Introduction
Module I
Module II
Module III
Module V
Roll-out
Qtr 1
4
Qtr 2
Qtr 3
Qtr
Action 1
Action 2
Action 3
Action 4
Action 5
Module VI
Conclusion
Module IV
Contents of Module IV
Introduction
Module IV
Introduction
Schedule for the A.T. Kearney Business Unit Strategy Training Program
Time
Monday
Tuesday
Wednesday
Thursday
Friday
Module II
Module III
Module V
Final presentation
8-9
Introduction
9-10
10-11
11-12
12-1
Module I
1-2
Lunch
Conclusion
Lunch
Lunch
Lunch
2-3
3-4
Module VI
Guest Speaker
Module IV
Guest Speaker
4-5
Case preparation
Case preparation
Case preparation
Strategy literature
review
7-8
Case presentation
Case presentation
Case presentation
Case Dinner
preparation
8-9
Dinner
Dinner
Dinner
Dinner
5-6
Lunch
6-7
9-10
10-?
Module IV
Introduction
Module I
Identification of the key
issues of the
engagement
Module III
Characteristics and
dynamics of the
individual companies
Module V
Definition and
evaluation of strategic
alternatives
Module VI
Implementable
recommendations
Roll-out
Qtr 1
Qtr 2
Qtr 3 Qtr 4
Action 1
Action 2
Action 3
Action 4
Action 5
Module IV
Execution
capacity of the
client
Note: The order of presentation of the curriculum elements should not be interpreted as a sequential guideline for a strategy engagement. Different
elements of the program may be referenced at different times in the engagement
Module IV
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
Source: A.T. Kearney
Introduction
Focus
Module IV
Introduction
Deliverable
Techniques
Module IV
Contents of Module IV
Introduction
Module IV
Introduction
Definition
Module IV
Introduction
Strategy
analysis
Assessment of
the situation
Generation
and evaluation
of alternatives
Implementation
Concurrent
processes
Iterations
Iterations
Integrated
evaluation
and planning
Executionfocused
analysis
Assessment
of degrees of
freedom to
execute
Alternatives for
improving
execution
capacity
Implementation
Powerful
Contributions
Note:
The recommendations must have (i) high strategic potential as well as (ii) high likelihood of implementation and therefore bridge the gap between
strategy and operations
Module IV
Source: A.T. Kearney
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
Introduction
Illustrative
Operations
100%
100%
Information Technology
An assessment of the
clients execution
capacity can determine
whether the client can
realistically implement
the strategic solution
100%
Organization
Note: All three execution capacity areas are, to a certain extent, linked to focus areas of A.T. Kearney, e.g. operational execution capacity could be seen in
relation to some of the operations practices; Organizational execution capacity could be seen in relation to the Enterprise Transformation methodology;
information technology capacity could be seen in relation to the Strategic Information Technology Practice and Jupiter
Source: A.T. Kearney
Module IV
10
Introduction
The three areas must be integrated when executing strategy, and therefore should
be evaluated together when assessing execution capacity
Illustrative
Operations
The three parts are not separate
entities, and any analysis of
one must be integrated with
analyses of the other two
elements. For example, the
organizational capacity
assessment will be a major part
of an IT or an operational
capacity assessment
Information
technology
Organization
Module IV
11
Introduction
Illustrative
Key question
Required
position
Resources?
Capabilities?
Module IV
12
Introduction
Focus
Operations
100%
Gap
100%
Information Technology
100%
Organization
Module IV
13
Introduction
To identify and assess a business units execution capacity, one must analyze its
resources and capabilities
Resources
Capabilities
Module IV
14
Contents of Module IV
Introduction
Module IV
15
Description
Definition
Module IV
16
Description
Key questions
Does the client have sufficient degrees of strategic
freedom or to what extent is the client constrained by
the current situation to execute operational tasks?
What is the clients current level of operational
resources and capabilities?
How are the current resources and capabilities
utilized?
How well is the client positioned in the supply
chain?
Does the client control all relevant activities in the
value chain?
Operations
100%
100%
Information technology
100%
Organization
Module IV
17
Description
Operational resources
Personnel
Suppliers
Purchasing
Accounting
and finance
The
operations
function
Technical
engineering
Marketing
Customers
Product/services
development
Module IV
18
Usage
A cost advantage
A dependability advantage
A flexibility advantage
A quality advantage
A speed advantage
Module IV
19
Usage
Dependable delivery
Costs
Speed
Fast
throughput
High total
productivity
Dependability
Reliable
operation
Ability to
change
Quality
Flexibility
On-specification products
and services
Module IV
20
Example
Retail banking
Cost
Corporate banking
Speed
Corporate banking
Cost is the major
weakness for
corporate banking
Dependability
Quality
Flexibility
Module IV
21
Example
Identify resources along the value chain and understand their relative strengths
Define resources
Define capabilities
R&D
Resources Patents
Copyrights
Research
facilities
Skills of
research
personnel
Product
Design
Manufacturing
Physical
characteristics
Quality
Expertise in
design
Marketing
and Sales
Distribution
Channels
Inventory
Warehouses
Distribution
fleet
Service
Warranty
Speed
Service
network
Efficiency
Quality and
and speed of
effectiveness
distribution
of customer
(Federal
service
Express)
(Walt Disney,
Marks &
Spencer)
Module IV
22
Example
Identify critical capabilities required to deliver customer value and assess the
companys strengths and weaknesses in these areas relative to competitors
Identify how the
current resources
can be improved and
which additional
resources should be
acquired to fill this
gap
Top performer
Assessment of capabilities
Capabilities required
Key operational
success factors
Determine the
importance of the
capability with
respect to the key
success factors
Client
Weight
1
Lead time
Manufacturing
flexibility
Delivery within 24
hours
Highly reliable
service
Module IV
23
Example
A benchmarking analysis can help to uncover key issues and questions related to
the clients ability to exploit its current resources and capabilities
Example: Security system
Product
Design
Manufacturing
Distribution
& Sales
Service
Client
USD 3m budget
split among
variable
cost reduction,
sales support and
development
Service
handled by
sales agents
Competitor A
USD 9m budget
Service
handled by
agent
network
Competitor B
Subcontracted
Module IV
24
Methodology
Input
Strategic era
analysis
Strategic planning
framework
Ratio analysis
Client
data/interviews
Expert interviews
Analyst reports
SEC filings*
Trade journals
Customer surveys
Annual reports
Identify the
clients operational
resources and
capabilities
Determine which resources
and capabilities are most
critical to successfully
implement the strategic
initiative
Identify the level of
resources and capabilities
available within the
company:
Purchasing
Personnel
Accounting and finance
Marketing
Product/service
development
Technical/engineering
Draw an operational map
using the key success factors
Identify the resources
employed to perform current
value chain activities, and
determine how efficiently
the resources are being
utilized
Output
Assess its
strengths and
weaknesses
Determine the
most critical
gaps
* Reports filed by publicly held companies with the Securities and Exchange Commission: e.g., 10K, 10Q
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
Source: A.T. Kearney
A determination of
the companys
ability to execute an
intended or proposed
strategy
An identification of
the critical
operational success
factors
An assessment of the
company's
operational resources
and capabilities
A gap analysis that
illustrates where the
company lacks
adequate resources
and capabilities
Module IV
25
Conclusion
Conclusion
Key points
Should be performed concurrently with all other analyses of the industry, client, and competitor
companies to relate strategic thinking to company capabilities
Purpose of the analysis is to understand the companys capacity or degrees of freedom to execute
certain strategies
Heavily interlinked with the company analysis in Module III
Benchmarking (see Module III) might provide additional insights
Strengths
If properly defined, a very strong technique used to ensure that a strategy is implementable
Weaknesses
References
Colis, D., and Montgomery, C. (July-August 1995); Competing on Resources: Strategy in the 1990s
Grant, R., (1996); Contemporary Strategy Analysis
Wernerfelt, B. (1984); A Resource-based View of the Firm, Strategic Management Journal, Vol. 5
Hamel, G. and Prahalad, C.K. (May-June 1990); The Core Competence of the Corporation, Harvard
Business Review
Stalk G., Evans. P, and Shulman, L.E. (March-April 1992); Competing on Capabilities; Harvard
Business Review
Module IV
26
Contents of Module IV
Introduction
Module IV
27
Description
Definition
Module IV
28
Description
Operations
100%
100%
Information technology
100%
Organization
Module IV
29
Usage
Tangible
Physical
Organizational
capabilities and
resources of the
company
Technological
Intangible
Human
Reputation
Module IV
30
Usage
A number of key factors will indicate the clients organizational execution capacity
Resources
Key indicators
Financial
Debt/equity ratio
Ratio of net cash to capital expenditure
Credit rating
Physical
Technological
Human
Reputation
Brand recognition
Price premium over competing brands
Percentage of repeat buying
Objective measures of product performance
Level and consistency of company performance
Module IV
31
Example
Is the organizational design and skill base optimal to implement the strategy
General Manager
Understand the
decision mechanism
of the company
Who are the key
decision makers?
Who has the
power?
Purchasing
Operations
Finance
...
...
...
...
Head of
Region A
...
...
Head of
Region B
...
...
Head of
Region C
...
...
Head of
Region D
...
...
Module IV
32
Example
Curriculum Vitae
1 = Poor
10 = Very good
Middle management
Mr. X
Mr. Y
Mr. Z
Leadership capabilities
Technical skills
Experience in
implementing change
10
Commitment to change
10
Operational skills
Linguistic abilities
Note:
A.T. Kearney executive search may be able to provide insights on key success factors in different countries
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
Source: A.T. Kearney
Module IV
33
Example
Knowledge of
company product range
To what extent are the
individuals in the
middle management
group ready and
capable to undertake
changes?
Knowledge
of customer
business
issues
Ability to flexibly
deploy staff
Willingness
to make and
accept
mistakes
Module IV
34
Example
The organizations track record for the execution of previous strategies should
impact future strategic recommendations
By analyzing the
historical decisionmaking process of the
client, a picture of
change willingness
can be depicted
Date
Decisions
made As original
Minutes of
the Board
meeting of
Implemented
Minor
changes
Major
changes
Not
implemented
3
3
3
3
3
Module IV
35
Example
New strategy
periods
Major changes
suggested in the
strategic plan
Breakthroughs
achieved
Problems during
implementation
Module IV
36
Example
An actual engagement showed that the client had not considered the consequences
of its objectives
Show the
development required
to make the changes
Indicate story
behind slide
100
50
1997
Pose questions
that create a
reality check
Is this realistic?
Is the human
resource
department ready
to pursue such a
task?
1999E
Module IV
37
Methodology
Inputs
7S
Strategic era
analysis
Strategic planning
framework
Client
data/interviews
Expert interviews
Analyst reports
Annual reports
SEC filings*
Trade journals
Press clippings
Customer surveys
Outputs
Analyze the
organizational
structure
Assess the
strengths and
weaknesses
Evaluate the
critical gaps to
be closed
Strengths and
weaknesses of the
organizational
structure
Determination of
measures required to
raise the
organizational
capabilities up to the
level necessary to
implement the
strategy
* Reports filed by publicly held companies with the Securities and Exchange Commission: e.g., 10K, 10Q
Source: A.T. Kearney
Module IV
38
Conclusion
Conclusion
Key points
Should be performed concurrently with all other analyses of the industry, client, and competitor
companies to relate strategic thinking to company capabilities
The purpose of the analysis is to understand the companys capacity or degrees of freedom to execute
strategies
Draws heavily upon the analyses taught in Module III
The 7S analysis in Module III provides insights on organizational strengths
Strengths
Helps the team develop strategies that are implementable and executable from an organizational
perspective
Weaknesses
References
Module IV
39
Contents of Module IV
Introduction
Module IV
40
Description
Definition
Information technology execution capacity is defined by the
extent to which the clients information technology system
provides a basis for executing strategy. Accordingly, it
Module IV
41
Description
Key questions
Operations
100%
100%
Information technology
100%
Organization
Note:
A.T. Kearneys Strategic Information Technology Practice (and Jupiter) can in many instances be helpful to determine key areas of focus
Module IV
Source: A.T. Kearney
A.T. KEARNEY BUSINESS UNIT STRATEGY TRAINING
42
Description
Strategy
Traditionally we have
been asking:
Technology
Module IV
43
Description
This entails helping clients to understand and exploit new technologies in order to
develop new business capabilities that will create competitive advantage
Understanding the
new Business Context
Digitalization
- Virtualization
Network Connectivity
- Interactive reach
Eliminating Barriers
Developing new
Business Capabilities
Module IV
44
Description
Foresight
I need insight
into my IT
challenge &
opportunity
I understand the
challenge, but I
need a plan and
an approach
Insight
Plan
I have an IT
plan, but I want
implementation
leadership
Implementation
I have
implemented
but, I want
assurance
Hindsight
Module IV
45
Description
The SITP core competencies are teams of people who are particularly skilled
within a certain area of expertise
Foresight
Insight
Plan
Implementation
Hindsight
Digital Economy
IT Alignment
Enterprise Modeling
Enterprise Implementation
Electronic Commerce
Business Intelligence Systems
Transforming the IT Organization
Large Scale Program Management
Module IV
46
Description
Key Jupiter deliverables in foresight and insight are relevant to strategy work
Module IV
47
Description
Increased sales
Competitive advantage
Market positioning
Partner integration/
virtual enterprise
Infrastructure
Integration
Flexibility
Lower IT costs
Standardization
Information
Increased control
Better information
Better integration
Improved quality
Transaction
Cut costs
Increase throughput
Strategic
Module IV
48
Usage
Information technology can be used to create value throughout the value chain
An generic value chain with example areas that can be improved via IT developments
Company
infrastructure
Planning modes
Human resource
management
Technological
development
Procurement
Automated
warehouse
Inbound
logistics
Flexible
manufacturing
Operation
Automated
order
processing
Telemarketing
remote
terminals for
sales persons
Outbound
logistics
Marketing
and sales
Remote service of
equipment
Computer
scheduling of
repair trucks
Service
Module IV
49
Usage
Strategic information
technology planning
Strategic analysis
Company resources
and capabilities
Strategic choice
Information
technology priorities
Module IV
50
Usage
Computing
Applications
Network
Data
Module IV
51
Usage
The IT department
Strategy
The IT management
The IT culture
Module IV
52
Usage
Questions
What major IT projects have been
implemented during the past 5 years?
Where and why were the projects
initiated?
Who managed the projects?
What was the failure and/or success of
these projects?
Module IV
53
Example
The stages of
change readiness
In order to assess
client strengths
and weaknesses,
IT capabilities
should be
evaluated with
respect to the four
stages of change
readiness
Stage 1
Innocence
Stage 2
Awakening
Stage 3
Commitment
Stage 4
World class
Information
technology systems
linkages with the
business
Information
technology
alignment
Stand-alone
information technology strategy
Linked to work
processes
Linked to agenda
for todays
business
Linked to agenda
for tomorrows
business
Around the
transaction
Around line
organizations
Around line
organizations and
product lines
Orientation of
information
system
Process
transactions
Data exists, but not
readily available
Support period
accounting
Fragmented
departmental
data
Support planning
with operational
data
Shared data
Support process
flow, internal and
external
Concurrent
visibility of data
Technology base
High dependence
on mainframes and
mini-computers
PCs/workstations
used in significant
numbers
PCs/workstations
are interconnected
PCs/workstations
access information
globally (internal
external sources)
User base
Technicians only
A few initiatives
Module IV
54
Example
Areas of
responsibility
IT director
Program/application
Manager - financial
Program/application
Manager - sales
Micro systems
Manager
Responsible for
store-level-systems
(PCs and software)
Operations
Manager
Responsible for
Monitoring daily
workloads of
system
Administration
phonemail system
Set-up and repair
corporate PCs
Description of
area
Source: A.T. Kearney
Module IV
55
Example
Understand
processes, strengths
and weaknesses
External user
Provision of
data adjustment
transformation
External user
User interface
Routing/
switching/
converting
Booking
Data warehouse
CIS/MIS/reporting
Authorizing
Billing
Provision of
data adjustment
transformation
Administration of
document
Internal
administration
Module IV
56
Example
Understand the
performance of
the MIS
department
Look at factors
such as MIS
expenditure
The users
satisfaction with
applications is a
key indication of
MISs ability to
develop
competitive
solutions
Percent
Percent
41
59
Develop
80
70
61
86
85
70
60
59
Maintain
39
1995
41
1996
1997
1995
1996
1997
Module IV
57
Example
Key indicator
Very good
Good
Satisfactory
Department X
Department Y
Not good
Quality of current
applications
Do the applications
match the requirements
Software performance
Availability of IT
solutions
Responsiveness of IT
service
Technical assistance
Map the
execution
capabilities of
the client
Consulting of users
Module IV
58
Methodology
Outputs
Technology
trends
Client
data/interviews
Expert interviews
Analyst reports
Trade journals
Clients IT
execution capacity
detailed by the
strength of
individual IT
resources and
capabilities
Employ the
Perform the IT
Perform the IT
Application value
framework
baseline
organization
change readiness
assessment
portfolio
investment/value
analysis
A qualitative framework
that maps each major
application system
against business value on
one axis and
functional/technical
adequacy on the other
Business value may be
based on one or more
considerations, such as:
Support for KSF
Support for new
business direction
Critical information
needs
Customer satisfaction
This provides a
qualitative assessment of
the investment and
subsequent value of the
current IT portfolio with
respect to it being able to
address the needs of the
business. The intent is to
show a causal link
between business
objectives and IT
investment
Module IV
59
Conclusion
Conclusion
Key points
Should be performed concurrently with all other analyses of the industry, client, and competitor
companies to relate strategic thinking to company capabilities
Understand the companys capacity or degrees of freedom to execute certain strategies
Can be related to the technology portion of the value chain
Strengths
An identification of the current IT and capabilities resources will outline the key areas of concern
Key IT drivers
IT as an enabler or constraint
Weaknesses
References
Module IV
60