Post on 24-Jun-2015
transcript
ANALOG DEVICES INC.(B)
2000,ADI had an explosive top line growth Manufactured components for PC modems,
ADSL switches, mobile phones and wireless infrastructure equipment
ADI’s product mix included components for Internet-related equipment
ADI’s strategy was innovation and product design
Q1.HOW DID ADI’S INDUSTRY CHANGE BETWEEN 1996 AND 2001
Internet era let to a 78 % increase in top line growth
Change in demand characteristics for ADI’s products
Disaggregation of the supply chain Operators of chip fabrication Global component distribution Contract equipment manufacturers
Tradition distinction between analog and digital market was increasingly becoming blur
Greater collaboration required in the product design process
Reduce product life cycle
Q2.HOW ARE THE TARGETS SET FOR THE METRICS ON THE SCORECARD? WHO SETS THEM?
Gradual drift from half life concept as it was only suitable for weakness based measures
Goal setting process Bottom up
Divisions prepare the plans which are approved by the senior management, based on the plan post consultation with both the parties goals are assigned
Top downSenior management assigns goals to
the lower rang managers
Cross Functional Team sets the targets
Q3. IS ADI’S SCORECARD AS USEFUL TODAY AS IT WAS IN THE 80S? WHAT ARE THE LIMITATIONS TO SCORECARD? WHAT CAN GO WRONG?
Not as effective as in 80s Change in Business Environment
Extremely dynamic measures are not included in the Executive information system and are captured through spreadsheets
Presence of too many measures make them less relevant as actionable information
The Scorecard was not linked with the employee compensation
Q4.WOULD YOU MAKE ANY CHANGES TO THE WAY ADI MANAGES ITS SCORECARD? WHAT CHANGES? WHY?
Metrics should be embedded in EIS & not on manual spreadsheets
Metrics should be kept flexible
Q5.DOES THE METRICS SYSTEM HAVE FLAWS? CAN EMPLOYEES GAME THE SYSTEM? WHAT ARE THE DANGERS OF THE EIS?
As employees and the organization get used to the old way of doing things, new scorecard measures should be introduced keeping in mind the
Dynamic nature of the semiconductor market Time required to implement the project
Dangers of EIS Ubiquity of information-Presence of too many
measures make them less relevant as actionable information
Benefits hard to quantify
High implementation costs
System may become slow, large, and hard to manage
THANK YOU