School Improvement Plan by M Bustaman IAB KPM 2010

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DEVELOPING SCHOOL IMPROVEMENT PLAN BY Muhamad Bustaman Abdul Manaf Institute Aminuddin Baki National Institute of Educational Management and Leadership Ministry of Education Malaysia


2 BIODATA PENCERAMAH MUHAMAD BUSTAMAN BIN HAJI ABDUL MANAF Senior Lacturer DG 52. Head of Innovasion/Quality Department Join IAB since 1995 4. Writing: 1. Perancangan Strategik (2006/2007). 2. Pengurusan Kualiti Dalam Pendidikan (1998). 3. Buku ketiga: Perancangan Strategik Sekolah ( 2009) 4. Major Training in Strategic Management: i. Strategic Management & Leadership: World Trade Institute, New York, USA (1996) ii. TQM in Education: SEAMEO Innotech, Manila. Philippine (1998) iii. Strategic planning in education: Uni of York, England (2000- 2004) iv. Strategy Performance Measurement (BSC): Uni of Adelaide, Australia (2005) 5. Lead Auditor MS ISO 9000 since 1998 - IRCA London. 6. Member of Central Strategic Planning Committee for MOE 2011-2020 2 mbustamanIAB

My Third books:

My Third books Next Year New Book: Developing KPI

Workshop Objectives:

Workshop Objectives This two days workshop is designed to assist participants to: Understand the new concept of school Improvement plan (SIP) Learn how to develop and implement SIP effectively

Workshop Objectives: Workshop Objectives Define the needs for Change for school improvement Explain the new strategic planning approach and processes for school improvement plan. Explain how to create strategy measurement (KPI) and execute a school improvement plan strategically and effectively

Organizational Change:

Organizational Change … any alteration of activities in an organization that may be the result of changes in the structure of the organization, transfer of tasks, new product introduction, changes in attitude of group members or process, or any number of events inside and outside of an organization Change starts with a goal, often called a mission and vision… a reason for change

What is change management?:

What is change management? Change management is the process of developing a planned approach to change in an organization . Typically the objective is maximize the collective efforts of all people involved in the change .

The Improvement (change) Model:

The Improvement (change) Model Strategy is about change C= [D.V.f] > R C – change D – dissatisfaction V – vision/ continuous improvement f – first step of action R – resistance Change (C) occurs when dissatisfaction (D), vision (V) and first step of action (f) exceed resistance (R)

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Change ( C ) means to move from one state to another, to become different from what it was. Dissatisfaction (D) then can be used as a lever. Change will happen when the product of D.V.f greater than R Resistance (R) to be transferred into productive energy. People get excited when they participated

A change programme is underway when all three dimension can be recognised:

A change programme is underway when all three dimension can be recognised P EX IN Mission & Vision + Objectives + Strategy + Plan + KPI + Buy-in + Teamworking + Recognition + Benefits + Belief + Enthusiasm + Commitment + Hope

Paradigm Shifts:

Paradigm Shifts A paradigm shift is a radical change of paradigm. The term was first used by Thomas Kuhn in his book ‘The Structure of Scientific Revolutions’, 1962 Examples of paradigm shifts: The work of Galileo (telescope) The invention of modern physics by Newton (gravity) The evolution theory of Darwin (man evolution) The work of Kepler (planetary motion) Other uses: …..represents the notion of a major change in a certain thought-pattern such as radical change in personal beliefs, and radically different way of thinking or organizing.

“In the end, it is important to remember that we cannot become what we need to be by remaining what we are.”:

“In the end, it is important to remember that we cannot become what we need to be by remaining what we are.” - Max de Pree in Leadership is an Art (1989,p.100 )

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Take 5

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“Strategic management is the process of formulation the strategic plan and implementation of the plan . It involves strategic analysis, strategic choice and strategic implementation” Brian Fidler, Strategic Management for School Development (2002)

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Mandates, Mission & Vision Strategy Formulation External Opportunities & Threats Internal Strengths & Weaknesses Priorities (issues), KPI & Long-Term Objectives Strategies Tactical

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Strategy Implementation Annual Objectives (Annual Plan) Policies Employee Motivation Budgeting plan & Resource Allocation

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Strategy Evaluation Internal Review External Review Performance Metrics Corrective Actions

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Strategy ORGANIZATION CHARTERS Mission Vision Values Goals LEADERSHIP 1. Mission Statement 2. Vision Statement 3. Values Statement 4. Strategy 5. Operating Goals and Milestones 6. Leadership

What is School Improvement Plan?: What is School Improvement Plan? Process to establish priorities on what you will accomplish in the future Forces you to make choices on what you will do and what you will not do Pulls the entire organization together around a single game plan for execution Broad outline on where resources will get allocated

Why do Improvement Plan?: Why do Improvement Plan? If you fail to plan, then you plan to fail – be proactive about the future Strategic planning improves performance Counter excessive inward and short-term thinking Solve major issues at a macro level Communicate to everyone what is most important

Fundamental Questions to Ask: Fundamental Questions to Ask Where are we now? (Assessment) Where do we need to be? (Gap / Future End State) How will we close the gap (Strategic Plan) How will we monitor our progress (Balanced Scorecard)

A Good Strategic Plan should . . . : A Good Strategic Plan should . . . Visionary – convey a desired future end state. Address critical performance issues or Key Results Areas (KRA) and Key Performance Indicators (KPI) clearly Create the right balance performance measurement between what the organization is capable of doing vs. what the organization would like to do Cover a sufficient time period to close the performance gap Flexible – allow and accommodate change Guide decision making at lower levels – operational, tactical, individual

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Hello Sir, I’m Mr. M. Bustaman from IAB to would like to introduce ……………….

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Balanced Scorecard Hall of Fame Implemented Strategies and Achieved Breakthrough Results… Fast:

Balanced Scorecard Hall of Fame Implemented Strategies and Achieved Breakthrough Results… Fast Saatchi & Saatchi + $2b ATT Canada + $7b Chemical Bank 99% Merged Target Asset Retention UPS Southern Garden Wells Fargo Cigna + $3b Brown & Root #1 in growth & profitability City of Charlotte Duke Children’s Mobil Last to first Cash flow +$1.2b ROI 6% --> 16% Hilton Hotels Least Cost Producer 3 years Customer Satisfaction Market Revenue Index Revenues 9% Net Income 33% # Customers 450% Best Online Bank Customer Satisfaction = 70% Public Official Award Customer Satisfaction #1 Cost/Case 33% 3 years 2-5 years 3 years 3-5 years 3 years 3 years 2 years 3 years 3 years 2-5 years 2 years

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Balanced Scorecard:

Balanced Scorecard Customer Objectives Measures Targets Initiatives Internal Objectives Measures Targets Initiatives Financial Objectives Measures Targets Initiatives Employees & Capacity Objectives Measures Targets Initiatives Strategy

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The individual needs of each student are met Our students enjoy a positive and enjoyable learning experience Our students demonstrate exemplary behaviour Providing quality & varied extra curricula activities Effective teaching methods that instil the joy of learning Knowledgeable, efficient, competent, nurturing & highly motivated staff who display our core values Transparency & Accountability Financial viability FIDUCIARY LEARNING INTERNAL CUSTOMER School Strategy Mapping - 2011 Our students strive towards academic excellence Safe welcoming, efficient, comfortable facilities and working environment Ongoing maintenance & upgrading of facilities Ample supply of resources – teaching aids, technology, equipment Consistent discipline Providing opportunity for Learning religion Principles Responsive curriculum that encompasses the motto “work, play and learn together” Our students are well rounded & excel in all fields Our students enjoy a safe, welcoming, efficient, comfortable and family oriented environment

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BSC: Strategy Mapping:

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Basic Scorecard Terminology (Southwest Airlines Example):

Basic Scorecard Terminology (Southwest Airlines Example) Objectives Fast ground turnaround Objectives: What the strategy is trying to achieve Targets 30 Minutes 90% Targets: The level of performance or rate of improvement needed Cycle time optimization Initiatives: Key action programs required to achieve targets Initiatives Measures On Ground Time On-Time Departure Measures: How success or failure (performance) against objectives is monitored Strategic Theme: Operating Efficiency Profits and RONA Financial Learning Ground crew alignment Lowest prices Fewer planes Customer Internal Fast ground turnaround Strategy Map On-time Service Attract & Retain More Customers Grow Revenues

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Pre-Requisites to Planning: Pre-Requisites to Planning Senior leadership commitment Who will do what? What will each group do? How will we do it? When is the best time?

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What is Mandate?:

mbustaman/IAB/KPM/05 64 What is Mandate? Mandates are written and unwritten rules that govern and guide an institution and its stakeholders. Its maybe directly tied to laws, by laws, ordinances, acts and charters (Sevier, 2000)

What is a Mission Statement?:

mbustaman/IAB/KPM/05 65 What is a Mission Statement? A mission statement describes the primary purpose for our organisation existence, who we serve, what we produce and how we do it. Example: INSTITUTE AMINUDDIN BAKI “Building Educational Leadership Capacity For Quality Organisation”

3 Basic Elements of the Organizational Mission:


Criteria for Effective Mission Statement:

mbustaman/IAB/KPM/05 67 Criteria for Effective Mission Statement Defines why we do, what we do; why the organization exists Short and sharply focused Is sufficiently broad Clear and easily understood Does not prescribe means Provides direction for doing the right things Addresses our opportunities Matches our competence Inspires our commitment Says in the end, what we want to be remembered for Next: Vision

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mbustaman/IAB/KPM/05 68 Notes: For now it is enough to note simply that foundation of any good vision of success is an organization’s mission statement or statement of purpose and values (Bryson, 1995, page 67).

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mbustaman/IAB/KPM/05 70 o o o o o o o o o Looks Beyond

What is a Vision?:

mbustaman/IAB/KPM/05 71 What is a Vision? … What the organization intends to become ultimately A vision is like a dream. It’s the mental image of your organization’s ideal. It’s where you want to go, what you want to be. It’s perfectly acceptable for your vision, your dream to be unattainable, to be just out of reach. It’s what you reach for. The vision statement is where you describe this dream to the people who work for you in your business or on your team. Example: For years Pepsi’s vision statement was simply, ‘Beat Coke’

Vision: Vision C omponents How the organization wants to be perceived in the future – what success looks like An expression of the desired end state Challenges everyone to reach for something significant – inspires a compelling future Provides a long-term focus for the entire organization

Examples of Vision Descriptors: Examples of Vision Descriptors Adept Aggressive Agile Aligned Assertive Available Best-in-class Challenging Clear Competent Complex Compliant Conservative Coordinated Critical Direct Equal Disciplined Effective Efficient Enduring Expanding Expert Fast Fast-paced Financially-sound Focused Growth Healthy Improving Incentivized Increasing Solid Solvent Stable State of the Art Strong Streamlined Sufficient Strategic Sustainable Timely Value-added Vigilant Visionary World-class Informative Innovative Leading Logical Major Nimble Pioneering Protected Organized Over-Arching Quick Ready Responsive Savvy Simple

Sample: Vision Statement:

74 Sample: Vision Statement IAB as a centre of distinction for educational leadership

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mbustaman/IAB/KPM/05 Characteristics of Good Vision Statement Easily understood by all stakeholders Briefly stated, yet clear and comprehensive in meaning Challenging, yet attainable Lofty, yet tangible Capable of stirring excitement for all stakeholders Not concerned with numbers Sets the tone for employees Conveys the organization’s strategic emphasis

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mbustaman/IAB/KPM/05 Vision is used for communication Mission is used for planning Vision is long in length and narrow in focus Mission is short in length and broad in focus Vision inspires Mission informs Vision is for seeing Mission is for knowing and doing Vision comes from the heart and is for the heart Mission comes from the head and for the head Our vision is unique to our organization Our mission may be in common with other organizations A vision is caught A mission is taught Vision Statement Mission Statement Next: values

Guiding Principles and Values: Guiding Principles and Values Every organization should be guided by a set of values and beliefs Provides an underlying framework for making decisions – part of the organization’s culture Values are often rooted in ethical themes, such as honesty, trust, integrity, respect, fairness, . . . . Values should be applicable across the entire organization Values may be appropriate for certain best management practices – best in terms of quality, exceptional customer service, etc.

Value Statement:

mbustaman/IAB/KPM/05 Value Statement Value statement describes the principle that guide the organization’s work and includes a description of an organization’s philosophy and beliefs and often explains the organization’s relationship to its environment and resources.


STATEMENT OF IAB VALUES Integrity Profesionalism Team Work Culture Learning Organisation High Performance

Examples: Value Statement :

mbustaman/IAB/KPM/05 Examples: Value Statement We value education and we believe that providing lifelong learning and personal development opportunities are the primary objectives of the college We value students and we believe that commitments to students is our primary focus We value our employees and we believe that it is the right and responsibility of all employees to take an active role in their professional development in order to continue achieve institutional excellence We value freedom and fairness and we believe in academic freedom, freedom of speech, and the free exchange of ideas

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mbustaman/IAB/KPM/05 Examples: The Guiding Principles XYZ Corporation will make every effort to deliver the highest-quality products and services to its customers At XYZ Corporation, all stakeholders (customers, suppliers, and employees) will be treated as partners At XYZ Corporation, employee input will be actively sought, carefully considered, and strategically used At XYZ Corporation, continual improvement of products, processes, and people will be the norm XYZ Corporation will provide employees with a safe and healthy work environment that is conducive to consistent peak performance XYZ Corporation will be a good corporate neighbor in all communities where its facilities are located

Values of Visionary Companies:

mbustaman/IAB/KPM/05 Values of Visionary Companies Sony: “Being a pioneer – not following others, but doing the impossible” Walt Disney: “To bring happiness to millions” Wall Mart: “We exist to provide value to our customers” Motorola: “To honorably serve the community by providing products and services of superior quality at a fair price” Marriott: “Customers are guest” Johnson & Johnson: “The company exists to alleviate pain and disease” Hewlett_Packard: “We exist as corporation to make contribution” General Electric: “Improving the quality of life through technology and innovation” 3M: “Respect for individual initiative and personal growth” Citicorp: “Expansionism – of size, of service offered, of geographic presence” Boeing: “To eat, breathe, and sleep the world of aeronautics”

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Definition of customers Organisation or person that receives a product or services. A customer can be internal or external to the organisation. (ISO 9000:2000)

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Definition of customer satisfaction the degree to which the customer’s requirement have been fulfilled. – ISO 9000:2008

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Taxonomy of Strategic Data Collection:

mbustaman/IAB/KPM/05 87 Taxonomy of Strategic Data Collection Area for Analysis Data Needed Available Approaches The Environment National & regional trend International trend PESTLE The school customer & stakeholder Existing and potential customers-their values, wants and needs Market segmentation Demographic, survey data The school’s product and service Areas of strength, weakness, growth& contraction Perceptions of the school SWOT analysis International evaluation External evaluation Attitude surveys The Competitors The products &services offered, their strength & weakness SWOT analysis Customer survey data Competitor analysis Inspection reports


mbam/iab-moe/2006 88 THE ORGANIZATION AS AN ICEBERG 14.5

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Important Questions:

mbustaman/IAB/KPM/05 90 Important Questions Where are we now? What are our stakeholders want and needs? What do our assessment data tell us? What are we doing well? What can we improve? External opportunities/threats? What is happening in the external environments? Trends?

Assessment Model: S W O T/SWOC: Assessment Model: S W O T/SWOC A ssessment External Assessment: Political, economic factor, competitor’s, social trends, technology, regulatory environment. (PESTEL) Internal Assessment: Organizational assets, resources, people, culture, systems, partnerships, suppliers, . . . Easy to Understand Apply at any organizational level Needs to be Analytical and Specific Be honest about your weaknesses Good Points Possible Pitfalls SWOT SWOT

Role of SWOC/T Analysis in Crafting a Better Strategy:

mbustaman/IAB/KPM/05 92 Role of SWOC/T Analysis in Crafting a Better Strategy 1. Developing a clear understanding of an organization’s Internal resource strengths Internal resource weaknesses External best opportunities External threats or Challenges 2. Drawing conclusions about how Organization’s strategy can be matched to both its resource capabilities and external opportunities Urgent it is for organization to correct resource weaknesses and guard against external threats

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A: Identifying Internal Resource Strengths and Capabilities:

mbustaman/IAB/KPM/05 94 A: Identifying Internal Resource Strengths and Capabilities A strength is something an organization does well or a characteristic that enhances its abilities Valuable staff competencies or know-how Valuable physical assets Valuable human assets Valuable organizational assets Valuable intangible assets Important competitive capabilities An attribute that places an organization in a position of market advantage Alliances or cooperative ventures with capable partners Resource strengths and competitive capabilities are competitive assets !

Identifying Resource Weaknesses and Competitive Deficiencies:

mbustaman/IAB/KPM/05 95 Identifying Resource Weaknesses and Competitive Deficiencies A weakness is something a firm lacks, does poorly, or a condition placing it at a disadvantage Resource weaknesses relate to Deficiencies in know-how or expertise or competencies Lack of important physical, organizational, or intangible assets Missing capabilities in key areas Resource weaknesses and deficiencies are competitive liabilities !

Organization Competencies and Capabilities:

mbustaman/IAB/KPM/05 96 Organization Competencies and Capabilities Stem from skills, expertise, and experience usually representing an Accumulation of learning over time and Gradual buildup of real proficiency in performing an activity Involve deliberate efforts to develop the ability to do something, often entailing Selection of people with requisite knowledge and expertise Upgrading or expanding individual abilities Molding work products of individuals into a cooperative effort to create organizational ability A conscious effort to create intellectual capital

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mbustaman/IAB/KPM/05 97 THE EXTERNAL ENVIRONMENT Customers Competitors Suppliers Public Pressure Groups The Organization General Environment Specific Environment 3.11 © 2003 Pearson Education Canada Inc.


mbustaman/IAB/KPM/05 98 PEST Political Legislation and Regulation International relations, world peace Economic Economic cycles, recession, boom Currency rates, interest rates, tariff/taxes/quotas Capital, labour and commodity markets Social Demographics, foreigners Tastes, fashion, perception, worldview Environmental awareness Technological Process effect development Product capability ICT



Gap Analysis: Gap Analysis B aseline Baseline / Org Profile Challenges / SWOT Gap = Basis for Long-Term Strategic Plan

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Describes an overall strategic direction Can improve the communication effectiveness of the Strategy Map Examples of themes: Innovative Services Lean Processes Adaptive Organization Realign our Core Competencies Reach the Stakeholder Group common set of objectives around a theme Strategic Themes

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mbustaman/IAB/KPM/05 104 Mission Vision Goals Objectives Measures Targets Actions/Initiatives Why we exist What we want to be What we must achieve to be successful Indicators and Monitors of success Desired level of performance and timelines Planned Actions to Achieve Objectives O1 O2 AI1 AI2 AI3 M1 M2 M3 T1 T1 T1 Specific outcomes expressed in measurable terms (NOT activities) Strategic Planning Action Planning Implementation / Measures Goals serve as the starting point for cascading Objectives, Initiatives, and Measures down through the organization

What are Goals?:

mbustaman/IAB/KPM/05 105 What are Goals? Goals … are targets set for performance. Goals should answer the question: “What do we hope to achieve in support of the mission and vision (over the period …)?”

Goals: Goals C omponents Describes a future end-state – desired outcome that is supportive of the mission and vision. Shapes the way ahead in actionable terms. Best applied where there are clear choices about the future. Puts strategic focus into the organization – specific ownership of the goal should be assigned to someone within the organization. May not work well where things are changing fast – goals tend to be long-term for environments that have limited choices about the future.

Developing Goals: Developing Goals C omponents Cascade from the top of the Strategic Plan – Mission, Vision, Guiding Principles. Look at your strategic analysis – SWOT, Environmental Scan, Past Performance, Gaps . . Limit to a critical few – such as five to eight goals. Broad participation in the development of goals: Consensus from above – buy-in at the execution level. Should drive higher levels of performance and close a critical performance gap.

Strategic Themes/Areas:

Strategic Themes/Areas 8 strategic critical success areas for school? 1. 2. 3. . . . 8. mbustaman/IAB/KPM/05 108

Goals vs. Objectives:

mbam/iab-moe/2006 109 Goals vs. Objectives GOALS OBJECTIVES Very short statement, few words Longer statement, more descriptive Broad in scope Narrow in scope Directly relates to the Mission Statement Indirectly relates to the Mission Statement Covers long time period (such as 5 years or more) Covers short time period (such 1 year budget cycle)

Goals vs. Objectives: Goals vs. Objectives GOALS OBJECTIVES Very short statement, few words Longer statement, more descriptive Broad in scope Narrow in scope Directly relates to the Mission Statement Indirectly relates to the Mission Statement Covers long time period (such as 5 years or more) Covers short time period (such 1 year budget cycle) C omponents

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What is an objective?:

mbustaman/IAB/KPM/05 117 What is an objective? Definition: A target we hope to achieve Is much more specific than a broad goal Good objectives are SMART: S= Specific M=Measurable A=Action Oriented R=Realistic T=Time Oriented

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Why Write Objectives and Outcome Measures?:

mbustaman/IAB/KPM/05 119 Why Write Objectives and Outcome Measures? Provides the department with information for decision making and planning Provides the department with useful “lessons learned” If your activities are not being implemented as you had planned, your department can make mid-course corrections and get back on track Aids in planning, training, and resource allocation

Why Write Objectives and Outcome Measures?:

mbustaman/IAB/KPM/05 120 Why Write Objectives and Outcome Measures? Unfortunately, we will not be able to get firm answers about whether or not our department is reaching its goals and objectives from the following: Poignant vignettes told by staff, faculty, students Testimonials about how much people like our department Staff/faculty reports about how well they have done or how hard they have worked **Although these can all be useful supplements**

Why Write Objectives and Outcome Measures?:

mbustaman/IAB/KPM/05 121 Why Write Objectives and Outcome Measures? “Ritualism” and inertia can be overcome Allows for organizational empowerment: Increased understanding of problems/concerns Increased ownership of programs Increased satisfaction---”what we do matters” Increased organizational commitment

Guiding Principles of Writing Objectives:

mbustaman/IAB/KPM/05 122 Guiding Principles of Writing Objectives The process of writing outcome objectives and measures assumes that “doing good” cannot be taken for granted. It must be assessed by “reality testing.” Is internally driven Is focused upon continuous program improvement. Goal is not to prove “are we good or not” but rather: What did we do? How much did we do” What worked? What didn’t? Under what circumstances? What could be altered or improved? What do we need to do what we said we could do?

Key Questions to ask when formulating objectives::

mbustaman/IAB/KPM/05 123 Key Questions to ask when formulating objectives: Are the objectives clearly related to the goals and mission? Are the objectives understood? What specific intermediate results should be achieved? Are they realistic? What variable or factors may influence the outcome? Are specific levels of achievement or solutions already mandated by Government? Are the purposed results consistent with govern’ policies, legislative, organization policies, values and strategic goals? 7. What are the reasonable period of time for achieving the desired results? Are specific time frames already mandated by external elements? (Gov etc) Have performance measures been established? If so, do they meet the development principles? 10. How critical is immediate action? What are the opportunities to act now versus later? What are the consequences of action now versus later?


mbustaman/IAB/KPM/05 124 Specific Has a single aim or purpose Don’t lump multiple objectives together Uses strong verbs (e.g., “will publish”, “will retain”)


mbustaman/IAB/KPM/05 125 Measurable Can be measured quantitatively Provides a numeric indicator of what you are trying to accomplish Evidence can be collected to document achievement of your objective

Action Oriented:

mbustaman/IAB/KPM/05 126 Action Oriented Shows how each objective is linked to the overarching goal of the College Specifies what activities will need to occur to attain the objective


mbustaman/IAB/KPM/05 127 Realistic Good objectives are attainable They can be accomplished with your department’s current capacities and resources Ask yourself, “Do I have everything that I need to do this?” Is this a reasonable expectation for the department?

Time Oriented :

mbustaman/IAB/KPM/05 128 Time Oriented Objectives are time specific States when the activities to reach each objective will begin States the time by which each objective will be accomplished

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An old story ………. ……… but still true:

mbustaman/IAB/KPM/05 130 An old story ………. ……… but still true “Any organisation which boasts one Statement of Mission (Purpose), one Vision, five Values, six Goals, seven Strategic Priorities (Objectives) and eight Key Performance Indicators without any clear correlation between them is producing a recipe for total confusion and exasperation.” Learmont Report, October 1995 on the Prison Service

Take 5!:

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Developing & Managing KPI:

132 Developing & Managing KPI hak milik mbustamanIAB.KPM

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Performance indicators are measures that describe how well a program is achieving its objectives. What are performance indicators? Key Performance Indicators are quantifiable measurements, agreed to beforehand, that reflect the critical success factors of an organisation. They will differ depending on the organisation

The terms “KPI” originates from three different words: Key, Performance, and Indicators.:

The terms “KPI” originates from three different words: Key, Performance, and Indicators. These terms can be described in the manner that the KPI should be seen as only Key when it is of fundamental importance in gaining competitive advantage and is a make or break component in the success or failure of an organization; only relating to Performance when it can be clearly measured, quantified and easily influenced by the organization; and only an Indicator if it provides leading information on future performance.

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Key Performance Indicators, also known as KPI or Key Success Indicators (KSI), help an organisation define and measure progress toward organisational goals. Once an organisation has analysed its mission, identified all its stakeholders, and defined its goals, it needs a way to measure progress toward those goals. Key Performance Indicators are those measurements

Why Do We Need KPIs?:

Why Do We Need KPIs? There are two main reasons for using KPIs: 1 . To Motivate the Organization. Measure to motivate for higher performance on both individual and group basis Measure to encourage changes in behaviour mbustaman/IAB/KPM/05

Why Do We Need KPIs?:

Why Do We Need KPIs? There are two main reasons for using KPIs: 2 . To Monitor the Organization. Measure to track progress of strategy Measure as the basis for a fair reward and recognition program mbustaman/IAB/KPM/05

Why use KPIs?:

Why use KPIs? Helps us to know whether we are succeeding in our mission. They are an important management tool for tracking progress against strategic goals. Working with KPIs encourages system thinking. In most systems 85% of problems can usually be attributed to the system and 15% to the individual (Juran). KPIs direct and prioritize behaviour towards achievement of the mission, vision, goals and objectives .

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Measures or KPIs are Meant to Generate Strategic Information We don’t just measure our strategy to be compliant …. We measure our strategy so that we can see: Where we are going well (Yellow) Where we need to improve ( Amber) Where we are having problems (Red) SMART –A Measures are more likely to generate ‘strategic Information’ Rankings (Benchmarks) Absolute Numbers Rating (surveys) Ratio Percentages Indices Strategic Information Generated Complexity of Analysis

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1.3 Identifying & Creating KPIs There are Two Types of Strategic Measures … Lagging Measures: Measure the outcomes of your strategy- Your customer stakeholder/financial outcomes Usually found in the ‘top half’ of the Strategy Map Tend to indicate what has happened in the past Are usually quantitative in nature Leading Measures: Measure the drivers in your organization- Your people and your processes Usually found in the ‘bottom half’ of the Strategy Map Tend to indicate what will happen in the future if an action is taken now Are usually qualitative in nature

Performance Measures:

Performance Measures 1. Percentage of… 2. Number of… (hours, times per month, donation, activities, km etc) 3. Frequency of …. 4. Level of …. 5. Total of …(score, costs, hours, ..) 6. Average 7. Grade 8. Ratio of 9. Degree of

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Performance Metrics Can Present in Different Forms Rankings (Benchmarks) Absolute Numbers Rating (surveys) Ratio Percentages Indices Strategic Information Generated Complexity of Analysis

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Absolute Numbers vs. indexes Absolute Numbers Positives: Objective – ‘the number is the number’ Easy to measure and analyse Easy to communicate performance required ( i.e. what needs to be done) Negatives: Are simplistic in the information that they generate Direct comparisons between departments/ divisions/ organizations is difficult because the relative importance of what is being measured may be different for each E.g. Number of tons of exported Number of patients admitted Number of days of sick leave taken Number of passenger journeys

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Absolute Numbers vs. indexes Indices Positives: Generate a lot of strategic information Able to make comparisons across a wide range of areas Able to weight areas of importance Negatives: Difficult to communicate what needs to be done Results can be skewed by one factor if weighting is done incorrectly (or not at all) Results can be interpreted in different ways by different people Individual component performance often cancel out so index performance generally does not change rapidly E.g. Index of customer satisfaction - Happiness index Index of employee engagement - Economic prosperity index

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Ranking vs. Ratings Rankings (Benchmarks) Positives: Relatively easy to measure and analyse Relatively easy to communicate what needs to be done Negatives: Are simplistic in the information that they generate Direct comparisons between departments/ divisions/ organizations is difficult because different organizations: May use different criteria for ‘best’ Performance spreads from best to worst may vary greatly Brand recognition ranking ‘Employer of Choice’ ranking Pharmaceutical distributor ranking University ranking E.g.

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Ranking vs. Ratings Ratings (surveys) Positives: Relatively easy to measure and analyse Relatively easy to communicate what needs to be done Generate a lot of strategic information Able to make comparisons across a wide range of areas Negatives: Results can be skewed by one factor Results can be interpreted in different ways by different people . Rating achieved on customer satisfaction survey Rating achieved on employee engagement survey rating achieved on product acceptance in market E.g.

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Ratios vs. Percentages Ratios Positives: Easy to measure and analyse Able to make comparisons across a wide range of areas Negatives: Need to be reviewed to ensure organizations aren’t managing the denominator Number of complaints per passenger journey Number of calls completed per operator Number of students matriculating per school E.g.

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Ratios vs. Percentages Percentages Positives: Everything is normalised to ‘100’ therefore easier to understand as everything is related back to the whole Easy to communicate improvements required easy to measure and analyse Able to make comparisons across a wide range of areas Negatives: Need to be reviewed to ensure organizations aren’t managing the denominator Percentage of new vs. old customers Percentage of actual vs. budget Percentage of IT projects completed on time and on budget percentage of staff trained E.g.

Categories of Performance Measures:

Categories of Performance Measures Input measures (e.g., staff time, materials, equipment, resources) are useful in showing resources or effort used to provide services; however does not show effectiveness You may be a spending a lot of effort doing the wrong things Output measures (e.g., number of products produced or services provided) are useful in defining program or service; however, does not reveal quality or efficiency You may be producing or providing a lot of the wrong things inefficiently or with poor quality

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Outcome measures (e.g., score on standardized test, distance from proposed targets) are useful in showing the impact or benefit of the program or service Efficiency measures (e.g., cost per unit of output, outputs per unit of input, outputs per unit time) are useful in showing productivity and cost effectiveness Effectiveness measures (e.g., participation rate, graduation rate, failure rate, completion rate) Quality measures (e.g., reliability, accuracy, courtesy, competencme, responsiveness) are useful in easuring the effectiveness in meeting customer expectations.Lack of quality can be measured (e.g., error rates)

Some Tools for Determining What to Measure:

Some Tools for Determining What to Measure Inputs Process/ System Output Intermediate Outcomes End Outcome Program Logic Model Desired Outcome Causal Analysis Process Flow Results Of Testing Not Acceptable Acceptable Prototype Product Back to Laboratory To Market

Designing Good KPIs:

Designing Good KPIs Objectives – what are we trying to achieve? May be more than one indicator for each objective. Each objective will have strategies on how to achieve them. Indicators – what are you going to measure? Used to assess the present state of progress and to suggest an appropriate course of action. Measures – how are you going to measure it? Can be qualitative or quantitative data related to inputs, progresses or outputs. Targets – what is the result that you want? Can be minima targets, stretch targets or a combination. Results – what have you actually achieved?

Constructing Good KPIs:

Constructing Good KPIs Objectives High quality training / teaching. Indicators Student satisfaction with the training/ teaching they experience. Measures Mean student response per class to the question e.g. Overall, how satisfied are you with this teacher/trainer? On a 1 to 5 Likert-type scale or (IAB- Percentage of satisfaction) Targets At least 3.6 on a 1 to 5 scale, or (IAB- 80%) Best in class compared with benchmark partners. ( Case IAB – INTAN)

Example Goal: To provide timely response to undergraduate applicants:

Example Goal: To provide timely response to undergraduate applicants Input measure: The number of file managers Output measure: The average number of applications processed per day Outcome measure: The application processing time for applications based on the time from receipt of an application in the Admissions Mail room to the key-in of the admission decision as recorded in PeopleSoft Efficiency measure: The average number of applications processed per file manager per day Quality measure: The satisfaction of applicants with the application processing time as measured by a survey

Generating Performance Measures then Objectives:

Generating Performance Measures then Objectives Goal: To provide timely response to undergraduate applicants Objective 1: to increase the productivity of the file managers by 10% PM: Average number of applications processed per file manager per day Objective 2: To reduce the application processing time to less than 14 days for 95% of applications PM: Number of days to process each application

Criteria For Selecting Performances Measures:

Criteria For Selecting Performances Measures 1. Linked to strategy 2. Easy to understand 3. Link in a chain of cause and effect. 4. Updated frequently- timely 5. Accessible- data availability

Criteria For Selecting Performances Measures:

6. Portray the true picture of the process 7. Resistant to “date” – related measures. (An action taken to assure success on the measure- than a measure itself) 8. Quantitative- to ensures any subjective biases are barred from the system. 9. Dysfunctional Criteria For Selecting Performances Measures

Measurement Template: Measurement Template (Insert organization name) (Insert division name) (Insert department name) Risk Frame area objective supports (Insert objective owner) (Insert measurement owner) (Insert reporting contact info) Objective Description – description of objective purpose, in sufficient detail for personnel not familiar with the objective to understand its intent. Objective descriptions are typically two or three paragraphs long. This will appear in the pop-up window when you mouse over the objective in the Balanced Scorecard System. References – source documentation for objective and objective description Comments – additional information about the objective not covered in above blocks, such as recommendations for further revision, additional organizations objective impacts, recommendations for coordination / alignment with other objectives, etc. Measure Name - The name exactly as you want it to appear in the Balanced Scorecard, including the measure number (i.e. Percent Employees Satisfied, etc.) Measure Description – description of the measure, include its intent, data source, and organization responsible for providing measure data. This will appear in the pop-up window when you mouse over the measure in the Balanced Scorecard. Measure Formula – formula used to calculate measure value (if any) Data Source - The source of the data – manual, data spreadsheet, or database name and contact familiar with the data Measure Weight - the relative weight of the measure based on the impact it has on the overall objective. The total weights for all measures for an objective must add to 100 Measure Reporter – Person responsible for providing measure data. Include the name, organization and email. Target Maximum – Maximum expected value for the measure. Effective Date – Date the target first becomes effective Frequency – How often target data will be reported Units – Units of measure Target – Point where the measure goes from green to amber Target Minimum – Point where the measure goes from amber to red. The target minimum and target can not be the same value. Scorecard Perspective Name

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PERFORMANCE MEASURE RECORD SHEET Measure A good self explanatory title Purpose Why are we measuring this? Relate to To which top level business object does this relate? Target What is to be achieved and by when? Formula How is this measured? Be precise Frequency How often is this measured and reviewed? Who Measures? Who collects and reports the data? Who acts on the data? Where does the data comes from? What do they do? What are the general steps which should be taken? Notes & Comments (Adapted from Neely et al, 1996)

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164 PERFORMANCE MEASURE RECORD SHEET Measure Customer complaints Purpose To understand what upsets customers so service and products can be improved Relate to Satisfying customers and retaining their business in the future Target Maintaining a customer complaint level of under 5 per cent per annum. Formula Number of customer complaints Number of orders despatched X 100 Frequency Monthly. Who Measures? Julie Carter, Customer Service Manager. Who acts on the data? Julie Carter, Customer Service Manager. What do they do? Analyse complaints by type, ensure relevant managers are informed of problems in their area and that those managers report back corrective action taken. Flag any major trends for discussion at quarterly management meeting. Notes & Comments A customer complaint is an email, letter or problem highlighted by telephone call to call centre staff which is logged on to the complaints system.

Targets: Targets For each measurement, you should have at least one target Targets should stretch the organization to higher levels of performance Incremental improvements over current performance can be used to establish your targets Targets put focus on your strategy When you reach your targets, you have successfully executed your strategy

Examples of Targets: Examples of Targets Average Time to Process New Employee Setups in DB 65 days Year 2007 60 days Year 2008 55 days Year 2009 Utilization Rate for Rental Housing Units 90% for Year 2007 92% for Year 2008 95% for Year 2009 Toxic Sites meeting in-service compliance 55% for Year 2007 70% for Year 2008 95% for Year 2009 Personnel Fully Trained in Safety and Emergency 65% by 2 rd Quarter 75% by 3 th Quarter 90% by 4 th Quarter Open Positions Filled after 30 day promotion period 75 positions Sept 2007 100 positions Jan 2008 135 positions July 2008 % Reduction in Orders Filled Short in 1 st Cycle 50% by Year 2008 65% by Year 2009 85% by Year 2010

Sanity Check . . .: Make sure everything is linked and connected for a tight end-to-end model for driving strategic execution. INITIATIVE Employee Productivity Improvement Program Employee Satisfaction Survey Rating 90% favorable overall Measure Target Target Actual 90% 45% Percent Satisfaction gap MEASURE / TARGET OBJECTIVE Improve Employee Satisfaction ACTION PLAN Identify issues per a company wide survey Sanity Check . . .

Link KPI with target & Initiatives:

mbustaman/IAB/KPM/05 Link KPI with target & Initiatives Target: Desired level of performance for a performance measure (e.g., % of customer satisfaction target = 95%) Initiatives: Action programs that will achieve our performance goals (e.g., license renewals via Internet) (source: Balanced Scorecard Institute, USA. 2005)

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mbustaman/IAB/KPM/05 Potential areas to consider when setting targets: 1. TOV or Baselines and trends 2. National, state, local or Education Standards. 3. Benchmarking 4. Feedback from customers and stakeholders

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mbustaman/IAB/KPM/05 Tips (Stacey Barr,2006) When you are setting a target, involve the people that will participate in achieving it. It more motivating if you set a series of staged targets that give you more managable milestones to achieve which collectively work up to the ultimate target. If you are writing goals or objective statements, a good recipe is: the strategic direction + KPI + target + timeframe.

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Tips (Stacey Barr,2006) When you are setting a target, involve the people that will participate in achieving it. It more motivating if you set a series of staged targets that give you more managable milestones to achieve which collectively work up to the ultimate target. If you are writing goals or objective statements, a good recipe is: the strategic direction + KPI + target + timeframe.

Take 5?:

Take 5? mbustaman/IAB/KPM/05

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Step 6: The step six is…:

Step 6: The step six is … develop strategies for each objective in step five . Strategies are statements of major approach or method for attaining objectives and resolving specific issues. The information from organizational analysis is important for strategy development. Print out the strategic plan and present the draft strategic plan for review by all staff to get more wide participation and to create a ‘sense of ownership among all staff, which is needed to build commitment during implementation of the plan.

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Detailed statement of what is critical to successfully achieving the strategy How success in achieving the strategy will be measured and tracked Key action programs required to achieve objectives The level of performance or rate of improvement needed Objective Description Target 2 per setup per month each Outlet Office Initiative Measure Number of Reworks Strategy Map Stakeholder Internal Process L&G Faster Service Access Self Service Applications Web Enable Technologies Process and Value Map Analysis Lean Processes Investments Invest in IT Extend the Map into Measurements, Targets and Initiatives Lean / Six Sigma Eliminate waste, reworks, and other errors in our processes

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Make sure the components of your scorecard fit together. We want to create a tight model for driving execution of your strategy. Goal Objective Measurement Target Initiative Achieve Agency operational efficiencies with best practices in the private sector Reduce Operational Service Costs by 50% over the next 5 years Cost per Outlet Office, Cost per Region, Cost per FTE 5% - Year 1 10% - Year 2 15% - Year 3 Activity Based Costing / Management Reduce identified re-activities within primary processes by 80% over the next 3 years Waste Volume Charts, Rework Tracking, Cycle Time End to End in S-LX (5 of 7 Regions) Waste stream reductions of 5% each year, Reworks cut in half for next 3 years, cycle time cut by 75% Lean / Six Sigma Alignment of Scorecard Components

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Extra Topic Strategys & Tactics

What is Strategy?:

What is Strategy? An organisation strategy consists of the set of competitive moves and business approaches that management is employing to run the organisation. Strategy is management’s “game plan” to: Attract and please customers Stake out an organisational position Conduct Operations Compete successfully Achieve organisational objectives


GENERATE STRATEGIES USING COWS MATRIKS INTERNAL ENVIRONMENT S-O STRATEGIES Invest: Clear matches of strengths & opportunities lead to comparative advantage USE ST’ TO TAKE ADVANTAGE OF OPP’ W-O STRATEGIES Decide: Areas of opportunity matched by areas of weakness require a judgement call: invest or divest;collaborate OVERCOME WE’ BY TAKING ADVANTAGE OF OP’ STRENGTHS 1. 2. LIST STRENGTHS 3. 4, WEAKNESSES 1. 2. LIST WEAKNESSES 3. 4. OPPORTUNITIES 1. 2. LIST OPPORTUNITIES 3. 4. THREATS 1. 2. LIST THREATS 3. 4, S-T STRATEGIES Defend: Areas of threat matched by areas of strength indicate a need to mobilize resources either alone or with others. USE ST’ TO AVOID TH’ W-T STRATEGIES Damage Control: Areas of threat matched by areas of weakness indicate need for damage control MINIMIZE WE’ AND AVOID TH’ EXTERNAL ENVIRONMENT

‘interplay SWOT/C’:

‘interplay SWOT/C’ 1. Advantageous Strategies used in situation when time and resources are to one’s advantage, when there is no need to rush and detailed planning can be carried out Strategies: 1. Kill with a borrowed knife 2. Deep sea fishing 3. Loot a burning house

1.1 Kill with a borrowed knife:

1.1 Kill with a borrowed knife Key elements: 1. You induce a third party to attack your ‘enemy’. 2. You take no direct action 3. You influence your adversary with a third party Case: Use consultants, rely on outsider to stimulate growth, licensing, franchising & joint ventures.

1.2 Deep sea fishing:

1.2 Deep sea fishing Key elements: 1. You ‘capture’ your enemy 2. Though you are able, you do not kill your enemy. 3. Force can win hands but rarely hearts Tactics: Strike when the timing is right Be patient, to capture heart, let it go 7 times To capture competitor, learn to let it go- case Coca-cola & Pepsi: ICIC H&B

1.3 Loot a burning house :

1.3 Loot a burning house Key elements: 1 . Your adversary in trouble 2. You capitalize on your adversary’s inaction or retreat to build power. 3. Exploiting chaotic situation Case: Price of food& drinks at show, exhibition & tourist attractions + souvenier + tickets. Higher demand Nature causes.

2. Opportunistic Strategies:

2. Opportunistic Strategies Thrive on situations where vulnerabilities can be exploited. The idea is to capitalize on all opportunities so as to gain the advantage. Tactics: 1. Create something out of nothing 2. Observing the fire from the other side of the river. 3. Hide a dagger behind a smile

2.1 Create something out of nothing :

2.1 Create something out of nothing Key elements: Using a false front, not to deceive the enemy totally, but to make what is false seem real. Your direct attack is ineffective You create a new player/entity This player/entity catches your adversary off guard.

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Tactics: 1.Bidding of favourite/popular numbers 2. Advertising & sales promotion 3. Create value/generate benefits- case Auction 4. (share- buy-back shemes) 5. Create customer (case Boeing create United Airlines- US Postal to be Douglas mbam/iab-moe/2006 189

2.2 Observing the fire from the other side of the river. :

2.2 Observing the fire from the other side of the river. Key elements: 1. Your adversary is engaged in internal conflict or in conflict with his allies 2. Your attack might unify your adversary 3. You refrain from acting 4. Allowed to continue, the conflict damages your adversary. Tactics: Exploiting conflicts, Staying out of uncertain situations, Lets internal/adversary destroy themself. Cases: 1.Epson & Hp in Laser Printer. 2. Intel: staying out of competition in electronic manufactures competition- product mobile phone or PDAs. mbam/iab-moe/2006 190

2.3 Hide a dagger behind a smile :

2.3 Hide a dagger behind a smile Key elements: 1. maintain ‘friendly” appearances. 2. One should win the trust of one’s enemy so as to disarm him while preparing to launch an ambush. The enemy must not be alerted to the changes when well is well prepared. (smiling tiger) Cases: Japanese Business Strategies., Microsoft buy Apple (1997), Intel (intel inside)., mbam/iab-moe/2006 191

3. Offensive Strategies:

3. Offensive Strategies Used in situations when time and resources are not constraining factors. However, these strategies seek to gain victory through direct attack. Strategies: 1. Beat the grass to startle the snake 2. Exchange a brick for a jade 3. To catch the bandits, capture their le ader . mbam/iab-moe/2006 192

1. Beat the grass to startle the snake:

1. Beat the grass to startle the snake Key elements: You are unsure of sure of your enemy’s strength or strategy (not rush into any decision- gather information) You launch a small-scale or indirect attack on your adversary Your adversary reveals his strength or strategy by his response to your ‘false’ attack. You plan your ‘real’ attack with this new knowledge Case:1. Provoke or gimmicks (advertising: 50% off), 2. Open Tenders or auctions. Beware of Boomering effects/unintended effects Calculated risk

2. Exchange a brick for a Gold bar :

2. Exchange a brick for a Gold bar Key Elements: You give your adversary something on which you place relatively little value (as a bait) In exchange, your adversary gives you something you value much more. Tactics: 1. Free offer. 2. Incentives- gift with purchase/lucky draw/early birds/complimentary etc. 3. Auction for charity

3. To catch the bandits, capture their leader. :

3. To catch the bandits, capture their leader. Key Elements: You face a persistent adversary You have identify your adversary’s leader Your adversary’s leadership falls and brings down your adversary’s. Save resources by getting to the root of the problem Tactics: Head Hunting (Managers/academics) Analysis Pareto & Ishikawa ( Root Cause)

4. Confusion Strategies:

4. Confusion Strategies Aim to confuse a pursuing enemy to throw him off guard. In this way, valuable time can be gained in making one’s escape. Strategies: 1. Pulling out the firewood from under the pot 2. Trouble the water to catch the fish 3. Shut the door to catch the thief

1. Pulling out the firewood from under the pot:

1. Pulling out the firewood from under the pot Key Elements: 1. When faced with a strong opponent, direct confrontation may not be advisable. 2. Rather than engage your adversary head-on, you attack his source of power. Tactic: Removing key Corporate Lieutenants. ( Cases: incentives for public doctors) Avoid head-on competition ( Cases: Dell Computer not using agents (firewood) but direct to customer) Attack the fuel (Case: Sony buy Columbia Pictures & CBS)

2. Trouble the water to catch the fish :

2. Trouble the water to catch the fish Key Elements: Create confusion around your adversary To hinder adversary ability to understand your attention To take advantage of the ‘trouble’ situation which the fish is unable to see clearly & restricted movement. Tactic: Case Microsoft Powerpoint in ‘confusing ‘ the consumer. Avoid Confusion: Unclear policies & procedures, poor communication channels. Exploiting chaotic situations: Case Tertiary education chaotic in Australia & UK by Malaysia, S’pore & Taiwan.

3. Shut the door to catch the thief:

3. Shut the door to catch the thief Key Elements: 1 . You encounter a moment when your opponent is weak, divided, or dispersed. Tactic: 1. handling weaker products & brands. Case Japanese brands locked television, camera, electronic. 2. Exploiting the advantages of size

5. Deception Strategies:

5. Deception Strategies Is to create advantages for oneself and to handicap the opponent. Its main aim is to mislead the opponent. Strategies: 1. Deck the tree with flowers 2. Pretending to be insane but remaining smart 3. The guest takes over as host

1. Deck the tree with flowers:

1. Deck the tree with flowers Key Elements: 1 . Your adversary has a weakness or need. 2. You are to weak to attack your adversary 3. You bait your adversary by feeding this weakness or need 4. You take advantage of his misstep. Tactic: Use the art of packaging & Branding Buyer-supplier relation e.g: payments term Distributor: margin & marketing support (Case: Proton buy Lotus)

2. Pretending to be insane but remaining smart :

2. Pretending to be insane but remaining smart Key elements: 1. A direct attack would generate resistance in your adversary 2. A friendly approach 3. Hidden attack. Tactic: 1.Case: Avoid publicity by business tycoon 2. Case: Intel smiles & takes consumers: Intel Inside campaign. 3. Case: Buy American companies by Japannese Car man’/ export to US under the labels: Made in Malaysia or Thailand. mbam/iab-moe/2006 202

3. The guest takes over as host :

3. The guest takes over as host Key Elements: Whenever there is a chance, enter into the decision-making body of your ally and extend your influence skillfully step-by-step. Eventually, put it under your control. Tactic: 1. Case Wal-Mart relationship with manufacturer 2. Profit sharing & Stock Ownership 3. Involving labour Union/ PTA at school.

6. Desperate Strategies:

6. Desperate Strategies In a desperate situation, one may to resort to unconventional and unorthodox and means. As such, some of these strategies can be quite dramatic and tragic. However, when used appropriately, such strategies can be very effective. Strategies: 1. Beauty scheme 2. Escape scheme 3. Self-injury scheme

1. Beauty scheme :

1. Beauty scheme Key Elements: 1. With regards to an enemy with strong troops, one should aim to control its general. One should plot to dampen his morale. 2. Try to hit the general weakness 3. This strategy must combined with other strategies. Tactics: Good Look, well-known personalities, celebrities to market product (case: cosmetics- ladies as promoters) Projecting Organization good looks. The impotance of training & grooming- spend time & money for this (customer satisfaction) (Case: Hotel, Airlines)

2. Escape scheme :

2. Escape scheme Key Elements: Enemy is obviously stronger, total retreat may be the best option Tactics: Cases- KFC entered Asian market aftar fail at H.Kong 1960s. Walk away but knowing when to quit (forgo businesses in which they are no longer competitive) (Case: Japanese Car-moved the production of their lower-end product)

3. Self-injury scheme:

3. Self-injury scheme Key elements: No one intentionally harm himself. Therefore if someone in hurt, others would believe that he has injured by another. To gain sympathy Sacrifice. Tactics: Price Discounts & Sales Promotion (e.g: closing down sale, removal sale, bankruptcy sale, Warehouse sale, annual stock-taking sales)( Case: Genting- $1 per night for Singaporean-Celebrate Group Founder’s Birthday) Cutting losses and gaining market share (Case:1. Kia Motors slashed price by a much as 30%- nearly bankruptcy- evoke public sympath) Case 2: Netscape-internet communicator to counter Microsoft-1998)

Slide 208: D own to Specifics

What are Action Plans?: What are Action Plans? Objectives Initiatives Action Plans The Action Plan identifies the specific steps that will be taken to achieve the initiatives and strategic objectives – where the rubber meets the road Each Initiative has a supporting Action Plan(s) attached to it Action Plans are geared toward operations, procedures, and processes They describe who does what, when it will be completed, and how the organization knows when steps are completed Like Initiatives, Action Plans require the monitoring of progress on Objectives, for which measures are needed D own to Specifics

Characteristics of Action Plans: Characteristics of Action Plans D own to Specifics Name the specific action /projects/programme Assign responsibility for the successful completion of the Action Plan. Who is responsible? What are the roles and responsibilities? Establish a time frame & KPI for the completion each steps. When will we need to take these actions? Establish the resources required to complete the steps. How much will it take to execute these actions? Define the expected results or outcomes of the action plan. Any contingency action where necessary

Action Plan Execution (Operational Plan): Action Plan Execution (Operational Plan) D own to Specifics Requires that you have answered the Who, What, How, Where, and When questions related to the project or initiative that drives strategic execution Coordinate with lower level sections, administrative and operating personnel since they will execute the Action Plan in the form of specific work plans Assign action responsibility and set timelines – Develop working plans and schedules that have specific action steps Resource the project or initiative and document in the form of detail budgets (may require reallocation prior to execution) Monitor progress against milestones and measurements Correct and revise action plans per comparison of actual results against original action plan

Step 7:

Step 7 Cascading KPI

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Alignment by Soichiro Honda-Honda Motors: 1. Craft a vision: what we will be 2. Create goals and performance measures: What 4 or 5 things we must do to get there 3. Alignment: Translate the work of each person into alignment with the goals. hak milik mbustamanIAB.KPM 214

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4 Keys to Cascading organisation KPIs to Individuals :

4 Keys to Cascading organisation KPIs to Individuals Key #1: Don't cascade by duplicating the measure, cascade by building the cause-effect chain. If a corporate goal is customers satisfaction, then ask "what makes customers satisfied?" to determine the first level of cascading. You might end up with things like attracting more answers. Cascade to the next level (say, teams), ask "what makes it possible to improve customers satisfaction?". Keep this line of questioning until you reach individuals and their contribution to the cause-effect chain hak milik mbustamanIAB.KPM 219

Key #2:

Key #2 Only cascade to where it counts, to where there is highest leverage to achieve the corporate goal. . Keep asking "where is the greatest leverage?" hak milik mbustamanIAB.KPM 220

Key #3:

Key #3 : Document the cascading cause-effect links, to build a map or story of the organisation's strategy. It will make it easier to test the logic of cause-effect, and to communicate throughout the organisation what matters and why. Maps bring everything together, so you can see the whole, not just the parts. And you can start seeing something more than the cascading - you can see the collaboration! hak milik mbustamanIAB.KPM 221

Key #4: :

Key #4: Involve people in the process of determing their "line of sight" to corporate goals. We find the most meaning in things we take part in discovering and creating. People throughout your organisation will not only have the best idea of how they contribute to organisation goals, but they will also have many times better buy-in if they take part in the cascading process hak milik mbustamanIAB.KPM 222

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Step 8: Implementing the strategic plan:

[email protected] Step 8: I mplementing the strategic plan (a) deploy or communicate the plan, (b) put the plan into operation. Issues : 1. Leadership. 2. Communication 3. Managing change 4. Teambuilding

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Ten Commandments in BSC Implementation:

227 Ten Commandments in BSC Implementation Do: - Know what you hope to achieve. - Use the scorecard for implementation of strategic goals. - Ensure goals are in place before the scorecard is implemented. - Ensure that at least one top-level non-financial sponsor and line manager back the project. - Implement a pilot before introduction. - Carry out a pilot for each business unit before implementation Don't: - Use the scorecard for top-down control. - Standardize the project with ready-made scorecards. - Ignore training and communication. - Overcomplicate the process or strive for perfection. - Underestimate the extra administrative workload and cost. - Leave the process to accountants or without top-down support. hak milik mbustamanIAB.KPM

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228 Make a commitment to measure performance and get started. Although several participants emphasized this, one stated it best, "You just need to start and don't expect it to be perfect." Treat performance measurement as an ongoing process. Performance measurement is an iterative process that progresses but has no end. An organization's commitment to performance measurement is a tacit agreement to continually build, change, and improve. Tailor the process to your organization. An organization must develop performance measures that complement its culture size, mission, vision, organizational level, and management structure as well as its goals and objectives. Implementation Tips hak milik mbustamanIAB.KPM

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Step 9: Monitoring and controlling the implementation of plan:

Step 9: Monitoring and controlling the implementation of plan (a) control the process (b) arrange an internal audit, to determine how closely the performance matches the plan, (c) arrange a management review meeting, (d) take corrective action where needed, align the plan and undertake a continuous improvement process. (e) arrange an audit of external environmental development, (f) maintain as quality records the results of process control measures, to provide evidence of effective operation and monitoring of the process.

Performance Management: D2-D5: Build the Balanced Scorecard Performance Management Establish a regular review cycle using your balanced scorecard. Analyze and compare trends using graphs for rapid communication of performance. Don’t be afraid to change your metrics – life cycle (inputs to outputs to outcomes) Work back upstream to revise your plans: Action Plans > Operating Plans > Strategic Plans Planning is very dynamic – must be flexible to change. Recognize and reward good performance results Brainstorm and change – take corrective action on poor performance results.

Link Budgets to Strategic Plan: Link Budgets to Strategic Plan The world’s best Strategic Plan will fail if it is not adequately resourced through the budgeting process Strategic Plans cannot succeed without people, time, money, and other key resources Aligning resources validates that initiatives and action plans comprising the strategic plan support the strategic objectives

What Resources? How to Link?: Every Action Plan should identify the following: The people resources needed to succeed The time resources needed to succeed The money resources needed to succeed The physical resources (facilities, technology, etc.) needed to succeed Resource information is gathered by Objective Owners which is provided to the Budget Coordinators for each Business Unit. Resources identified for each Action Plan are used to establish the total cost of the Initiative. Cost-bundling of Initiatives at the Objective level is used by our Business Unit Budget Coordinators to create the Operating Plan Budget What Resources? How to Link?


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235 KAEDAH BALANCE SCORECARD PERSPEKTIF Pencapaian Sebenar Target Matlamat Strategik Objektif KPI Unit Pengukuran 2006-2007 2007-2008 2008-2009 2009-2010 2006-2010 M1 M1-O1 M1-O2 M1-O3 M2 M2-O1 M2-O2 M2-O3 M2-O4 hak milik mbustamanIAB.KPM

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239 MISI VISI BORANG PENGUKURAN PRESTASI DAN MAKLUM BALAS Objektif KPI Tov Sasaran Prestasi Sebenar Ulasan MATLAMAT: hak milik mbustamanIAB.KPM

10 Reasons Why KPI Systems Do Not Succeed in Public Sectors:

240 10 Reasons Why KPI Systems Do Not Succeed in Public Sectors Staff believe top management imposes a system under political pressure or merely because it is the managerial fashion to have one. The real purpose of the organization escapes definition. The staff who have to contribute indicators cannot see their relevance to their working life. Too many, too complicated, too incomprehensible. What is measured is not necessarily important, only measurable. Managers do not use the indicators to improve work, only compile them. Staff forget about them, until it is time for the annual returns. The available data is not reliable, or not sufficient, or too expensive to collect. The results are disappointing, and are suppressed. The KPI system is treated as an end in itself, not as means to an end. hak milik mbustamanIAB.KPM

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241 hak milik mbustamanIAB.KPM

Some Final Thoughts: Some Final Thoughts Integrate all components from the top to the bottom: Mission > Vision > Goals > Objectives > Measures > Targets > Initiatives > Action Plans > Budgets. Get Early Wins (Quick Kills) to create some momentum Seek external expertise (where possible and permissible) Articulate your requirements to senior leadership if they are really serious about strategic execution

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244 THANK YOU From Muhd Bustaman Abdul Manaf Institute Aminuddin Baki Ministry of Education [email protected] 0199890524 hak milik mbustamanIAB.KPM

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