04 Corporate Transformation in Practice Flashcards
What is the key transformation activity where most time & effort are spent?
Key effort-heavy activity is to map the new Co strategy into processes, implement them & then keep them evolving
What is the 1st step to do it?
Why is it key?
1st segmentation step is to map these taxonomies:
- products
- costomer segments
- regions
- distribution channels
with their relationships, i.e. which subcategory is related with which subcategory (it is a 4D-matrix)
It is key to agree on 1 common Co segmentation because it provides a common language, which must then be enforced by the Co.
What is step 2 of transformation?
what is the outcome?
Medium- to long-term planning for the Co, done properly:
estimate growth prospects, and then decide how much to invest, for every segment of the 4D segmentation matrix resulting from step 1.
The outcome is the (target) positioning.
usual planning technique by CFOs:
just use avg of analysts’ projections
LOL brilliant!
industrial complexity: driver?
diversity (in the 4 segmentation dimensions)
What are the characteristics of a strategic biz fields?
biz field def=
the homogeneity of the environment (incl. competition)
def= product X customer segment
Step 3 of transformation:
+ 2 typical models therein
map biz field X Customer Relationship Interactions to find Macro Processes!
(think how to bundle them, considering your strategy & customer experience)
2 typical models for bundling in here:
- a cost leader “is oriented horizontally” with its MPs, i.e. bundles horizontally across biz fields => looking for synergies
- a differentiator “is oriented vertically” with its MPs, i.e. bundles vertically => looking for “intimacy”
Macro-Processes:
- def=
- how many
- for how long
- strategic bundles of CRIs X biz fields
- from 6 to 18
- don’t change them for a long time: this is standardization for stability
Two outcomes of Macro-Processes:
- synergies
- found in shared activities, either primary or secondary
- org chart
- can be reverse-engineered to the biz segmentation
- nowadays it is typically structured by processes, rather than as a matrix
Step 4:
- what?
- how?
- goals?
- go from strategic planning to operations
- going from Biz Process Architecture to to project portfolio
- then implementing those projects with experienced project managers
- keep value added activities, outsource the rest (incl. problems)
Taxonomy of Co resource allocation
resource allocation <= at top, controlled by board
- resources for operations
- investments
- incremental improvement
- strategic programs / projects
3 levels of project management - w 3 considerations!
3 levels of project management:
- project portfolio mgmt:
board wonders: can we afford all of the projects that we need? (NO=>SELL) - external project mgmt:
like client controlling their own architect - internal project mgmt:
like the architect running the construction project
3 considerations:
- Just like there are 5 types of strategies!
- They need different types of skills & EXPERIENCE
- a Co must correctly identify levels & skills, or it fails
Resource allocation: responsibilities
- board => think of how to change the biz => first allocate resources to strategic programs/projects, then allocate money to run the biz based on biz cases
- key: use psy & social competencies to make top managers feel not like individual representatives of BUs, but like “team members” of the system
- BU top managers should put forward only honest biz cases, for a constructive discussion in the Co’s interest
- in most companies every BU just lies
steering committee
def=
hierarchical structure
committee dealing w strategic programs / projects
Structure:
- program manager => looks across projects
- for each project:
-
project owner* (sometimes aka sponsor) => allocates the project budget, prepares “project request”
- people taking material decisions:
-
project committee* + project manager
* sub-project manager
* sub-project team
why do projects always take longer than anticipated?
because of disagreements =>
negotiations =>
cycles of revisions
