Upload
jaafar
View
47
Download
0
Tags:
Embed Size (px)
DESCRIPTION
Third Principle: Strategy - Delivery of Vision, Mission and Purpose. Workshop Agenda. Part I: Understanding the Third Principle - What is strategy?. Part II: Delivering the strategy. Part III: Evaluating the strategy. Part IV: Communicating the strategy. Part V: The role of the board. - PowerPoint PPT Presentation
Citation preview
Third Principle: Strategy - Delivery of Vision, Mission and Purpose
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.2
Workshop Agenda
Part IV: Communicating the strategy
Part V: The role of the board
Part I: Understanding the Third Principle - What is strategy?
Part II: Delivering the strategy
Part III: Evaluating the strategy
Part VI: Strategy away day
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.3
Voluntary Code of Good Governance for the Sport & Recreation Sector -Third Principle: Delivery of Vision, Mission and Purpose
“The Board should set the high level strategy and vision of the organization and ensure that it is followed without becoming involved in
the operational delivery.”
Part I: Understanding the Third Principle - What is strategy?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.5
Part I: Understanding the Third Principle - What is strategy?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.6
Part I: Understanding the Third Principle - What is strategy?
Vision
Purpose
Mission
There is a clear difference between the vision, mission and purpose of an organisation but all three concepts play a vital role in keeping management focused on delivering the right strategy.
Strategy
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.7
Part I: Understanding the Third Principle - What is strategy?
What is meant by
Vision, Mission & Purpose -
what is their difference?
Purpose
Vision
Mission
A purpose statement answers to the question of why something exists.
Vision is where you want to be in the long run. A view of a desired future state for the company. A vision is the ideal picture in your mind, and in the minds of your people, about what your NGB should look like. A vision is the ideal. It’s the dream.
Mission is a statement of what needs to be done in order to achieve the envisioned state, preferably quantified. It answers to the question of how. It tells you what steps you need to take in order to fulfil your vision.
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.8
Part I: Understanding the Third Principle - What is strategy?
Define purpose Decide on vision State mission Design strategy
Steps
Implement strategy
?“Bowls England will deliver an exceptional sport and community experience that is appealing, entertaining and accessible to all.”
Strategic plan 2009-2013
“…Embracing athletes of all abilities and from all communities – to grow the next generation of athletics champions.”
Strategic plan 2009-2013
“We aim to provide to all an excellent experience of the BSAC…” Strategy document
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.9
Part I: Understanding the Third Principle - What is strategy?
“Bowls England will deliver an exceptional sport and community experience that is appealing, entertaining and accessible to all.”
Strategic plan 2009-2013
“…Embracing athletes of all abilities and from all communities – to grow the next generation of athletics champions.”
Strategic plan 2009-2013
“We aim to provide to all an excellent experience of the BSAC…” Strategy document
Vision
Mission
Purpose
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.10
Part I: Understanding the Third Principle - What is strategy?
NGB purpose
Why the NGB exists
NGB’s vision
Where directors want the NGB to be in the future
NGB’s strategy
How directors are going to take the NGB from where it is now to where
they want it to be
?
How to set an NGB’s strategy?
Competitive advantage
Resources needed
Access to resources
Members
Stakeholders
Scope
? ? ??
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.11
Part I: Understanding the Third Principle - What is strategy?
Strategy seen… as process
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.12
Part I: Understanding the Third Principle - What is strategy?
Eliminating strategic uncertainties…
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.13
Part I: Understanding the Third Principle - What is strategy?
What should sport
organisations include in
their strategic plan?
A complete strategic plan usually contains the following elements…o Vision, Mission and Purpose statements o Structure, leadership and governanceo Statement of compliance
Voluntary Code of Good Governance UK Sport and Sport England principles UK Corporate Governance Code
o Strengths & weaknesses (SWOT) analysiso Environment (PESTLE) analysiso Membershipo Key stakeholders and contributorso Risk Management plan identifying all types of risks (financial, operational,
reputational etc.)o KPIs
The above list is non exhaustive. NGBs might choose to include any information they deem appropriate in order to deliver a complete strategic plan
Key elements
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.14
Part I: Understanding the Third Principle - What is strategy?
How do you arrive at it?
Strategy development
Strategic plan design
Implementation and Monitoring
Definition of the overarching objectives
Business model formulation
1
2
3
4
How the organization creates, delivers and captures value: The board questions, understands and decided on general framework
Strategic plan• Based on priorities, activities and resources • Multiyear plan (3 to 5 years) in order to coincide with
4-year funding cycles• Reviewed annually
Budget (reviewed at least annually)
Delivering the expected results, measuring them to ensure consistency and timeliness with what was planned, within the approved resources. Deliverables:
• Annual business plan (reviewed at least annually)• Multi-year business plan (reviewed annually)• Timelines / road maps• Map of reporting lines
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.15
Part I: Understanding the Third Principle - What is strategy?
NGB budget The objectives of the budget are:o To commit management in achieving the goals of the organisation in a
specific annual periodo To set clear criteria for the evaluation of the above managerso To describe in detail the way through which available resources (human
resources, technical infrastructure, capital) will be distributed in order to achieve the goals above
o To facilitate the delegation of authority within the NGB The budget should support the long term strategic targets of
management as described in the business plan The budget should reflect developments in the sports industry
The budget is developed by management and approved by the board The board receives reports at least twice a year on budget implementation
and approves eventual amendments
Principles and objectives
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.16
Case study: Liverpool F.C.
Autumn 2010: The board of Liverpool F.C. sold the company to a group of investors, against the wishes of the Club owners. By doing that, the board disregarded one of the bedrocks of modern corporate governance: the idea of shareholder value
Issues for discussion: Why did the board do that? Arguments for and against How does a board decide what is right? Debate between shareholder value and stakeholder rights Ethics of corporate governance Alignment of strategic objectives between the board and shareholders. Is it a prerequisite?
Source: “The ethics of shareholder value: Duty, rights and football”, Donald Nordberg, Westminster Business School, June 2011
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.17
Part I: Understanding the Third Principle - What is strategy?
Discussion - Your experience: Elements of NGBs’ strategic plans, challenges and pitfalls
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.18
Part I: Understanding the Third Principle - What is strategy?
Questions?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.19
Group Exercise
Prepare a skeleton of an NGB’s strategic plan. Make sure to include vision, mission and purpose statements. Two groups should work on a new sport and two groups on an established sport. (Duration: 15 minutes max.)
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.20
Part II: Delivering the strategy
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.22
Part II: Delivering the strategy
Who is accountable?
The board is accountable for developing the strategy. In particular, according to the Third Principle, the board is responsible for:
Setting the high level strategy and vision of the organisation Ensuring there are sufficient resources available to deliver the strategic plan Ensuring appropriate business planning tools are in place Conducting a strategic review Creating appropriate committees Delegating authorities to the committees created (e.g. reviewing budgets and
operational plans etc.) Conclusion: even though the board shouldn’t be the one delivering/implementing
the strategy, it will be nevertheless held accountable if strategy is not delivered by the NGBs’ management bodies
The responsibility of the board
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.23
Part II: Delivering the strategy
To whom is the board accountable?
Stakeholders!“the board needs to be open and accountable to its membership and to its participants and its actions should stand up to scrutiny when reasonably questioned”(Voluntary Code, Sixth Principle)
The various stakeholders of the NGBs and above all the members can therefore question the board’s actions and omissions when strategy is not delivered appropriately. The board is responsible for ensuring that appropriate whistleblowing mechanisms are in place.
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.24
Part II: Delivering the strategy
Key Performance
Indicators (KPIs)
DefinitionKey performance indicators (KPIs) are a set of metrics that are being used in organizations across all sectors to measure individual or organizational performance in one or more areas
Why KPIs?
In the context of the Third Principle, setting KPIs is the best way to make sure that strategy is being implemented
KPIs will allow the NGB to keep the right track and help its board to monitor the performance of officers or managerial bodies that are responsible for implementing the organization’s strategy
Examples of KPIs
KPIs are individual to each organisation. They must reflect the organisation’s unique priorities and objectives. Some examples of KPIs (source: Bowls England Strategic Plan 2009-2013):
Review Committee structure Appoint key staff and ensure they are sufficiently supported
in their role Prepare strategic plan 2013-2017 Recruitment strategy
The KPIs list is usually accompanied by statement of who is responsible for their delivery as well as a timeframe
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.25
Part II: Delivering the strategy
Discussion - Your experience: Examples of efficient/inefficient KPIs. Their role in the successful
delivery of NGBs’ strategy
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.26
Part II: Delivering the strategy
Questions?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.27
Group Exercise – Case study
You ‘ve been appointed to the board of “XYZ” NGB as their first independent director because of concerns about their funding continuity. The CEO provides you with an induction which includes a 3-page strategy paper for XYZ. The strategy focuses on developing the sport for people who have recently retired, developing international relationships, hiring a deputy CEO and COO and obtaining increased media coverage. The CEO was authorised to apply the budget to deliver the plan. He explained that he had been personally committed to developing XYZ in schools although this is not in the strategic plan. As CEO, he has ensured that 40% of the budget has been allocated to this and so far was very pleased with the progress albeit that there was now insufficient funds in the budget to hire the approved new staff. His daughter had been made school and county captain of XYZ and his wife’s physiotherapy business now specialized in treating injuries for players in XYZ youth squad. You also learned that he disagreed with the target group, was sceptical of international alliances and had paid a fee to a sports magazine to run an article on his family’s commitment to the sport.The CEO considered himself to be a visionary and is confident that he could deliver far broader participation without oversight of the board or obtaining input from the XYZ affiliates and senior players. It emerged that XYZ had set no objectives for the CEO and no KPIs for delivery of the strategy.
Please set appropriate KPIs for XYZ’s strategy. Are there any other issues that concern you? (Duration: 20 minutes max.)
Part III: Evaluating the strategy
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.29
Part III: Evaluating the strategy
“The board should keep member and participant focussed in order to adapt to changing society”
SRA Voluntary Code, Third Principle, practical considerations
What if there is need to change strategy?
In a rapid changing sporting environment, NGBs’ strategy should be easy to refine and adapt to changing circumstances in the sports sector
Since the board is responsible for setting the high level strategy and vision and creating a strategic plan for the organization, it is also responsible for ensuring that this strategic plan reflects current needs and external circumstances
The need to change strategy will be identified through the strategic review that the board is responsible to conduct according to the Third Principle
This review should be periodical. International experience and best practice indicate that most boards conduct strategic reviews at least on an annual basis
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.30
Part III: Evaluating the strategy
Refining strategy - Typology of uncertainty
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.31
Part III: Evaluating the strategy
Scenario analysis as a useful tool
Definition “A scenario is a narrative description of a consistent set of factors which define in a
probabilistic sense alternative sets of future business conditions” (Huss, 1988)
Scenarios help where: Discontinuous change is important
Quantitative factors are important
You need a long-term perspective
There is high uncertainty
There are significant data gaps
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.32
Part III: Evaluating the strategy
What if external factors
change? External factors in sport change very often, often unexpectedly…
Change in government strategy & funding Change in regulations & best practices Unexpected events that tarnish the brand name of the sport organisation etc.
Change can be either positive or negative Even though most people think that strategy should only be refined when things go
wrong, this is just half of the story. Successful NGBs should also try to constantly improve their strategic plans in order to take advantage of new opportunities as soon as they arise
The board should be flexible enough to respond quickly and efficiently to every change affecting the NGB
Change in external factors can be assessed through a PESTLE analysis
The role of external factors
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.33
Part III: Evaluating the strategy
PESTLE
Political
Economic
Sociological
Technological
Legal
Environmental
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.34
Part III: Evaluating the strategy
The change of the membership structure of the NGB shouldn’t affect the delivery of the strategy
The Code clearly states that the board “creates a strategic plan in consultation with staff and other stakeholders”
the Third Principle is complemented by the Sixth Principle which states that “the board needs to be open and accountable to its membership and to its participants and its actions should stand up to scrutiny…”
In the practical considerations (Sixth Principle), it is also stated that the board should “make use of structures and meetings to fully engage with members and participants”
The board should constantly engage with members…
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.35
Part III: Evaluating the strategy
Non-delivery of strategy
According to the Code (Second Principle), it is for the board to determine whether the CEO delivers the NGB’s strategy: “the board is responsible for recruiting, appointing, monitoring and supporting the CEO”
Further, the board is responsible for “ensuring each member of the board carries out a self-assessment and has an informal annual one-to-one meeting with the Chair”. This self-assessment relates to both executive and non-executive members of the board
The board is responsible for delegating the appropriate authorities to executives According to the Third Principle, the board is responsible for “delegating operational
issues outside the board room to individuals with a remit to deliver the operational function”
Those individuals are accountable to the board and can be removed by the board in case of non-delivery
What if the CEO or other executives don’t deliver?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.36
Part III: Evaluating the strategy
UK Government
Sport England / UK Sport / SRA etc.
Funding & commercial partners
Employees, members, volunteers, sponsors etc.
Stakeholders More rigorous focus on:
Creating strong links between NGB and its stakeholders
Consulting with all appropriate stakeholders when setting or amending the strategic plan
BOARD
“Creating a strategic plan in consultation with staff and other stakeholders (particularly participants)…”
SRA Voluntary Code, Third Principle, practical considerations
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.37
Part III: Evaluating the strategy
Questions?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.38
Group Exercise
Please identify what may trigger the need to revise the adopted strategy. How would you revise it? (Duration: 15 minutes max.)
Part IV: Communicating the strategy
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.40
Part IV: Communicating the strategy
“The board should put the participant at the core of the mission of the organisation” and should “keep member and participant focussed in order to adapt to changing society”
SRA Voluntary Code, Third Principle, practical considerations
Member endorsement of strategy
Apart from the Third Principle, the Sixth and Seventh Principles include many provisions regarding member, participant and stakeholder inclusion
In order for members to endorse the organisation’s strategy and accept potential changes, they must feel part of the decision making process
They must feel that they contribute to the success of the organisation and that the board values their inputs and takes into account their recommendations
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.41
Part IV: Communicating the strategy
Explaining and obtaining
buy-in
Obtaining buy-in depends on the extent of members’ inclusion in the decision making process and the quality of information flows within the organisation
It is up to each organisation to develop the systems and processes that best fit its culture and resources
NGBs should aim at establishing a good and efficient communication channel between the board and the various stakeholders
Some relevant questions that boards should ask: Do we recognise the importance of engagement with members?
Is there an annual plan?
In what occasions is more engagement required and how is it best achieved?
When is formal approval required?
Answers should be specified by the organisation’s constitutional documents
How can NGBs engage with members on strategic issues?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.42
Part IV: Communicating the strategy
Steps in order to effectively communicate strategy…
MotivateCreate
common vision
Develop networks within the organisatio
n
Approach individual members
Plan and implement
smooth transition
Keep the momentum
– build support systems
1 2 3 4 5 6
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.43
Part IV: Communicating the strategy
Questions?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.44
Group Exercise
Please identify best practices in developing an effective communication strategy. What can go wrong? (Duration: 15 minutes max.)
Part V: The role of the board
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.46
“The Board should set the high level strategy and vision of the organization and ensure that it is followed without becoming involved
in the operational delivery.”
Part V: The role of the board
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.47
Part V: The role of the board
Source: McKinsey, 2006, “How to Improve Strategic Planning,” McKinsey Quarterly
Role of directors in strategic planning
64%
Challenge emerging strategy 52%
Monitor performance against strategy 48%
Identify key strategic issues 37%
Help develop strategy’s content 25%
Parties involved in strategic decisions
Small group including the CEO 52%
Within a formal strategic planning process 23%
By business unit leaders 11%
By the CEO 10%
Approve final strategy
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.48
Part V: The role of the board
BOARD SENIOR
MANAGEMENT
Responsible and accountable for:
Overseeing the day-to-day operation
Strategy execution
Responsible and accountable for:
Setting the overarching objectives and policies
Holding management accountable for operating the NGB in accordance with objectives and policies
Reporting to board
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.49
Part V: The role of the board
Ensure there are sufficient resources for strategy delivery
Ensure appropriate mechanisms for managing risk are in place
Ensure appropriate business planning tools are in place
Monitor functioning of committees
Delegate authorities within the organisation
Ensure members’ and participants’ views are being heard
Regularly conduct strategic reviews
Ensure implemented strategy is aligned with NGB’s values
What should NGBs’ boards do?
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.50
Part V: The role of the board
How to avoid hands-on oversight of operational delivery…
Regularly solicit reports from the individuals responsible for implementing the strategy Regularly monitor the progress of on-going projects Regularly evaluate the performance of senior management Send appropriate memos to individuals with detailed description of the steps to be
taken, timeframes and KPIs
The board / board committees should:
Part VI: Strategy away day
Nestor Advisors’ confidential and proprietary material. May not be copied or reprinted without prior written approval.52
Part VI: Strategy away day
When?• Annually
Who?• Board, CEO and support
What?
• Set / review strategy• Output: Adopt / refresh NGB’s strategy
Follow-up
• CEO finalises• Communication with membership• KPIs
Nestor Advisors LtdIbex House, 42-47 MinoriesLondon, EC3N 1DYUnited Kingdom
Tel: +44 (0)20 7628 3497
Fax:+44 (0)20 7256 6454
www.nestoradvisors.com
Thank you