MANAGEMENT CONTROL SYSTEMSUMMARYAchieving Strategic Alignment & Feedback And Strategic Learning Process

International Accounting

GROUP 2:Auzan Giffari (1210534005)Wahyunda Risa Putri (1210534008)Shabrina Alin Fristiana (121054010)

Lecturer : Drs. Riwayadi, MBA., Ak., CSRS.

International ClassFaculty of EconomicsAndalas University2014Achieving Strategic Alignment & Feedback AndStrategic Learning Process

1. Achieving Strategic Alignment & FeedbackThe main goal of strategic alignment is that every person in the organisation is making choices that re-enforce each others decisions and that everyone is pursuing a common value proposition- a common way of gaining competitive advantage. Maintaining this common view for each strategic scenario can be very challenging to present in traditional formats such as Word documents, PowerPoint or Excel worksheets. Strategy trees, strategy maps and scorecards can assist with this challenge by presenting large amounts of data at once by using visuals.One way of achieving strategic alignment is though feedback mechanisms such as strategy trees, strategy maps, scorecards and dashboards. These can be useful as they can quickly identify areas that are under performing.A strategy tree lays out what you are trying to achieve and how you are planning on achieving it. They show strategic objectives, critical success factors and the actions for each critical success factor. This allows everyone to see what the strategy actually is.Strategy maps have also become popular. These are made up of a subset of objects from the strategy tree. They have become so popular as they only include objectives and the relationship between them.Scorecards can be critical in successful strategic alignment as they bind the users to the strategy itself. They can be very useful as they give visuals of the key performance measures, their direction, key responsibilities and what actions may be necessary. Scorecards can show users how their actions or inactions can effect the alignment of strategy. However just using scorecards will not solve the alignment issue. Failures may occur if the wrong technology is rolled out or if it does not have the support from management. It needs to be as part of a wider performance management platform this is so the data will be relevant, consistent, accurate and available when needed. One of the biggest advantages of scorecards is that they can help to support change in an organisation another is ability for enquiry and analysis. This drill down should show the relationship between the performance indicators and measurements such as projects, objectives and goals. It should start to indicate how performance in one area of the business may be affecting performance in another. This can help to show users how their own goals and objectives can support the all over strategy.Here are some of the success factors that can help you in aligning your staff with a new strategy: Communication of the strategy at all levels of the organizationEffective communication lies at the heart of strategic alignment. It pretty much goes without saying, that staff members can implement a new strategy successfully only if they are able to understand it and accept it. Ideally, a communication strategy should be developed providing regular and jargon free communication of the organization's strategy on various channels. This way employees will be constantly reminded that the organization is heading into a new direction. Communication is successful when every employee, every team, and every business unit is able to answer the following questions:

In simple words, what is the organization's strategy?What actions can I take to support strategy implementation? What do I need to do different from what I have done so far?How will it be measured if the goals have been achieved?Which are my personal goals? How will my performance be measured?How will the achieving or exceeding of goals be rewarded?

Employee participationPeople are easier to motivate and mobilize when they have the feeling that they are involved in decision making, rather than when decisions are being imposed on them. Employee participation is one of the most effective ways to create strategic alignment. Employees should be involved both in strategy development and in decisions on how to implement the strategy in practice. Giving them opportunity to share ideas and concerns based on their frontline perspectives will not only provide employees with a sense of ownership over the strategy and the implementation process but also helps to improve their quality.Crowdsourcing, for instance, is one method for staff involvement that is becoming increasingly popular. Linking individual performance goals to strategyAnother way to motivate people is by providing financial incentives. Individual performance goals should always be linked to the strategic goals of the organization. This way, employees are encouraged to make a continuous personal contribution to the achievement of corporate goals. Good and outstanding performance of teams and departments should be recognized and rewarded as well, for instance by organizing parties or group getaways. Human resource management should reflect strategyHiring, training, and retaining the right people is another important factor for achieving alignment within your organization. You want to make sure that your staff has the skills and capabilities required for best possible implementation of your strategy. For instance, if you follow an R&D strategy, make sure to provide appropriate resources for hiring highly qualified professionals and offering them an attractive work environment. Roles should be clearly definedEveryone involved in strategy implementation should be aware of the decisions and actions he or she is responsible for. In small companies with a manageable number of employees, this may still be rather obvious. In global corporations with many different divisions, however, the situation looks quite different. In this case, a central point of ownership for the strategy implementation process as a whole should be established and responsibilities for the various strategic initiatives should be clearly defined. Free flow of information across organizational boundariesSilo thinking is one of the greatest stumbling blocks for strategic alignment. Free flow of information both horizontally between teams and departments and vertically from top management all the way down to front line employees and vice versa is key. Holding regular meetings to report on progress made and discuss problems together can help. Equally important is that information on changes in the external business environment that could affect the organization's strategy gets passed on quickly.Strategy softwarecan help to facilitate efficient communication within the organization. Monitoring progressRegular monitoring allows for making quick course corrections whenever problems arise. Commonly used tools for monitoring progress arescorecardsanddashboards. The latter reflect the current performance status at a glance, and, therefore, are very suitable for making quick tactical decisions.Aligning business units and staff members with the organization's strategy is not a one-time deal but an ongoing process that requires constant leadership, communication, and monitoring. Moreover it requires diplomatic skills in dealing with different types of personalities. This becomes even more important when a new strategy brings disadvantages for the staff (e.g., when closing branches and laying off employees). This requires sure instincts and good change management. Strategic alignment is not an easy task, particularly in large companies. However, it is indispensible in order to walk the chosen path successfully

2. Strategic Learning ProcessJohn A. Healy, Director of Strategic Learning and Evaluation at The Atlantic Philanthropies, shares ways to position learning as an organizational priority.The Strategic Learning and Evaluation (SLAE) team at The Atlantic Philanthropies develops evaluation techniques, encourages learning from foundation and grantee experiences, and facilitates dissemination of that learning. Strategic learning means that SLAE's audiencesthe foundation, grantees, and interested external audiencesunderstand and respond to the lessons they learn from both formal evaluation and more informal monitoring. We use multiple tactics to create a culture that emphasizes learning.1. Position evaluation as a resource linked to strategy.We began SLAE in early 2004 knowing that it was important to demonstrate the value of learning and evaluation in creating and executing more effective strategy. SLAE staff have both strong evaluation skills and the rare ability to build enthusiasm for evaluation. SLAE works hard to ensure that both grantees and Atlantic see planning and evaluation as strategic and necessary to reach their goals. Within Atlantic we act as a resource, using an approach influenced by strategic planning. SLAE helps staff plan program strategy, map out grant strategies, and ensure programs are ready to be evaluated. We use strategic planning tools (e.g., logic models and theories of change) to clarify our intended outcomes and the strategies to achieve them.We also work with staff to help grantees plan strategically. Importantly, Atlantic objectives are informed by grantees' objectives, rather than imposed by Atlantic. As a result, grantees have an incentive to learn because their objectives are their own. Once the buy-in for evaluation exists, we position evaluation as practical and useful for grantees' work. For example, human rights grantees' focus has long been on fighting for a particular cause and not on assessment, so we emphasize the importance of fighting the good fighteffectively. If we frame evaluation correctly and align it with the mission of the organization, grantees see it as a win because it informs their work. Our approach helps us adapt as we learn and as the grant making environments change.2. Share accountability, acknowledge risk, and reward adaptive learning.Atlantic has a vertical grant approval structure. Working with grantees, teams of program executives develop grant proposals. They make recommendations to a program investment committee, and the committee submits grants to the board for approval. So at the end of the day, everyone is accountable for decisions about grant making.Because accountability is shared, it is essential that everyone understands the risks associated with grants and has an open dialogue about what may or may not work. If we are clear on the risks and the grant fails but we learn something from it, the result can be as valuable as if the grant had succeeded. In assessing progress we refer to grantee reports, rigorous project evaluations, and external evaluations of grant clusters in our four program areas.Now we are working on creating incentives for learning from mistakes at all levels of the foundation. Staff need to understand that adaptive behavior from learning will be rewarded. Shared accountability helps since the organization is seen as taking the risk rather than individuals.We also try to be open with grantees about the risks involved in their work. When we encourage evaluation, grantees know we want honest answers. We build relationships with grantees so they see us as advisors, and, if necessary, sources of funding to solve problems. This reinforcing of the message that failure can lead to valuable lessons is essential if a culture of strategic learning is to be developed. If the context changes or evaluation findings signal the need for change, grantees understand they scan, and should, adjust if their approaches are no longer relevant.3. Create space and structure for learning.It is not enough to encourage learning; we need to create space and structure for doing it. To encourage internal learning, program staff and board members have a fundamental discussion around strategy annually. We ensure the board is clear on what we are trying to achieve, and that they engage in the learning process.With grantees, we build purposeful opportunities for information exchange. For example, external evaluators meet with Atlantic teams and grantees biannually for a mutual exchange, with evaluators responding to grant-related data that staff and grantees provide and vice versa.4. Focus on different levels of learning.Atlantic has agreed on a number of levels on which we will share learning, and SLAE is now working with our communications staff to ensure learning is targeted effectively to internal and external audiences.At the foundation level, we will share case studies on organizational development and key areas of change management. Atlantic has chosen to spend down our endowment over the next 10 to 15 years. As we do, we will share lessons on what the foundation does, and what we learn along the way.Also at the foundation level, we will commission significant studies on areas of strategic importance to the foundation. For example, since many Atlantic objectives focus on policy change, we will share lessons about key aspects of this process, such as evidence gathering and advocacy. Additionally, at the program area level, every 3 to 4 years we will commission more intensive evaluation where we pause and evaluate the core program areas in-depth.Finally, at the grantee level, we ensure they can share their own lessons. We build in funding for communications, and work closely with grantees to ensure they go that final step.