Strategy & Execution

Speed & Balance

Senior Management Forum

Strategising for the New Business
Landscape
25 April 2001
 Strategy & Precision in
Executing
Speed & Balance in
Managing Business Growth
 Superior Execution
Inseparable from Strategy
“Most businesses with mediocre strategies
will do well if you execute well. A bold
strategy executed poorly is very bad.
Therefore, you need relentless follow up on
execution.”
Chairman, global food company

“I think a great strategy by itself,

without efficient execution, will fail.
A bad strategy with excellent
execution will probably do better.”
CFO, Electric Utility.
 Performance Ethics
Mc Kinsey Survey
Must Do’s - To be world class in all 5 areas

Mission 4.3 Exceptionally strong embracement

of the organization
Targets 3.9
Unique clarity of purpose

Organization 3.4 Organization units and targets

could be more performance
oriented
Performance 3.0
Feedback

Consequence
Management 1.9
World Class Target = > 4.3
 Performance Ethics
Mc Kinsey Survey
Mission 4.3

Targets 3.9

Organization 3.4

Performance 3.0 Basics are clearly in place, but links to

Feedback individual performance need
reinforcement. Need to further
strengthen coaching & mentoring.
Consequence 1.9 We are not managing the
Management non performers. There’s low
consequence of not
performing.
 Performance Ethics
Mc Kinsey Survey
Choose one lever from each group to be distinctive at.
Distinctive = 4.5
Best Practice = 3.5

Common = 2.5

Opportunities
Operational

Incentives
Financial

Values
People

2.8 3.5 3.7 2.2 3.4 3.7

Coordination & Control Motivation

 Coordination & Control
Strength & Weaknesses
Distinctive = 4.5
Best Practice = 3.5
People
+ve Emphasize on training Common = 2.5
-ve Coaching & development not 2.8 3.5 3.7
common, prefer formal feedback. P F O

Financial
+ve Adoption of VBM & benchmarking;
-ve Lack of rigorous financial KPIs
Operational
+ve Comprehensive operational targets;
-ve Weak link to individual performance and rewards
 Motivation Lever
Strength & Weaknesses
Distinctive = 4.5

Incentives Best Practice = 3.5

+ve Attractive in Malaysian
Common = 2.5
context; 3.4 3.7
2.2
-ve Limited use of non financial
I O V
incentives
Opportunities
+ve Abundant learning opportunity for staff;
-ve Not all opportunities given to staff

Values
+ve Focus on contribution to the country
-ve Attract international talents
 PMS Survey - Planning

+ve Our organisation has clear business goals

+ve My performance expectations are linked to
the business plans
? I’m clear about the results I’m expected to
achieve in my job.
-ve My Supervisor and I plan my performance
expectations at the beginning of my new
performance year.
 PMS Survey - Coaching
+ve My immediate supervisor is accessible and
approachable when I have work related issue to
resolve or need directions in decision making.
+ve Gives me the information or assistance I need to
accomplish my performance expectations.
? My Supervisor gives me feedback on how I’m doing
towards achieving the results.
? My Supervisor gives me feedback on how I’m doing
with regards to the behaviours expected.
-ve My Supervisor and I hold progress reviews to
discuss my performance in my job at least two
times a year.
 PMS Survey - Reviewing

+ve I know what I need to do to meet expectations

in my job
? Our organisation has a fair system for
evaluating an employee’s performance.
? I have a clear understanding of how my
performance is assessed
-ve My supervisor and I worked together to design
an individual development plan for me
 PMS Survey - Rewards

+ve Better performers are rewarded more than

average performers.
? Compensation at my company motivates me
to work hard on my job.
? When things go well in my job, my
contributions are recognised often.
-ve Our current pay system encourages
employees to work as a team.
What Gets Measured, Gets Done;
What Gets Reviewed, Gets
Managed;
What Gets Feedback, Gets Done
Well;
What Gets Rewarded, Gets
Repeated.
 Managing Strategy &
Managing People Are
Inseparable
• Why people is our most overlooked
lever?
• Why our practices show that we are
separating the two issues?
• Could an increase in opportunities
affect morale and retains superior
performers?
 Performance Distribution -
99/00
3500
3000
2500
2000
1500
1000
500
0
5 4 3C 3B 3A 2 1

Above Average Performers ranges from 9% to 34%

among OPUs.
 Under Performers - Execs
Percentage of below 3B Performers by Groupings

12% •1.3% (65 staff) of the

executives’ population
20%
•Rating 3C is 1.2 %
•Rating 4 is 0.14%
68%
•First Timer (FY00) -
68%
1st Timer Consistent Yoyo •Consistent Under
Performer - 20%
•Yo-Yo Syndrome
Performer - 12%
 Under Performers -
Non Execs
Percentage of Below 3B Performers by Groupings
18% •1.6 % (116 staff)of the
Population
•Rating 3C is 1.5 %
•Rating 4 is 0.1%
24% 58%
•Rating 5 is 0.04%
•First Timer (FY 00) -
1st Timer Consistent Yoyo 58%
•Consistent Under
Performer - 24%
•Yo -Yo Syndrome -
18%
 Total Number of Staff
Resigned by Year
Should our retention rate depend so
much on the economic situation?

250 4.5% 4.4%

200 3.8%

150
Total Staff 1.7% 1.5% 1.5%
Resigned
100

50

0
1995 1996 1997 1998 1999 2000
Years
 Exit Interview Findings -
Period 1/6/ 2000 - 31/1/ 2001
Exit Interview Findings • Blaming Culture
by Category • Lack of Coaching/
5% Counseling
24% • Lack of recognition
54%
• Management not
17% transparent
• PMS not properly
Better Job Offer
implemented
Career Advancement
Personal Reasons • Career development
Further Studies not taken seriously
• Salary not competitive
 Hay Compensation Report (June 2000 Base Date)
Total Remuneration - Executives
(Data Consolidated From 87 Organisations)
Annual Ringgit Malaysia (RM 000)

520
480
440
400
360
AVG
320
MED
280
240
PETRONAS
200
160
120
80
40
0
200 300 400 500 600 700 800 900 1000 1100 1200

Line 1 P90 P75 MED

P25 P10 AVG PETRONAS
 Hay Compensation Report (June 2000 Base Date)
Annual Base Salary - Executives
(Data Consolidated From 87 Organisations)
Annual Ringgit Malaysia (RM 000)

400

360

320

280 AVG
240
MED
PETRONAS
200
29
160 28
27
120 26
25
80 24
23
22
2021
40

0
200 300 400 500 600 700 800 900 1000 1100 1200

Line 1 P90 P75 MED

P25 P10 AVG PETRONAS
 Staff Movements by Business
Units
Total staff movements in year 2000 is 572.
Only 11% of the executives are transferred to other jobs.

150

100
Total Number
of Staff
50

0
E & Gas Petc Oil Mari TRM Educ HCU
Total No of Staff 119 75 114 83 14 10 16 141
Business Units
Is The Way Forward
=
Going Back to Basics?
 Creating High -
Performance Team

To create a high - I’m in a rut. They throw the

performance team, we must ball, I bring it back. They
replace typical throw it again, I bring it
back again.
management activities like What’s the point of it all?
supervising, checking,
monitoring and controlling
with new behaviours like
coaching and
communicating.
Ray Smith, CEO, Bell Atlantic
 Leadership
A vision is only a dream if it
does not have the
commitment and support
from the people involved.

You can only be

as good as your
people
 For The Want of Feedback

For the want of feedback, residue accumulated.

Because residue built up, trust was lost.
For the want of trust, working together became
difficult.
Because working together became tedious,
decisions were avoided.
For the want of making decisions, the business
failed.
All for the want of feedback.
Thomas G. Crane
 Feedback
360 Feedback and Mentoring are
the two most useful learning
strategies to achieve developmental
objectives apart from Job Rotation
and Special Project Assignments.
1998 International Survey by
Linkage International, 1998
 Feedback
360 Feedback and Mentoring are
the two most useful learning
strategies to achieve developmental
objectives apart from Job Rotation
and Special Project Assignments.
1998 International Survey by
Linkage International, 1998
 Coaching

Great Job, As a
We must see people in
reward, I’d like you
terms of their future to prepare the
potential, not their past other 65 reports
performances.
 Developing Talent Pool

“A single I realise, I’m being groomed

as your successor, Sir
conversation across But is all this absolutely
the table with a wise necessary?
man is worth a
month’s study of
books.”
Chinese Proverb
 Mentoring
The art of Mentoring …. Passing
along the wisdom
What is it Bob?
You seem a little
Learning is not withdrawn today
attained by
chance, it must be
sought for with
ardor and attended
to with diligence.
Abigail Adams
 Getting the soul at work

We need to see Lighten up Ted,

I know you are
employees as in here
people with lives, somewhere
ideas, dreams and
fears.
The Future Depends on Us
Thank you