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Strategy Implementation by Kurt Verweire - Book Launch
- 2. © Vlerick Business School
INTRODUCTION OF AUTHOR
PROF KURT VERWEIRE
ASSOCIATE PROFESSOR IN
STRATEGIC MANAGEMENT
PROF PHILIPPE HASPESLAGH
DEAN VLERICK BUSINESS SCHOOL
2 Strategy Implementation
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STRATEGY IMPLEMENTATION
3
“Execution is not only the biggest issue facing business today;
it is something nobody has explained satisfactorily.”
(Bossidy and Charan, 2002)
Strategy Implementation
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DEFINING STRATEGYstrategy occurs at different levels
9 Strategy Implementation
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DEFINING STRATEGY: EASYJET CASE
Whom do we serve?
How do we realize this?
What do we provide?
What is our value
proposition?
People paying a ticket out of their own
pocket; not the ‘fat cats’
Short-haul flights, no longer than 4h
European destinations
Operational excellence:
standardization, no-frills, the basics
Low price
Convenience: fast and easy
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REVENUES PASSENGERS
PROFIT MARGIN RETURN ON EQUITY
Strategy Implementation
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DEFINING A COMPETITIVE THEME
16
What is our value
proposition?
What is our
operating model?
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A WINNING VALUE PROPOSITION
17
Level Access Connectivity Price Product Service
Consumer
seeks the
company
Turn my hassle
into a positive
experience.
Establish intimacy
with me by doing
something no one
else can.
Be my price agent;
let me trust you to
make my
purchases.
Inspire me with an
assortment of
excellent products
I didn’t know
about.
Provide me with a
solution, take my
problems away.
Consumer
prefers the
company
Make the whole
interaction
reliable and
convenient for
me.
Care about my
needs and me.
Be fair and
consistent in your
low pricing (this
does not
necessarily mean
lowest price).
Offer continuously
high-quality and
well-performing
products.
Educate me when I
encounter a
product or a
situation I don’t
understand.
Consumer
accepts the
company
Make it easy for
me to find what I
need.
Respect me, treat
me like a human
being.
Keep the prices
honest; don’t jack
them up or offer
big savings when
there are none.
Be credible in your
product and
service offerings.
Accommodate me;
bend over
backward some-
times to show me
you care.
Consumer
underworld
Block my way,
hassle me, keep
me waiting, make
it hard for me to
get in and out.
Dehumanize me;
disrespect me;
ignore my needs.
Be inconsistent,
unclear, or
misleading in your
pricing.
Offer me poor-
quality
merchandise and
services that I
can’t use.
Give me an
experience I’d just
as soon forget;
give me a reason
to tell my friends
to stay away.
Strategy Implementation
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A WINNING VALUE PROPOSITION
18
Source: Crawford & Mathews (2001) A 5-4-3-3-3 profile is optimal.
Strategy Implementation
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DEFINING A COMPETITIVE THEME
20
What is our value
proposition?
What is our
operating model?
Strategy Implementation
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A MODEL FOR STRATEGY IMPLEMENTATION
31
Source: Vlerick Business School/Electrabel (GDF Suez) (2004, 2014)
Strategy Implementation
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ALIGNMENT
32
Operational Excellence Product Leadership Customer Intimacy
Orchestrating theme ‘Best price’ and/or
‘Best access’ (‘fast, easy,
painless’)
‘Best product’ ‘Best service’ and/or
‘Best connectivity’
(‘relationship
orientation’)
Direction and goal setting
processes
Efficiency through
process thinking
Zero-defect service
Best product through
continuous product
innovation
Clear innovation strategy:
where to place the bets?
Understanding the
broader problem
Having expertise about
the customer’s business
Customers carefully
selected
Operational processes The operations
department drives the
company
Attention is paid to
process speed and quality
R&D is key: idea
management
Marketing is also key:
educate people with a
missionary zeal
Get engineers, designers,
and marketers
systematically together
Demonstrate expertise
and experience
Strengthen the
relationship
Build loyalty: focus on
customer retention
Strategy Implementation
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ALIGNMENT
33
Operational Excellence Product Leadership Customer Intimacy
Support processes Highly automated
processes
Information systems
increase control and
coordination and
streamline tasks
World-class supply chain
management
Clear innovation
governance process
Systematic process for
allocating resources to
innovation programs
Knowledge sharing and
networks
Systematic collection of
customer and market
information (through
Customer Relationship
Management)
Structured sales process
Evaluation and control
processes
Rigid, centralized control
Detailed measures on
various aspects of the
process
Setting higher thresholds
Innovation performance
measures
Control, learning, and
experimentation
Detailed measures about
account penetration and
loyalty
Lifetime value of the
customer
Organizational behavior
processes
Centralized structure
Organization structured
around core processes
Culture of continuous
improvement
Fluid organization
structure
Stimulate diversity,
tolerate mavericks
Low levels of
formalization
Entrepreneurial culture
Decentralized
organization
Employee retention
Focus on quality, defined
from the customer’s point
of view
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A MODEL FOR STRATEGY IMPLEMENTATION
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A MODEL FOR STRATEGY IMPLEMENTATION
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EEN STRATEGIEGERICHTE ORGANISATIE
40 Strategy Implementation
the structured organization
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COMMITMENT: INTRODUCING ‘MATURITY’
Implementing Winning Business Strategies
- 33. © Vlerick Business School42 Op Weg naar een Strategiegerichte Organisatie
the connected organization
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COMMITMENT: INTRODUCING ‘MATURITY’
Implementing Winning Business Strategies
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the committed organization
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PANEL DEBATE
Dirk Wouters
CEO
Bank Van Breda &
C°
Ignace Van Doorselaere
CEO
Van de Velde
Stefaan Hermans
COO
Carglass
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DEFINING STRATEGY
Financial services
What do we provide?
1989:
Whom do we serve?
What is our value proposition ?
2005: Is this enough to
differentiate?
Refining our strategy: best in
assisting self employed building
up finanial assets in a structured
and diversified way
How do we realize this?
- Personal approach: 1 Account
manager for both professional
& private needs
- Better understanding through
focus on target group
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FROM BELIEF TO KNOWLEDGE
FROM KNOWLEDGE TO IMPROVEMENT
57
Execute
In
take
Exceed
expectati
on
Strategy Implementation
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ALIGNMENT
1990 – 2000: Stop servicing other retail
customers in order to create focus on
entrepreuneurs and liberal professions
2005 – 2014: Stop servicing entrepreneurs and
liberal professions that are not interested in a
partnership to build up financial assets with
Bank J.Van Breda & C° in order to create focus
on our main value proposition
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Structured Organisation:
Discipline, operational processes, control
processes
CRM
Adapted remuneration
Focus
ALIGNMENT
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EVERY WEEK MORE THAN 1000
FEEDBACKS OF CUSTOMERS
Net Promotor Score YTD
2014
Promotors - Score 9 or 10
84 %
% Promotors % Detractorsminus
Net Promotor Score 10:
Detractors - Score < 7
2 %
Passives - Score 7 or 8
14 %
82 %
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COMMITMENT
Corporate culture:
Top 3 values employees
Honesty
Enthusiasm
Sense of responsibility
right attitude to create a service and
customer oriented business
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COMMITMENT
Connected and Committed Organisation:
IT-tools that support strategy
IT provides answers on the needs (≠ questions)
Credit analyst:
Cash flow serves to pay back credit + to build up financial
assets
Dividend pay out is diminishing solvency + opportunity to
build up private financial assets
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(*) Excluding ABK the net profit in 2011 amounted to Eur 21.407 million. The exceptional non-recurring impact on
results (badwill) from the acquisition of ABK means that the ROE for 2011 provide a distorted picture of underlying
profitability.
Bank J.Van Breda & C° (consolidated):
Sustainable growth
2009 2010 2011 2012 2013
Staff 399 418 462 465 466
Net profit after taxes 23.317 25.664 54.880 (*) 27.739 31.546
Equity 243.667 258.620 394.969 427.267 447.907
Cost income ratio 60% 57% 61% 58% 59%
Return on average equity (ROE) 10% 10% (*) 7% 7%
Impairments on loans 0,09% 0,15% 0,06% 0,08% 0,04%
Core capital ratio (Tier 1) 11,80% 11,30% 14,70% 14,20% 13,70%
(thousands of Euros)
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COMMUNICATION AND RECOGNITION IS KEY
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PANEL DEBATE – QUESTIONS?
Dirk Wouters
CEO
Bank Van Breda &
C°
Ignace Van Doorselaere
CEO
Van de Velde
Stefaan Hermans
COO
Carglass
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SWIM TOGETHER, SUCCEED TOGETHER
KEEN FOR MORE?
UPCOMING PROGRAMMES
Successful Strategy
Execution
24-26 November 2014
We invite you to enjoy the
reception and walking
dinner!
#KurtBookLaunch
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Strategy Implementation