Strategic Enterprise Management

© Empower Management Consulting LLC - All Rights Reserved

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Strategic Enterprise Management

Mohamad J. SammanHR Best Practice Group

Doha, QatarOctober 14, 2009


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Strategic Enterprise Management introduces broad agenda on how to efficiently implement Corporate Business Strategies to leverage Human Capital contributions for the organizational effectiveness with comprehensive framework that integrates SMART Objectives (KPIs) and Competency Models with Performance Appraisal practices, Compensation, Incentives, Career Development, Succession Planning, and Talents Acquisition processes.

The Presentation shall introduce extensive information of the unlimited advantages through efficiently using measurement-based strategy model to achieve corporate business objectives by implementing Balanced Scorecard (BSC) concept as Strategic Enterprise Management (SEM) Tool to identify and communicate Corporate Business Strategies and deploy strategy roadmaps with clear Matrix and specific Metrics and cascade Strategic Objectives to effectively manage Human Capital.

Agenda


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Corporate Struggle!

How to Design, Communicate, and Implement Business Strategy?


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Corporate Dilemma!!!

FIASCO

How to Align & Cascade Corporate Objectives and Evaluate Performance?


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Global Recession & Financial Crisis: significant decline in the GDPs.

Socioeconomic changes and Cost of Living Inflation/Fluctuations.

Unclear Business Strategy & lack of Corporate Objectives.

Transforming HR Management to Strategic Business Partner Role.

Shortage of Technical Skills and swift migration of Talents.

Employees’ expectations vs. Corporate directions.

New Business Techniques and ERP/ICT Solutions.

Ongoing Quality Improvement and demands for Service Excellence.

Collaboration between Global Joint Ventures and Local Partners.

Outsourcing: Availability, Commitment, Cost, Quality, Control.

Globalization & Labor Laws (Amnesty, Human Rights, ILO).

Global Alliances & widespread Competition (WTO & FTA).

Governmental Regulations, Constrains, and Political conflicts.

Today’s Business Challenges


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Leadership & Line Management!– No Authorization/Delegation

– Unclear Accountability

– Slow Decisions & Approvals

Business Practices:– Outdated Policies & Procedures

– Complicated & Inefficient Processes

– Lost Data & Inaccurate Information

– Disorganized Files and Lost Records

– No Control & No Follow-up

Inconsistent Communication

Internal Audit & Legal Compliance

Confidentiality: Rumors & Gossips

Motivation & Loyalty: Reactive Behavior

Corporate Problems


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Strategic Enterprise Management

Values

………

………

………

………

………

………

DemonstratedSkills & Behaviors

Critical Success Factors

Key Performance Indicators


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Vision: Defines the desired or intended future state of a specific organization or enterprise in terms of its fundamental objective and/or strategic direction.

Mission: Defines the fundamental purpose of an organization or an enterprise which is basically describing why it exists.

Values: Beliefs that are shared among the Stakeholders of an organization. Values drive an organization's Behavior, Culture, Business Strategy, and Priorities.

Business Foundation (3 Pillars)


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Integrated Business Strategy refers to management techniques, metrics and related tools that companies can use to make strategic decisions.

It is important to link Business Strategy with Human Capital Management by Integrating Balanced Scorecards and Strategic Talents Management to translate Vision and Mission to BusinessStrategy and Objectives and Achievements for Corporate Competitive Advantage.

Integrated Approach


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Strategy defines the direction in which an organization intends to move and establishes the business framework and actions to achieve its Goals and Objectives.

Stakeholders are Individuals, Groups, or other Entities that are affected by or have a vested interest in an organization’s Business Strategy, Policies or Decisions.

Business Strategy & Stakeholders


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Stakeholders Influence/Power

Organization

Government

Society

Lobbyers

Customers

Suppliers Creditors

Unions

Employees

Management

Owners


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Owners: Business Acquisition, Brands, Assets, Reputation, Profitability (ROI), Corporate Governance (Audit), Growth, and Prospects, © & ®.

Management: Accountability, Resources (Human, Technical, Financial), Competition, Costs, Productivity, Objectives, and Performance Outcomes.

Employees: Salary, Benefits, Work Conditions, Training and Career Development, Promotion, Relationships, Job Security, and Satisfaction.

Unions: Memberships, Dues, Collective Bargaining on Pay, Benefits, Work Conditions, Promotions, Job Security, Fair Business Practices.

Creditors: Trustworthy, Assets, Liquidity (Cash-flow), New Contracts.

Government: Regulations, Taxation, Inspection, Legal Compliance.

Lobbyers: Environment, EEO, Human Rights, Disability, Business Ethics.

Society: Corporate Social Responsibility, Contributions, and Activities.

Customers: Quality, Value for Price, Refunds, Services, After-Sale Care, Warranty, Maintenance, Health & Safety, Durability, Reliability.

Suppliers: Competition, Availability, Quantity, Delivery, Payments.

Stakeholders’ Interests


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VALUE

PROPOSITION

COST

STRUCTURE

CUSTOMER

RELATIONSHIPSCUSTOMER

SEGMENTSACTIVITY

CONFIGURATION

CORE

CAPABILITIES

PARTNER

NETWORK

REVENUE

STREAMS

INFRASTRUCTURE CUSTOMEROFFER

FINANCE

a business model describes the value an organization offers to

various customers and portrays the capabilities and partners

required for creating, marketing, and delivering this value and

relationship capital with the goal of generating profitable and

sustainable revenue streams

DISTRIBUTION

CHANNELS

Source: Osterwalder (2004) The Business Model Ontology

Business Model Framework


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Due-Diligence & Feasibility

S.W.O.T

Internal External

Strength Weakness Opportunity Threat

Government

Shareholders

Products

Customers

Financial

Legal


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Business Continuity - Risk Matrix

Severity

Probability

Improbable Remote Occasional Probable Frequent

Catastrophic

Severe

Critical

Marginal

Negligible


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Business Strategy

Talents & Resources

Efficient Processes

Value-Added Services

Satisfied Customers

Revenue


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Balanced Scorecard Model


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Business Strategy Map (Sample)

Profits

Revenue from

New Customer

Revenue from

New Services

Revenue from

Alliances

Improved

Operating Efficiency

Alliances

Partnerships

Expand

Business

Prospects

Ongoing

Reliable

Support

Value

Added

Services

World

Class

Company

Business

Development

and Branding

Benchmarking

Best Practices

Knowledge

Management

Productivity

& Quality

Services

Marketing &

Relationship

Management

New/Ongoing

Business

Opportunities

Media &

Public

Relations

Talents &

Resources

Due

Diligence

ICT

Support

Training &

Reward

Admin &

Finance

Services

Fin

an

cia

lC

usto

me

rs

Pro

ce

sse

sE

nte

rp

rise


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Performance Matrix and Metrics

Objective Owner Projects Measures Targets Actual

Fin

an

cia

lC

usto

me

rs

Pro

ce

sse

sE

nte

rp

rise


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Master Plan (Deliverables)

Jan Mar Apr May Jun July Aug Sep Oct Nov DecFeb


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Human Capital Performance

Achievements

Expectations

Who, What, Which, Why, Where, When, and How?


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Strate

gic

P

erfo

rm

an

ce

M

an

ag

em

en

t

360°

Fe

ed

ba

ck

Managing Human Capital

Talents Acquisition

DevelopmentReward

Demonstrated

Skills/Behaviors

Contributions &

Achievements

Performance Appraisals

Competencies

Performance

Ratings/Outcomes

Strengths &

Weaknesses

Objectives


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Higher emphases on rewardingAchievements and Contributions

Individual Objectives are based on:– Organization’s Business Plan;

– Job Requirements (Job Description);

– Additional Contributions (Value-Added).

SMART Objectives (not Tasks)

Specific KPIs & Weighting Factors

Clear Rating Scale and Definitions

Individual Objective’s Measures

Objectives’ Overall Calculated Rating

Ongoing Review and Alignment

Self-Assessment & 360-Degree Feedback

Objectives Mgmt. Design


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Specific

Measurable

Achievable

Result-Oriented

Time-Framed

Energizing

Recordable

SMART Objectives


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Cascading & Alignment

Corporate Objectives

Division Objectives

Unit/Section Objectives

Individual Objectives

Key Performance Indicators

Targets and Measures

Business

Strategy is

Everyone’s

Business!


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Strate

gic

P

erfo

rm

an

ce

M

an

ag

em

en

t

360°

Fe

ed

ba

ck


Talents Acquisition

DevelopmentReward

Demonstrated

Skills/Behaviors

Contributions &

Achievements


Performance

Ratings/Outcomes

Strengths &

Weaknesses

Objectives Competencies


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Competency is a specific range of Skill, Knowledge,

or Ability.

Competencies are a set of Effective Actions and

Demonstrated Behaviors that, if exhibited, produce

Superior Performance.

What is Competency?


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Competency Pyramid

Behavior

Feelings andEmotions

CharacterPersonality

Social InterestsFinancial Needs

Self-Perceptionsand Self-Esteem

Career AspirationHidden Expectations

Unresolved Problems and Critical Issuesfrom the Past Experience


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Leadership: Required for all Employees who have direct responsibility for Individuals, Teams, or Projects.

Corporate: Required for all Employees such as: Customer Service, Cost Effectiveness, and Quality.

Generic: Required by Job Category such as: Information Seeking and Analytical and Innovative Thinking.

Technical & Functional: Skills and Qualifications related to the specific functional discipline and unique to each Profession.

Competency Domains

Leadership

Generic

Technicaland

Functional

Corporate


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Linked to:– Vision & Mission

– Core Values

Aligned with Strategy:– Corporate Objectives

– Individual Objectives

Categories

Definitions

Importance

Levels

Key Actions

Sample Job Activities

Compared to

Competency Matrix

Competency Models (Dictionary)


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Strate

gic

P

erfo

rm

an

ce

M

an

ag

em

en

t

360°

Fe

ed

ba

ck


Talents Acquisition

DevelopmentReward

Demonstrated

Skills/Behaviors

Contributions &

Achievements


Competencies

Performance

Ratings/Outcomes

Strengths &

Weaknesses

Objectives


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“Performance Appraisal is one of those special human encounters where the Manager gets no sleep the night before, and the Employee gets no sleep the night after!!”

Performance Appraisal is an ongoing process that provides regular constructive feedback to employees so that they develop into skilled workers who are useful to the organization.

A written Performance Evaluation is a way to formalize feedback process, and lets employees know how they perform.

Performance Appraisal Concept


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Checklists

Rating Scales

Ranking Methods:– Forced Distribution

– Rank-Order System

– Alternation Ranking

– Paired Comparison Ranking

Critical Incident Reports

Work Standards Approach

Management By Objectives

Narrative or Essay Evaluations

Behaviorally Anchored Rating Scales

Multi-Rater Assessment (360° Feedback)

Aligned and Linked with Balanced Scorecards

Appraisal Techniques


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Process can be paper-intensive and time-consuming which requires excessive administrative efforts.

Difficult to balance Employees’ Expectations & Organization’s Strategy.– Avoid honest feedback to prevent conflict.

– No Time - Overloaded work schedule!

– Conflicts on who owns the Appraisal Outcomes (Confidentiality Policy).

Concerns of the effective integration between Employee’s Appraisal, Career Development, and Reward.

Unclear Org Structure (Staff working on Shifts) and reporting relationships (Projects) which might be confusing!

Why Everyone Avoid It?


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Past Spillover

Contrast Effect

First Impression

Central Tendency

Bias or Clone Error

Leniency or Severity

Nagging and Begging

Recent or Short Time-Span

Halo or Horn Effect (Event)

Halo or Horn Effect (Person)

Inappropriate Time & Location

Appraiser Talks Most of the Time

Inadequate Observation (No Facts)

Professional Background and Social or Cultural Influence

Appraisal Errors


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Not designed based on Performance Management Methodology

Lack of Expert’s involvement

Inadequate support from Management

No buy-in from Employees

Not linked to Corporate Business Plan:– Unclear Objectives & Expectations

– No Accountability

– Low Motivation

Not linked to Training & Development Programs or Succession Plans

Paper-based and manual processes which requires tedious follow-up from Supervisors and HR Staff

PM Problems! (Design)


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Unclear Reporting Relationship (Matrix Structure )

Year-End Surprises and Bad News!

Poor communication between Supervisors and Subordinates

Unclear Rating Scale, AmbiguousDefinitions and Measurement Criteria

Subjective Performance Appraisals

Vague Performance Outcomes

Unrealistic Performance Ratings

Many Complaints and Grievances

Used mostly to determine:– Bonus & Salary Increases

– Promotions, Transfers, Secondment

– Downsizing, Layoffs, Terminations

PM Problems! (Practice)


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Sales & Profits

Operational Costs

Production Efficiency

Customer Satisfaction

Business Practices Improvement

Streamlined Processes

Quality and Standards

Utilization of Materials/Equipments

Incidents & Accidents

Mistakes, Errors, and Repairs

Training Costs

Grievances and Complaints

Employees Morale & Turnover

PM Problems! (Outcomes)


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Playing the Appraisal’s Cop!– Busy with distributing and collecting Forms

– Chasing Supervisors to send Appraisal ASAP

Thinking one Appraisal Model fits all Jobs– Using Complex Appraisal Systems/Forms

– No training on constructive feedbacks

– No communication on appraisal advantages

Believing that a documented Appraisal will protect the Organization against Lawsuits by Employees

Ignoring performance outcomes when an Employee’s Salary reached the max level and no longer tied to the appraisal results(no more merit increase!)

HR Management’s Faults


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Spending more time on performance evaluationthan planning and communication:– Appraisal is another “must-do” hassle

– Appraisal is an opportunity to Blame!

Comparing employees with each other

Suddenly conducting appraisal meeting:– Canceling or postponing appraisal meeting

– Surprises during appraisal review

Thinking all employees performanceshould be evaluated with the same procedures and standards

Playing “too-busy”, “I’m overloaded”, and “I have other important things to do”!

Supervisors’ Faults


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Biased and Unfair Supervisors:– Discrimination, Favoritism, and Nepotism

– Subjective Performance Ratings (No Facts)

Networking and Affiliation Influence

No Training & Development Plans

No Appreciation and Poor Motivation

Management is not Walking the Talk

Wrong Person in the Wrong Place

Benchmarking & Ranking(Forced-Distribution)

Performance Appraisals means Money and Promotion only

Appraisal is used to justify Terminations

Employees’ Perceptions


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Employees Culture and Values (Nationality, Religion, Gender, Age)

Communication Style:– Aggressive

– Passive

– Assertive

Language Barriers (jargons)

Educational Level

Specialization & Work Experience

Length of Service (Seniority)

Position Level & Authority

Past Appraisal Systems

Employees Perceptions:– Expectations & Motivation

– Comfort Zone (new system)

Human Nature Influence


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Do Nothing!

Buy Off-the-Shelf System

Hire Expensive Consultants

Do it Internally (Strategic Focus):– Ensure Common Understanding

of the Needs and Requirements

– Ensure Support from Top Management

– Ensure Line-Management’s Active Involvement and Buy-In

– Involve Representatives from all Business Units/Departments

– Develop Project Roadmap and Master-Plan with Flexible WBS

– Benchmark with Best Practices

– Educate, Communicate, and Communicate More!

Options


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Design Logical and Practical System:– Don’t Copy & Paste!

– Reflect Vision, Mission, and Values

Clarify Roles and Responsibilities:– Ensure Commitment and Participation

– Ensure Accountability for the Performance Expectations and Outcomes

– Ensure Ongoing Education/Communication

Integrate with other Corporate HR Processes (Reward, T&D, Succession)

Develop “User-Friendly” IT Solutions

Monitor, Measure, Track Achievements

Report Success and Failures (if any!).

Ensure Continuous Improvements

Key Design Principles


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EDCOM Strategy

Project Identity (Logo & Slogan)

Change Management Strategy

Objectives and Desired Outcomes

Information Cascading Process

Train-the-Trainer Workshops:– Subject Matter Experts

– Process Coordinators

Promotional Items/Gifts

Motivational Posters

Project Homepage (Intranet)

e-Mails & Newsletters Update

Clear & Consistent Messages

Rollout & Implementation Sessions


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Change Strategy: Phase-In or Pilot Implementation?

Scope of Change:– Structure, Processes,

– People, Systems

Resources & Action Plan

Resisting Change:– Comfort Zone & Job Security

– Assumptions & Perceptions

– Complex Processes

– Not User-Friendly System

– Language Barriers

– Poor Communication

Mitigating and Managing Risks

Outcomes Evaluation & Impact Analyses

Change Management


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Executive Management Support

Line Management Involvement

Employees Buy-In

Decision Making & Approval

Budget & Financial Ability

Available Tools & Logistics

Third Party's Involvement

Teamwork:– Availability & Dedication

– Workload & Commitments

– Work Schedules & Vacations

Information and Documents

Work Materials

Key Success Factors


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HR Management Responsibility:– Educate and Communicate

– Monitor and Follow-Up Process

– Provide Ongoing Support

– Suggest System Improvements

Moderation Panel Responsibility:– Verify Documented Justifications

– Identify Subjective Outcomes

– Clarify Irrational Decisions

– Ensure Company-wide Consistency

– Validate Regression & Impact Analyses

Executive Committee Responsibility:– Approve Performance Outcomes

– Review Executive Reports

– Provide Directions for the Future

Monitoring and Audit


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Objective’s Achievements:– SMART & Consistent,

– Target Dates,

– Weightage,

– Key Performance Indicators.

Reward Budget vs. Actual.

Training Requirements.

Training Days/Hours.

Succession Planning Pool.

Development Progress.

Recognition and Awards.

Benchmark Best Practices.

Improvement Areas.

Executive Reports


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Correlation Between Performance Ratings and:– Function/Discipline

– Sector/Unit

– Job Categories

– Position Grade & Classification

– Salary Level (Min, Mid, Max)

– Nationalities, Gender, Age

– Educational Level

– Years of Relevant Experience

– Length of Active Service (Seniority)

– Appraiser’s Effectiveness

– Disciplinary Actions

– Past Performance

– Absence Rates

Regression Analysis


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HR Management

• Develop & Implement

Strategic PM System

• Train End-Users

• Coordinate the Process

• Monitor Outcomes

• Keep Records and

Compile Analyses/Reports

• Assist Supervisors in

dealing with Poor

Performance and

Competency Gaps

• Mediate or Arbitrate

Employees’ Grievances

• Administer Reward &

Recognition Programs and

Training Courses

Subordinates

• Set Individual SMART

Objectives

• Clarify Expectations

(KPIs) with Supervisor

• Work as a Team-Player

and Collaborate with all

Colleagues

• Develop Value-Added

Results

• Report Progress and seek

Help when needed

• Participate in the 360°

Assessment (if needed)

• Exchange Constructive

Feedbacks

• Be Optimistic!!!

Roles & Responsibilities

Supervisors

• Assign Objectives, KPIs,

and Priorities for each

Subordinate

• Conduct Ongoing Work-

Progress Review

• Provide Constructive

Performance Feedback

• Avoid Rating Mistakes

• Rationalize and Justify

Appraisal Decisions with

Events and Facts

• Identify Performance

Deficiencies

• Formulate Performance

Improvement Plans

• Follow-up & Follow-up!!


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Contact Us!

Mohamad J. Samman

Founder & Managing Partner

Empower Management Consulting LLC

[email protected]

www.EmpowerMC.com

Mobile (+974) 586-1741

Phone (+974) 411-7561

Fax (+974) 479-5917

P.O. Box 11537 - Doha, State of Qatar