Part 1: Translating Management Objectives in Practice – Credit Agricole Corporate & Investment Bank (CA-CIB) Case Study
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Strategic planning is often far less formalised and more evolutionary in nature than management theorists would have you believe, argue contributors Adrian Grant and Isabelle Monier-Vinard. Here’s why. Typically strategic thinking is presented as ‘Top Down,’ such as Kaplan and Norton [1] shown below in figure 1. This means that there are clear objectives through the translation of a complete strategy into operational targets. To demonstrate value a change programme merely has to report delivery against this vision. In this model, strategy is first set and then translated into operational goals (steps 1 to 5). However, in practice the process of setting strategy and translating it into operational objectives is often far less formalised and more evolutionary in nature. These traditional strategic models, like Porter’s famous five forces [2], are "inside out" and live in stable environments. As such, they are less able to deal with external shocks or hyper competitive periods where outside market forces have a rapid and direct impact on shaping the firm. |
However, when times are tough or rapidly changing, strategy needs to be more evolutionary and less structured/ formalized. Strategies are being re-started and targets set on an ad-hoc basis because of global economic uncertainty. Data and management information for decision making are typically sparse and unreliable resulting in ‘gut-feel’ strategies. Additionally, there is increased pressure on senior management to be pro-active and make quick decisions (even with limited data), which leads to short-term (reactive) management.
Figure 1: Top down strategic model (click to enlarge)
The implications for Process Excellence
Here at Credit Agricole Corporate & Investment Bank, we’ve found that the strategic cycle is shorter and much more fluid. It’s also essential to show value and benefit right from the outset – so no woolly projects allowed!
We start with a ‘PILOT’ or proof of concept with delivery against quantified targets at project level.
Senior Management will initially have short term targets (their fires or burning issues).
By ‘Executing’ then ‘Demonstrating Benefit’ to Top Management you secure their involvement and trust which allows you to invest some of your programme’s credibility on getting ‘Business Buy-in’. This delivery will allow you then to develop a more ‘Balanced Portfolio’ of projects.
The picture below shows our journey, from the Pilot through to our role as the voice of Process Excellence to senior management and the business:
Our Journey at CA-CIB:
Figure 2: Journey from ‘Proof of Concept’ through to creating a sustainable change agenda (click to enlarge)
Our advice is to make sure you demonstrate your value and articulate it in quantifiable terms; show that you are putting out today’s fires effectively before you dedicate resource to things that are not on management’s immediate list of concerns.
The structure we put in place was designed to prove the applicability of Lean Six Sigma (LSS) to our particular environment and use demonstrated success to build bridges into departments. We expanded pragmatically based on the delivery of measured results - not too fast, or, too slow but at a pace appropriate for the organization.
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We now have a network of 100 operational Green Belts and use that to continue to drive the benefits of our data led approach, so it is getting easier.
In Part 2 of this 3-part article series, we will explain each of these steps in more detail.
Next Read Part 2: 5 Steps to demonstrate the value of process excellence
Editor's note: Credit Agricole Corporate & Investment Bank won PEX Network’s award for Best Process Improvement Project Over 90 days, a pan-European award judged on operational and business results as well as clarity in execution throughout the process and sustainability of change. You can download a full account of the award winning cash payment process improvement project here: FS Case Study: Improving the Cash Payment Process at Credit Agricole
[1] Robert S. Kaplan & David P. Norton, ‘Mastering the Management System’, Harvard Business Review; Jan 2008
[2] Michael E. Porter,‘How Competitive Forces Shape Strategy’, Harvard Business Review; March/April 1979