CHANGES FROM TQA 2006 SITTISAK PRUKPITIKUL.

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CHANGES FROM CHANGES FROM TQA 2006TQA 2006

SITTISAK PRUKPITIKUL


Changes from 2006 Changes from 2006 CriteriaCriteria


Strategic advantages Strategic advantages & Competencies& Competencies


What is StrategyWhat is Strategy

•Strategy is the way in which a company orients itself towards the market in which it operates and towards the other companies in the marketplace against which it competes .It is a plan an organization formulates to gain a sustainable advantage over the competition . The central strategic issue : why different companies, facing the same environment, perform differently.

Vadim Kotelnikov



Strategy answers the following questions:

•what are the sources of the company's sustainable competitive advantage?

•how a company will position itself

against competition in the market over the long run to secure a sustainable competitive advantage?

•what are the key strategic priorities?Vadim Kotelnikov



•Strategy is an agreed-on guide to action that should lead business to success in the marketplace by satisfying customer needs better than the competition does . Strategy formulation is the major task for the c

ompany entrepreneur and CEO , but it is the task of middle managers and pr

oject managers to carry this strategy out

and turn it into results.Vadim Kotelnikov


New Approaches to New Approaches to Strategy Fo Strategy Formulationrmulation • The currently dominant view of strategy is the

- resource based theory . Traditional strategy models, such as Michael Porter's five forces model, focus on the company's external competitive environment .Most of them do not attempt to look inside the company . In contrast, the resource-based perspective highlights the need for a fit between the external market context in which a company operates and its internal capabilities . According to t

his view, a company's competitive advantage derive s from its ability to assemble and exploit an appropri

ate combination of resources. Sustainable competitive advantage

is achieved by continuously developing existing and creating new resources and capabilities in response

to rapidly changing market conditions Vadim Kotelnikov



Choosing Between the Strategy-driven and the Opportunity-driven Business

DevelopmentUse strategy

approachUse opportunity

approach• Known

environment• Unknown / new

environment• Stable

environment• Unstable,

rapidly changing environment

• Building on existing competences, products, and/or markets

• Building on new competences, products, and/or markets

• Business consolidation

• Business expansion

• Need stability and certainty

• Need change; accept uncertainty



CRITERIA FOR CRITERIA FOR SUSTAINABLE ADVANTAGESUSTAINABLE ADVANTAGE

•Unique • Difficult to replic

ate• Superior to com

petition• Applicable to mu

ltiple situations

• Valuable • Rare • Costly to

imitate • Non-

substitutable


Strategy ManagementStrategy Management

•Role of Organization (Cat 2.1)–Determine principle success factors and key changes that effect competitive situation

–Determine org. strategic challenges, advantages

–Determine new opportunities


Strategy ManagementStrategy Management•Role of Organization (Cat 2.1)

–Establish Strategic Objectives that address•Strategic challenges•Strategic advantages•Key changes that effect competitive situation

•New opportunities•Short & Long term goals•Needs of all Stakeholders


Strategy ManagementStrategy Management•Innovate new business model as appropriate

•Strategic Risk management–Strategy Formulation Risk or blind spot (Cat 2.1)

–Strategy Deployment Risk (Cat 2.2)•Risk in Action plan formulation & deployment

•Resource related risks–Financial–Human Resource (Capacity & Capability)–Other Resource


Core CompetenciesCore Competencies


Physical

IntellectualCultural

Result of deployment of resources


Resources and Capabilities Defined

• Resources are inputs into a firm's production process; can be classified into three categories: 1 . Physical capital2. Human capital3. Organizational capital

•A capability is a capacity for a set of resources to integratively perform a stretch task of an activity


What Does the Core What Does the Core Competencies AchieveCompetencies Achieve

• Enables the creation of new products and services that provide potential access to a wide variety of markets .

• Makes a significant contribution to the customer value and enables a business to deliver a fundamental customer benefit – the perceived customer benefits of the end product .

• Helps create sustainable competitive advantage as it is competitively unique and difficult for competitors to imitate . Vadim Kotelnikov


Individual VS. Core Individual VS. Core CompetenciesCompetencies

• Individual capabilities stand alone and a re generally considered in isolation.

• Core competencies are harmonized, intentional constructions . They are more than the traits of individuals .Capabilities are considered core if they differentiate a company strategically .Core competencies are aggregates of capabilities, where synergy is created that has sustainable value and broad applicability . That synergy needs to be sustained in the face of potential competition and must not be specific to one product or market .

Vadim Kotelnikov


When does a capability When does a capability becomebecome

a Core Competence a Core Competence•To become a core competence, a

capability must be unique in the marketplace and collective in nature

•What makes a capability unique– Rareness– Inimitability– Non-substitutability

•What makes it collective?– Cross-functional– Cross-product– Cross-business



Core CompetencyCore Competency•Role of Org. (Cat 6.1)

–Determine Org. Core Competency–Protect Org. Core Competency–Exploit Org. Core Competency–Build and Strengthen Org. Core Competency through•Work system design•Individual competency development (Cat 5.1)

•Increase org. capability


InnovationInnovation





•Products/Service/Markets innovation

•Operational innovation – improves the effectiveness and efficiency of core processes & functions

•Business Model innovation – innovation on the structure and/or financial model of a business


BUSINESS MODELBUSINESS MODEL

• A business model is a conceptual tool that contains a big set of elements and their relationships and allows expressing the business logic of a specific firm . It is a description of the value a company offers to one or several segments of customers and of the architecture of the firm and its network of partners for creating, marketing, and delivering this value and relationship capital, to generate profitable and sustainable revenue streams.” —

Ostenwalder, Pigneur and Tucci


BUSINESS MODEL BUSINESS MODEL COMPONENTCOMPONENT


Common Business Common Business Model InnovationModel Innovation

•Org. Structure changes•Major strategic partnerships•Shared services•Alternative financing/investment vehicles

•Divestitures/spin-offs•Use of a third party operating utility Global CEO study








Jazz of Innovation : Jazz of Innovation : 11 Tips11 Tips

1. Provide strategic alignment . Create an inspiring vision and launch a crusade . Link the innovation strategy with corporate vision , goals, objectives , and

strategy . Develop a strategic innovation roadmap to choose and do the right things .

2 . Define the innovation process publicly. Rapid innovation requires an effective inn

ovation process. Help people understand how they fit into the system as a whole. Document your inno

vation process explicitly via maps and charts, and c ommunicate it implicitly by words and practice.

3. Build cross-functional expertise to harness the power of diversity and discover

synergies . Develop cross- functional individuals . Shuffle portfolios. Establish diverse cross-

functional innovation teams .Vadim Kotelnikov



4. Establish a creative chaos environment to inspire creativity and trigger accidentaldiscoveries . Encourage improvisation and wild play. Find the

right balance between order and chaos.5. Challenge assumptions. Think outside-the-box .

Ask searching questions "Why?" and "What If?" to identify hidden proble

ms and opportunities. Keep eyes open for inspiration . Brainstorm

every day.6. Cross-pollinate. I ncorporate a wide range of styles,

skills, and perspectives to inspire and develop wi nning innovative solutions. Encourage comments

and ideas. Inspire advocates and critics. Invite ou tsiders – experts, customers, suppliers, partners. Change hats to generate and evaluate ideas.Vadim Kotelnikov



7. Reward idea generation. People want to know their ideas make a difference.

Recognition and rewards motivate and encourage people to participate and make qualit

y contributions. They also demonstrate management commitment to the innovation program and to the e

mployees.8. Experiment to pursue opportunities , acquire new skill

s, learn from feedback and discover new opportunities . Create prototypes to visualize and tes t your ideas, inspire new ideas, and sell your ideas to

your sponsors and peers.9. Allow freedom to fail . Failure provides a great learning

opportunity and should be viewed as a very lifeblood of success . Learn from failures, regroup, and start again more intelligently .

1 0 . Measure the progress to take a corrective action and accelerate the pace of ideas to implementation .

1 1 . Make business fun to make people excited about what they are doing, working as a team, and tackling new

Vadim Kotelnikov



•Role of Senior leaders (Cat 1.1)– Create culture and nurture innovation-

friendly environment•Role of Org.

– Innovate new business model as appropriate

– Innovate new work system as appropriate– Learn & Share

•Role of HR– Create culture & environment conducive

to innovation– Evaluate & Improve Org. Innovation

System


Work SystemWork System



Work System Work System DecisionsDecisions

•Decision involve–Protection and capitalize on core competencies

–Deciding what should be procured or produced outside your organization in order to be efficient and sustainable in your market place


Work System Work System DecisionsDecisions

–Three generic work system design problems•Modularity – dividing at what points to cleave work systems into components allocation among subunits or out sourcing (what function we will do, what function we will outsource)

•Hierarchy – recognizing interdependencies and accountabilities for work performance across different levels in a nested hierarchy (what level do this)

•Network – managing the multiple sourcing relationships that constitute your alliance network (combination of above 2)



Work SystemWork System

•Role of Org. (Cat 6.1)– Innovate / Design WS to

effectively accomplish org. work

– Innovate / Design WS to protect and exploit org. core competency

– Evaluate and improve effectiveness of WS


WorkforceWorkforce


WorkforceWorkforce


Workforce CapabilityWorkforce Capability


Workforce CapacityWorkforce Capacity


WF Capacity & CapabilityWF Capacity & Capability

•Role of HR (Cat 5.2)–Ensure sufficient WF Capacity & Capability according to Org. & Strategic Needs

–WF Capacity & Capability risk management•Prepare•Prevent•Minimize Loss


Workforce EngagementWorkforce Engagement


Workforce EngagementWorkforce Engagement


WF EngagementWF Engagement

•Gallup Organization research reveals that the longer an employee stays with a company, the less engaged he or she becomes . And that drop costs businesses big in lost profit and sales, and in lower customer satisfaction . In fact, Gallup estimates that actively disengaged employees -- the least productive -- cost the American economy up to $350 billion per year in lost productivity.



•Employees who are "not engaged" aren't necessarily negative or positive about their company .They take a wait-and-see attitude toward their job, their employer, and their co-workers . They hang back from becoming engaged, and they don't commit themselves.



•The "actively disengaged" employees are the "cave dwellers ." They're "Consistently Against Virtually Everything." They're not just unhappy at work; they're busy acting out their unhappiness . Every day, actively disengaged workers undermine what their engaged coworkers accomplish.



• "Engaged" employees are builders. T hey want to know the desired expecta

tions for their role so they can meet a nd exceed them. They're naturally cur

ious about their company and their pl ace in it. They perform at consistently

high levels. They want to use theirtalents and strengths at work every d

ay. They work with passion, and they have a visceral connection to their co

mpany. And they drive innovation and move their organization forward.



•2004-05 National WF engagement Assessment–46% of all employees are fully engaged–23% are partially engaged. They may act in ways that benefit the org. in the short term; however, the majority of them are ‘trapped’ feeling they have to stay

–31% are unengaged-already halfway out the door

–The cost of replacing workers ranges from 6 to 18 months of en employee’s salary


Top five drivers of Top five drivers of employee loyaltyemployee loyalty

(2005 Walker Loyalty (2005 Walker Loyalty Report)Report)

•Attitudes : Employee focus, Development Opportunities, Job Quality, Brand, and Reputation

•Experiences: Care & Concern, Fairness at work, satisfaction day to day, feelings of accomplishment, and compensation/benefits



• Role of Senior Leaders (Cat 1.1)– Communicate & Engage with workforce

• Role of HR & Org. (Cat 5.1)– Determine engagement factors– Develop culture conducive to high

performance work•Performance Management System

– Develop WF & Leader– Evaluate and improve WF engagement

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