Prof. Fred Lachotzki • Hoogleraar Business Policy bij Nyenrode Business University 1
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Prof. Fred Lachotzki
• Hoogleraar Business Policy
bij Nyenrode Business University
1
THE MESSAGE
De attributen van het prestatievermogen tot waardecreatie van een onderneming moeten net zo nauwgezet en consistent geëxpliciteerd en gepubliceerd worden als fianciële resultaten.
THE PROBLEM
• Boards are struggling finding a balance between control and freedom.
• Boards fail in having equal metrics and processes in place measuring the company’s capacity to execute as they have for their financial performance.
THE SOLUTION
Top Management in organizations needs a new system, a new framework.
THE SYSTEM
WHAT DOES IT LOOK LIKE?
Resulting in
Effective Boards
Through
• Focus on Value Maximization of the Firm or Institution
• Leading Beyond Control • Leadership team • Strategy ( leveraging resources and carefully adding new resources)
• Managing the milestones
• Superior long-term return on
capital • Superior competitive
advantage/position • Strong strategic and
stakeholder alignment
© Fred Lachotzki Nyenrode Business Universiteit
•
A company or institution is strategically aligned when the crucial people in the company decide that the quality of corporate organizational capabilities meets their expectations and enables them to execute the strategy.
A company or institution posses stakeholder
alignment when all relevant stakeholders confirm that their interests are fairly balanced with one another.
•
Strategic and stakeholder alignment l
© Fred Lachotzki Nyenrode Business Universiteit
Effective Boards
Through
• Focus on Value Maximization of Firm or Instituation
• Leading Beyond Control • Leadership team • Strategy ( leveraging resources and carefully adding new resources)
• Managing the milestones
© Fred Lachotzki Nyenrode Business Universiteit
•
Leading “Beyond Control” has two primary meanings:
The “what” meaning: devoting equal time to a
company’s financial performance, or institution’s end results –the finish-line- as to the ability to get there.
The “how” meaning : a structured way of ‘letting
go’ and allowing, through ‘Corporate Dialogue’ considerable room for contributions from both a broad range of key executives who account for a company’s or institution’s long-term success, as well as contributions from a wide range of stakeholders driving or accommodating success.
• Leading Beyond Control l
© Fred Lachotzki Nyenrode Business Universiteit
•
The Creation of the Strategic and Stakeholder Alignment agenda’s through Measuring – Matching - Managing
• Corporate Dialogue l
© Fred Lachotzki Nyenrode Business Universiteit
Creating the corporate alignment agenda
Company Strategic Agenda
Ambition based on definition
of success , desired
archtecture and avaliable
resources
Strategic alignment agenda
Results from stakeholders
dialogue
Results from company’s
ambition in combination with
architecture the Board
desires being matched with
what the organisation desires
and needs
Stakeholders agenda Corporate Alignment agenda
Results from matching
definition of success,
strategic agenda and
stakeholders agendas
Blackbox becomes operating arena = portfolio of the 39 capabilities
QUALITY OF THE COMPANY
Continuous Improvement
Result and Output Driven
Transparent Communication
Clear Intent
Reinvent for Change
Innovation
Customer Value Creation
ORGANISATION MANAGEMENT
CULTURE OF THE ORGANIZATION
Direct and Open
Open to Partnerships
Entrepreneurial
Meritocracy
Shared Principles and Values
Adaptive and Open to Change
Cooperative Atmosphere
CAREER
PERSONAL DEVELOPMENT
Professional Development
Emotional Growth
Career Ownership
Assessment and Feedback
IMAGE OF THE ORGANIZATION
Dynamic Industry Shaper
Attractive Employer
Responsible Company
Solid Reputation
BENEFITS AND REWARDS
Compensation based on Performance
Good Financial Package
Lifestyle Benefits
Work-Life Balance
Strategic Rewards
Operating
arena
QUALITY OF THE MANAGER
Management Competence
Winning Coach
Interpersonal Skills
Influential
Trustworthy
PERSONAL EMPOWERMENT
High Level Strategy Participation
Freedom to Act
Maximum Challenge
Access to Knowledge
Full Support
Compelling Objectives
Personal Accountability
An ‘Archtecture/infrastructure model’ consisting of 39 capabilities
QUALITY OF THE COMPANY
Continuous Improvement
Result and Output Driven
Transparent Communication
Clear Intent
Reinvent for Change
Innovation
Customer Value Creation
ORGANISATION MANAGEMENT CAREER
PERSONAL DEVELOPMENT
Professional Development
Emotional Growth
Career Ownership
Assessment and Feedback
IMAGE OF THE ORGANIZATION
Dynamic Industry Shaper
Attractive Employer
Responsible Company
Solid Reputation
BENEFITS AND REWARDS
Compensation based on Performance
Good Financial Package
Lifestyle Benefits
Work-Life Balance
Strategic Rewards
Operating
arena
QUALITY OF THE MANAGER
Management Competence
Winning Coach
Interpersonal Skills
Influential
Trustworthy
PERSONAL EMPOWERMENT
High Level Strategy Participation
Freedom to Act
Maximum Challenge
Access to Knowledge
Full Support
Compelling Objectives
Personal Accountability
CULTURE OF THE ORGANIZATION
Direct and Open
Open to Partnerships
Entrepreneurial
Meritocracy
Shared Principles and Values
Adaptive and Open to Change
Cooperative Atmosphere
Creating the corporate alignment agenda
Company Strategic Agenda
Ambition based on definition
of success , desired
archtecture and avaliable
resources
Strategic alignment agenda
Results from stakeholders
dialogue
Results from company’s
ambition in combination with
architecture the Board
desires being matched with
what the organisation desires
and needs
Stakeholders agenda Corporate Alignment agenda
Results from matching
definition of success,
strategic agenda and
stakeholders agendas
Current Scores (Scale 1-10)
De
sir
ed
Sc
ore
s (
Sc
ale
1-1
0)
De
sir
ed
Sc
ore
: A
ve
rag
e v
. T
ota
l
Current Score: Average v. Total
Company Monitor Introduction
gap
Current Scores (Scale 1-10)
De
sir
ed
Sc
ore
s (
Sc
ale
1-1
0)
De
sir
ed
Sc
ore
: A
ve
rag
e v
. T
ota
l
Current Score: Average v. Total Company Monitor™
Online measurement of 39 organizational capabilities
Assessment of strategic alignment within an organization
Feedback given by top management and key people
Reporting on all organizational and demographic levels
19 Realizing strategy =
measuring a moving target
Organizational blueprint
15
Monitoring Strategy Execution Intervention
Houston Case Brunel CompanyMonitor Survey 2012
17
Collective change ambitions versus the benchmark Brunel 2011 – 2012
18
Department Overview: Houston Collective change ambitions of departments within Houston
19
Hous
ton 17
Difference: 2.6
Brunel 2012
Capability Overview: Houston Finance 21 out of 39 capabilities score a gap of 30 or higher
20
Monitoring Strategy Execution CEO Change
jb2008
A
High-Growth, High-Margin,
Specialized Nutrition Company
A New Direction Needed
jb2008
Focussing the Organization
• Diversified and internationalized Supervisory Board
• Replaced 40% of Top 50 managers under Exec Board
• Strategy – Image – Getting things done - Management
Case example: Numico starting position 2003 (II)
Overall low desired scores and low current scores (‘cynical’)
10
2
17
30
40
23
5 15 11
23
20
19
13
25
19
34
5
25
12
31
14
7.0
7.5
8.0
8.5
9.0
9.5
10.0
4.4 4.9 5.4 5.9 6.4 6.9 7.4 7.9 8.4
CBM 2007 AVG Current
CB
M 2
007 A
VG
Desir
ed
Current Scores
Scale 1 - 10
Desir
ed
sco
res
Scale
0 -
10
Ready for Change Excellent
Complacent Cynical
2003
Desir
ed
sco
res
(scale
1-1
0)
Creating the corporate alignment agenda
Company Strategic Agenda
Ambition based on definition
of success , desired
archtecture and avaliable
resources
Strategic alignment agenda
Results from stakeholders
dialogue
Results from company’s
ambition in combination with
architecture the Board
desires being matched with
what the organisation desires
and needs
Stakeholders agenda Corporate Alignment agenda
Results from matching
definition of success,
strategic agenda and
stakeholders agendas
Case example: Numico starting poition in 2003 (I) - On almost all 39
capabilities high Gaps (i.e. Desired score >> Current score)
Personal Empowerment
Company Monitor™ Quality of Boss
Benefits & Rewards
Quality of Company
Personal Development
Result & Output driven
Continuous Improvement
Transparent Communication
Customer Value Creation
Career Ownership
Emotional Growth
Professional Development
Assessment & Feedback
Interpersonal Skills
Winning Coach
Management Competence
Access to knowledge
Freedom to act
High strategy participation
Full Support
Maximum Challenge Compelling Objectives
Reinvent for Change
Clear Intent
Innovation
Influential
Trustworthy
Personal Accountability
Lifestyle Benefits
Good Financial Package
Comp.Based on Contr.
Work-life Balance
Profit Sharing
58
23
75
**
**
55
53
20 20 24
31 21
23 43 **
10 27
24 **
28
15
35
42
31
35
35
26
**
31
53
Image of Organisation Dynamic Industry Shaper
Solid Reputation
Responsible Company
Attractive Employer
67
40
9
3
30
Culture of Organisation Open to Partnerships
Sense of Service / Care
Entrepreneurial
Cooperative Atmosphere
Shared Principles & Values
Meritocracy
Adaptive & Open to Change
Direct & Open 9
18
31
36
37
25
** 26
23
25
30
29
jb2008
Key Capabilities
capability with significantly greater
alignment than the benchmark
Strengths R
an
k
Se
cti
on
Cate
go
ry
De
sir
ed
Cu
rre
nt
MM
Ga
p
MM
Ga
p
MM
Ga
p
1 PE Personal Accountability 8.9 8.0 3 5 12
2 IO Solid Reputation 8.7 7.6 6 7 19
3 IO Responsible Company 8.6 7.5 6 10 8
4 QB Trustworthy 9.3 8.2 7 8 5
5 PE High-Level Strategy Involvement 9.0 7.7 7 11 14
6 QB Influential 9.1 7.8 8 12 9
7 PE Maximum Challenge 9.1 7.8 9 13 14
8 QC Result & Output Driven 8.9 7.6 9 10 16
9 QC Clear Intent 9.2 7.8 10 12 31
10 PE Freedom to Act 9.0 7.6 10 9 12
Image: Solid Reputation,
Responsible Company
Getting things done: personal
accountability, result and output
driven, maximum challenge, freedom
to act
Strategy: clear intent, high level
strategy involvement
Management: trustworthy and
influential
1
2
3
4
10
2
17
30
40
23
515 11
2320
19
13
25
19
34
5
25
12
3116
13
15
14
13
7.0
7.5
8.0
8.5
9.0
9.5
10.0
4.4 4.9 5.4 5.9 6.4 6.9 7.4 7.9 8.4
CBM 2007 AVG Current
CB
M 2
00
7 A
VG
De
sir
ed
Current Scores
Scale 0 - 10
De
sir
ed
sc
ore
s
Sc
ale
0 -
10
Ready for Change Excellent
ComplacentCynical
2004
2003
2005
2007
2006
Resulting in
Effective Boards
Through
• Focus on Value Maximization of the Firm or Institution
• Leading Beyond Control • Leadership team • Strategy ( leveraging resources and carefully adding new resources)
• Managing the milestones
• Superior long-term return on
capital • Superior competitive
advantage/position • Strong strategic and
stakeholder alignment
© Fred Lachotzki Nyenrode Business Universiteit
THE MESSAGE
De attributen van het prestatievermogen tot waardecreatie van een onderneming moeten net zo nauwgezet en consistent geëxpliciteerd en gepubliceerd worden als fianciële resultaten.
30
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