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.
