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 Accrediting Managers at Work in the 21st Century

 

 

BUSINESS PROCESS AND EXECUTION CAPABILITY

Professor KC Chan and Christopher Goh

In this turbulent economy, to be the market leader firms need to adopt the best practice in excellent execution capability. This will require organizational change. The most pragmatic way is by changing the process, not the people. Developing execution capability comprises of People who has discipline in execution, Process which is the ability of the people to execute, Tools/ Technologies to accelerate the speed of execution.

The business process of converting strategy into superior performance is dependent on the degree of organizational maturity capability of a firm. Worldwide, world-class organizations attribute their success to project management, therefore, making project management indispensable for business results.

Winning companies thrive during a crisis/ financial meltdown (July 2009 article on ‘Results-Driven and Crisis Turnaround Leadership for Business Continuity’). WHY ?

These most admired companies in the world advocated that execution capability is attained by developing leaders who can handle different types of crisis situation (I, II, III) by adopting a Wholistic Solution approach through effective and efficient business process of managing the 3P’s.

The Execution Capability Paradigm

The result of execution capability is to achieve faster, better and/or cheaper products/ services for superior advantage through clarity in planning. Strategy can be cascaded down through the organizational structure for its execution through:

·         Portfolio Management at corporate level: Conduct portfolio management to ensure that investments are prioritized so that they are strategically acceptable. Commitment by top management is crucial.

·         Program management at managerial level: These prioritized investments must be transformed into a series of projects to be integrated for critical business mission of being financially sensible. Projects are monitored for cost – benefit realization.

·         Project management at operational level: Each and every project must be optimized to ensure that it is tactically viable.

The business process for execution capability model, S-I-O, ensures that the investment decisions, financial returns and project deliverables are connected and monitored for sustainable business results.

 

In portfolio management, investment strategy can be thus categorized:

·         Nice-to-Have:  can be dropped if there is inadequate resources/ budget

·         Essential:  need to maintain as corporate initiative

·         Intellectual Property: medium to longer-term projects which need to be developed, tested, inclusive of training to be provided during the implementation

·         Cash Cow:

        Support business unit/ functional department to realize the targeted savings/ benefits

        Projects that result in savings/ benefits/ profits/ market share

Program management refers to the integration of the many and varied projects in support of the preferred investment strategy. In reality, there is a gap caused by inadequate integration between “the strategy” (Knowing) and “the project” (Doing) which leads to non-performance or under-performance. Project management refers to the optimization of Resources, Scope and Schedule for each project. In essence, business process and execution capability starts with strategy, the visioning or “knowing”. The firm knows what to do. This has to be translated into a series of projects, collectively called Program Management. All projects must be potential winners. Often times, one project may excel at the expense of others to the detriment of the firm. According to Jack Welch, the former CEO of General Electric (USA), all projects must be in the winner’s league. Otherwise, you fix, sell or close the project. This makes business sense. Strategy is not everything. Strategy must be transformed into winning projects for business results. All great visions and ideas are worthless if they cannot be implemented effectively and efficiently. 90% of strategy remains in the strategic realm because of disintegrated execution. Business process and execution capability is a wholistic solutions approach to performance resulting in faster, better and cheaper products/services for superior competitive advantage through knowing what to do and how to do it within a systematic and rationally integrated framework.

Scope of Execution Capability

Based on the common language of managing a project, the execution capability process can be encapsulated into nine knowledge areas. The business process of managing a project (or investment) is known as the five key process groups, i.e. Initiating, Planning, Executing, Monitoring & Controlling, Closing. The stakeholders involved in influencing the success or failure of a project must not be overlooked.

The project structure should be kept simple for effective communications. The critical activities are not only managed by the project manager, but must obtain full support from a project support officer who does nothing but to monitor and control project deliverables.

The Execution Capability System

Execution capability is dependent on having the right people who has the ability to implement the right process, equipped with the right tools in order to attain the right business results. The tools will measure the milestone schedule for the strategy which has been translated into major deliverables so that improvements can be made throughout the whole project life cycle.

 

Different Levels of Execution Capability

Organizational capability can only matured progressively in tandem with the different management levels, namely corporate, business and operations. Hence, it is imperative that all the three levels must share a common mechanism to advance the organizational development from the initial phase of ad hoc through to optimized stage. It is obvious that execution capability cannot be developed overnight, but has to be incremental and leverage with the right type of leadership as explained in the July 2009 article. The respective strategic initiative for each stage is given.

To be sure, business process and execution capability is not an option, but is the lethal weapon to survive the impact of globalization forces and financial meltdown. Those who ignore are at their own peril.