XYZ Co. Are We On the Same Page?

1. XYZ Co.Are We On the Same Page? “Mission” Critical Success Factors Company Measurements - “Dashboard” Individual Expectations, Accountability & Feedback If everyone knows what the target is, and the reward and measurement systems are in alignment, you will hit it! Mark T. Livingston

2. Process Orientation I P O Output Input Process Definitions • Dashboard key measurements of companies performance. Relevant daily, weekly, monthly and annual metrics • EAF Expectations (role, objectives), Accountability (performance measurements) Feedback (review process) • IPO Each persons role is quantified in terms of Inputs they receive, the value they add (Process)and Outputs they create (definition and metrics). Provides objective basis for 360 degree review process • 360 Degree review A peer, subordinate and superior evaluation that measures how well the individual supports others to meet their objectives Mark T. Livingston

3. Definitions Organizational Capability ability to manage people for competitive advantage Or/ A businesses ability to establish internal structures and processes that influence its members to create organization specific competencies and thus enable the business to adapt to changing customer and strategic needs. Mark T. Livingston

4. CHANGE ECONOMIC VICIOUS CIRCLE COMPETITION Organizational Capability1 To what extent do we understand economic and social conditions affecting our business? Continuous Learning; the ability to learn continuously about business Conditions that affect the firm 1 Organizational Capability, Lake & Ulrich Mark T. Livingston

5. Organizational Capability1 • COMPETITIVE ADVANTAGE • Perceived Customer Value • Sources of Uniqueness To what extent do we understand and meet customer needs? Customer intelligence; the ability to scan continuously and learn from customers Competitor intelligence; the ability to examine continuously and learn from competitors 1 Organizational Capability, Lake & Ulrich Mark T. Livingston

6. SOURCES OF UNIQUENESS TECHNOLOGICALCAPABILITY ORGANIZATIONAL CAPABILITY ECONOMIC/FINANCIALCAPABILITY STRATEGIC/MARKETING CAPABILITY Organizational Capability1 To what extent does my business demonstrate world-class performance in each source of uniqueness as well as the ability to integrate them? Paradox; the ability to deal with competing demands 1 Organizational Capability, Lake & Ulrich Mark T. Livingston

7. Organizational Capability1 SHARED MINDSET To what extent do we have a shared mindset inside and outside The organization? Internalized Organizational Values; the ability to make customer values employee values Mindset dispersion; the ability to build a shared mindset inside and outside the organization 1 Organizational Capability, Lake & Ulrich Mark T. Livingston

8. Organizational Capability1 MANAGEMENT PRACTICES To what extent do we use all management practices to build shared mindset? Integration; the ability to integrate all the management Practices Unity; the ability of management practices to build internal and external unity 1 Organizational Capability, Lake & Ulrich Mark T. Livingston

9. Organizational Capability1 CAPACITY FOR CHANGE To what extent do we have the capacity for change? Symbiosis; the ability to remove boundaries between external threat and internal action Reflexiveness; the ability to learn from previous actions Alignment; the ability to integrate tasks, structures, processes and Systems at the technical, political and cultural levels Self Renewal; the ability to change over time 1 Organizational Capability, Lake & Ulrich Mark T. Livingston

10. Organizational Capability1 LEADERSHIP AT ALL LEVELS OF THE ORGANIZATION To what extent do we have leadership throughout the organization? External Leadership; the ability to translate external needs to internal Vision Internal Leadership; the ability to translate vision into action 1 Organizational Capability, Lake & Ulrich Mark T. Livingston

11. Business Realignment/Development Framework Objective: • Provide a framework for competitive advantage and aligning an organization and its stakeholders toward that objective • Reconcile a “smorgasbord” of management theories and answer questions about : • Competitive Advantage • Leadership & Teamwork • “Re-engineering” • Values; “greed”, executive salaries • Social economic inequality; growth of upper 20%v vs middle 60% and lower 20% • Corporate Responsibility; • Stakeholders Mark T. Livingston

12. Business Realignment/Development Framework • Assessment • Situation • If critical - Initiate cash flow controls to preserve cash & protect equity/security • Validate business model • SWOT • Determine if sustainable core business exists Mark T. Livingston

13. Business Realignment/Development Framework • Planning • Identify/solve the initial business model problems • Identify/prioritize opportunities to increase revenues, reduce costs, increase cash flow • Identify/set measurable milestones (critical success factors), metrics for revenues, costs, quality, productivity, customer satisfaction & retention • Align stakeholder objectives and provide an acceptable go forward plan Mark T. Livingston

14. Business Realignment/Development Framework • Implementation • Take action & responsibility to achieve agreed upon goals • Report, measure progress and results weekly, monthly • Develop tools, training & systems to support staff to meet objectives • Create self sustaining strategic business building process for succession teams to continue business successfully Mark T. Livingston

15. Customer Segment 1 Customer Segment 2 Customer Segment 3 Affinity Group Direct Retail Wholesale Distribution Channel Outsourced/External Competencies i.e. • Distribution • Telemarketing/Customer Service • Database Management • Other Operations Financial management Technical Support Outside Resources/Alliances Owned/Internal Competencies Marketing Systems / WAN Management Business Development Human Resources Research & Development Raw Materials Suppliers Materials To be Converted Service Providers Contract Manufacturers Content Providers XYZ Co.Value Chain/Business Model Mark T. Livingston

16. Value Chain/Business Model - Notes This is a diagram I use to analyze a businesses value chain. • I want to understand the business by each customer segment. I also want to understand how the end users of customers product use product (if customer of the subject business is not the consumer or end user). • Next I want to understand relationships with distribution channels, potential conflicts and opportunities; • Those used by subject company • Then those used by competitors/providers of alternatives to product or service • Next I want to understand relationships with suppliers of raw materials, etc. • Is subject an “A” customer ( very important to supplier) or a B,C,D or F? • Can subject improve relationship to reduce cost, shorten leads, increase quality, etc • Alternative sources of supply • Impact on service cycle • Next an analysis of “owned” competencies, comparison to best practices. Can someone else add more value to them than the subject? If so, consider outsourcing. • Economics • Impact on service cycle • Opportunity for improvement To succeed, every business must add value to an organization or individual. To out compete other providers, the organization must add more perceived value, to it’s “value chain” than those other providers. The same is true for individual competitive advantage The objective of this analysis is to understand the “value chain” for the business and all of the “stakeholders” necessary to create that value. The “chain” varies from organization to organization based on how the organization converts it’s raw materials, information or components. The winner, over time, is always the organization that can add the most value. This hasn’t changed since the spice trade routes were first developed. Initially, trade route and distribution support channels were developed to support overland trade. When galley ships began using trade routes around the Cape of Africa, galley ship operators won trade business because they were more reliable, faster and less expensive than overland routes. This spawned supporting industries in the ports and galley ship building enterprises. When Clipper ships were developed they were adopted for the same reasons. Galley ship building competencies were not the same as Clippers and new builders emerged to satisfy the market. When Steam ships were developed they also were adopted and as before a new ship building industry (steel construction; different competencies) emerged to satisfy demand. The steam ships were so successful the Clipper captains petitioned congress under the theory of unfair competition. Nothing’s changed. Understanding the value chain is critical to competitive strategy and advantage. Mark T. Livingston

17. XYZ Co.Industry Growth Curve Consolidation; many companies go out of business or are acquired Many new competitors, shrinking margins Few competitors, high margins Mark T. Livingston

18. XYZ Co.Company Growth Curve Mark T. Livingston

19. XYZ Co.Company Growth Curve Mark T. Livingston

20. XYZ Co.Discontinuities on the Horizon? Mark T. Livingston

21. Point of Contact “Moment of Truth” With Customer XYZ Co.“External”Service Cycle-creating Customer Perceptions Mark T. Livingston

22. “Moments of Truth” Mark T. Livingston

23. Process Orientation P I O Input Output Process XYZ Co.“Internal”Service Cycle Individual Understanding of Role Mark T. Livingston

24. Life “APP”Success/Failure – Accident or Design • How do you increase the Probability of Success ? • Can you define it? • “Begin with the end in mind” • Stephen Covey Mark T. Livingston

25. Life “APP”Success/Failure – Accident or Design • Alignment • Personal Values • Relationships • Social • Intellectual • Physical/Spiritual • Interests • Individual Strengths & Weaknesses • Vision of the future • Where do you want to be in the “Food Chain”? Mark T. Livingston

26. Life “APP”Success/Failure – Accident or Design • Perspective • Understanding of Process • Education you need • Competitive Advantage • Individual • Organizational • Options Mark T. Livingston

27. Life “APP”Success/Failure – Accident or Design • Increase Probability of Success • Take Action to • Maintain “Alignment”/Congruency • Invest in yourself to increase “Perspective” Mark T. Livingston