Business Plan Highlights

1. Business Plan Highlights

2. Overall business goals Critical capabilities Critical success factors Personal competencies Key performance indicators Relevant information Focused personal objectives Coaching for added personal value Supportive performance assessment Recognition and reward We must ensure coherence between the strategy and the daily operational management What consequences do they face if coherence is missing? • Suboptimisation and waste of resources • The organisation does not reach it’s targets • The organisation and the management spend their time on the wrong things What are the risks? • Damage of customer relations • Loss of credibility in relation to stakeholders • Loss of ability to realise new business opportunities • Excessive cost base

3. Link strategy to daily operations Overall Business goals Critical competencies Critical success factors Personal competencies Key performance indicators Focused Personal objectives Supportive performance assessment Coaching for added Personal value Recognition and reward

4. The reason is a common disconnect between strategic ambition and the operational targets which are designed to direct the daily operations The ‘goal hierarchy’ should be consistent from top to bottom Often the business units work towards own goals - not aligned with the corporate strategy Top Management Top Management Mission Values Goal Policies Goal Competition basis Vision Goal Success criteria Goals HR Strategies Marketing Finance BU 1 BU 2 BU 3 BU 4 BU 5 BU 6 Strategic Strategic Strategic Strategic Strategic Strategic conditions conditions conditions conditions conditions conditions Sales Mission Mission Mission Mission Mission Mission Policies Policies- Policies Policies Policies Policies specific to specific to specific to specific to specific to specific to Divisions Divisions Divisions Divisions Divisions Divisions Competition Competition Competition Competition Competition Competition IT basis basis basis basis basis basis Production Vision Vision Vision Vision Vision Vision Goal Objectives Objectives Objectives Objectives Objectives Objectives Success criteria Success criteria Success criteria Success criteria Success criteria Success criteria Strategies Strategies Strategies Strategies Strategies Strategies Projects Projects Projects Projects Projects Projects Goal Action plan Action plan Action plan Action plan Action plan Action plan Goal Financial plan Financial plan Financial plan Financial plan Financial plan Financial plan

5. Objectives • Must derived from “what our business is, what it will be and what it should be”. Represent the fundamental strategy of a business • Must be operational (specific targets and specific assignments) • Must make possible concentration of resources and efforts • Must be multiple objectives. • Must be in all areas on which the survival of business depends

6. Objectives key areas • Marketing • Innovation • Human resources • Financial resources • Productivity • Social responsibility • Profit requirements

7. analysis shows that performance management is an important tool to establish a connection between strategy and daily operations … • Most companies believe that performance management is an important tool in order to establish a connection between strategy and daily operations • All companies have implemented some kind of performance management system with the ambition of making this link • But not all companies can boast that this implementation is complete - all too often strategy is someone else’s job! Source: PA analysis The greatest advantage of management by objectives is perhaps that it makes it possible for a manager to control his own performance. Peter F. Drucker

8. … and only a few companies have formalised proceduresand processes to improve target figures Source: PA analysis Source: PA analysis • All companies believe in the importance of a systematic follow-up on all target figures, but only a few have formalised procedures and processes to improve target figures • And few reward systems are effective levers for change - most do not focus upon the few value-creating activities • Few organisations have mastered automating the paperwork!

9. The vital few value drivers are not identified • An important challenge is to focus and prioritise the strategy. Typically, there are only a few vital value drivers and targets for the organisation or the business unit. Too many organisations have a plethora of measures • And management is often of what can easily be measured rather than what drives value-creation • A balanced series of measures - financial and non-financial, lead and lag - has been shown to be a powerful tool for change • Representation of these balanced measures as a scorecard, capable of being cascaded down to job roles is an important part many performance management systems Balanced Measures

10. Balanced Scorecard

11. Environmental Scanning Strategy Formulation Strategy Implementation Evaluation and Control External Societal Environment General forces Task Environment Industries analysis Mission Reason for Existence Objectives What Results To Accomplish By When Strategies Plan To Achieve Mission & objectives Policies Broad Guidelines For decision making Programs Activities Needed to Accomplish A plan Budget and Procedure Cost of The programs and Steps needed To do the job Quarterly Reporting of the Performance And Operational Reviews Take corrective Actions Performance Internal Structure Chain of Command Culture Beliefs, expectations, Values Resources Assets, skills, knowledge Feedback / Learning

12. Department Mission Vision Charter • To provide world class Financial support which will: • Maximize company’s profitability • Maximize Customer satisfaction • Maximize predictability • Positively differentiate company’s products from that of the competition • Empower and involve employees in financial and strategic decisions Every company employee understand the business units financial objectives _ • Provide a balanced performance measurement, management reporting for quick, relevant information • Provide region financial analysis and finance/accounting expertise and training in support of companybusiness operations • Provide regionleadership and coordination to the Companybusiness for internal control activities

13. Strengths (internal) Capabilities? Resources, Assets, People? Experience, knowledge, data? Innovative aspects? Location and geographical? quality? Processes, systems, IT, communications? Cultural, attitudinal, behavioral? Management cover, succession? Opportunities (external) Technology development and innovation? Global influences? Geographical, export, import? Tactics - surprise, major contracts, etc? Business development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal? Weaknesses (internal) capabilities? Lack of competitive strength? Reputation, presence and reach? Own known vulnerabilities? Timescales, deadlines and pressures? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Processes and systems, etc? Threats (external) Political effects? Environmental effects? IT developments? Market demand? New technologies, services, ideas? partners? internal capabilities? Obstacles faced? Loss of key staff? SWOT analysis

14. Advantages of proposition? Capabilities? Competitive advantages? USP's (unique selling points)? Resources, Assets, People? Experience, knowledge, data? Financial reserves, likely returns? Marketing - reach, distribution, awareness? Innovative aspects? Location and geographical? Price, value, quality? Accreditations, qualifications, certifications? Processes, systems, IT, communications? Cultural, attitudinal, behavioural? Management cover, succession? Disadvantages of proposition? Gaps in capabilities? Lack of competitive strength? Reputation, presence and reach? Financials? Own known vulnerabilities? Timescales, deadlines and pressures? Cashflow, start-up cash-drain? Continuity, supply chain robustness? Effects on core activities, distraction? Reliability of data, plan predictability? Morale, commitment, leadership? Accreditations, etc? Processes and systems, etc? Management cover, succession? SWOT 1 internal strengths weaknesses

15. Market developments? Competitors' vulnerabilities? Industry or lifestyle trends? Technology development and innovation? Global influences? New markets, vertical, horizontal? Niche target markets? Geographical, export, import? New USP's? Tactics - surprise, major contracts, etc? Business and product development? Information and research? Partnerships, agencies, distribution? Volumes, production, economies? Seasonal, weather, fashion influences? Political effects? Legislative effects? Environmental effects? IT developments? Competitor intentions - various? Market demand? New technologies, services, ideas? Vital contracts and partners? Sustaining internal capabilities? Obstacles faced? Insurmountable weaknesses? Loss of key staff? Sustainable financial backing? Economy - home, abroad? Seasonality, weather effects? SWOT 2 external opportunities threats

16. Six-Stage Management System 2 Plan the Strategy 1 Develop the Strategy Strategic Plan 3 Align the Strategy 6 Test and Adapt Operational Plan 4 Plan operations Execution 5 Monitor and Learn Process Initiave

17. Stage 1 Develop te Strategy • What business are we in and why? • What is purpose of the organisation (mission)? • What is the internalcompassthatguides is actions (values)? • What are the axpirationsforfutureresults (vision)? • What are the key issues we face (SWOT analyse)? • Howcan we best compete? • In what niches will we compete? • Whatcustomervaluepropositionwilldifferentiate in those niches? • Whatkeyprocesseswillcreateourdifferentiation? • Whatdirection does the strategyrequire we take in humancapital? • What are the technologyenablers of the strategy?