Objectives, Goals, Strategy, Measurement and Tactics Process for Business Management. A communication methodology that links overall business strategy to an individuals goals and objectives.

1. Overview of Corporate Strategy and Objective Development Presented by MW Technology 3/25/2010 1 Property of MW Technology Michael Weaver, President Michael.weaver@mwtechnology.com

2. Strategy & O.G.S.M.T. The simplest management tool to stop shrinking profits by eliminating non value added work 3/25/2010 2 Property of MW Technology

3. AGENDA Discussion of Corporate Strategy Strategic Direction Styles Business Strategy Hierarchy Why Strategies Fail Business Culture & Why it is Important O.G.S.M.T. Management Process Objective Goal Strategy Measurement Tactics 3/25/2010 THE PUZZLE OF MANAGING A SUCCESSFUL ORGANIZATIONAL Property of MW Technology 3

4. A company can only expect to achieve a leadership position or superior financial results when it has purposefully laid out its strategic direction. Every outstanding corporate success is based on a direction that differentiates the firm’s approach from that of others. 3/25/2010 CORPORATE STRATEGIC DIRECTION Property of MW Technology 4

5. Specifically, strategic direction helps in: Identifying what “FITS” and what MARKET NEEDS the company is well suited to deliver. Analyzing potential synergies internally and externally with partners. Undertaking risks that cannot be justified on a project basis (e.g., willingness to pay for what appears, on a purely financial basis, to be a premium for delivery of a product or acquisition, a STRATEGIC NEED). Providing the ability to act fast . Presence of strategic direction not only helps in adequately and quickly scanning opportunities in the environment but capitalizing on them without waiting. Focusing on the “CRITICAL FEW” high return opportunities while providing adequate support to the existing core or “Hero” products is key to success. 3/25/2010 CORPORATE STRATEGIC DIRECTION Property of MW Technology 5

6. CORPORATE STRATEGIC DIRECTION Corporate strategic direction is defined in different ways. In some corporations, it is a corporate creed, or code of conduct, that defines perspectives from the viewpoint of different stakeholders. (This is actually the company value statements) At others; policy statements provide guidelines for implementing strategy. (Mission Statements) In others; direction is outlined in terms of objective statements. (In my opinion this is the Best Process.) However it is expressed, corporate directions are broad statements that represent the company’s position on its mission and serve as input in setting objectives and strategy at lower levels in the organization. 3/25/2010 Property of MW Technology 6

8. Strategic Management is the highest in the sense that it is the broadest - applying to all parts of the organization - while also incorporating the longest time horizon. It gives direction for corporate values, culture, goals, and missions. Under this broad corporate strategy there are typically business-level competitive strategies and functional unit strategies.

9. Corporate Strategy refers to the overarching strategy of the diversified organization. Such a strategy answers such questions as "which businesses should we be in?" and “How does being in these businesses create synergy and/or add to the competitive advantage of the organization as a whole?“

10. Business Strategy refers to the aggregated strategies of single business firm or a Strategic Business Unit (SBU) in a diversified corporation. According to Michael Porter, a firm must formulate a business strategy that incorporates either cost leadership, differentiation or focus in order to achieve a sustainable competitive advantage and long-term success in its chosen areas or industries.3/25/2010 Property of MW Technology 7

12. In the 1990s many companies felt that a functional structure was not an efficient way to organize so they re-aligned according to processes or SBUs. A Strategic Business Unit is a semi-autonomous unit that is responsible for its own budgeting, new product decisions, hiring, and price setting. An SBU is treated as an internal profit centre by corporate headquarters.

13. A Technology Strategy is focused on technology as a means of achieving the overall organizational objectives. This is used in many Innovation Based startup companies.

14. Since the turn of the millennium, some firms have reverted to a simpler strategic structure driven by advances in information technology. It is felt that knowledge management systems should be used to share information and create common goals. Strategic Business Units are sometimes thought to hamper this process but if properly integrated it can be extremely helpful in sharing market intelligence and cross functional synergies.3/25/2010 Property of MW Technology 8

16. Why do CUSTOMER’S buy ?

17. Is there a real need for the product ?

18. Inadequate or incorrect marketing research

19. Inability to predict environmental reaction

20. What will competitors do ?

21. Fighting brands

22. Price wars

23. Will government intervene ?

24. Over-estimation of resource competence

25. Can the staff, equipment, and processes handle the new strategy ?

26. Failure to develop new employee and management skills

27. Failure to coordinate

28. Reporting and control relationships not adequate

29. Organizational structure not flexible enough

31. Failure to obtain sufficient company resources to accomplish task

32. Failure to obtain employee commitment

33. New strategy not well explained to employees

34. No incentives given to workers to embrace the new strategy

35. Under-estimation of time requirements

36. No critical path analysis done

37. Failure to follow the plan

38. No follow through after initial planning

39. No tracking of progress against plan

40. No consequences for above

41. Failure to manage change

42. Inadequate understanding of the internal resistance to change

43. Lack of vision on the relationships between processes, technology and organization

44. Exclusion of stakeholders and delegates

45. **Poor communications ** ALWAYS #1 issue - insufficient information sharing among stakeholders Property of MW Technology 9

46. ORGANIZATIONAL CULTURE Decision makers have often fallen prey to one of the most basic rules of business: Strategy alone does not produce business results; it's the execution of that strategy that matters. Effective execution springs from the capability and the desire of all employees to perform in certain ways. If the culture of an organization does not support the vision and value proposition, successfully realizing the strategy is an almost impossible task. Culture is a critical determinant of success. It can help accelerate the achievement of high performance; it can also impede progress toward that goal. Attention to culture and successful efforts to shape culture in support of strategy will separate the winners from the losers. 3/25/2010 Property of MW Technology 10

47. CULTURE – WHAT IS IT? A fairly standard definition is an organization's shared set of assumptions, beliefs, values, understandings and meanings that guide the perceptions, judgments and behaviors of its people. One way to understand the importance is to compare it to the “Operating System" of a computer. When the operating system is working, you don't think about it. If you do stop to think about it, you realize the PC can't do anything that is not supported by the operating system. It determines your performance, restricts some actions and enables others. It is the same with corporate culture. The Culture guides and shapes the behavior of people from the newest employee to the most experienced. Creating a corporate culture that supports the positive behaviors, mindsets, perspectives, attitudes and beliefs of its workforce can drive Significant Financial Returns and a High Performance Team. It becomes so internalized by employees that it is taken for granted. People don't focus on what the culture is: UNTIL, the Leaders want to do something in an “INNOVATIVE” manner that may be foreign to the accepted norms of the organization. Without effective communication the change will meet significant resistance. 3/25/2010 Property of MW Technology 11

48. O.G.S.M.T. DiscussionThe simplest management tool 3/25/2010 12 Property of MW Technology

50. GOALS

51. STRATEGIES

52. MEASUREMENTS

53. TACTICS3/25/2010 Property of MW Technology 13

55. Word Test: Must present challenge at all levels of the organization. Be a guide for the business destiny.

56. Typical Words: advance, control, create, develop, establish, evaluate, identify, implement, improve, manage, produce, promote, recover, reduce, replace, research, restore , stabilize, substitute, update, etc.

57. All Action Words3/25/2010 Property of MW Technology 14

59. They are specific, achievable, and measurable statements about what is to be accomplished within a certain time frame.

60. A mnemonic for remembering the characteristics of clear objectives is to be “SMART“. (everyone has heard of this method)

61. Specific - Be precise about what you are going to achieve.

62. Measurable - Quantify your objectives.

63. Appropriate - Are you attempting too much?

64. Realistic - Do you have the resources to make the objective happen (people, money, machines, materials, time)?

65. Time bound - State when you will achieve the objective.3/25/2010 Property of MW Technology 15

67. Word Test:

68. Contains a verb that expresses behavior that can be readily seen. (performance aspect)

69. Describes the situation under which the action takes place. (condition aspect)

70. Describes how well you are expected to perform. (standards aspect)

71. Describes the kind of support that the organization must provide. (commitment aspect)

72. Typical Words: to organize, to conduct, to write, to analyze, to prepare, to evaluate, to design, to implement, to collect, to write, to experiment, to collaborate, to sell, to take market share, etc.3/25/2010 Property of MW Technology 16

74. Organizations cannot rely on chance or luck but many do.

75. The steps that lead from where a business is today to where it wants to be in the future - ITS OBJECTIVES – are often missing, especially in small & medium companies.

76. Even when the Objectives and Goals have been developed very often they are not clearly defined or measurable.3/25/2010 Property of MW Technology 17

77. Common action verbs used to write GOALS and fuzzy verbs that should not be used because they do not express a directly observable action. 3/25/2010 Bad Words Good Words Describe the situation under which the action verb takes place. This is called the Condition Aspect of the goal. It means to think about the circumstances under which you will pursue the goal. Will you do it within a certain period of time? — Are there timelines? -- Will you do it independently or with assistance? — Are others involved? -- Will you do it regularly, weekly, or monthly? — What is the frequency?” Describe how well you are expected to perform. This is called the Standards Aspect of the goal. Up to this point you have collaboratively established with your manager what you are going to do and under what conditions. Now it is time to state how well you will be able to do it. This means to use words that describe an acceptable performance level—that is, use words that get at the quality of the performance you must work toward or exceed. Property of MW Technology 18

79. A plan, method, or series of maneuvers for obtaining a specific goal or result.

80. The overarching, long-term plan of operations that will achieve the financial objectives of the company.

81. Tactics is concerned with the conduct of an engagement while strategy is concerned with how different engagements are linked.

82. In military words, how a battle is fought is a matter of tactics: the terms that it is fought on and whether it should be fought at all is a matter of strategy.

83. Sun Tzu’s (Chinese Warlord) five elements in strategic detail: 1. The Mission 2. The Climate 3. The Ground 4. The Leadership 5. The Methods 3/25/2010 It is my personal view that business should be approached as a War against the competition and a study of combat strategies and tactics can be extremely useful in developing effective plans. Property of MW Technology 19

85. To design, develop, manufacture and market specific product lines for sale on the basis of certain features to meet the identified needs of specified customer groups via certain distribution channels in particular geographic areas.

86. A statement along these lines indicates what the organization is about and is infinitely clearer than saying, "we're in electronics" or "we are in business to make money.“

87. Some people confuse mission statements with value statements - the former should be very hard-nosed while the latter can deal with 'softer' issues surrounding the group or business.

88. Typical Words/Descriptions: What the business is/does, the primary products/services, key processes & technologies, main customer groups, primary markets/segments, and principal channels & outlets

89. Examples

90. The company's internal cash flow will fund all future growth.

91. New products will progressively replace existing ones over the next 3 years.

92. All assembly work will be contracted out to lower the company's break-even point.

93. Focus efforts on

94. Identify partners, market segments (new or expanded), suppliers, etc.

95. Leverage knowledge, resources, partnerships, etc

96. Identify, Create, Utilize, 3/25/2010 Property of MW Technology 20

97. Common action verbs used to write STRATEGIES and fuzzy verbs that should not be used because they do not express definitive . 3/25/2010 Good Words Bad Words Property of MW Technology 21

99. Alliance Strategies - The use of alliances and partnerships to build strength and stabilize situations.

100. Position Defense - The erection of fortifications.

101. Mobile defense - Constantly changing positions.

102. Encirclement strategy - Envelop the opponents position.

103. Cumulative strategies - A collection of seemingly random operations that, when complete, obtain your objective.

104. Counter-offensive - When you are under attack, launch a counter-offensive at the attacker’s weak point.

105. Strategic withdrawal - Retreat and regroup so you can live to fight another day.

106. Flank positioning - Strengthen your flank.

107. Leapfrog strategy - Avoid confrontation by bypassing enemy or competitive forces.

108. (The best possible strategy if you have a highly innovative new product development team)3/25/2010 Property of MW Technology 22

110. Defensive marketing warfare strategies - are used to defend competitive advantages; lessen risk of being attacked, decrease effects of attacks, strengthen position. (usually fails in the long term)

111. Flanking marketing warfare strategies - Operate in areas of little importance to the competitor.

112. Guerrilla marketing warfare strategies - Attack, retreat, hide, then do it again, and again, until the competitor moves on to other markets.

113. Deterrence Strategies - Deterrence is a battle won in the minds of the enemy. You convince the competitor that it would be prudent to keep out of your markets.

114. Pre-emptive strike - Attack before you are attacked.

115. Frontal Attack - A direct head-on confrontation.

116. Flanking Attack - Attack the competitor’s flank. 3/25/2010 Property of MW Technology 23

118. Word Test: A measurement answers the general question, "how many?", as in how many miles, or millimeters, or dollars or % of market share. As measurement is basically about counting, measurement is conducted in numbers and is quantitative. The measurement used in business are results compared to an established goal that signifies success.3/25/2010 Property of MW Technology 24

120. Market share

121. Production efficiency or OEE

122. Gross / standard margin

123. Operating income

124. Sales volume

125. CAGR (compound annual growth rate)

126. ROI (return on investment)

127. ROC (return on capital)

128. First Time Pass

129. Warranty Return Rates

130. Schedule Attainment

131. Order Fill Rate

132. Many, Many others

133. Expressed in an increase or decrease in % value measured or a currency.3/25/2010 Property of MW Technology 25

135. While the Warfare Business Philosophy is not popular in today’s politically correct environment it is one of the most effective approaches to business competition. View competition as warfare between competitors with the market place as the battle field. Some of the most meaningful business books are based in the study of combat strategy and tactics.3/25/2010 Property of MW Technology 26

137. Typical Words:

138. Setup and Evaluate

139. Conduct

140. Leverage

141. Conduct an in-depth investigation

142. Organize

143. Actively Search

144. Clearly Define

145. Work in Collaboration With

146. Develop Plans

147. Maintain

148. Schedule

149. Conduct3/25/2010 Property of MW Technology 27

150. ORGANIZATIONAL O.G.S.M.T. FLOW CHART 3/25/2010 GOOD PLANNING PROFITS UNLOCKS Property of MW Technology 28

152. Promote cross-functional training

153. Identification of ? ?????????? By Date

154. Deliver # By Date

155. Complete all By Date

156. Reduce by ## % By Date

157. Implementation of By Date

158. Update ## % By Date

159. (Must be clear and definable, An easily defined and understandable measure,)

160. Complete # By Date

161. Setup Visit and Evaluate Technology

162. Conduct Survey

163. Leverage

164. Do an In-Depth Investigation

165. Organize

166. Complete Study

167. Actively Search

168. Clearly Define

169. Work in Collaboration With

170. Develop Career Plans

171. Maintain a skill set

172. Schedule and Conduct Cross Functional Training

173. Implement Multiple Joint Development partnerships with external engineering & research firms.

174. Identify at least 5 candidates by the end of 2008 and expand as needed by the business in the future.

175. Develop 4 science based models to simulate the parameters of ?????????? by 01/2010.

176. Provide the business with the highest level of technical competency in Engineering

177. Dedicate 10% of resources against Blue Sky Thinking / Creative Playing

178. Focus efforts on the biggest opportunities for maximum impact

179. Identify candidate companies and organizations for future research, equipment and process needs.

180. Focus efforts in cross function teams that cover all the aspects of formulation.

181. Leverage outside resources where it is appropriate

182. Focus Efforts on the biggest opportunities

183. ( Strategies can support more than one objective)

184. Create a working environment that is fun and non-threatening where the associates feel comfortable and part of the team.Functional Level STRATEGIES become Team Level OBJECTIVES 3/25/2010 Property of MW Technology 29

185. 3/25/2010 THE FAILURE TO COMMUNICATE CLEARLY IS THE ROOT CAUSE OF EVERY CONFLICT OR FAILURE IN BUSINESS, POLITICS, RELATIONSHIPS, AND SOCIETY. JMW CONFLICT COOPERATION Property of MW Technology 30

187. Acknowledgements and Thanks Walter Herbst for insight into OGSMT Tool. Kellogg School of Management , Dept. of Mechanical Engineering, Northwestern University Warrent Haug for insight into OGSMT Tool and how to implement effectively. Wikipedia, the free on line encyclopedia Merriam-Webster on line dictionary The multitude of authors of the White Papers and Articles published on the internet that have contributed to the development of this concept. 3/25/2010 Property of MW Technology 32

188. 3/25/2010 SPONSORING WORLD COOPERATION WATCHING TECHNOLOGY AROUND THE WORLD THANK YOU FOR YOUR TIME MW Technology & Sourcing http://www.mwtechnology.com (717) 993-0113 mwtechnology@verizon.net DRIVING SUSTAINABILITY BUILDING PARTNERSHIPS Property of MW Technology 33