DAY TWO - Tuesday, March 9, 2010

Stage 4a: Linking Strategy to Operations

 
While alignment creates value, the benefits cannot be sustained unless the strategy is integrated
into the operational processes of the business. This linkage constitutes Stage 4 of the BSC system.
Several dimensions of the linkage process will be explored including: 1. linking operational process
improvements to strategic objectives such as the role for performance improvement programs (TQM,
Six Sigma, Lean) and designing operational dashboards of KPIs that drive continuous improvement;
and 2. linking to resource management such as sales planning and rolling forecasts, resource capacity
planning, and developing dynamic budgets and pro forma profitability statements.
 
Key Issues

• Aligning quality and process improvement programs to strategic priorities
• Applying analytics to develop operational dashboards
• Using time-driven ABC to forecast and fund the resource capacities required to produce and deliver the strategic plan
  

Stage 4b: Aligning Enterprise Risk Management to Strategy Execution

Risk management has become essential for successful and sustainable strategy execution. Many
organizations, however, despite having a designated risk management officer and even a risk
management department, have suffered massive losses from their failure to understand and manage
the risks inherent in their strategies. Bob Kaplan will share insights on how organizations can incorporate
risk objectives into the Balanced Scorecard’s financial and process perspectives, as well as formally
incorporating discussions of risk exposure in periodic strategy review management meetings.

Key Issues

• Interactive case discussion on managing strategic risk
• Linking strategy map objectives to risk events
• Developing key risk indicators
• Selecting and funding risk mitigation initiatives

Stages 5 & 6: Monitor, Learn, Test, and Adapt the Strategy

 
Strategy is a hypothesis on how to satisfy shareholder/stakeholder objectives. A management system
must not only define these hypotheses (accomplished in Stages 1 through 4) but also monitor, adapt,
and test these theories based on real world experiences. The BSC management system achieves this
objective at several levels including conducting operational and strategy review meetings as well as
statistical testing of the strategy.
 
Key Issues

• Operational review meetings for problem solving, learning, and sharing best practices
• Strategy review meetings to fine tune performance and the execution of strategic initiatives
• Using analytics to test and adapt the strategy

Best Practice Case Study: Organizational Transformation at Army Air Force Exchange Services (AAFES): Linking Strategy to Operations

Making Strategy Management a Core Competency

The new BSC strategy management system does not manage itself. This session will discuss how a
new competency and a new organization, the Office of Strategy Management, has emerged to play
this role. Discussions will address your performance management philosophy and management
system – static or dynamic / silos or platform.
 
Key Issues

• What is Your Performance Management Philosophy?
• Why you need one?
• Different options
• The Balanced Scorecard as a PM system
• The Management System:  Static or Dynamic?
• How does a strategy management system help me during a recession?
• The Management System: Silos or Platform
• How can a management system integrate the many islands of creativity that have sprung up to facilitate strategy?
• The Office of Strategy Management
• What it is and why you need one?

 Open Forum with the Strategy Experts