Core Activity C - Manage performance and cost to aid value creation Flashcards
Describe FLATHALL’s value chain ? How can It be improved?
Primary activities
Split into project work and daily operations
- Inbound logistics
- Operations
- Outbound logistics
- Market and sales
- After sales service
Secondary activities
- Infrastructure (QM, employee/ leadership)
- HR
- Tech
- Procurement
Flatthall specific balanced scorecard ?
Maintenance vs project work
Solution for transfer pricing
Financial (Capturing Value)
- Margins
- Leverage
- Asset turns
- MIRR
- PPE/ debt
- Accounting return
- NAV per share
- Loan to value
- EPS growth
Customer (Defining & Delivering Value)
- Occupancy rate
- % nomination agreements
- NPS scores
- Retention rates
- Security incidents
- Valid complaints
Process (Creating value)
- Check out time
- Maintenance request / time to resolve
- Projects on time
- Projects on budget
Learning and growth (Creating Value)
- Staff turnover
- Staff training
- R&D
What leadership styles exist
Authoritative
Democratic
Participative
Describe the balance scorecard approach
Financial
Customer based
Operations
Learning and growth
How does FLATHALL ensure TCM?
Frequent inspections of the accommodation
What costs transformation tools could be used to help FLATHALL manage rising costs?
ABC
ABM
TQM via frequent inspections
Cost conscious culture
Link cost to profitability
Hedging utilities
Understand risks involved in reducing costs
How are costs currently managed?
Centrally perhaps for hedging ?
Unclear how the buildings are run in terms of responsibility centres
How are pricing decisions currently managed ?
Pricing appears to be managed centrally and is very sensitive due to affordability and relationships with institutions. Demand also very high which allows us to charge realistic rents for the standard of accommodation.
Why does flathall appear to have low liquidity ?
Nature of the business
Receives deposits and rentals in advance with low receivables balance and has a high payables balance due to the nature of building projects
Key changes that could affect ROCE
Revaluation method portfolio
Increase capital employed and reduce ROCE
Increased depreciation lowering profitability
Explain cost transformation techniques?
CGMA cost transformation model
- cost conscious culture
- understanding cost drivers
- incorporating sustainability
- managing risks with cost competativness
- connect products / service with profitability (segmented reporting)
- generate maximum value through new products
Explain target costing
Market driven price, desired margin and target cost
How might Flathall currently run each building in relation to responsibilities centres ?
Cost centres may be more affective as revenues are likely to be determined by central management due to price sensitivity of the market.
Describe the 4 stages of data analytics? Including management financial information
Descriptive - What has happened?
Diagnostic - Why this has happened?
Predictive - What is likely to happen?
Prescriptive - What should we do next?
How could we improve employee engagement?
- Set clear goals/ objectives and responsibilities
- Understand how performance will be measured
- Have clarity around remuneration for achieving and exceeding targets.
- Ensure employee’s strengths align with their roles
- Improve efficiency and optimisation to promote job satisfaction
How might you best retain high performing employees ?
Differentiated motivators
- Impact ( how their work impacts overall purpose and vision)
- Discretion
- Opportunity to show excellence
Great company
Aligned values
How should you approach goal setting with an individual?
Develop (10 mins)
- 3/5 per person annually
- Outcomes driven
- Aligned to the companies goals
Discuss (10 mins)
- Them
- You
- Next steps
Describe the goal setting ‘the table’ checklist?
Impact
Discretion
Excellence
Great company
Aligned Values
