2014 strategic execution conference ensuring tangible business outcomes through effective engagement hughes, jon v1.02

1. © 2014 Cognizant © 2014 Cognizant October 2014 Ensuring Tangible Business Outcomes through Effective Engagement Jon Hughes Head of Program Management Consulting Americas Vice President, Cognizant Business Consulting

2. © 2014 Cognizant In the next 45 minutes, we will cover FIVE key topics… Why is StratExImportant? How Successful is Stratex? Why is StratExDifficult? How Can You Succeed? What Results Can be Achieved? 1

6. © 2014 Cognizant In the next decade Competitive Advantage will not be achieved through simply having a winning strategy It will be by ensuring the organization can Deliver Strategy more Effectively than the competition 5

7. © 2014 Cognizant Organizations are continuing to invest in increasingly larger and complex programs of change The Royal Bank of Scotland is to invest £700 million over the next three years upgrading its branches In 2012 Europe Invested $2.35 billion in Smart Grid Projects Global 2013 H1 acquisitions total $896Bn Mondelezis investing in a $3.5B program to reduce $1.5B per annum in operating cost Why is StratExImportant? 6

8. © 2014 Cognizant Visible failure is painful, costly and potentially catastrophic for the enterprise Originally scheduled for delivery in 2006, the AIRBUS 380 entry into service was delayed by almost 2 years and was several billiondollars over budget The NHS IT system is one of the 'worst fiascos ever', say MPs. Latest estimates are £9.8bn (and rising) $840 million has been spent onHealthCare.gov, including more than $150 million just in cost overruns for the version that failed so badly when it launched last year How Successful is Stratex? 7

12. © 2014 Cognizant (Some of) The Reasons Why Strategic Execution Fails Include the Following: • Effort is applied to unimportant areas • Staff Rotation • Being overtaken by another priority • It’s Too Complex • Breaking down the problem into silos • Fear of telling the truth (no matter how bad it is) • Not going ugly enough early enough • Unable to balance details with big picture • The wrong people • The right people in the wrong roles • Poor preparation • Poor execution • Poor control • Insufficient attention to quality • Point Scoring • Lack of common nomenclature • Different perspectives • Differing priorities • Inadequate Sponsorship • Lack of Focus on Results • “Drip Feed” or Soft Launch • Lack of Urgency • Poor Communications • Conflicting Agendas • Inadequate Capability to Deliver • Poor Organizational Culture • Lack of Delegation • Inappropriate Method • We always do it this way • Fear of Failure • History of Failure • Taking too long • Poor expectation management • Lack of buy in • Afraid to make difficult decisions • Time wasting Why is StratExDifficult?

15. © 2014 Cognizant Strategic Execution Success is not about methods (or tools) ! Plus all the proprietary methods from over 100s of firms globally… • PMI •PMBOK •Critical Chain •Agile •Extreme •Event Chain •Deliverable based •Risk Based •CMMI •SPICE •APM •PRINCE • PRINCE II • GAPS • PRINCESS • PROMPT • HERMES • WATERFALL • ISO 9000 • ISO10006 • V-Modell • Team Software Process • Total Cost Management Why is StratExDifficult? 14

16. © 2014 Cognizant Based upon running and reviewing MANY strategic execution initiatives over the past two decades… I believe that over 75% of critical flaws are created right at the beginning of a major initiative… and are essentially INDEPENDENT of the method or tools used 15

17. © 2014 Cognizant Little thought has been given to creating ENGAGED, high performance strategic execution teams in a focused, structured and repeatable way at the start of major transformational initiatives 16

18. © 2014 Cognizant Effective Engagement resolves the EIGHT critical areas essential for any successful Strategic Execution 1. Ensuring Clarity of Purpose 2. Simplify Complexity AND Maintain Alignment 3. Effective Sponsorship 4. Measure and Manage the Right Things 5. Understand your Capability and Environment REALLY well 6. Building an integrated plan that is thoroughly understood and bought into by the team 7. Embedding a consistent approach, with a supporting toolset and ENSURING the team use them! 8. Creating an Esprit rapidly that surmounts the “SOFT” issues experienced by all new teams How Can You Succeed?

19. © 2014 Cognizant The best vision statements reduce complexity to something manageable and unite the organisation “Selling the highest quality natural and organic products available.” Wikipedia “Imagine a world in which every single person is given free access to the sum of all human knowledge.” Salesforce.com “The end of software” “Give customers the freshest, highest quality foods you can buy and provide them with friendly service in a sparkling clean environment. Illiteracy Program “In two decades our services will no longer be needed. Google “To provide access to the world’s information in one click.” “To be the world’s most customer-centric company How Can You Succeed? 18

21. © 2014 Cognizant A One Page Strategy helps to divide, conquer AND retain integrity! Key Business ProcessesWhat are the core operational and supporting processes? Process VisionWhat will the organization look like in 3-5 years? VisionWhat will our business look like in the future? MissionWhat are we here to do? Goals for ExcellenceWhat are the Intermediate signposts from now to the vision? Management ActionsWhat are the key capability and short-term performance gaps that need to be addressed? Strategic Transformation InitiativesWhat projects and workstreamsare required to change direction and/or transform ways of working? Stakeholder GoalsWhat for are the goals for group? How will we know when we get there? Strategic AlignmentHow well do the opportunities align with goals? Do we have enough of the right ideas? How Can You Succeed? 20

22. © 2014 Cognizant Design Principles and Goals are essential integrating themes to keep the focus on the kind of business you want to be… Proposition (Vision) VALUES Beliefs, attitudes that Underpin the way we behave CSF’s What we must do well Design Principles Guidelines for what we want To be GOALS Processes Technology People Organisation Design Principles and Goals are best practice guidelines for reviewing current operations, and setting the future direction of the business They affect Process, Systems, Structure, Roles and Responsibilities, Reward Mechanisms, Culture and the future success of the business They impact all the Workstreamsof the transformation and will be used to determine valid design decisions They will particularly affect the way we design processes How Can You Succeed? 21

23. © 2014 Cognizant The impact of Different “DPs and G’s” is enormous... Vision Get to work in city from home in suburbs by 8am Design Principle BDesign Goal B • MinimiseCost <$1/day • Comfort not an issue No restrictions Design Principle ADesign Goal A • Cost is no issue$100/day • MaximiseComfortNo increase Heartrate How Can You Succeed?

25. © 2014 Cognizant EFFECTIVE Sponsorship is required to drive alignment Power: The power to drive change within the business Pain: A sufficient degree of dissatisfaction with the current state to want to change it Clarity of Purpose: An unambiguous, communicable “Vision” of the desired end state A Plan: A thorough understanding of the roadmap and milestones on the journey that needs to be undertaken to deliver the Vision Commitment: Deep knowledge of the organizational resources needed for success together with the ability and willingness to commit what is necessary for the project to succeed Empathy: An in-depth understanding of the effect the change will have on: the organization; customers; staff Pragmatism: The ability to determine the best or “least wrong” course of action at key points in the transformation journey Public Support: The ability and willingness to convey strong and unwavering public support of and commitment to the change Private Support: The ability and willingness to meet privately with key individuals or groups in order to convey strong personal support for the change Consequence Management: Promptly reward those who assist with the change or express displeasure with those who inhibit acceptance of the change Follow Through: The determination to ensure that monitoring procedures are established to track progress, highlight problems that may occur during the transformation process and resolve them swiftly Sacrifice: The commitment to pursue the task knowing that a personal, political, or organizational price may be paid for implementing the change Persistence: The capacity to demonstrate consistent sustained support for the change and reject any course of action with short-term benefits if it is inconsistent with the strategic goals Desirable Sponsorship Attributes for Change Programs Jon Hughes, Change Management Conference 2009 How Can You Succeed? 24

26. © 2014 Cognizant Measuring the Wrong Things is A Surprisingly Common Error Do You…. Manage what you measure? Measure what you manage (because that’s easy!)(because it is important!) How Can You Succeed? What is Important? I’ll manage what is important I need to measure what I need to manage Result: Achieve the Vision 25

27. © 2014 Cognizant Effectiveness vs Efficiency – What would you choose? Efficiency Effectiveness Doctor Minimum waiting line Cure every patient in one visit Airport security Process the maximum number of travellersin the shortest time Ensureno-one who represents a threat to safety is allowed through Transformational Initiative Minimisetime and Cost to deliver Maximisetangible output How Can You Succeed? 26

28. © 2014 Cognizant When the wrong Metrics are used….Catastrophies DO Occur NHS waiting list scandal revealed by JENNY HOPE, Daily Mail A shocking official report yesterday exposed how NHS waiting lists were massaged to meet Government targets. It said patients with life-threatening illnesses had their treatment delayed because priority was given to those with minor ailments who had waited longer. The National Audit Office found a majority of consultants - who have themselves complained of heavy pressure from hospital managers -admitted distorting clinical priorities. Operations to reverse vasectomies were performed at the expense of patients waiting for bladder tumoursurgery. Minor ear, nose and throat disorders went ahead of serious breathing troubles. Patients for hip and knee replacement were treated before those needing urgent surgery to repair artificial joints. Doctors say it is impossible to know whether this led to avoidable deaths, but it certainly increased the suffering of some patients. How Can You Succeed? 27

29. © 2014 Cognizant “To achieve our vision, what must we excel at?” “If we succeed, how will we look to our shareholders?” “To achieve our vision, how must we look to our customers?” “To achieve our vision, how must we learn & improve?” External Internal Softer measures -harder measures Financial Perspective Customer Perspective Learning & Growth Perspective Operational Perspective Overarching Question The Balanced Business Scorecard* 6 Increasing Operational Efficiency Developing Capability for the Future Increasing Corporate Agility/Flexibility Saving the Planet Improving Strategic Execution Capability Improving Customer Satisfaction Increasing Profitability Improving Leadership Alignment Staying Legal Increasing Shareholder Value Increasing Innovation Capability Increasing Revenue Increasing Competitive Differentiation Increasing Operational Effectiveness Reducing Operational Risk Increasing Employee Morale How Can You Succeed? *DrRobert Kaplan and DrDavid Norton 28

30. © 2014 Cognizant Some famous thoughts suggest that understanding your environment and nature is important… True wisdom comes to each of us when we realize how little we understand about life, ourselves, and the world around us Socrates Look deep into nature, and then you will understand everything better Albert Einstein How Can You Succeed? 29

31. © 2014 Cognizant Understanding your UNIQUE organizational ability to Execute Strategy is Key How Can You Succeed? Drive program deliveryManage transition to operationsProvide effective governanceManage benefits realizationManage change & stakeholdersManage projectsManage scope & changeAssure solution integrityDefine program strategy & visionManage releasesManage procurementEstablish an effective program organizationSet up program operations012345Provide effectivegovernanceDefine program strategy& visionSet up programoperationsEstablish an effectiveprogram organizationManage benefitsrealizationManage scope & changeAssure solution integrityManage procurementManage releasesDrive program deliveryManage change & stakeholdersManage transition tooperations 30

32. © 2014 Cognizant Without an Integrated, Resource Loaded Master Schedule you don’t have a viable STRATEGIC EXECUTION PLAN Distribution - Shared SvcsMAC Analyst - TechnicalMAC Analyst - Technical788000143982342407100Distribution Web ServicesMAC Analyst - TechnicalMAC Analyst - Technical8290000396749713810219415891135Distribution Web ServicesDoug VickeryMAC Analyst - Technical2561900000000Distribution Web ServicesMAC Analyst - TechnicalMAC Analyst - Technical1600000000136240ENT - FinanceMAC Analyst - TechnicalMAC Analyst - Technical29800000791378200OPERATIONS - Trade SettlementsMAC Analyst - TechnicalMAC Analyst - Technical60001000500OPERATIONS - Transfer AgentMAC Analyst - TechnicalMAC Analyst - Technical370008575830FO - EquityMAC Analyst - TechnicalMAC Analyst - Technical197500017622626850032239490FO - SMAMAC Analyst - TechnicalMAC Analyst - Technical13280003103962602101221813Distribution Web ServicesMAC Analyst - TechnicalMAC Analyst - Technical8290000396749713810219415891135Distribution Web ServicesDoug VickeryMAC Analyst - Technical2561900000000Distribution Web ServicesMAC Analyst - TechnicalMAC Analyst - Technical1600000000136240FO - Fixed and ComplianceMAC Analyst - TechnicalMAC Analyst - Technical251200013610320528546313200OPERATIONS - Investment ActMAC Analyst - TechnicalMAC Analyst - Technical110003001520FO - Market DataMAC Analyst - TechnicalMAC Analyst - Technical220800025639839140840528170 Beware falling behind on the resource onboarding curve 0 50 100 150 200 Jan Feb Mar Apr May Jun Jul Aug Sep Oct Nov Dec Resources needed Resources onboarded Look for overcommitted critical resource at the PROGRAM or PORTFOLIO level How Can You Succeed? 31

34. © 2014 Cognizant Look for Look for Three types of Behavior to overcome organizational inertia MP Bumsted BioculturalScience & Management How Can You Succeed? Lubricants: People who are deft with other people and can smooth out inter- personal or inter-group issues Catalysts: People who drive to make change happen and inspire other people to join in Irritants: People who are initially negative but if they can be converted become advocates of the change –like a grain of sand in an oyster which could kill the oyster or become a pearl 33

35. © 2014 Cognizant You need to work harder than you think to rapidly drive performance of the teams up “Cogg’s Ladder  Information Gathering Ritual sniffing Uncertainty, anxiety Pairing/cliques Stereotyping Dependence/ shunting Conflict (overt, covert) Infighting Confusing re ends/means individual needs Competitive, points scoring Scapegoating (external) ‘I’ behaviour Hidden Agendas Lost Ideas Question ground rules and assumptions Make invisible visible Confront conflicts & search for solution Acknowledge weakness Experimentation Clarity of ‘what’ Disclosure Cohesion/Identity Listening Compromise/build Rewarding/supporting ‘How to’ problem solving Effectiveness ‘We’ behaviour Including Raising Standards How to do better Flexible contributions roles, leadership structure Rigid on goal, flexible on how to reach if Interdependence Maturity/ excellence Inclusion Control Supportiveness SKILLS TO RESOLVE EACH STAGE GIVE UP TO GROW FORMING STORMING NORMING REFORMING PERFORMING POLITE WHY ARE WE HERE BID FOR POWER CONSTRUCTIVE ESPRIT Articulates/Summarises Differences Comfort Risk conflict/disagreement Non commitment Link/build Search for commonality Risk possibility of being wrong or not having all the answers Defence of own views Disclosure Draw out How to/what if? Risk of depending on others to deliver trusting them Control How Can You Succeed? 34

36. © 2014 Cognizant The Results of Effective Engagement: Sponsor Quotes “we had supreme confidence in where we were going and what we needed to do” “the ONLY way to start a major strategic initiative!” “an estimated 6 weeks of time was saved through effective mobilization and engagement” “we accelerated delivery by around 4 weeks by getting our house in order at the beginning through effective engagement” How Can You Succeed? 35

37. © 2014 Cognizant SUCCESSFUL Strategic Executions are Gamechanging A financial services business wanted to design a new target operating model to transform its financial performance. An effectively engaged team designed and delivered the program to plan that outsourced commodity business processes, sold non-core business units, and transformed people, process and technology to support core operations and created new capabilities A utility company underwent a high-risk and extremely complex transformation of process, systems and people to radically change their operating model to meet competitive pressures. Acceleration of over 4 weeks in the first 6 months of the program through effective engagement of the joint team of vendors, client staff and consultants resulted in operating cost reductions of over $100M A global oil company merger resulting in a $100B combined entity and significantly enhancing shareholder value over 12 months The merger of two European Investment Banks created the largest Investment Firm in the world and an effective integration of all aspects of the business ranging from marketing collateral to supporting systems, processes and organization resulting in accelerated delivery of the merged entity ahead of analyst expectations How Can You Succeed? 36

41. © 2014 Cognizant For further information on this presentation, to use one of the diagnostics or to discuss Successful Strategic Execution and mobilization techniques please contact Jon Hughesjon.hughes@cognizant.com

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