Radar Screen”: Stakeholder Expectations
  • Shareholders – push for quarterly returns, ‘what have you done for me lately’
  • Employees – ‘what’s in it for me?’
  • Customers – better, faster, cheaper customized, high quality
  • Partners – easy to do business with
  • Suppliers – want ‘your’ attention, lock you in
important innovations by customers
Category

Health Products

Personal Care

Sports

Food

Office

Computers

Apparel

Example

Gatorade

Protein-based Shampoo

Mountain Bike

Chocolate Milk

White-out Liquid

E-mail, Desktop Publishing

Sports Bra

Important Innovations by Customers
how often do users innovate
Study

Scientific Instruments

Process Machinery

Tractor Shovels

Plastics

First Device Used in Field

Developed and Built By:

Product Product

User Manufacturers

77% 23%

67% 33%

6% 94%

0% 100%

How Often Do Users Innovate?

Source: E.v. Hippel, The Sources of Innovation, Oxford University Press, 1988

innovation patterns documented
Innovation Patterns Documented

Example: Scientific Instruments

77% of

Innovations

Developed by

Users

First firm

Bringing

Product to

Markets

5 – 7 Year

Transfer Lag

implications of customer loyalty
Implications of Customer Loyalty

100%

77%

  • Of those who rated:
  • A very satisfied rating, 77% would definitely recommend
  • A satisfied rating, 21% would definitely recommend
  • Neither satisfied nor dissatisfied rating, 1% would
  • definitely recommend
  • A dissatisfied or very dissatisfied rating, 0% would
  • definitely recommend

21%

1%

0%

0%

VeryDissatisfied

NeitherSatisfiednor Dissatisfied

VerySatisfied

Satisfied

Dissatisfied

high employee satisfaction equals customer satisfaction loyalty
High Employee Satisfaction Equals Customer Satisfaction -> Loyalty

5.0

4.01

Customer

Satisfaction

Rating

3.80

3.67

Low

2.5 - 3.0

Average

3.0 - 3.5

Leaders

3.5 - 4.5

Employee Satisfaction Range

PR-300

drivers of employee satisfaction
Drivers of Employee Satisfaction
  • Ability to satisfy customer needs
  • Possesses the appropriate skills and knowledge
  • Ability to influence the workplace

PR-461

employee customer satisfaction drives profitability two ways
Employee/Customer Satisfaction Drives Profitability - Two Ways

Employee

Satisfaction

Outstanding

Service

Satisfied

Customers

Job

Involvement

Customer

Loyalty

Ideas

Productivity

ContinuousImprovement

Profitability

your radar screen post 911 fallout
Your “Radar Screen”: Post-911 Fallout
  • More hassles at the border – the future of JIT in jeopardy?
  • More regulation of transportation industry – cost pressures, H/R pressures
  • Greater scrutiny of transported goods – more delays, Homeland Security, “where is your stuff”
  • “North American” standards and compliance – increased costs of coordination
your radar screen post corporate scandal fallout
Your “Radar Screen”: Post-corporate scandal fallout
  • Corporate governance – tough to find directors, more ‘fingers in’ the business
  • SOX compliance – bureaucracy & controls abound taking ‘eyes’ off the business
  • Environmental liability
your radar screen technological shifts
Your “Radar Screen”: Technological Shifts
  • RF id (item)
  • Nanotechnology
  • Electronic Paper/Digital Ink
  • On-Demand Software
your radar screen demographic social shifts
Your “Radar Screen”: Demographic & Social Shifts
  • Aging workforce
  • 25% of business owners retiring in next 5 years
  • Work-life balance concerns
your radar screen globalization
Your “Radar Screen”: Globalization
  • Outsourcing & offshoring – not just goods but services also
  • Key trends driving these views:
    • Declining shipping costs & abundant and cheap bandwidth China and India emerging as economic forces
the operations challenge
The Operations Challenge

Performance

Are competitors getting better?

Faster?

We are getting better!

Time

Competition - Ruthless and Dynamic

PR-048

so what can you do
So What Can You Do?
  • Good news and bad news – depends on your perspective…..
  • Every industry is impacted, in different but significant ways
  • To lead and manage effectively in the face of all this change, operations professionals need to be very good at:
      • Setting strategy – recognizing the need to change, creating a plan
      • Fostering innovative & creative thinking
      • Engaging employees
      • Leading and managing the changes that result
your radar screen tracking leading indicators
Your Radar Screen: Tracking Leading Indicators

Strategic Health

Strong

Weak

Monitor performance

Execute well

Avoid complacency

Operating performance

may mask deteriorating

strategic health

Re-formulate strategy

Strong

Operational

Health

Avoid long-term pain

for short-term gain

Operational program:

Improve margins, costs,

productivity

Turnaround required:

Improve operating

performance

Re-position the

business

Weak

streamlined strategic planning process
Streamlined Strategic Planning Process

StrategicIssue

Analysis

Strategic PlanDevelopmentWorkshop

InformalPre-Work

Size-UpWorkshop

  • Environment
    • Macro
    • Industry
    • Competition
  • Corporate
    • Capabilities
  • Business
    • Positioning
    • Critical successfactors
  • Vision/mission
  • Objectives
  • Strategies
  • Initializing actionplans
    • Who
    • What
    • When
    • How much
  • Implementationissues

Benchmark

Discussions

Study Groups

‘Radar Screen’

Review

Implement

and Review

Task Forces

Management

Reviews

Customer

Surveys

4-6 weeks

2-3 days

2-4 weeks

2-3 days

PR-029

engagement link to business results
Engagement: Link to Business Results
  • Best Employer research has identified a strong and consistent link between engagement and various performance measures. An analysis of the 2003 study results comparing the 50 organizations that were identified as the 50 Best (“Best”) to the 78 organizations that did not make the top 50 list (“Rest”) indicated the following:

* Information is based on total shareholder returns for publicly traded organizations over a five-year period (annualized over five years: 1997 to 2002).

engagement 15 related drivers

People

  • Senior Leadership
  • Manager
  • Co-workers

Work / Values

  • Intrinsic Motivation
  • Resources
  • Corporate Citizenship

Engagement

Opportunities

Total Rewards

  • Career Opportunities
  • Development Opportunities
  • Pay
  • Benefits
  • Recognition

Procedures

  • People Practices
  • Performance Review

Quality of Life

  • Work / Life Balance
  • Physical Work Environment
Engagement: 15 Related Drivers
  • Hewitt’s Engagement Model TM
the importance of innovation
The Importance of Innovation

“… the only sustainable competitive advantage is to innovate consistently …”

… remember Digital Equipment Corporation?

… remember when gold was the precious consumer metal?

EM-369

different levels of innovation
Different Levels of Innovation

High

Incremental “Tinkering at the Edges”

Degree of Difficulty

Quantum “New Box(es)”

Breakthrough “Outside the Box”

Low

EM-733

fostering innovation
Fostering Innovation
  • Intrinsically motivated people
  • Objectives around innovation NOT just invention
  • Stay ‘close’ to customers
  • Opportunities for diversity of perspective
  • A disciplined process to evaluate and fund new initiatives with potential and ‘weed out’ the rest
  • Time for people who do the work, to “think” creatively
slide32
“Strategies take on value only as committed people infuse them with energy”

Philip Selznick

EM-357

managing change it s not what you do it s how you do it
Managing Change: It’s Not What You Do, It’s How You Do It
  • Family Vacations
    • We all know what makes for a smooth journey on the drive across Canada: create the winning conditions
  • Physics
    • It’s all about momentum and overcoming inertia -> GUIDANCE, SPEED & CRITICAL MASS
  • Heterogeneity
    • The workforce is diverse, and typically operates under the ’20:70:10’ principle when it comes to change
winning conditions for change
Winning Conditions for Change
  • Guidance – share the itinerary
    • Establish the need, create shared understanding of the entire journey, make a plan
  • Speed – overcoming inertia
    • Create urgency, focus on a ‘critical few’, enable rapid decision making, deploy initiatives in parallel
  • Critical mass – gaining momentum
    • Provide leadership, operationalize ’20-70-10’, deal with the ‘arsonists & saboteurs’

Find the ‘Tipping Point’

long term success
Long Term Success

Visionary leaders

Establishdirection

Raise thebar

Ability toinvent thefuture

Innovativeapproaches

Create newrules

Outwit thecompetition

Defined &

forward looking

strategy

Expect changes

Adjust

along the

way

Ability tomake ithappen

Dynamicculture

Pride, passion

Energy

PR-103

staying ahead reading list
Staying Ahead – Reading List
  • The Economist
  • MIT’s Technology Review
  • The Tipping Point (Gladwell)
  • Fast Forward: Organizational Change in 100 Days (Murray & Richardson)
  • Built to Last (Collins & Porras)
  • Good to Great (Collins)
slide38

© 2004 Microsoft Corporation. All rights reserved.

This presentation is for informational purposes only. Microsoft makes no warranties, express or implied, in this summary.