12 - Planning the Campaign Flashcards
What are the three ingredients that must be added to the strategy map to create the dynamics of strategy?
- Quantify: Establish targets and validate cause-and-effect relationships
- Define the time line: Determine how strategic themes will create value in short-, medium-, and long-term horizons
- Select initiatives: Choose strategic investments and action programs
What does quantifying a strategic objective provide?
A clear, measurable target rather than a passive statement of intent
What is the role of a strategy map in an organization?
It provides a holistic perspective, integrating various processes for implementing strategy
What does the strategic theme represent in the context of strategy?
A building block of strategy that creates a microeconomic model of one dimension of the strategy
How long does the innovation theme typically create value?
Over a three- to five-year period
True or False: Each strategic theme is analogous to a battle in a military campaign.
True
What was the overarching objective of Cigna Property & Casualty under Gerry Isom?
To transform the division into a high-profit performer
What is the combined ratio measure used for in the insurance industry?
It serves as a surrogate for profitability by comparing expenses to revenues
Fill in the blank: The stretch target for Cigna P&C was to achieve a combined ratio of _______.
less than 1
What were the four themes of Isom’s high-level strategy at Cigna?
- Improve agents’ productivity
- Focus on target markets
- Align the underwriting and claims processes
- Upgrade the underwriting process
What is the first step in the six-step process for planning the campaign?
Define the shareholder/stakeholder value gap
What does the term ‘value gap’ refer to?
The difference between future aspiration and current reality
What are the three financial sub-objectives defined by Consumer Bank?
- Reduce cost per customer
- Increase revenue per customer
- Add and retain high-value customers
What is the target for reducing annual customer cost at Consumer Bank?
From $100 to $75
What is the significance of setting stretch targets for an organization?
It stimulates innovative thinking and motivates employees
What is the second step in the six-step planning process?
Reconcile the customer value proposition
What must be identified to achieve revenue growth according to the strategy?
The value proposition offered to targeted customer groups
What is the target for the percentage of customers based on the relationship value proposition at Consumer Bank within five years?
70 percent
What does establishing a timeline for results involve?
Allocating the value gap to different strategic themes
What are the targets for customer retention and cross-selling focused on?
Objectives, targets, and initiatives in the internal and learning and growth perspectives of the strategy.
What is the overall time horizon for Consumer Bank’s strategy?
Five years.
By how much would the cost per customer drop in the first two years?
$100 to $80 per year.
What would happen to the company’s net income in the first two years if the target was achieved?
It would double from $20 million to $47 million.
In which year would the major growth in relationship customers occur?
Year three.
What would the net income reach in year three?
$96 million.
What was the target for revenue per customer to be increased to?
$300 per year.
How long does developing new products typically take?
Two to three years.
What is the purpose of breaking down high-level financial targets into specific internal process targets?
To assess whether the high-level targets are achievable.
What does the customer value proposition define?
How the enterprise creates value for its customers and shareholders.
What are the two operations management processes selected by Consumer Bank?
- Provide rapid response
- Minimize problems
What is the measure for the process ‘Provide rapid response’?
Request fulfillment time.
What is the focus of the process ‘Understand customer segments’?
Clarifying the customer value proposition and segmenting the market.
Which customer management process aims to migrate customers to a cost-effective approach?
Shift to appropriate channel.
What is the target increase in revenue per customer from the innovation process?
50 percent.
What is one of the strategic job families identified for the operations management process ‘minimize problems’?
Quality managers.
What was the goal for the ‘customer-focused culture’ measure?
100 percent of customers believe employees are customer-focused.
What percentage of the workforce should have personal goals linked to the Balanced Scorecard?
100 percent.
What was the target for the service error rate that Consumer Bank aimed to achieve?
0.1 percent.
What two strategic initiatives did Consumer Bank identify to reduce the service error rate?
- Install a new problem tracking system
- Redesign the front end of several processes
What is essential for the overall success of strategic initiatives?
They must be viewed as a bundled investment.
What was the target for the customer base increase at Consumer Bank?
From 200,000 to 600,000 in five years.
What does the strategy map provide for an organization?
A clear and comprehensive description of its strategy.
What is the benefit of having a strategy map?
It enables executives to execute their strategies effectively.
What is the purpose of a strategy map?
To provide a clear and comprehensive description of an organization’s strategy.
How does a strategy map enhance executives’ ability to execute strategies?
By linking objectives for both outcomes and drivers of the strategy.
What does the strategy map convert word statements of objectives into?
A Balanced Scorecard of measures, targets, and initiatives.
What does the strategy map enable within an organization?
A common understanding of the strategy.
What is required to close performance gaps between targeted and current performance?
Strategic initiatives.
True or False: The strategy map is a dynamic representation of the strategy.
False.
What dimensions do targets add to a strategy?
Time and speed.
What is the Strategic Readiness System (SRS) based on?
The Balanced Scorecard.
What were the army’s strategic priorities captured in the strategy map?
- People
- Readiness
- Transformation
What does the internal process perspective articulate?
The relationship between current readiness and future readiness.
What is the ultimate goal of the U.S. Army’s transformation?
To transform into the Future Objective Force.
What does the learning and growth perspective emphasize?
The well-being of soldiers and their families.
Fill in the blank: The theme to secure _______ provides the foundation for the strategy map.
[resources]
What is included in the broader definition of resources for the army?
- People
- Dollars
- Infrastructure
- Installations
- Institutions
- Time
What was implemented in October 2002 to enhance readiness assessment?
The Army’s Strategic Readiness System.
Who stated the benefits of the Strategic Readiness System before the U.S. House of Representatives?
General John M. Keane.
What did the SRS improve regarding readiness measurement?
Timeliness and precision of information.
What type of war did the U.S. Army face that required a new readiness reporting system?
Global war on terrorism.
What was a constant priority for the army during the transformation?
The well-being of the troops and their families.
