Strategy Realisation through Collaborative Action

PowerPoint Presentation

Leiden University:Where Business Meets Talent Event

Strategy Realisation through Collaborative Action Philip Holt, Head of Partnership DevelopmentPhilips Accounting Operations10th June 2015

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#PHILIPS: Our Vision & Mission

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#

Founded in 1891

Headquartered in Amsterdam, The Netherlands

One of the largest global diversified industrial companies in the World, with sales in 2013 of EUR 23.3 billion

A multinational workforce of approximately 115,000 employees (October 2014)

Globally present with manufacturing sites in 100 countries and sales outlets in 100 countries

An R&D force with expenditures of EUR 1,7 billion in 2013

PHILIPS: About us

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#Start with Why?

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#10 Beliefs of Successful PeopleSource: http://www.inc.com/jeff-haden/10-inspiring-beliefs-of-phenomenally-successful-people.htmlSuccess was only inevitable in hindsightI can choose for myselfI am not self-serving; I am a servantI may not be first ... but I can always be lastI will do one thing every day that no one else is willing to doI don't build networks; I make real connectionsStrategy is important; but execution is everythingReal leadership is measured in years, not momentsHard work comes first; Pay-off comes laterI can make history -- and I will.

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#1. Success is only inevitable in hindsight.Read stories of successful entrepreneurs and it's easy to think they have some intangible entrepreneurial something-ideas, talent, drive, skills, creativity, whatever-that you don't have.Wrong. Success is inevitable only in hindsight. It's easy to look back on an entrepreneurial path to greatness and assume that every vision was clear, every plan was perfect, every step was executed flawlessly, and tremendous success was a foregone conclusion.It wasn't. Success is never assured. Only in hindsight does it appear that way.If you're willing to work hard and persevere, who you are is more than enough. Don't measure yourself against other people.Pick a goal and measure yourself against that goal. That's the only comparison that matters.2. I can choose myself.Like Seth Godin says, once you had to wait: to be accepted, to be promoted, to be selected... to somehow be "discovered."Not anymore. Access is nearly unlimited; you can connect with almost anyone through social media. You can publish your own work, distribute your own music, create your own products, or attract your own funding.You can do almost anything you want -- and you don't need to wait for someone else to discover your talents.The only thing holding you back is you -- and your willingness to try.3. I am not self-serving. I am a servant.No one accomplishes anything worthwhile on his own. Great bosses focus on providing the tools and training to help their employees better do their jobs-and achieve their own goals. Great consultants put their clients' needs first. Great businesses go out of their way to help and serve their customers.And as a result, they reap the rewards.If you're in it only for yourself, then someday you will be by yourself. If you're in it for others, you'll not only achieve success.You'll also have tons of friends.4. I may not be first ... but I can always be last.Success is often the result of perseverance. When others give up, leave, stop trying, or compromise their principles and values, the last person left is often the person who wins. Other people may be smarter, better connected, more talented, or better funded. But they can't win if they aren't around at the end.Sometimes it makes sense to give up on ideas, projects, and even businesses -- but it never makes sense to give up on yourself.You can always be the last to give up on yourself.5. I will do one thing every day that no one else is willing to do.Just one. Even if it's simple. Even if it's small. Do one thing every day.After a week, you'll be uncommon. After a month, you'll be special.After a year, you will be phenomenal.6. I don't build networks. I make real connections.Often the process of building a network takes on a life of its own and becomes a numbers game.You don't need numbers. You need real connections: people you can help, people you can trust, people who care.So, forget numbers. Reach out to the people whom you want to be part of your life, even if just your professional life, for a long time. And when you do, forget about receiving and focus on providing; that's the only way to establish a real connection and relationship.Make lasting connections and you create an extended professional family: You'll be there when they need you... and they'll be there when you need them.7. Strategy is important, but execution is everything.Strategy is not a product. Binders are filled with strategies that were never implemented.Develop an idea. Create a strategy. Set up a rudimentary system of operations. Then execute, adapt, execute some more, and build a solid operation based on what works.Success isn't built on strategy. Success is built through execution.Phenomenally successful people focus on executing remarkably well.8. Real leadership is measured in years, not moments."Leaders" aren't just the guys who double the stock price in six months, or the gals who coerce local officials into approving too-generous tax breaks and incentives, or the guys who are brave enough to boldly go where no man has gone before.(If you don't get that last reference, you're too young. Or I'm too old. Probably both.)Those are examples of leadership-but typically the kind of leadership that is situational and short-lived.Phenomenal leaders can consistently inspire, motivate, and make you feel better about yourself than even you think you have a right to feel. They're the kind of people you'll follow not because you have to but because you want to. You'll follow them anywhere.And you'll follow them forever, because they have a knack for making you feel like you aren't actually following. Wherever you're headed, you always feel like you're going there together.Creating that bond takes time.9. Hard work comes first. Payoff comes later.Ever heard someone say, "If I got promoted, then I would work harder"? Or, "If the customer paid more, then I would do more"? Or, "If I thought there would be a bigger payoff, I would be willing to sacrifice more"?Successful people earn promotions by first working harder. Successful businesses earn higher revenue by first delivering greater value. Successful entrepreneurs earn bigger payoffs by first working hard, well before any potential return is in sight.Most people expect to be compensated more before they will even consider working harder.Phenomenally successful people see compensation as the reward for exceptional effort, not the driver.10. I can make history -- and I will.You may not make it onto the pantheon of great entrepreneurs. Yours may not become a household name.But think about the past ten years: Technologies, industries, and ways of doing business that were once notions are now commonplace. You can be part of the next wave -- whatever it might be. Or you can make a small change your industry. You can make a small change in your profession.You can be at the forefront of a minor or major change, even if only in your community or niche. You just have to be willing to try something new.How cool is that?5

The Business Problem90% of companies fail to execute their strategies successfully Why?

86% of executive teams spend less than one hour a month reviewing strategyLess than 15% of companies routinely track how they perform over how they thought they were going to perform95% of employees dont understand their companys strategyLess than 27% of employees have access to their companys strategic planSources: Marakon Associates/Economist Intelligence Unit, Kaplan and Norton, Harvard Business Report

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#Only 48% of workers say that their firm has a clear strategic directionOnly 44% of workers say their organisation has clearly communicated its most important goalsOnly 37% understand the reason for that directionOnly 54% of employees say they understand what they are supposed to do to help their organisation achieve its goalsOnly 15% of workers could identify their organisations top three goals

What are our top three goals?The Effect on our PeopleSource: Franklin Covey


The CountermeasureA mindset change:An organisation which executes well on a good strategy will always outperform an organisation that executes badly on the most brilliantly crafted strategy


HoshinHo =directionShin = needle

KanriKan = control/channelingRi= reason/logicHoshin Kanri = the management and control of the organizations direction or focus.

Hoshin KanriThe Origin


Hoshin Kanri is a participative, systematic planning process used to align business strategy with day to day activities.

Hoshin Kanri ensures everyone knows the organisations vision and their role in the strategy to achieve that vision.

Synonyms: Hoshin Planning, Policy Deployment, HoshinHoshin KanriThe Definition


10

Breakthrough versus continuous improvementBusiness FundamentalsDaily ManagementHow to stay afloatContinuous Improvement / Kaizen

Breakthrough PlansBased upon the Organisations VisionWhat must be done to change the way that the Organisation will operate in the future


11

Problem solving opportunities

Many smallproblemsFew mediumsized problemsVery few bigproblems


12

Many smallproblemsFew mediumsized problemsVery few bigproblemsKaizeneventStrategic Planning InitiativeStrategic Planning InitiativeStrategic Planning Initiative

KaizeneventKaizenevent

KaizeneventKaizeneventKaizeneventDaily problem-solving: minutes/hours/daysYearsWeeks or monthsProblem solving opportunities


13

PerformanceBaseBaseKaizenYear 0Year 1Year 2Year 3Year 4BaseBaseBase

KaizenKaizenStrategic Objective Achieved!HoshinKanriHoshinKanriHoshinKanri

Hoshin Kanri approachFrom breakthrough to daily management

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#SAY: All Breakthrough is built on the foundation of Daily Management. We are building PROCESSES, not chasing numbers.SAY: This chart displays the effects of Hoshin Planning on an organization. This figure shows how Hoshin Planning along with Kaizen (continuous improvement) will raise the baseline each year until the breakthrough objectives are reached. Once the breakthrough objectives are reached, that level now becomes the beginning baseline for further kaizen. Therefore, processes that are established when achieving Breakthrough Objectives will eventually become part of the Daily Management systems of your organization.Hoshin Planning ensures that a company remains focused, aligned, and proactive, and retains a sense of urgency. The key emphasis is SUSTAINABLE.Hoshin Planning forces an organization to decide what and what not to focus on.14

Top ManagementMiddleManagementSupervisorFront LineAssociateAdapted From Beyond Strategic Vision, Effective Corporate Action With Hoshin Planning; Cowley, Domb, 1997 pg. 57Hoshin Kanri approachHow should you spend your time

BreakthroughDaily ManagementKaizen

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#If management is not doing breakthrough action plan development then what are they doing? Breakthrough means managing the action plans. One can not push breakthrough management down because that level is doing kaizen and daily management. 60-70% of the leaderships time should be on Breakthrough management.

If a ship has cannonball holes and you dont plug them, the ship will sink fast.If you only plug holes with no one steering, the ship will run aground.

The 7-step Hoshin Kanri Planning cycle

Establish OrganizationalMission - Vision - ValuesDevelop3-5 YearStrategicPlanDevelopAnnualObjectivesDeploy to departments ImplementplansRegularprogressreviewAnnualreview

10th June 2015 Philips Accounting Operations Royal PhilipsSTRICTLY CONFIDENTIAL DO NOT USE OR REPRODUCE WITHOUT WRITTEN PERMISSION#Organizational visiondefine the mission, vision and valuescommunicate

Develop 3-5 year plan:what is the roadmap to achieve the company visionperform gap analysisdefine breakthroughs needed

Develop Annual Objectiveswhat must be done each year to stay on trackwhat resources are needed to get this done

Deploy to departmentswhat are the vital tasks that need to be donestart catchball processdevelop plans to fulfill the vital tasks

Implementestablish implementations plans with timelines and responsibilitiesdefine quantifiable objectives

Reviewcreate structure for reviewestablish problem solving process

Annual revieware lower level actions driving top level breakthrough improvements?are our objectives still validhow has our Hoshin process worked?what can we improve?

Establishing Organizational VisionThe first phase in the planning process is establishing organization vision. During this phase, the strategic business unit will develop a vision statement, mission statement, and values statement for the company.Develop 3-5 Year Breakthrough ObjectivesThe second phase in the planning process is known as strategic planning. Strategic planning involves analyzing the gap of where the company should be functioning and where it is currently functioning. If necessary, root causes are determined from the gaps that are discovered and breakthrough objectives are developed in order to target the root causes. The breakthrough objectives are worked towards over a period of 3-5 years. Develop Annual Breakthrough Objectives & Improvement PrioritiesTypically, the transition point from Strategy development into Strategy deployment takes place at step 3.Annual Objectives are those objectives that we need to achieve this year which will enable us to reach our overall 3-5 year Breakthrough ObjectivesThe third phase in the planning process is determining what is breakthrough for the first year of your policy deployment, and developing improvement priorities that are process-oriented, focused, clear, measurable, and designed to meet the annual breakthrough objectives. Consideration should be paid to developing the underlying business processes necessary to achieving the result. Deploy Improvement PrioritiesThe fourth phase in the Hoshin planning process is to deploy the improvement priorities. At this step, the multi-functional areas of the company are identified and the improvement priorities are aligned to the multi-functional areas. The Implementation ProcessImplement Improvement PrioritiesAt this point the planning development is now put to action. Value Stream Mapping is performed to identify HOS/Lean opportunities. The Lean Tools are selected and utilized in order to maximize opportunity and meet objectives.The Review ProcessMonthly ReviewEach level of deployed policies is reviewed on a monthly basis. Scorecards and control charts, both measurement tools, are used to track monthly progress. At this review period, the focus is on the exceptions; where are you off target?When you determine the exceptions, countermeasures are developed and acted upon. Annual Review ProcessThe annual review is a self diagnosis step that examines the results of the policy deployment and focuses upon the processes you did or did not set in place.

16

Danaher a Top Performing ConglomerateDanaher: A Top Performance ConglomerateDBS Danaher Business SystemKaizen Support & Promotion OrganizationResults


Hoshin Kanri at Danaher


Hoshin Kanri is Integral to a Lean Business System and delivers Breakthrough Collaboratively


The best way to predict the future is to create it.Peter Drucker


20

Further insightsare on LinkedInand my Personal BlogBoth sites are Personal and my views and ideas are not necessarily representative of those of my employer



Leadership & Management

Strategy Realisation through Collaborative Action