STRATEGIC PLANNING AND ORGANIZATION CLARITY.ppt

STRATEGIC PLANNING AND ORGANIZATION CLARITY Case Study,Concepts and Debatable IdeasKenny OngCNI Holdings Berhad,Intro:CNI,20 years oldCore Business:MLMOthers:Contract Manufacturing,Export/Trading,eCommerceMalaysia,Singapore,Brunei,Indonesia,India,China,Hong Kong,Philippines,Italy,Taiwan,Oman,United States,VietnamStaff force:500Distributors:200,000Products:Consumer Goods and Services,The digital watch didnt come from established watch companies,the calculator didnt come from slide rule or adding machine companies,video games didnt come from board-game manufacturers Parker Bros or Mattel,the ballpoint pen didnt come from fountain pen manufacturers,and Google didnt come from the Yellow Pages Bob Seidensticker,Futurehype,Whats wrong with Strategic Planning Today?,Long-term PlansObjectivesStrategiesEnablersResources,Also known as L.O.S.E.R.,Whats wrong with Strategic Planning Today?,Biggest Threats often come from OUTSIDE your normal industryPlanning from the base of an Existing organization vs.zero-basedTraditional Analysis(e.g.SWOT)based only on known or existing assumptions or knowledgeSpending too much time in market research and analysisDefining the company from a Product/Service perspective vs.Category vs.JTBD(e.g.Coca-cola)Wrong Benchmark already successful vs.what made them successfulNew strategy,same people,Todays Agenda,Summary:Todays presentation,1.Business Model Clarity,2.Strategy Clarity,3.Execution Clarity,What is the Business Model?,USP,Market Discipline,Profit Model,Business Model:USP,Unique Selling Proposition(USP)=Targeted Customer=Core Buying Purpose/Customer Value Proposition/Job To Be Done(JBTD),Business Model:USP,“The Product is Not the Product”What is the customer really buying?What is the“Core Buying Purpose”?What is the“Job To Be Done”?,Business Model:USP,Obstacles to JBTD:Insufficient WEALTHInsufficient ACCESSInsufficient SKILLInsufficient TIME,What is the Business Model?,USP,Market Discipline,Profit Model,Business Model:Profit Model,Business Model:Profit Model,Profit Model Examples:Gillette ShaveriPod and iTunesIBM and LenovoGM and GM FinanceGoogle and Ad RevenueMcD and Drive-thru revenue,Subsidizing Hire Purchase Loan vs.reduce price to protect brand Oracle Project Financing over 4 years covering even non-Oracle componentsSaaS PAYU e.g.Siebel/Salesforce,Who Killed Disney?,Profit Model vs.Competition:DVD vs.video games and online moviescar sales vs.car leasingnewspaper vs.online newsclient server systems vs.SaaS,Bussinessweek,February 19 2009,“Hollywood Is Worried as DVD Sales Slow”,your greatest competitor for market share is often a different profit model,What is the Business Model?,USP,Market Discipline,Profit Model,Intro:Market Discipline,Mamak stall,Intro:Market Discipline,They are the most innovativeConstantly renewing and creativeAlways on the leading edge,A great deal!Excellent/attractive priceMinimal acquisition cost and hassleLowest overall cost of ownershipA no-hassles firmConvenience and speedReliable product and service,Exactly what I needCustomized productsPersonalized communicationsTheyre very responsivePreferential service and flexibilityRecommends what I needIm very loyal to themHelps us to be a success,Product Leadership,OperationalExcellence,CustomerIntimacy,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Value Disciplines,www.myCNI.com.my,www.OOBEY.com,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Disciplines,HP well-balanced portfolio,mass customization,Acer super lean cost structure,aggressive pricing,Apple powerful products,premium pricing,limited range,Still Doing well in 2009,Business Model vs.Competition,Competitor Anchoring vs.Business Model:Air Asia vs.Busses&TrainsTata Nano vs.MotorbikesiPod vs.Sony BMGKindle(Amazon)vs.iPhone(Apple)Google vs.Newspaper(Ads)vs.Yahoo(Search)vs.Microsoft(Software)McD vs.Toys R Us,Shift your Business Model,and your Competitor will change,Operational ExcellenceCompetitive priceError free,reliableFast(on demand)SimpleResponsiveConsistent information for allTransactionalOnce and Done,Customer IntimacyManagement by FactEasy to do business withHave it your way(customization)Market segments of oneProactive,flexibleRelationship and consultative sellingCross selling,Product LeadershipNew,state of the art products or servicesRisk takersMeet volatile customer needsFast concept-to-counterNever satisfied-obsolete own and competitors productsLearning organization,Strategy:Value Disciplines,www.myCNI.com.my,www.OOBEY.com,The McPlaybook*,Make it easy to eat50%drive-thruMeals held in one hand,Make it easy to prepareHigh TurnoverTasks simple to learn&repeat,Make it quick“Fast Food”Tests new products for Cooking Times,Make what customers wantProwls market for new productsMonitored field tests,*Adapted from:Businessweek,Februrary 5th 2007,www.myCNI.com.my,www.OOBEY.com,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Disciplines,Business Model,1.change one,effect three,2.change one,change model,Summary:Todays presentation,1.Business Model Clarity,Done,2.Strategy Clarity,3.Execution Clarity,2.Strategy Clarity,Hope is not a strategy,What is Strategic Planning?,Strategic Planning,Variables:ResearchGrowthRisksStakeholdersConstraintsSWOTMisc.,Output:PlansPrioritiesKPIs,Before we start,Which comes first?Strategies-KPI?KPI-Strategies?,Before we start,Which comes first?Strategies-KPI?KPI-Strategies?,already know our priorities,aware of all strategy options availablecreating something UNIQUE,INNOVATIVE and DISRUPTIVE e.g.Air Asiaconducting a business Turnaround e.g.MAS,Before we start,Which comes first?Strategies-KPI?KPI-Strategies?,want to find out possible strategies,determine our priorities first thru selection of important KPIs;growing through normal business,not a Turnaround.,Business Situation vs.Focus,Upturn,Flat,Downturn,Fight ComplacencySharpen EdgeKeep MomentumConquer,Change mgmtReduce FatContinuityEveryone Happy,InnovationAcquireProfitsBuild momentum,SalesCash Flow,Talent MgmtInnovation/R&DEarly winsSlow Down HR Costs,Top Talent focusSales,Sales,SalesIncrease attrition,www.myCNI.com.my,www.OOBEY.com,Business Situations vs.Focus,Upturn,Flat,Downturn,Fight ComplacencySharpen EdgeKeep MomentumConquer,Change mgmtReduce FatContinuityEveryone Happy,InnovationAcquireProfitsBuild momentum,SalesCash Flow,Talent MgmtStack R&DEarly winsSlow Down HR Costs,Top Talent focusStack SalesIncrease attrition,Many times,you need a different CEO/Leader/Management Team for each business situation,www.myCNI.com.my,www.OOBEY.com,What is your Goal?,Cost ReductionGrowthBoth?,Growth Strategy,“Double-Digit Growth”,Michael Treacy,www.myCNI.com.my,www.OOBEY.com,How Markets determine Growth Strategies(1),Growth Rate,www.myCNI.com.my,www.OOBEY.com,Churn Rate,How Markets determine Growth Strategies(2),www.myCNI.com.my,www.OOBEY.com,How Markets determine Growth Strategies(3),Example:XYZ Sector,www.myCNI.com.my,www.OOBEY.com,Downturn Strategy,Downturn Strategy,Downturn Strategy,Downturn Strategy,Side Notes on Cost Reduction Strategy,Cost Reduction,5%-30%,30%-80%,Business Situation vs.Sales,Upturn,Flat,Downturn,Fight ComplacencySharpen EdgeKeep MomentumConquer,Change mgmtReduce FatContinuityEveryone Happy,InnovationAcquireProfitsBuild momentum,SalesCash Flow,Talent MgmtInnovation/R&DEarly winsSlow Down HR Costs,Top Talent focusSales,Sales,SalesIncrease attrition,www.myCNI.com.my,www.OOBEY.com,Optimize customers current assets Offset customers costs Focus market share CEO and Sr.Mgmt in the field Sell up the buyer chain Motivate troops Add extra services Control troop emotionsSpecialized vs.general teams,i.e.sell support services,sell equipment,existing customers etc.(e.g.Xerox),Marketing Clarity:,Goods Return Policy“I dont care if they return a Goodyear tire.If they said they paid$200,pay them$200.”,Nordstrom does not sell tires,Marketing Clarity:CNI,“CNI is more than business.We strongly believe that every individual has the opportunity to attain a better living through CNI.”,Marketing Clarity:Segment&Target,Who?,Experience,Swing,Former,Opposition,Branding Clarity:Segment&Target,Who are you attracted to?,Branding Clarity:Basics&Differentiators,Segments,Targets,Targets,Basics,Differentiators,Experience=Branding,Swing Loyalty,Swing Customers are“loyal”because:Individual RelationshipsConvenience(at that point in time)Tied-upProduct UniquenessPromotionsNo better alternativeDownlinesNo known alternativePsychologically lazy,Swing=Best alternative at the current moment until I find another alternative,“Swing”Marketing,Increase switching costsMega packagesCommunityReward programs(Points)Membership SubscriptionEmail communication,NewslettersPersonalized alertsSurveySuggestion BoxSwitching Techniques(e.g.Balance Transfer of credit cards),R&D Clarity:The“Old”Days,Invent,R&D,R&D Clarity:The“New”Days,Invent,Build,Market,Sell,R&D Clarity:Marketing 101,R&D Clarity:Marketing&R&D,Features,Brand,Target,Logistics,R&D Clarity:Marketing&R&D,Features,Brand,Target,Logistics,Price,Promotion,Place,Product,IKEA Apple Nestle Asus,R&D Clarity:RD&D,GarnierDigi,Design Point 1:Designed to SELLDesign Point 2:Before-After R&D,R&D Clarity:RD&D,CNI Waterlife,Design Point 1:Designed to SELLDesign Point 2:Before-After R&D,R&D Clarity:RD&D,Research,Development&DESIGN,FeaturesBenefitsDifferentiation,R&D Clarity:RD&D,Research,Development&DESIGN,FunctionAestheticsLogistics,Design Point 1:Designed to SELLDesign Point 2:Before-After R&D,Innovation Clarity,Product/Service,Process,Business Model,Break-through,Sub-stantial,Incre-mental,Summary:Todays presentation,1.Business Model Clarity,Done,2.Strategy Clarity,3.Execution Clarity,Done,3.Execution Clarity,Accountability,Benchmarking,BSC,KPIs and other evils,“in the past 18 months,we have heard that profit is more important than revenue,quality is more important that profit,people are more important than profit,customers are more important than our people,big customers are more important than small customers,and that growth is the key to our success.No wonder our performance is inconsistent,CEO,Anonymous,Wrong KPIs,“What is the moral of the story?”,KPIs and Behavior,Before:“Handle Time”Per CallMotivated Call Centre staff to transfer callers,getting rid of complainers,making them someone elses problemCallers at 45%chance of being transferred7,000 customers each week suffered transfers 7 times or more,KPIs and Behavior,After:“Minutes Per Resolution”of a problemResolution in ONE CALL become the core goalReduced probability of call transfers from 45%to 18%,Why BSC?,Reason 1:BalancedReason 2:Cause-and-Effect,www.myCNI.com.my,www.OOBEY.com,Financial“To satisfy our stakeholders,what Financial objectives must we accomplish?”,Cause and Effect,Revenue Growth,Base Retention,Share Gain,Positioning,Adjacent Market,New Business,Operational Excellence,Product Leadership,Customer Intimacy,Competencies,Information Systems,Motivation,empowerment,alignment,Financial,Learning&Growth,Internal Process,Customers,Investment Strategy,Productivity,Market Value,Linking BSC to Strategy,Financial,Learning&Growth,Internal Process,Customers/Distributors,Cause and Effect:An Example,Example:Selection of KPIs for BSC,Customer satisfactionCustomer loyaltyMarket shareCustomer complaintsComplaints resolved on first contactReturn ratesResponse time per customer requestPrice relative to competitionTotal cost to customerAverage duration of customer relationshipCustomers lostCustomer retentionCustomer acquisition ratesPercentage of revenue form new customersNumber of customersAnnual sales per turnover,Win rate(sales closed/sales contact)Customer visits to the companyHours spent with customersMarketing cost as a percentage of salesNumber of ads placedNumber of proposals madeBrand recognitionResponse rateNumber of trade shows attendedSales volumeShare of target customer spendingSales per channelAverage customer sizeCustomers per employeeCustomer service expense per customerCustomer profitabilityFrequency(number of sales transactions),Financial,Learning&Growth,Internal Process,Customers/Distributors,Example:1st Level BSC&KPIs,Profit after Tax.Revenue.Cash-to-cash cycle.Operating cash flow,Average Revenue Per User(ARPU),Customer Complaints.Customer Acquisition Rate.Product Availability.Product Quality&Service.Renewal Annual Subscription.No.of Active Members.No.Retail Points.,Customer Database Availability.Accuracy of Forecast Planning.Continuous Improvement.Response Time to Customer Needs.Perfect Order Fulfillment.Inventory Turnover.Number of Effective Loyalty Programs.On Time Delivery.Number of Effective A&P,%of staff evaluated on Core Competency Framework.%of staff with Career Development Plans.No.of training hours completed per staff.%of staff with access to strategic information.Q12 Index.%staff evaluated on Culture alignment,Sample:Other 1st Level KPIs across industries,Lagging and Leading KPIs,Historical,Outcome,Results,1st Level,Usually Financial or tangible,Quarterly and Annually,Current,Indicators,Drivers,2nd Level onwards,usually non-financial or intangible,Weekly,Monthly and Quarterly,Developing Driver KPIs,What is the Objective?,Do-or-Die KPIs for CNIRevenueARPUSponsoringRetentionCommission Plan(BDP)ProductCorporate Image,Operational Excellence(low cost producer),Ref:The Discipline of Market Leaders,Michael Treacy 1995,Product Leadership(best product),Customer Intimacy(best total solution),Strategy:Disciplines,Priorities,and KPIs,Operational ExcellenceCompetitive priceError free,reliableFast(on demand)SimpleResponsiveConsistent information for allTransactionalOnce and Done,Customer IntimacyManagement by FactEasy to do business withHave it your way(customization)Market segments of oneProactive,flexibleRelationship and consultative sellingCross selling,Product LeadershipNew,state of the art products or servicesRisk takersMeet volatile customer needsFast concept-to-counterNever satisfied-obsolete own and competitors productsLearning organization,Strategy:Disciplines,Priorities,and KPIs,Operational ExcellenceMove know-how from top performing units to othersBenchmark against best in classEnsure operations training for all employeesUse disciplines like TQM for continuous learning