Strategic leadership handout
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13/03/13 <br />
Goals<br />
Strategy<br />
Phil Abernathy<br />
www.purplecandor.com<br />
<strong>Strategic</strong> Leadership <br />
The key to effective<br />
portfolio management<br />
www.purplecandor.com<br />
1
13/03/13 <br />
About Phil <br />
• Phil Abernathy is an inspiring Agile and Lean Leadership speaker, <br />
trainer, coach and consultant. <br />
• His mission is to make every work place a happy, productive place. <br />
• His passion is making a material difference to the top and bottom line <br />
of companies, by substantially lifting the capability of their Leaders. <br />
• With over 30 years of experience in blue chip companies all over the <br />
world, Phil is the founder of Purple Candor, <br />
http://www.purplecandor.com , an Australian company focused on <br />
enabling <strong>leadership</strong> excellence using Agile and Lean. <br />
Our 45 min journey <br />
So what?<br />
Problem<br />
What have we<br />
done to date?<br />
What could<br />
we do?<br />
How come?<br />
www.purplecandor.com<br />
2
13/03/13 <br />
The problem <br />
Too much work<br />
Pressure to deliver<br />
Stressed and/or<br />
disengaged teams<br />
Missed targets<br />
Sub optimal results<br />
The challenge <br />
Do more with less<br />
Deliver better<br />
Deliver faster<br />
Deliver cheaper<br />
Great place to work<br />
3
13/03/13 <br />
Our 45 min journey <br />
So what?<br />
Problem<br />
What have we<br />
done to date?<br />
What could<br />
we do?<br />
How come?<br />
www.purplecandor.com<br />
Impact? <br />
www.purplecandor.com<br />
4
13/03/13 <br />
Impact? <br />
Waste<br />
Lower productivity<br />
Higher costs<br />
Low morale<br />
Missed targets<br />
Unhappy customers<br />
Lower profitability<br />
www.purplecandor.com<br />
Our 45 min journey <br />
So what?<br />
Problem<br />
What have we<br />
done to date?<br />
What could<br />
we do?<br />
How come?<br />
www.purplecandor.com<br />
5
13/03/13 <br />
The perfect soluFon <br />
To a delivery problem<br />
www.purplecandor.com<br />
What do we normally do? <br />
Reorganisation<br />
New systems/tools<br />
Risk/Quality initiative<br />
Team building<br />
HR campaign<br />
Shout louder<br />
Implement Agile<br />
www.purplecandor.com<br />
6
13/03/13 <br />
Has it solved the problem? <br />
www.purplecandor.com<br />
Our 45 min journey <br />
So what?<br />
Problem<br />
What have we<br />
done to date?<br />
What could<br />
we do?<br />
How come?<br />
www.purplecandor.com<br />
7
13/03/13 <br />
Root cause: Lack of prioriFsaFon <br />
www.purplecandor.com<br />
Resource constraints <br />
Growth is controlled not by the <br />
total of resources available, <br />
but by the scarcest resource <br />
Dr. Liebig <br />
www.purplecandor.com<br />
8
13/03/13 <br />
Theory of constraints <br />
Every organizaFon has <br />
at any given point in <br />
Fme at least one <br />
constraint which limits <br />
the system's <br />
performance relaFve to <br />
its goal <br />
Dr. Eliyahu GoldraW <br />
www.purplecandor.com<br />
You can only deliver as <br />
fast as the slowest part of <br />
your process <br />
Slow down in order to do more! <br />
BACKLOG <br />
IN PROGRESS <br />
DONE <br />
P P P<br />
P<br />
P P P<br />
P<br />
P P<br />
P<br />
P<br />
P<br />
P<br />
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P P P<br />
P P P P<br />
P P<br />
P P<br />
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P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
P<br />
www.purplecandor.com<br />
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13/03/13 <br />
Governance <br />
Doing<br />
the<br />
right<br />
work<br />
Portfolio<br />
Program<br />
Project<br />
Doing<br />
the<br />
work<br />
right<br />
www.purplecandor.com<br />
PrioriFsaFon soluFon <br />
AGILE<br />
PMO<br />
www.purplecandor.com<br />
10
13/03/13 <br />
SFll struggling…. How come? <br />
www.purplecandor.com<br />
Go to the source <br />
Ahhh! <br />
www.purplecandor.com<br />
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13/03/13 <br />
Is it strategy that’s the cause? <br />
No of course not….. We have a strategy!<br />
www.purplecandor.com<br />
We have a strategy <br />
A perfect strategy<br />
www.purplecandor.com<br />
12
13/03/13 <br />
It’s hard to prioriFse because… <br />
1. Leaders pulling in different directions<br />
2. <strong>Strategic</strong> choices not made<br />
3. Unable to link work with the strategy<br />
4. No clear sense of purpose<br />
5. No buy-in, not involved in the process<br />
6. Lack of clear SMART goals<br />
7. Poorly communicated strategy<br />
8. Each leader does it differently<br />
9. Disconnected from budget process<br />
10. Annual process – inflexible<br />
www.purplecandor.com<br />
“Drawing a line between<br />
strategy and execution<br />
almost guarantees failure”<br />
~ Roger Martin. HBR Aug 2010<br />
www.purplecandor.com<br />
13
13/03/13 <br />
The ‘disengaged doer’! <br />
Just follow the<br />
rules<br />
Disillusioned<br />
a <br />
Discontented<br />
Abstract choices<br />
Little credit – lots<br />
of blame<br />
www.purplecandor.com<br />
Strategy execuFon <br />
Getting strategy execution right<br />
HBR<br />
Prof Michael Jarrett<br />
INSEAD<br />
www.purplecandor.com<br />
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13/03/13 <br />
Our 45 min journey <br />
So what?<br />
Problem<br />
What have we<br />
done to date?<br />
What could<br />
we do?<br />
How come?<br />
strategy<br />
www.purplecandor.com<br />
<strong>Strategic</strong> Leadership <br />
As a <br />
manager, <br />
what <br />
percent <br />
of your <br />
time do <br />
you <br />
spend on <br />
strategy? <br />
www.purplecandor.com<br />
15
13/03/13 <br />
HBR survey march 2010 <br />
59% of respondents said:<br />
“There is an invisible line in my<br />
company’s org chart.<br />
Those above the line set the strategy<br />
and those below execute it”<br />
www.purplecandor.com<br />
Root cause <br />
Leadership!<br />
<strong>Strategic</strong> Leadership!<br />
www.purplecandor.com<br />
16
13/03/13 <br />
Our 45 min journey <br />
So what?<br />
Problem<br />
What have we<br />
done to date?<br />
What could<br />
we do?<br />
How come?<br />
strategy<br />
Leaders<br />
www.purplecandor.com<br />
<strong>Strategic</strong> clarity <br />
www.purplecandor.com<br />
17
13/03/13 <br />
What’s good strategy? <br />
And what should leaders do?<br />
Strategy <br />
Formulation <br />
Strategy <br />
Execution <br />
www.purplecandor.com<br />
Strategy <br />
Strategy formulation<br />
• Purpose? (why)<br />
• Goals? (where)<br />
• Drivers? (what)<br />
• Strategy? (how)<br />
• Plan? (when/with what)<br />
Strategy execution<br />
• Measure<br />
• Monitor<br />
• Adapt<br />
• Prioritise<br />
• Steer<br />
www.purplecandor.com<br />
18
13/03/13 <br />
Plan<br />
Schedule<br />
Resource<br />
Strategy formulaFon -‐ PREP <br />
Paint <br />
Mission<br />
Vision<br />
Goals<br />
Drivers<br />
Plan <br />
Reality <br />
Retro<br />
SWOT<br />
Challenges<br />
Options<br />
<strong>Strategic</strong><br />
choices<br />
Priority<br />
Evaluate <br />
www.purplecandor.com<br />
<strong>Strategic</strong> Drivers <br />
For every $100 revenue,<br />
where is it spent??<br />
www.purplecandor.com<br />
19
13/03/13 <br />
Driver tree -‐ Insurance <br />
1<br />
<strong>Strategic</strong> Drivers<br />
Revenue $100 <br />
H <br />
GOALS<br />
+30%<br />
-3.1%<br />
-3.5%<br />
-18.7%<br />
-16.0%<br />
-$1<br />
-$1<br />
-$3<br />
-$2<br />
2<br />
3<br />
4<br />
5<br />
Claims <br />
$32 <br />
Commissions <br />
$28 <br />
Mkt and sales cost $16 <br />
Operations cost $12 <br />
L <br />
L <br />
M <br />
H <br />
Operating ProTit $12 <br />
+$7 +58%<br />
www.purplecandor.com<br />
Driver tree -‐ Telco <br />
1<br />
<strong>Strategic</strong> Levers<br />
Revenue $100 <br />
GOALS<br />
+30%<br />
-3.1%<br />
-3.5%<br />
-18.7%<br />
-16.0%<br />
-$1<br />
-$1<br />
-$3<br />
-$2<br />
2<br />
3<br />
4<br />
5<br />
Marketing $32 <br />
Billing <br />
$28 <br />
Administration <br />
$16 <br />
Network maintenance $12 <br />
Operating ProTit $12 <br />
+$7 +58%<br />
www.purplecandor.com<br />
20
13/03/13 <br />
-3.1%<br />
-2%<br />
-1%<br />
-0.1%<br />
<strong>Strategic</strong> Driver: Claims <br />
Drivers behind Claims<br />
REDUCE: <br />
H<br />
• Re-‐insurance costs <br />
M • Claims management costs <br />
L • Claims incidents <br />
M • Claims leakage <br />
• Leakage audits <br />
• Private Eye <br />
<strong>Strategic</strong><br />
Programs<br />
• Renegotiate <br />
contract <br />
$20m<br />
$200.000<br />
• Single claims <br />
process and <br />
system <br />
www.purplecandor.com<br />
$10m<br />
+10%<br />
<strong>Strategic</strong> Driver: Revenue <br />
MUST WIN BATTLES <br />
Drivers behind revenue<br />
INCREASE: <br />
H<br />
• Online sales <br />
M • Agent footprint <br />
L • New product/markets <br />
<strong>Strategic</strong><br />
Programs<br />
• Online-‐full <br />
service <br />
• Social media <br />
• New agents in <br />
Perth <br />
• More agents in <br />
rural vic <br />
• New all-‐in-‐one <br />
product <br />
• Product X <br />
www.purplecandor.com<br />
21
13/03/13 <br />
<strong>Strategic</strong> iniFaFves <br />
Initiative Driver Bene2it Cost <br />
appetite <br />
Renegotiate <br />
Reinsurance <br />
CL <br />
New claims sys CL <br />
Leakage <br />
initiative <br />
Online full <br />
service <br />
Nnnnn <br />
Nnnnnn <br />
Nnnnn <br />
CL <br />
NPV <br />
Rev $50M $15m 1500 1 <br />
Priority <br />
2 <br />
4 <br />
3 <br />
5 <br />
6 <br />
7 <br />
www.purplecandor.com<br />
<strong>Strategic</strong> Leadership <br />
Does not apply to me..<br />
I’m helpless…<br />
I’m just a team leader<br />
I’m in a functional unit<br />
www.purplecandor.com<br />
22
13/03/13 <br />
Levels of strategy – GS Model <br />
Group level<br />
Vision/<br />
Mission<br />
Objectives/<br />
Goals<br />
Strategy<br />
Plan<br />
Business Unit/<br />
Profit centre level<br />
Vision/<br />
Mission<br />
Objectives/<br />
Goals<br />
Strategy<br />
Plan<br />
Support functions<br />
HR/Fin/IT/Legal/etc<br />
Vision/<br />
Mission<br />
Objectives/<br />
Goals<br />
Strategy<br />
Plan<br />
Operational<br />
Team level<br />
Vision/<br />
Mission<br />
Objectives/<br />
Goals<br />
Strategy<br />
Plan<br />
www.purplecandor.com<br />
Strategy is every leaders job, <br />
at every level <br />
Group <br />
CEO <br />
Division <br />
Div 1 <br />
Div 2 <br />
Department <br />
Product <br />
Mkt & <br />
sales <br />
Ops <br />
Services <br />
Team <br />
P1 <br />
P2 <br />
www.purplecandor.com<br />
23
13/03/13 <br />
Strategy simplified <br />
Simplify your strategy<br />
HBR<br />
Prof Donald Sull<br />
London School of Business<br />
www.purplecandor.com<br />
So what should we do? <br />
Strategy is a process<br />
Strategy <br />
Formulation <br />
Strategy <br />
Execution <br />
www.purplecandor.com<br />
24
13/03/13 <br />
The funnel of work <br />
Goals<br />
<strong>Strategic</strong> Drivers<br />
<strong>Strategic</strong> Initiatives<br />
8<br />
<strong>Strategic</strong><br />
Programs<br />
6 7<br />
5<br />
4<br />
3<br />
2<br />
www.purplecandor.com<br />
1<br />
<strong>Strategic</strong> Leadership <br />
Strategy<br />
Leadership<br />
Projects<br />
Operations<br />
Leadership<br />
Culture<br />
www.purplecandor.com<br />
25
13/03/13 <br />
Leadership is pordolio governance <br />
Strategy<br />
Leadership Governance<br />
Projects<br />
Operations<br />
www.purplecandor.com<br />
Agile governance <br />
PORTFOLIO <br />
FUNNEL <br />
Strategy &<br />
Governance<br />
Feedback<br />
and approvals<br />
Concept Initiate Deliver <br />
Programs & Projects<br />
www.purplecandor.com<br />
26
13/03/13 <br />
A Fp for successful strategy execuFon <br />
Execute your strategy like an Agile Project<br />
www.purplecandor.com<br />
IteraFve Agile strategy <br />
Portfolio<br />
Governance<br />
provides the feedback<br />
to strategy<br />
Strategy<br />
Governance<br />
Projects<br />
Operations<br />
www.purplecandor.com<br />
27
13/03/13 <br />
Strategy ExecuFon -‐ MAPS <br />
Walk<br />
Guide<br />
Empower<br />
Measure <br />
Drivers<br />
Blockers<br />
Risks<br />
Steer <br />
Govern<br />
Adapt <br />
Prioritise<br />
Decide<br />
Re-plan<br />
Communicate<br />
Prioritise <br />
www.purplecandor.com<br />
Fine-tune<br />
Adjust<br />
Pivot<br />
“Our strategy was brilliant <br />
…..but the execuFon was poor” <br />
www.purplecandor.com<br />
28
13/03/13 <br />
The heart of the maWer <br />
Vision<br />
Goals<br />
Mission<br />
Customer<br />
Strategy<br />
Capital<br />
<strong>Strategic</strong><br />
Leadership<br />
Projects<br />
Leadership<br />
People &<br />
Culture<br />
Operations<br />
The important link<br />
between<br />
goals and<br />
success<br />
www.purplecandor.com<br />
Governance cannot be delegated <br />
www.purplecandor.com<br />
29
13/03/13 <br />
Work expands to the Fme allowed <br />
www.purplecandor.com<br />
TradiFonal strategy approach <br />
• Done at the top at ‘away days’<br />
with a high level core group<br />
• Rushed at the end<br />
• No consistent process/<br />
standard for the sub levels<br />
• Goal à Driver link missing<br />
• Inconsistent and incomplete<br />
cascade ( in final draft…)<br />
www.purplecandor.com<br />
30
13/03/13 <br />
Impact of tradiFonal strategy approaches <br />
www.purplecandor.com<br />
Strategy – The Agile n Lean way <br />
Safe to fail<br />
Iterative<br />
Flexible<br />
Simple<br />
Customer value<br />
Collaborative<br />
Process and cadence<br />
Transparent<br />
Continuous improvement<br />
A way of working <br />
www.purplecandor.com<br />
31
13/03/13 <br />
AGILEAN – a holisFc way of working <br />
Agile <br />
• Iterative <br />
• Time boxed <br />
• Collaborative <br />
• Flexible <br />
• Empowered teams <br />
Lean <br />
• Kaizen <br />
• Gembutsu <br />
• Leaders as teachers <br />
• Value stream mapping <br />
• Flow, pull, overload <br />
www.purplecandor.com<br />
Agile exposes the problem <br />
www.purplecandor.com<br />
32
13/03/13 <br />
Success <br />
Doing<br />
the<br />
right<br />
work<br />
Portfolio <strong>Strategic</strong><br />
Governance<br />
Leadership<br />
Program<br />
Project<br />
Doing<br />
the<br />
work<br />
right<br />
www.purplecandor.com<br />
Summary <br />
<strong>Strategic</strong> Leadership<br />
So what?<br />
Problem<br />
What have we<br />
done to date?<br />
What could<br />
we do?<br />
How come?<br />
strategy<br />
Leaders<br />
www.purplecandor.com<br />
33
13/03/13 <br />
In conclusion <br />
Vision<br />
Goals<br />
Mission<br />
Customer<br />
Strategy<br />
Capital<br />
<strong>Strategic</strong><br />
Leadership<br />
Projects<br />
Leadership<br />
People &<br />
Culture<br />
Operations<br />
The important link<br />
between<br />
goals and<br />
success<br />
www.purplecandor.com<br />
Call to acFon <br />
Formulate strategy using a structured <br />
process at all levels and Agile n Lean <br />
principles <br />
Execute the strategy as an <br />
Agile project <br />
www.purplecandor.com<br />
34
13/03/13 <br />
Q&A <br />
Phil Abernathy<br />
phil@purplecandor.com<br />
enabling <strong>leadership</strong> excellence<br />
www.purplecandor.com<br />
35
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