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Recipe for Successful Strategic Performance

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Recipe for Successful Strategic Performance

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    1. Recipe for Successful Strategic Performance Stan Abraham, Ph.D. Professor, Cal Poly Pomona President, Future By Design

    2. Recipe Ingredients

    3. Effective Leadership

    4. Effective Leaders (cont.) Have Jim Collins’ “Level-5” qualities Company first, self unimportant Get the best people around you (and get rid of the wrong people) Give them a chance to help you set the direction for the company—then execute Groom a successor who’s even better Servant leadership (Max DePree)—ask, “How can I help you do your job better?”

    5. The “Right” People

    6. The “Right” People (cont.) The “Right” People Put company first Share vital information Get things done Are team players Collaborate Care about results Do the right things Lead Enable The “Wrong” People Put themselves first Hoard vital information Procrastinate Aren’t team players Don’t collaborate Don’t care about results Do the easy things Constantly criticize Block (for attention)

    7. Organizational Purpose

    8. Strategic Thinking The constant search for a better strategy, better business model, new opportunities, situational monopolies, and blue oceans Must be done to grow and succeed Must become skilled at getting, validating, and making sense of external data Relevant information must be shared within the company Must be analyzed and discussed constantly (“strategic conversations”) so everyone understands what’s changing and why

    9. Strategic Planning

    10. The “Right” Culture Status quo Innovative Collaborative Adaptive Customer-focused Selfish—me, me, me Profit-at-all-costs Hierarchical, top-down Autocratic, coercive Empowering

    11. Financial Resources Projects or strategic initiatives are funded through Cash Debt (the loan comes in as cash) Sale of stock if a public company (equity financing) (also cash) Cash—good amount on hand? Positive cash flow? A/R and expenses under control? Debt—What is the firm’s capacity to borrow? Good if Debt/Equity ratio is low Equity financing—makes sense when D/E ratio is high and further borrowing isn’t possible

    12. Financial Resources (cont.)

    13. Key Performance Indicators Strategic KPIs are those the company uses to define “success” Quantified “purposes” (see first “ingredient”) From these stem operational KPIs In marketing, production, finance, R&D, engineering, HR, etc., different for every company Must be widely disseminated, understood, agreed with, tracked, and incentivized Correctional action must be taken ASAP when found necessary to stay “on track” Contingency planning

    14. Smooth Execution People in the organization… …know what to do …know how to do it …know why they’re doing it …have the resources they need …are excited to achieve their objectives (KPIs) …collaborate to get things done …have a personal stake in “doing the right things” and “doing things right” …share their ideas for improvement …love coming to work every day

    15. “Cooking” the Soup

    16. What’s Your Recipe? Final thoughts?

    17. Thanks for listening… Stan Abraham, Ph.D. Professor of strategy & entrepreneurship Cal Poly Pomona scabraham@csupomona.edu (909) 869-2420 President, Future By Design Santa Monica, CA (310) 450-2340 Cell: (310) 488-9795 stan@futurebydesign.biz www.futurebydesign.biz

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