-
Allocating Resources to Support Strategy Execution
- vFunding strategic initiatives that can
- make
- a contribution to strategy implementation
- vFunding efforts to strengthen
- competencies
- and capabilities or to create new ones
- vShifting resources — downsizing
- some areas, upsizing others, killing
- activities no longer justified, and funding
- new activities with a critical strategy role
-
Creating Strategy-Supportive Policies and Procedures
nRole of new policies
- vChannel behaviors and decisions
- to promote strategy execution
- vCounteract tendencies of
- people to resist chosen strategy
nToo much policy can be as stifling as
vWrong policy or as
vChaotic as no policy
- nOften, the best policy is empowering
- employees, letting them operate
- between the “white lines” anyway they think best
-
nKey tools to promote continuous improvement
vSix Sigma quality controlvBusiness process reengineeringvTQM
-
nThe best practice must have a proven
record in
- vSignificantly
- lowering costs
- vImproving
- quality or performance
- vShortening
- time requirements
- vDelivering
- some other highly positive operating outcome
-
nTo be valuable and transferable, a best
practice must
- vDemonstrate
- success over time
- vDeliver
- quantifiable and highly positive results
and
Be repeatable
-
Characteristics of Benchmarking
- nInvolves
- determining how well a firm performs
- particular activities and processes when compared against
- v“Best in
- industry” or “Best in world” performers
- nGoal Æ Promote achievement of operating excellence in performing
- strategy-critical activities
- nCaution Æ Exact duplication of best
- practices of other firms is not feasible due
- to differences in implementation situations
- nBest approach – Best practices of
- other
- firms need to be modified
- or adapted
- to fit a firm’s own specific situation
-
What Is Total Quality Management?
- nA philosophy of managing a set of business
- practices that emphasizes
- vContinuous improvement in all phases of
- operations
v100 percent accuracy in performing activities
- vInvolvement and empowerment
- of employees at all levels
vTeam-based work design
vBenchmarking and
Total customer satisfaction
-
Popular TQM Approaches
- Deming’s 14 Points
- Crosby’s 14 Quality Steps
- Baldridge Award Criteria
- The Juran Trilogy
-
Six Sigma Quality Control
- nSix Sigma is a
- disciplined,
- statistics-based system aimed at having not more than 3.4 defects
- per million iterations for any business practice
nTwo approaches to Six Sigma
- vDMAIC process (Design, Measure,
- Analyze, Improve, Control)
- «An improvement system for existing
- processes falling below specification
- and needing incremental improvement
- «A great tool for improving performance
- when there are wide variations in
- how
- well an activity is performed
- vDMADV process (Define, Measure, Analyze, Design, Verify) or DFSS (Design for Six
- Sigma)
- «An improvement system used to develop new processes or products at
- Six Sigma quality levels
-
Characteristics of Six Sigma Quality Programs
nSix Sigma is based on three principles
- 2. All
- processes have variability
- 3. All
- processes create data to explain variability
- nDMAIC process is a good
- approach to improve
- performance when wide
- variations in how well an activity is performed exist
nEvidence exists that innovation can be stifled by Six Sigma programs
- nBlended
- approach to Six Sigma implementation involves
- vPursuing incremental
- improvements
- in operating efficiency and
- vGiving freer rein to
- R & D and other processes
- focusing on new ways to offer value to customers
-
Approach of the DMAIC Process
nDefine
vWhat constitutes a defect?
nMeasure
- vCollect data to find out why, how,
- and how often the defect occurs
- nAnalyze – Involves
- vStatistical analysis of the metrics
- vIdentification of a “best practice”
- nImprove
- vImplementation of the documented “best practice”
- nControl
- vEmployees are trained on the “best practice”
- vOver time, significant improvement in quality occurs
-
nKey challenges in implementing Six Sigma quality programs
1. Obtain managerial commitment
2. Establish a quality culture
3. Full involvement of employees
-
Business Process Reengineering vs. Total Quality Programs
nReengineering
- vAims at quantum gains of
- 30 to 50% or more
nTotal quality programs
Stress incremental progress
-
What Areas Should Information Systems Address?
nCustomer data
nEmployee data
- nSupplier/partner/collaborative
- ally data
- nFinancial
- performance data
-
Balancing Positive vs.Negative Rewards
nElements of both are necessary
- vChallenge and competition are
- necessary for self-satisfaction
nPrevailing view
- vPositive approaches work better
- than negative ones in terms of
«Enthusiasm
«Dedication
«Creativity
«Initiative
-
Management’s most powerful tool for mobilizing
employee commitment to competent strategy execution and operating excellence is
. a properly designed reward structure.
-
A well-designed reward system
- makes strategically relevant
- measures of performance the dominant basis for incentive compensation.
-
From a strategy-implementing/strategy-executing perspective, a company's operating budget should
be strategy-driven and based primarily on how much each organizational unit needs to carry out its piece of the strategic plan efficiently and effectively.
-
rescribing policies and operating procedures aid the task of implementing strategy by
by providing top-down guidance about how certain things need to be done, helping ensure consistency in how strategy-critical activities are performed, and by promoting the creation of a work climate that facilitates good strategy execution.
-
A "best practice"
is a method of performing an activity that has been shown consistently deliver superior results compared to other methods.
-
Using benchmarking and best practices as a means of achieving operating excellence
is a four-step process that entails (1) benchmarking how well a company performs specific tasks and activities against best-in-industry or best-in-world performers, (2) adapting the various best practices to fit the company's situation and then implementing them, (3) continuing to benchmark company performance of activities against best-in-industry or best-in-world performers, and (4) continuing to improve and refine the company's performance of its activities and thereby move closer to operating excellence.
-
Business process reengineering is a tool for
pulling the pieces of strategy-critical activities out of different departments and unifying their performance in a single department or cross-functional work group that has charge over the whole process and can be held accountable for performing the activity in a better, cheaper, and/or more strategy-supportive fashion.
-
Total quality management (TQM)
s a philosophy that entails creating a total quality culture bent on continuously improving the performance of every task and value chain activity.
-
Six Sigma quality program
utilizes advanced statistical methods to improve quality by reducing defects and variability in the performance of business process
-
The use of state-of-the-art information and operating systems
not only enable better strategy execution but also strengthen organizational capabilities (perhaps enough to provide a competitive edge over rivals).
-
Management's most powerful tool for mobilizing employee commitment to competent strategy execution and operating excellence is
a properly designed reward structure.
-
Which of the following is not characteristic of a compensation and reward system designed to help drive successful strategy execution?
Keeping performance incentives and bonuses to less than 15% of total compensation
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