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)
Desired Scores (Scale 1-10)
Desired Score: Average v. Total
Current Score: Average v. Total
Company Monitor
Introduction
gap
Current Scores (Scale 1-10)
Desired Scores (Scale 1-10)
Desired Score: Average v. Total
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
15 11 5 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
CBM2007 AVG Desired
Current Scores Scale 1 - 10
Desired scores Scale 0 - 10
Ready for Change Excellent
Complacent Cynical
2003
Desired scores (scale 1-10)
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
Rank Section Category Desired Current MM Gap MM Gap MM Gap
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
15 11 5
23 20
19
13 25
19 34
5 25
12
31 16
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
CBM 2007 AVG Desired
Current Scores Scale 0 - 10
Desired scores Scale 0 - 10
Ready for Change Excellent
Complacent Cynical
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
