Corporate Strategy

Awareness of the company that his fate depends also on the environment and the community about the rise of late. Therefore, we can also read the news more often about the increasing efforts that include a corporate social responsibility (CSR).

In the country we can see efforts such as Telkom who donated computers and Internet connections to assist in the villages, the Sampoerna diligently to provide scholarships, or Unilever products through the development Lifebouy help higenis a toilet in the villages. Anyone who do these things, and whatever they do, we give them worthy of praise. We also expect more companies to follow them.

Unfortunately, most companies still view CSR as part of the cost or reactive measures to anticipate rejection and community environment. Some companies are able to raise the status of CSR to a higher level with the making as part of efforts to increase brand building and corporate image. However, efforts CSR is still a rarely used as part of a strategic planning company.


CSR and corporate strategy? Sounds second it mutually incompatible. Milton Friedman, the Nobel Prize winning economist, even pout efforts to make the company as a tool for social purposes. Corporate goal, according to him, only generate economic benefits for shareholders. Of course, Friedman's considered opinion increasingly outdated. However, creating synergies between CSR and corporate strategy is not something that is also prevalent.

Fortunately only a few large companies and academic circles, including Michael Porter, Clayton Christensen, and Rosabeth Moss Kanter (third from the Harvard Business School), has proven successful programs CSR disinergikan with the company's strategy will provide a far more impact to the community and large companies itself compared to the efforts of CSR ala measure. According to them, only with the CSR as part of corporate strategy, CSR programs can be eternal. Because the company's strategy is closely related to the CSR program, the company will not remove the program even though the CSR was a crisis, unless you want to change the fundamental strategy. While in cases of CSR in general, so the company was a crisis, the CSR program will be cut first.

An example of a very interesting case is that Nestle to help the breeder cow in India. Before Nestle into India, the farmers who have difficult access to clean water channels, the land fertile, and other infrastructures that support should be satisfied with the life-cow beef lean and short. When Nestle into India, the company quickly realized for the supply of pure milk is sufficient, they need to help the breeder's. Thus, the CSR program diluncurkanlah massive.

Nestle established centers with milk storage engine cooling in some places. In addition, periodically, the car that brought the Nestle veterinarian, nutrition experts, agriculture experts, and experts come to the quality of the breeder. Financial and technical assistance are also provided to help the cattle farmers dig wells and improve the well-irrigation system. The result? When Nestle was first launched this program, only 180 local breeder who participate. Nestle now have to handle about 75,000 cattle farmers. Milk production increased by 50 per breeder times, and the standard of living of the breeder took much improved.

An example is the hotel group Marriott International, which provides job training to the unemployed heavyweight. This program is run in a dozen cities in the U.S.. Marriott promising trainees work remains if they successfully pass. This program was not only to help the unemployed and the local community, but also Marriott. Why? In fact received the unemployment of more loyal to the company.

Company information-technology companies such as Cisco and Microsoft also does not lag. Cisco to provide free training on them-they are talented but can not afford to obtain certification from Cisco. Microsoft to assist schools in developing countries (including Australia) in the computer design curriculum subjects. When the students have graduated, their skills can be used to support products that are produced by two companies.

That's some examples of successful companies in the strategy and coordinate their CSR program. They not only succeeded in helping the environment and local communities, but also the company itself. Synergies between the two was very possible. If we want to complete the social problems, may be the main key is located on the involvement of the corporate sector at this time because of the strength of the corporation has exceeded the power of government and other institutions. Which is the main problem is how difficult it is to change the mindset for this purpose the company and see each other for behind CSR.

Who is your company said this challenge?

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Strategic Planning - The Present and The Future

Any managements which don’t find the present day challenging must be either very lucky or completely comatose. It doesn’t matter whether the business is a long-term, high-tech growth star, like Finland’s Nokia, or a solid, stolid retail empire, like Britain’s Marks & Spencer. Get your present-day strategy wrong, and retribution, as in those and many other cases, is swift to follow. The marketplace, the media, and the financial markets turn on former heroes with a vengeance – and this reaction, of course, only intensifies the pressure on those who have lost their way.

Note that these observations apply to present-day strategy - how companies are managing in the here and now, and never mind the problematical future. But if managements are unable to meet the challenges that surround them now, tangible and visible, they can’t offer much hope of surmounting the much harder challenges of the future. The future, remember, cannot be known. You can make intelligent predictions. But you don’t know whether they really are intelligent until much later - which will often be too late to avert catastrophe.


NOWHERE TO HIDE

Thus Nokia can’t be excused for missing the threat posed by the union of Sony and Siemens in mobile phones, or the possibility of a resurgence of its major Scandinavian rival, Ericsson. Nor can M&S hide from its culpability in missing the challenge created by its customers and competitors as the former responded to faster-moving fashions and more stimulating formats - the creations of newer and fresher minds and eyes that the old champion could deploy.

Yet both companies can be forgiven in theory (they won’t be forgiven in practice) if their vision of the year 2014 proves to be hopelessly wrong. The decisive phenomenon of the present-day is the revolution in information and communications technology (ICT). The digital onrush has created an entire new economy which impacts on the old economy at every turn. But the significance of the World Wide Web couldn’t be surmised until it existed, and even then the correct response to this marvel was evidently difficult to devise. The dot.com bust wasn’t a failure of the technology or the systems, but a result of profound misunderstanding and crass mismanagement.

The challenge for managers is therefore to manage the present better - much better - as preparation for the unforeseeable. Companies have no option but to live by the old Boy Scout maxim, Be Prepared. And that is what ties present and future together.

After correctly recognising and interpreting what is happening now, inside and outside the firm, you can at least ensure that the present nature and standards of management are appropriate and effective.

That’s the foundation on which you build the future - not on forecasts of the future as a whole, but on ideas strong enough to create your very own future. Nokia, as it happens, is a rightly famous example of doing precisely that - throwing away the entire contents of a ragbag of businesses to concentrate on the one market where it had the chance of developing real competitive edge. Its continuous stream of innovations both stimulated and satisfied demand. In doing both, Nokia closed the gap between the dreary present it knew and the golden future which it wished to achieve.

CREATING YOUR FUTURE

Closing the gap, however, applies to other key aspects of today’s management challenge. To create your own future, you have to close the gap between generating ideas and achieving results: and that also means closing the large gap between the typical organisation’s current behaviours and those that foster ideation. And that is something that the typical manager finds difficult - and shouldn’t.

Here, for example, are what I diagnosed as ten prime attributes of a critical Nokia supplier: ARM, designer of 75% of the silicon chips used in mobile phones. ARM’s attributes offer further penetrating insights into the 21st century ‘Ideas Company’.

1. Get the business model right – and keep it that way
2. Make the customers into real and treasured partners in the business
3. Honour and reward the innovators
4. Foster - and never lose - a desire to survive and succeed
5. Develop new ideas to attack new markets
6. Give R&D its own special place in the organisation
7. Ensure a proper balance between current development and future research
8. Make sure that there’s a place and hearing for whacky and far-out thinking
9. Create closely knit teams of people at all levels of the company
10. Regard challenges as the source of the best opportunities - and take them.

Are any of those policies ones which would strain your organisation? Do you consider any of them wrong-headed, or dangerous? On the contrary, the ten are not only practical and beneficial; they constitute part of the template for the Ideas Company, the one that can create its own future.
But there’s another question: how many of the ten actually feature in the management of your workplace?

My educated and experienced guess is that very few established companies practise more than a handful of these behaviours. They may have a business model, but it will be much the same as that of the competition, providing no useful edge, let alone a transcendent one.

GROWN-UP START-UP

True, ARM is a grown-up, high-tech start-up that doesn’t have the historical lumber or organisational deadweight that hamper businesses of greater age and slower-moving technology and markets. But weren’t the gee-whiz digital growth stars supposed to become the models for the 21st century company? Of course, many stars were nothing like what they were cracked up to be. But their speed of reaction and innovation was and is real enough. And that speed is in itself armour against the unexpected: i.e., the future

For a complete contrast, I visited a company that is about as far from ARM as you could find. It is old-established (1876), sells a very traditional product (English ale), and is largely confined to one area, the East of England(whose Development Agency commissioned my three studies). ARM is a public company that has been riding the high-tech seesaw. The brewer, Charles Wells, is private and family owned. As for the future, not long ago it didn’t seem to have one: giants were mopping up the independents.

So what behaviours had kept the company thriving and growing?

1. Base new development on a foundation of lasting and relevant virtues.
2. Make continuous improvement over time the basis for radical change.
3. Build the brand – manage both the corporate brand and the products.
4. Be old-fashioned about good financial house-keeping and strategic prudence
5. Be innovatory about everything else, with new projects at all levels and in all activities.
6. Don’t insist on being first – but insist on being best.
7. Be very patient but extremely determined in breaking new ground.
8. Keep close to the customers and develop new ideas around satisfying their needs.
9. Involve staff fully in the company’s strategy and its progress.
10. Have a unifying and bold ambition to which everybody can respond.

The difference in flavour between ARM and Wells is evident - as you would expect, given the differences in their markets, products, ownership and history. That expectation is in itself an important point. My recent book, The Fusion Manager, made this point most emphatically - that there is no one right answer, only the best answer you can produce at the right time.

Neither of these two companies is run by theorists, but both are essentially pragmatic. They follow the philosophy of a stock market professional I once knew: he never acted on predictions, but only followed ‘money on the table’ - the amount of cash investors were actually placing on their bets.

THE PERFECT COMPANY

That doesn’t sound very clever, but it made him exceedingly rich. Yet there is a valuable place for theory and experiment. At HFL, my third subject, the astonishing aim is to create ‘The Perfect Company’.

This is, of course, impossible, since perfection is not given to man. But the pursuit of perfection is eminently feasible, hard to better as an animating, driving force.

The bedrock of HFL’s business is bio analysis, primarily testing racehorse and greyhound samples to check that no illegal substances have been used to enhance the animal’s performance. Since scientific perfection is within reach, the work is a good match for HFL’s ceaseless and many-sided search for perfect corporate performance. The ten key principles I found there are vigorous and vital.

1. Set all targets and ambitions at the highest feasible pitch.
2. Use every available channel of communication, and invent ones of your own.
3. Make voluntary activity a critical element of the ideas organisation.
4. Use IT as a positive means of storing and exchanging ideas.
5. Lead from the top, but to animate and facilitate rather than command and control.
6. Relate all innovatory activities to the strategy and the economic performance of the business.
7. Look for new ideas in management and people policies, not only in products and processes.
8. Use informal methods to reinforce the formal elements of the organisation
9. Never be shy about ‘creative swiping’
10. Invest in people’s personal as well as their professional development.



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Manage the performance of the Company with Balanced Scorecard

"You can not manage what you can not measure", say the teacher of management, Peter Drucker. Spirit sentence indicates that the management of performance management or performance of the business must work through the process and measurable results. Without management based on the indicators and measurable objectives, prompting a business organization can slip into a kind unit that's not productive.

In the context of measuring the performance of this company, we now know of the existence of an approach known as the Balanced scorecard. This approach has populated by Kaplan and Norton through their books, which is phenomenal, Balanced Scorecard : Translating Strategy Into Action. Balanced Scorecard understandingif can be translated as meaning a balanced result performance (balanced). It's called a balanced approach because it would measure the performance of the organization through a comprehensive four main dimensions, namely: the dimensions of financial, customer, business processes and internal dimensions of learning and growth.


The financial dimensions is the final result that wanted by a business organization. Because without that generate sustainable profit and cash flow is healthy, a company may be more feasible as the social unit. In this dimension, some of the indicators of performance (or commonly referred to as the key performance indicators, or KPI), which is often used as a reference, among others: the level of profitability of the company, the number of sales in the year (sales revenue), the level of cost efficiency of the operation (operation cost, compared to sales) , And also a number of financial indicators such as ROI (return on investment), ROA (return on assets) or EVA (economic value added).

The next dimension is the customer that's a great milestone to achieve success in the financial aspect. Because without customers, a business organization no longer have a reason to continue winded. Thus to achieve success, companies must also make a number of measures of success in the dimensions of the customer. A number of key performance indicators (KPI) that are commonly used in the dimensions of these customers include: the level of customer satisfaction (customer satisfaction index), index of the brand image, brand loyalty index, the percentage of market share, or market Penetration level.

The next dimension is dimension of internal business processes. The key question asked here is feasible: to achieve financial success and satisfaction of our customers, internal business processes that must be continuously enhanced? Some key elements in the internal business processes that fit with the optimal routes include the entire chain (supply chain) the process of production / operations, quality management, and process innovation. Some examples of KPI, which is used commonly in the dimensions of this are: the percentage of the product defect (defect rate), high speed in the production process, the number of product and process innovations are developed in a year, the number of products / services in the delivery of timely, the number of violations or SOP (Standard Operating Procedures).

The last dimension is the dimension of learning and growth. The dimensions of this would focus on the development of human resources capability, leadership potential and strength of the cult organization to continue to split the optimal point. In other words, this dimension would put a solid foundation to a business organization, so that can continue to display its superiority. Example KPI (Key Performance Indicators) that are commonly used to measure the performance of the dimensions of this are: employee satisfaction (Employee satisfaction index), level of competence the average employee, the index cultural organization (organizational culture index), or the number of hours of training and development per employee.

Thus the four main dimensions that must be managed and measured in constant performance from time to time. Basically, the four dimensions above are synergistic and mutually behubungan closely in hierarchical. A business organization is almost not possible without achieving excellence supported financially by the line of customers satisfied and loyal. And the line of loyal customers that this will never continue to grow if an organization does not have a business process that ekselen innovative. And in the end, the process of excellent working will probably only become reality if the organization is supported by a superior line of human resources, a respite leadership and a positive culture of the organization.

Business performance management organization with such an optimal must consider the fourth dimension over the intregratif. A series of key performance indicators (with the target number) for each of the above dimensions must then be monitored and identified pencapaiannya periodically (eg once a month in each session Monthly performance review meetings). Through a process of comprehensive management performance in the four dimensions of this, a business organization should continue to grow and blossom to the domain of success.

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Integrated Risk Management

Here is the current reality there is a phenomenon to be studied. When prices of Avtur rise, two airline operator immediately reduce the number of flight and destination of Yogyakarta. However, there are other airlines that action as will increase the number of flights to and from Yogyakarta. For the first two operators, the increase price of Avtur was arrested as a threat, while an airline operator interpret this as another opportunity. A valuable lesson that risk, uncertainty, and losses are three different things, the same can not reconcile it.

Many people are wrong, the risks are considered together with business and financial risks are considered together with the loss. In the financial risk is only one component of the risk business, in addition to the risk of the project, operational risk, market risk and risk associated with the regulations.

Risk in the event of a substance that has a negative impact on the company's goals and strategy. Integrated risk management is a process where the risk is identified, measured and manageable throughout the organization. The possibility of the risk and consequences of the business are two fundamental things to identified and measured. Through integrated management of risk, every strategic decision taken on the basis of the information is always valid and reliable. Thus, the decision is expected to be able to effectively anticipate the events in the future and reduce uncertainty.


Ironically, the frequent risk management focused only on the risks associated with operational activities, which is then converted into units of money (financial risk). This approach is certainly less complete, because not covering overall risk inherent in the business. Indeed, every industry has its own emphasis on risk will controlled. In integrated management of risk, the risk of a dominant as the main reference. For example, in the financial industry and banking, risk management more on the financial aspects without ignoring other aspects of risk.

The next question is how to technical integrated risk management? In fact, the process began from analysis to accurately both internal and external environment the company. Results of analysis and then followed up with the identification and classification are clear, specific, comprehensive and each of the risk that, from the aspects of operational, market, financial, project, and regulations. One of the ways that are often done through the identification question is what, when, where, why, how associated with the emerging trend of risk. Of course, this process is not quite done tembak only once only. The complete data collected in the identification process, this will further facilitate the search for solutions for each of the risks that arise.

However, only identification is not enough. Many companies can do well with the identification of risk is the risk that know what will be faced in business activity, but one of anticipation in doing. Why? Not infrequently in determining disability would start from where the resolution of the problems that arise cause despair. Therefore it is necessary to the process of analysis and evaluation. This process helps to understand the potential risks with the impact of any future risk if true, and to determine whether a risk can be accepted or not.

The problems that often appear in determining priority is the handling and determination of the limit of tolerance when terebut risk can not be managed entirely. Limit of tolerance will determine how much of a risk can be accepted (Acceptable). Here, policy and management of the company's leadership role in decision making. Of course it is not enough merely rely on gut feeling as related to the achievement of the target company. In the risk management business, management companies are some options: avoid risk, reduce risk, or transfer the identified risks will appear.

For the type of risk that potential high-impact and large, the options that can be taken is to avoid the risk. This means that the company's management determined that the company will avoid any activity that is high risk. On the other hand, for the type of risk that the occurrence probability is low impact and small, management can only accept the limits of tolerance that has been set. To risk the possibility of the emergence of small but big impact, companies usually do a transfer of risk facing the other parties, such as with insurance, but the company still responsible for minimizing the potential risks.

Of course, a risk management policy must be preceded by a comprehensive analysis by considering various aspects, especially related to the cost and the benefit that will be obtained and are covered by the company. Here the functions of planning, supervision and control of policies that will be taken against a risk will be very decisive.

Actually what is a major factor in the application of risk management in an integrated organization, especially when associated with the performance of the company? Leadership can not be finished a role as a stimulus to provide direction and guidance for all members of the organization. With such commitment from the leaders (leadership commitment) is not successful in determining risk management. In addition, the risk management culture needed a strong bond as for all members of the organization that can be attached, as achieving the goal line. In the implementation, revenue from members of the organization just is not enough, more than the required depth involvement (deep Employee Involvement) members from each organization. In addition, the integration between planning and implementation is also important.

Change management, communication and learning play a role as a pillar integrated risk management. Leaders of the organization should disillusion the meaning of the crisis or even, if necessary, create a situation of crisis in relation to the importance of the implementation of risk management is done to improve the performance of the organization. In the step-by-step guide that changes needed to better not lose (set back). Clearly, the communication can not end, between the lines in the organization and in time. Keep in mind also that the communication process in risk management is carried out not only limited in the organization (inward), but also outward to partners and other relevant stakeholders.

That very important in the integrated management of risk is the aspect of control. The leader of the organization charged for serious concern in this case because of the often terlemah point in the risk management practices. Control of the well, by learning to make risk management as an integrated process with the completion of the ongoing. In return the organization's performance is improving significantly.

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