5 MAJOR TAKE-AWAYS
- YOU GET WHAT YOU MEASURE:
The primary mission of management is to formulate and implement value-creating strategies. In a company, with its many complex activities, this task is especially demanding. This is the reason why managers use performance measurement and control systems as tools to achieve their desired profit goals and strategies.
If you don’t assign a reward no attention
BALANCING EXPECTATIONS OF DIFFERENT STAKEHOLDERS:
Whose goals are we seeking to achieve?
Aware of the different interest is crucial because these expectations will collide. “We believe that the market will reward those who set and explain long-term goals in building sustainable businesses of lasting benefit to society.”
SHORT TERM VS LONG TERM
“In making administrative decisions, career managers preferred policies that favoured the long-term stability and growth of their enterprises to those that maximised short-term profits,” It was this approach that built the great businesses of the 20th century such as IBM, General Electric and Procter & Gamble. The main tasks of the CEO were to determine strategy, appoint divisional heads and supervise their work.
Too many businesses neglect the boring but crucial issue of management. STRATEGY AS PATTERN OF ACTION:
Strategy must be dynamic and constanlty renewed.
In a word of hypercompetition sustained competitive advantage is almost impossible. Strategy has to be constantly creating new “unsustainable” competitive advantages. IMPORTANCE OF NON-FINANCIAL GOALS (KPI):
It allows to have a more balanced incentive system, encomprising both financial and non-financial, internally and externally focused processes.
PORTER 5 FORCES: understand industry you’re competing in
MISSION: a formalized mission statement creates a long term perspective that counterbalances the short-term effect that incentives system have on people behaviour BE ABLE TO EXPLOIT OPPORTUNITIES AND TRENDS:
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