ملتقى التميز المؤسسي 2015 - اليوم الثاني - From Strategy to Results: How can you get it done?

From Strategy to Results: How
can you get it done?
Mathias Mangels
Partner Tantum Group
Riyadh , Saudi Arabia
April 2015
EXCELLENCE DAYZ / The Road to Management Excellence

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Is your strategy successful? Does it generate value for your organization?

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TABLE CO CONTENT
1. Do you have a good strategy? Slide
2. What is the content of Strategy? Slide
3. Strategy is about learning and adjusting. Correct? Slide
4. Strategy is about change. Are you leading your strategy? Slide
5. Quick Q&A Slide

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TABLE CO CONTENT
5. Quick Q&A Slide

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• PRIVATE SECTOR
GOOD STRATEGY?

-7-
WHAT IS OUR WINNING ASPIRATION?

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WHAT CAPABILITIES MUST WE HAVE?

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• PUBLIC SECTOR
GOOD STRATEGY?

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• SUSTAINABLE DEVELOPMENT
WHAT IS OUR WINNING ASPIRATION?
KPI 2007 2010 2015
GNP Growth 5,5%
a.a.
5,5%
a.a.
7,0 %
a.a.
Industrial GNP
Growth
7,0%
a.a.
7,0%
a.a.
8,5%
a.a.
Productivity
Index - Industry Cresce
r 4%
a.a.
Cresce
r 6%
a.a.
Cresce
r 6%
a.a.
Unemployment
Rate
9,0% 7,0% 6,0%
Export / GNP
22% 25% 30%
Taxes 33% 30% 27%

SISTEMATIC LINKIGES TO THE ASPIRATIONBasesoftheDevelopmentProcesses&ActivitiesMarket
Expansion of the
Industrial Base
International insertion
Sustainable development
ResultsForthe
Country
Foster the Development
of Small and Medium
Enterprises
To stimulate
and fortify
Productive
Chains and
clusters
Enterprise
management and
Productivity
Innovation Social and Ambient
responsibility
Promote
competitive
Industrialization of
less developed
Regions
Enterprise leadership Education and Health
Institutional and Regulatory Environment
• Society
• Diligent
• Entrepreneurs
• Government
Economic
growth
Expansion of
the businesses
with Generation
of Value
More Job and
Income
Version. - 20-05-2005
Interested
people
Infrastructure
Availability of
Resources
To develop a New Standard of Financing
for the Productive Sector at Internationally
Competitive Costs
Reduce burocracy of the State,
assuring its transparency and
efficiency in the use of public
resources
Reduce tax burden,
simplifying and
optimizing the tax
system
Competitive a quality
products
To speed up the
Growth of the
Industrial Product
Positioning

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WHERE WILL WE PLAY?
27 state federations + 900 industry sectors.
DEVELOPING A BETTER ECONOMIC STANDING

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WHAT CAPABILITIES MUST WE HAVE?
Enterprise
Leadership
infrastructure Availability of Resources
Institutional and regulatory
Environment
Education and
Health
Developing on Top of our Capabilities
LEVARAGE
Basesdo
Desenvolvimento
Processose
Atividades
Mercado
Industrial Base Expansion
Inserção Internacional
Sustainable Development
Resultados
ParaoPaís
Fomentar Desenvolvimento da
Micro, Pequena e Média Indústria
Estimular e
Fortalecer Cadeias
Produtivas e APLs
Gestão Empresarial e
Produtividade
Inovação
Responsabilidade Social e Ambiental
Promover a
Industrialização
Competitiva das Regiões
Menos Desenvolvidas
Liderança Empresarial Educação e Saúde
Institutional and Regulatory Environment
• Sociedade
• Trabalhadores
• Empresários
• Governo
Economic
Development
Business
Development and
Value Generation
Employment and Pay
check
Versão . – 20-05-2005
Partes
Interessadas
Infra-Estrutura
Availability of
Resources
Desenvolver um Novo Padrão de Financiamento para o
Setor Produtivo a Custos Internacionalmente
Competitivos
Promover a Redução do Tamanho do Estado e a
Desburocratização, para Garantir a sua
Transparência e Eficiência na Utilização de
Recursos Públicos
Reduzir a Carga,
Simplificando e
Aperfeiçoando o Sistema
Tributário
Produtos Competitivos e de
Qualidade
Acelerar o Crescimento do
Produto Industrial
Positioning

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TABLE CO CONTENT
5. Quick Q&A Slide

STRATEGY ID DEFINED BY KPIS AND TARGETS
*estimativa

Innovation KPI
KPI Description
Private Investment in Innovation/
GNP
Presents the private investmenmt
in innovation and R%D as a
percentage of GNP
Source: MCT

Innovation Target
KPI 2007 2010 2015
Innovation
Investment /GNP
0,6% 0,8% 1,4%

Strategic Programs Supporting Innovation
58. Promotion of the Intellectual Property and its Protection in the
Country.
59. Development and strong support for new companies in
incubation phase – start ups.
60. New policies to support financing and tax rates for innovation
projects.

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TABLE CO CONTENT
5. Quick Q&A Slide

Process of Management of the Map of the Industry
Thematic Advisory
Group
Thematic units
To follow up programs,
measures and targets
Consolidate
information
Monitor the
Performance of
Each strategic
theme
Critical analysis
Consolidate
recommendations
Recommend
actions and
projects
To provide Internal and
External Communication
Recommend
objectives,
measures, targets
and
actions/projects
Management of the
Map
Digital
Cockpit
Management
System of the
Industry Map
FNI
Monitor the industry
strategic
performance and
validate objectives,
measures
targets, programas

Strategic Analysis
Digital
Cockpit
Assure energy availability at
competitive prices
System of
Management of the
Map of the Industry
Installed capacity of generation of electrical energy
Subject Infrastructure

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TABLE CO CONTENT
5. Quick Q&A Slide

5%
25%
60%
85%
9 of 10 organizations fail to
execute strategy
Clive Keyte, Oct 2012,
business2community.com
Only 5% of the work force
understands the strategy
The Vision Barrier
Only 25% of managers have
incentives linked to strategy
The People Barrier
60% of organizations don’t link
budgets to strategy
The Resource Barrier
85% of executive teams spend
less than one hour per month
discussing strategy
The Management Barrier
STRATEGYEXECUTION

Leadership issues are the dominant barrier to effective strategy execution
“What are the factors that make it difficult to
execute strategy using the six stage
Kaplan/Norton strategy management process?”
MAJOR FACTORS *
#1. Politics
Organization politics get in the
way
#2. Platform
It is too difficult to modify,
eliminate or replace the current
management approach
#3. Sponsorship
Leadership team does not
provide enough sponsorship to
get the job done
#4. Incentives
We are reluctant or unwilling to
align incentives with performance
objectives
89%
69%
60%
58%
Based on survey of 55 BSC users conducted by Randall H. Russell of Palladium Research, April 2010
* Percentage of BSC users describing this as difficult or very difficult.
MINOR FACTORS *
47%
31%
29%
22%
#5. Competencies
We don’t have the necessary human capital
and competencies to implement the system
#6. Philosophy
Our organization is not willing to embrace a
philosophy of strategy management
#7. Technology
We lack the right technology to effectively
implement this approach
#8. Kaplan/Norton Methodology
The K/N methodology is too complex

Source: BSCol Research (Survey of 143 performance management
professionals, drawn from BSCol Online Community,
Process Matters! Organizations with a formal strategy execution process in place are dramatically
outperforming organizations without formal processes.
Do you have a formal strategy
execution process in place?
Describe your organization’s
current performance.
Yes No
(54%) (46%)
• …. We have breakthrough results
• …. We are performing better than our peer group
Sub-Total
12%
58%
70%
7%
20%
27%
Do you use a formal performance management methodology?
Rated “most competitive” in
their industry
Rated “least competitive” in
their industry
Source: IDC Research (Improving Organization Decision-Making
through Pervasive Business Intelligence,
75% 43%

Strategy Management Framework
results
performance measures
Process
Initiative
EXECUTION
results
1
3
5
6
Strategic Plan
• Strategy Map
• Balanced Scorecard
• Stratex
Operating Plan
• Sales Forecast
• Resource Requirements
• Dashboards
• Budgets
2
• Key process improvement
• Sales planning
• Resource capacity plan
• Budgeting
PLAN OPERATIONS
4
• Business Units
• Support Units
• Employees
ALIGN THE ORGANIZATION
• Strategy Reviews
• Operating Reviews
MONITOR & LEARN
• Profitability Analysis
• Strategy Correlations
• Emerging Strategies
TEST & ADAPT
• Strategy Map / Themes
• Measures / Targets
• Initiative Portfolios
• Funding / Stratex
TRANSLATE THE STRATEGY
• Mission, Values, Vision
• Strategic Analysis
• Strategy Formulation
DEVELOP THE STRATEGY

Strategy Management – State of the Art
Do you have a formal management process in place?
Translate: Clear articulation of the corporate
strategy and measures
Initiatives: Manage a limited number of key
strategic initiatives
Update: Regular update of strategy to account
for changing conditions
Reviews: Regular meetings to report on and to
manage the strategy
Communicate: Communications about the
strategy
Align: Alignment of business units/support units
to strategy
Process
Percentage of companies with a formal process
10 20 30 40 50 60 70 80 90 100
WinnersLosers
43
46
43
33
26
76
75
75
73
64
77
36 64
41 60
28
28 63
HR: Organization Development
Finance: Link strategic initiatives to the budget
IT: Service Level Agreements
(Survey of 143 performance management professionals, BSC Research, Palladium
The
Execution
Gap

DIFFICULTY IN IMPLEMENTING THE
MANAGEMENT PROCESS
Which part of the Strategy Management process is most difficult to implement?
The Alignment Process is clearly
the most difficult stage of the
strategy management system
Survey of 55 BSC users conducted by Palladium Research, April 2010.
 Align The Organization
 Test & Adapt
 Develop The Strategy
 Monitor & Learn
 Translate The Strategy
 Plan Operations
75%*
58%
47%
45%
41%
40%
results
Process
Initiative
EXECUTION
results
1
3
5
6
Strategic Plan
• Strategy Map
• Stratex
Operating Plan
• Sales Forecast
• Dashboards
• Budgets
2
• Sales planning
• Budgeting
PLAN OPERATIONS
4
• Business Units
• Support Units
• Employees
MONITOR & LEARN
TEST & ADAPT
results
Process
Initiative
EXECUTION
results
1
3
5
6
Strategic Plan
• Strategy Map
• Stratex
Operating Plan
• Sales Forecast
• Dashboards
• Budgets
2
• Sales planning
• Budgeting
PLAN OPERATIONS
4
• Business Units
• Support Units
• Employees
MONITOR & LEARN
MONITOR & LEARN
TEST & ADAPT
TEST & ADAPT

Vision & Strategy Alignment
14 Directorates / units
(over 150 objective owners)
Levels of Cascading and alignment of strategic
objectives from the National Bahrain 2030 Vision

The five themes of the “President’s Management Agenda” (US Government) provide a common
focus for all federal agencies.
President’s Management Agenda
Strategic
Management of
Human Capital
Competitive
Sourcing
Improved
Financial
Performance
Budget and
Performance
Integration
Expanded
E-Government

DIFFICULTY IN IMPLEMENTING THE
MANAGEMENT PROCESS
Which part of the Strategy Management process is most difficult to implement?
Testing and Adapting in Order to
Drive Results
Survey of 55 BSC users conducted by Palladium Research, April 2010.
 Align The Organization
 Test & Adapt
 Develop The Strategy
 Monitor & Learn
 Translate The Strategy
 Plan Operations
75%*
58%
47%
45%
41%
40%
results
Process
Initiative
EXECUTION
results
1
3
5
6
Strategic Plan
• Strategy Map
• Stratex
Operating Plan
• Sales Forecast
• Dashboards
• Budgets
2
• Sales planning
• Budgeting
PLAN OPERATIONS
4
• Business Units
• Support Units
• Employees
MONITOR & LEARN
TEST & ADAPT
results
Process
Initiative
EXECUTION
results
1
3
5
6
Strategic Plan
• Strategy Map
• Stratex
Operating Plan
• Sales Forecast
• Dashboards
• Budgets
2
• Sales planning
• Budgeting
PLAN OPERATIONS
4
• Business Units
• Support Units
• Employees
MONITOR & LEARN
MONITOR & LEARN
TEST & ADAPT
TEST & ADAPT

Good performance management makes a difference. It creates an “execution premium.”
 Employee Recognition of KCS
strategy increased by 31% (2 yrs)
 Employee satisfaction increased
from 73% to 91%
 Detection rate of illegal
cargo increased by 92%
(six sigma process)
 Import cargo release time ↓
 Customer satisfaction increased
from 12% to 87%
 Crackdown on illegal drugs from
$34b to $77b (3 yrs)
 Tax Collection Revenue from $32b
to $51b (3 yrs)
Execution Premium
Constituents
Stakeholders
Brand
Value
Customer
Satisfaction
Technology
Support
“Best
Employer”
Key Process
Effectiveness
Mission
Perspective
Customer
Perspective
Internal
Perspective
Learning & Growth
Perspective
“I, myself, will give full support to the successful operation
of KCS performance management”
KCS Commissioner Sung Yum-gap
Korea Customs Service

 Knowledge Management System log-ins
increased from 9,000 to 375,000 (1 yr)
 Received “Best Government Innovator”
Award
 Reduced civil petition processing time
from 9 days to 1 day
 Customer satisfaction increased
by 12 points (1 yr)
 Quality of Life:
— # of Hospitals increased from
323 to 427 (6 yrs)
— Income levels and property tax
grew
“We will make the utmost effort for continuous and long-term development of our organization.
I am confident that the BSC will support us in this endeavor.”
MOGAHA Minister Park
* MOGAHA: S. Korea Ministry of Government Administration and Home Affairs
Execution Premium
Constituents
Stakeholders
Brand
Value
Customer
Satisfaction
Technology
Support
“Best
Employer”
Key Process
Effectiveness
Mission
Perspective
Customer
Perspective
Internal
Perspective
Learning & Growth
Perspective

 95% Product Portfolio Change in 4 years
 Best Performing Prices : > 200/year
 Re work reduction by 24%
 1st in Automotive Market from
2nd position.
 Market Share 22% to 25%
 Domestic Sales 300K to 600K a
year
 Growth
— 30K units to 60K units
— From Break Even to Positive ***
EBITDA
— Sales from 5 to 7 BI Euros
“VW is again a top performer in the Latin American automotive industry. The strong
engagement of our teams and the transformation of our processes were key success drivers.
Our consistent strategy implementation drove our success .” CEO Volkswagen do Brasil
Execution Premium
Sustainable
Financial
Result
Mrarket
Share
Company
Image
Customer
Satisfaction
Innovative
Product
Portfolio High
Performan
ce Culture
Key Process
Effectiveness
Financial
Perspective
Customer
Perspective
Internal
Perspective
Learning & Growth
Perspective

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TABLE CO CONTENT
5. Quick Q&A Slide

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SMC Strategy Management Certification Program RIYADH MAY 2015

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For information exchange, feel free to contact me at: m.mangels@tantum.com

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CVs OF MATHIAS MANGELS
Background
Mathias Mangels was the founder in 1989 of Symnetics, a leading Latin American management consulting
company focused on strategy execution. Symnetics have been cooperating with Robert Kaplan and David
Norton from the year 2000.
In November 2004, Mathias was appointed Vice President of Palladium/BSCol responsible for the
Palladium Global Network out of the London Office. Mathias has strongly supported the development of
the Palladium Middle East business
From January 2008 he returned to Symnetics / Tantum Group as its chairman after the acquisition of the
Palladium’s BSCol CEE shareholdings by Symnetics. Mathias’s past experience is focused on strategy design
and execution for private, public and non-profit organisations in the Middle East, Americas and Europe. He
has been researching both, the theoretical and practical aspects of the Strategy Focused Organization
Framework for the Public Sector and the BSC as well as its link to the Blue Ocean and Stakeholder / Citizen
Experience Co Creation Methodology. He has is also part of the Services and High Tech Industries of
Tantum Group Competency Centre and has been active in the Retail Banking, Insurance ,
Telecommunication and Fund Management and Thrust Industries. Mathias has been presenting these
topics at conferences and summits in Europe, the Americas and Middle East.
Prior to his role as a consultant at Tantum Group Mathias was a Senior Researcher for Private and Public
Strategy at the Battelle Research Institute in Geneva, Switzerland.
Education/ Professional Experience
Mathias holds a Bachelor Degree in Mechanical Engineering (Mackenzie University) and a Masters Degree
in Business Administration (INSEAD – Paris, France).
Mathias’ mother tongue is Portuguese and German and is fluent in English and Spanish.
Mathias Mangles

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ملتقى التميز المؤسسي 2015 - اليوم الثاني - From Strategy to Results: How can you get it done?