A Tale of Two Companies - PowerPoint PPT Presentation

Loading...

PPT – A Tale of Two Companies PowerPoint presentation | free to download - id: 1dbd08-ODdkN



Loading


The Adobe Flash plugin is needed to view this content

Get the plugin now

View by Category
About This Presentation
Title:

A Tale of Two Companies

Description:

Balanced Scorecard Budgeting. Fusing the Link Between Strategy & Budgeting ... Margaret Cho. PROJECT LEADER. 1) Organize a cross functional team April '05 ... – PowerPoint PPT presentation

Number of Views:40
Avg rating:3.0/5.0
Slides: 51
Provided by: lawrenc125
Category:
Tags: cho | companies | margaret | tale | two

less

Write a Comment
User Comments (0)
Transcript and Presenter's Notes

Title: A Tale of Two Companies


1
(No Transcript)
2
Outline
  • A Tale of Two Companies
  • 3 Immutable Laws (and their implications)
  • Balanced Scorecard Budgeting
  • Keys to Success
  • QA

3
A Tale of Two Companies
Company snapshot which company has been more
successful?
Company A
Company B
4
Why has Company A been more successful?
5
Company snapshot (part 2) why has Company A been
more successful?
Company A
Company B
6
Which way should the arrow go? Which set of
measures drives the other?
7
Measures for What Really Drives Success in the
Business

8
Set annual plan targets (numerical)
Bake into the budget
Report on every month to sr. exec team
Analyze variances
9
Most companies manage to the PL while the actual
drivers of business performance fade into the
background.
10
Highly successful companies manage to the real
drivers of success…
…and also understand how and why they impact the
PL
11
Balanced Scorecard Budgeting
12
Outline
  • A Tale of Two Companies
  • 3 Immutable Laws (and their implications)
  • Balanced Scorecard Budgeting
  • Keys to Success
  • QA

13
3 Immutable Laws
Immutable Law 1 Strategy has no value on its
own other than to achieve specific goals.
Strategy for strategys sake is corporate make
work.
Implication
Set corporate targets first, then build a
strategy to meet them. Thats purpose built
strategy.
14
3 Immutable Laws
Immutable Law 2 Its all about execution. A
plan exists only in PowerPoint until its
executed.
Implication
Build the ongoing monitoring and reporting
mechanisms to ensure plans are being followed
through on.
15
3 Immutable Laws
Immutable Law 3 Any project, strategic or
operational, will die unless resources are
allocated to it.
Implication
The resources necessary to see a project though
must be identified and included in the operating
budget.
16
Outline
  • A Tale of Two Companies
  • 3 Immutable Laws (and their implications)
  • Balanced Scorecard Budgeting
  • Keys to Success
  • QA

17
Balanced Scorecard Budgeting
KPIs
Plan
Monitor
Budget
18
Balanced Scorecard Budgeting
KPIs
Step 1 Identify Company KPIs
19
Step 1 Identify Company KPIs
Best KPIs
Worst KPIs
Used to make better decisions
Shelfware
Embraced by line managers
Seen as not really relevant to line managers
Reflects what actually drives success in the
business
Nothing but Financial Stats
Cocktail Napkin
Telephone Directory
20
Step 1 Identify Company KPIs
The Value Driver Workshop
Who The Senior Management Team (or designates)
What A one day Workshop to identify what really
drives success in the business (e.g, Innovation,
being the Low Cost Producer, etc.)
How A series of facilitated workshop exercises
Next
21
Step 1 Identify Company KPIs
Identification of KPIs
Who The project work team
What A Workshop to translate what Senior
Management has identified as driving the success
of the business into Key Performance Indicators
(KPIs)
How A series of facilitated brainstorming
exercises
22
Step 1 Identify Company KPIs
Step 1 Deliverables A Company Scorecard of KPIs
23
Balanced Scorecard Budgeting
KPIs
Step 2 Establish targets for the KPIs
Plan
24
Step 2 Establish Targets for KPIs
KPI Target Setting
Who KPI Teams
What Benchmarking and historical analysis to
determine both long term (strategic) and short
term targets for each KPI
How After a kick off meeting led by the KPI team
leader, the group conducts benchmarking and
historical trend analysis to establish long term
(i.e., 3 to 5 years) targets as well as targets
for the upcoming year. Depending upon the
circumstances, this may take a few days to a few
weeks.
25
Step 2 Establish Targets for KPIs
Step 2 Deliverables Targets for KPIs
2005
2006
2007
Customer Satisfaction Index
80
85
90
Defects per Thousand
On Time Delivery
New Product Dev Cycle Time
Employee Satisfaction Index
of Sales Coming From Products Introduced in the
Last 2 Years
Product Returns
26
Balanced Scorecard Budgeting
KPIs
Plan
Step 2 Establish targets for the KPIs
Step 3 Develop Strategy to Achieve Targets
27
Step 3 Develop Strategy to Achieve Targets
Develop Strategy to Achieve Targets
Who KPI Teams SMEs (subject matter experts)
What Each KPI team develops a strategy that is
designed to achieve the targets for their KPIs.
This is a long term view that incorporates
strategic initiatives.
How Each KPI team, working with internal experts
and other subject matter experts develops a
strategy, including long term initiatives, that
if executed will achieve the targets established
for the KPIs.
28
Step 3 Develop Strategy to Achieve Targets
Step 3 Deliverables Strategic Initiative Summary
KPI Employee Satisfaction
05-07 Targets
2005 80
2006 85
2007 90
Strategy Description
Through investments job rotation and other
programs, we will make our employees the most
sought after in the industry. Clearly this will
be a win for our employees, but it will also be
a win for the company. If, in fact, our
employees are the most sought after in the
industry, that will be a major selling point in
recruiting new talent. It also serves as an acid
test for us, for in fact our employees are the
most sought after in the industry, they most
sought after skills and know how. We will be
known as the company that enables employees to
build their marketable skills and understanding
of the business.
Leader
Hans Bergen V.P., Career Development
  • Integrate the goal of developing employees into
    each managers bonus calculation
  • Develop a career rotation program
  • Set standards for hours of training per year for
    each job level and monitor
  • Create a job shadowing program
  • Launch an alumni network

Strategic Initiatives
29
Balanced Scorecard Budgeting
KPIs
Plan
Step 2 Establish targets for the KPIs
Step 3 Develop Strategy to Achieve Targets
Step 4 Develop Action Plans to Achieve Near Term
Targets
30
Step 4 Create Action Plans to Achieve Near Term
Targets
Develop Action Plans
Who KPI Teams
What Each KPI team develops Action Plans that
are designed to achieve the targets for their
KPIs. Particular attention is paid to what can be
done in the first year.
How Each KPI team, working with internal experts
and other subject matter experts develop Action
Plans complete with Activities, Tasks, and
Milestones.
31
Step 4 Create Action Plans to Achieve Near Term
Targets
Develop Action Plans
Who KPI Teams
What Each KPI team develops Action Plans that
are designed to achieve the targets for their
KPIs. Particular attention is paid to what can be
done in the first year.
How Each KPI team, working with internal experts
and other subject matter experts develop Action
Plans complete with Activities, Tasks, and
Milestones.
32
Step 4 Create Action Plans to Achieve Near Term
Targets
Step 4 Deliverables Action Plans (Summary View)
Career Rotation Program
PROJECT LEADER
DEADLINE
Margaret Cho
December
BRIEF DESRIPTION
Enable employees to rotate through various
business units/ functional areas to build their
skills and understanding of the business.
(HIGH LEVEL) RESOURCE REQUIREMENTS
KEY MILESTONES
1) Organize a cross functional team April
05 2) Draft a complete project charter
(Objectives, Scope, Approach, Structure) May
05 3) Complete RFP process for outside expert
July 05 4) Develop program blueprint Oct
05 5) Validate program with Sr. Management Nov
05 6) Implement program -- 2006
  • INTERNAL
  • 8 Person cross functional team (on average 2
    hours a week for 9 months)
  • 1 Procurement specialist to help us through the
    RFP process
  • EXTERNAL
  • HR Specialist (TBD)

33
Step 4 Create Action Plans to Achieve Near Term
Targets
Step 4 Deliverables Action Plans (Gant Chart)
34
Balanced Scorecard Budgeting
KPIs
Plan
Step 5 Develop Action Plan Budgets
Budget
35
Step 5 Develop Action Plan Budgets
Develop Action Plan Budgets
Who KPI Teams, working closely with Finance
What Each KPI team works with the Finance build
budgets for their Action Plans
How Each KPI team, working with Finance,
identifies the resources they need to execute
their Action Plans. Finance then translates these
resource requirements into SGA line item detail
and CAPEX requests for budget purposes.
36
Step 5 Develop Action Plan Budgets
Step 4 Deliverables Action Plans Budgets
37
Balanced Scorecard Budgeting
KPIs
Plan
Step 5 Develop Action Plan Budgets
Budget
Step 6 Combine with the Baseline Budget
38
Step 6 Combine with the Baseline Budget
Create a Baseline Budget
Who Finance and budget managers
What The Finance area facilitates the
development of a baseline budget (keep the
lights turned on) that can then be combined with
the Action Plan budgets to produce a total
company plan
How Working with managers, the Finance area
develops a baseline budget, that incorporates all
elements of the annual plan PL, that is then
combined with the Action Plan budgets.
39
Step 6 Combine with the Baseline Budget
Step 6 Deliverables A Combined Budget
(Incorporating both Action Plan Budgets and the
Baseline Budget
40
Balanced Scorecard Budgeting
KPIs
Plan
Monitor
Budget
Step 7 Establish ongoing reporting and review
41
Step 7 Establish Ongoing Reporting
Establish Ongoing Reporting Review
Who Finance and IT work team.
What Finance and IT work together to build an
ongoing reporting mechanism for Financial
Results, KPIs and the progress of the Action
Plans.
How A combined Finance and IT work team identify
requirements and select the tools that will
enable monthly monitoring of results (both
financial and KPIs). In addition, the work team
will develop a process for the monthly review of
progress of Action Plans alongside of the
financial results.
42
Step 7 Establish Ongoing Reporting
Step 7 Deliverables Reporting and monitoring
tools for KPI results
43
Step 7 Establish Ongoing Reporting
Step 7 Deliverables Reporting and monitoring
tools for progress of Action Plans
Career Rotation Program
PROJECT LEADER
DEADLINE
Margaret Cho
December
BRIEF UPDATE
Weve slipped 60 days due to a delay in reaching
a decision on our RFP vendor, but we should be
able to make up half that time.
KEY QUESTIONS
KEY MILESTONES
1) Organize a cross functional team April
03 2) Draft a complete project charter
(Objectives, Scope, Approach, Structure) May
03 3) Complete RFP process for outside expert
July 03 4) Develop program blueprint Oct
03 5) Validate program with Sr. Management Nov
03 6) Implement program -- 2004
Project on Schedule?
NO
Days Delayed
60
Reasons?
Senior management approval of vendor by 60 days.
Actions to get back on track?
Streamlining brainstorming and documentation
should result in a savings of 30 days
44
Outline
  • A Tale of Two Companies
  • 3 Immutable Laws (and their implications)
  • Balanced Scorecard Budgeting
  • Keys to Success
  • QA

45
Keys to Success
Keys to Success 1 Benchmark your company
against national averages to quantify if your
organization could benefit (or not)
  • Do people know what the strategy is?
  • Do they know how it links to the plan/budget?
  • Do they know what the companys key performance
    measures are?
  • Do they think they have anything to do with them?
  • Do goals really cascade down through the
    organization?
  • Are we any different from national averages?

46
Keys to Success
Keys to Success 2 Dont create a separate
budget exercise bring balanced scorecard
budgeting into your current process
  • Many companies make the mistake of creating a
    separate process for budgeting balanced scorecard
    initiatives.
  • But the real budgeting process still dictates
    how resources are allocated.

47
Keys to Success
Keys to Success 3 Know thyself. Customize
Balanced Scorecard Budgeting to suit your culture
planning processes
  • If you currently employ a rolling six quarter
    forecast, for example, then tailor the Balance
    Scorecard Budgeting approach to synch up with it.
  • If your strategic planning process looks out five
    years, for example, then your KPI targets should
    go out five years.

48
Keys to Success
Keys to Success 4 Pick the right technology
tools to enable Balanced Scorecard Budgeting.
  • After designing your Balanced Scorecard Budgeting
    process, develop a set of requirements for a
    planning/reporting system.
  • Determine if your current set of tools can meet
    the requirements
  • If the current set of tools will not adequately
    meet the needs, conduct a vendor selection
    process (with a minimum of three vendors).

49
Outline
  • A Tale of Two Companies
  • 3 Immutable Laws (and their implications)
  • Balanced Scorecard Budgeting
  • Keys to Success
  • QA

50
QA
About PowerShow.com