Leading Change for Strategy

Execution

Dr. Robert S. Kaplan

Baker Foundation Professor, Harvard Business School
Executing strategy: Senior executives’ #1 issue
The Balanced Scorecard: The Central Component in a New Strategy
Execution Management System
Non Profit and Public Sector Organizations
Private Sector Organizations
Financial Perspective
"If we succeed, how will
we look to our
shareholders?”
“How do we attract resources
Customer Perspective
"To achieve our vision,
how must we look to
our customers?”
Process Perspective
"To satisfy our customers
and shareholders, at which
processes must we excel?”
Learning & Growth
“How do we align our
intangible assets to
improve critical
processes?”
Mission (Customer) Perspective
“How do we have a social
impact with our
citizens/constituents?”
Support Perspective
and authorization for our
mission?”
Process
“To have a social impact and to
attract resources and support, at
which processes must we excel?”
Learning & Growth
“How do we align our
intangible assets to improve
critical processes?”
Financial
“How should we manage and
allocate our resources for
maximum social impact?”

3
Palladium Balanced Scorecard Hall of Fame for Executing
Strategy® : By Industry 2000-2010
The Management System for Strategy Execution Links Vision and
Strategy to Operational Excellence
2
TRANSLATE THE STRATEGY DEVELOP THE STRATEGY 1
• Strategy Map / Themes • Mission, Values, Vision
• Measures / Targets • Strategic Analysis
• Initiative Portfolios • Strategy Formulation
• Funding / Stratex

TEST & ADAPT 6

3 ALIGN THE ORGANIZATION
• Profitability Analysis
• Business Units Strategic Plan
• Support Units performance measures • Strategy Correlations
• Strategy Map • Emerging Strategies
• Employees
• Balanced Scorecard
• Board of Directors
• Stratex

results
Operating Plan
MONITOR & LEARN 5
4 PLAN OPERATIONS
• Sales Forecast performance measures • Strategy Reviews
• Key process improvement • Resource Requirements • Operating Reviews
• Sales planning • Dashboards
• Resource capacity plan • Budgets
• Budgeting
results

EXECUTION
Process
Initiative
Leadership: The Necessary and Perhaps Sufficient Condition for
Successful Strategy Execution

LEADERS …

1. Establish Direction
Develop a vision of the future along with strategies for producing the
changes needed to achieve that vision.

2. Align People
Communicate the direction to all employees, create coalitions that
understand the vision and are committed to achieving it.

3. Motivate and Inspire

Encourage people to move in the right direction by appealing to basic
human needs, values and emotions.
The Eight Step Process for Leading Successful Change:
John Kotter, Leading Change (Harvard Business Press).

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for
Achieving It
4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

The Eight Step Process for Leading Successful Change:

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for Achieving It

4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

John Kotter on Complacency versus Leading Change

• Complacency exists when people think what they are

doing is right and they don't need to change. The most
common cause of complacency is past success.

• In a world that is changing faster and faster all the time,

complacency is cancer. Not bad. Not a problem. Cancer.

• Well-known and often still highly respected companies have the disease, and
their futures aren’t pretty. Many people, including capable CEOs, don't recognize
this in their organizations—and even more don't see it in themselves. Success
and scale usually result in an inward focus, where people don't see the threats or
opportunities that lie just outside. They of course deny this, as do people in all
organizations. Just ask a crowd of people how many of them are complacent,
and see how many hands go up.
Leadership Must Overcome Complacency (We’re doing OK) and
Communicate the Urgency for Change: “Why” and “Why Now”

Financial Challenges
• Weak competitive position (profitability rank in industry)
• High costs
• Mediocre to poor quality
• Stagnant or declining revenues

Competitive Challenges
• Traditional Competitors
• New Competitors

Technology Challenges
• Lack of innovation
• Threat from emerging technologies

Regulatory and Environmental Challenges

Leaders, even when sailing in smooth waters, must anticipate the
dangers that lie ahead
Executing Strategy is Leading Change

“Change before you have to”

Jack Welch

12
The Eight Step Process for Leading Successful Change:
John Kotter, Leading Change (Harvard Business Press).

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for Achieving It

4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

A Successful Journey Requires both Visionary Leadership and a
Great Crew
2. Form the Guiding Coalition: Achieve Consensus and
Commitment Among the Leadership Team

Senior leaders must concur on both the vision and the plan to
carry out the strategy successfully

Strategy execution requires two pillars of support from

leadership:
− Building consensus
− Securing commitment Successful Strategy
Implementation

Commitment
Consensus
Brian Baker, Mobil US
Marketing & Refining
Executive Vice “You could take our scorecard and give it to
President a competitor and it wouldn’t work. You had
to have sweated through the hours and
hours of work and effort that went behind
the card to get the benefits from the
measures. That’s what brings it to life. It’s
got to become part of the company’s belief
system, almost a religion – the benefits
don’t come just from having a piece of
paper with a scorecard on it.”
The Eight Step Process for Leading Successful Change:
John Kotter, Leading Change (Harvard Business Press).

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for Achieving It

4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

3. Create the Vision for Change and a Strategy for Achieving It

The vision is a concise statement that defines an ambitious measurable target (a

Big Hairy Audacious Goal) and a date by which it must be achieved.

Having a stretch target and a date, not too far into the future, creates the sense of
urgency: We must start now on the trajectory to breakthrough performance.

• Cigna Property and Casualty Insurance Company [when it was the least
profitable P&C insurer] : “to be in the top quarter of profitability within 5 years”

• Large Apparel Retailer (with $8 billion in sales):

“to achieve $20 billion in sales within 5 years”

• President John F. Kennedy (1962) for the US Space Program

“to land a man on the moon and return him safely to earth by the end of the decade.”
Stage 1: Develop the Strategy

2
TRANSLATE THE STRATEGY DEVELOP THE STRATEGY 1
• Strategy Map / Themes • Mission, Values,
• Measures / Targets Vision
• Initiative Portfolios • Strategic Analysis
• Funding / Stratex
• Strategy Formulation

TEST & ADAPT 6

3 ALIGN THE ORGANIZATION
• Profitability Analysis
• Business Units Strategic Plan
• Support Units performance measures • Strategy Correlations
• Strategy Map • Emerging Strategies
• Employees
• Balanced Scorecard
• Board of Directors
• Stratex

results
Operating Plan
MONITOR & LEARN 5
4 PLAN OPERATIONS
• Sales Forecast performance measures • Strategy Reviews
• Key process improvement • Resource Requirements • Operating Reviews
• Sales planning • Dashboards
• Resource capacity plan • Budgets
• Budgeting
results

EXECUTION
Process
Initiative
Case Study: Volkswagen do Brasil’s new strategy

Vision: Restore profitability and achieve #1 market share in Brazil

by 2009

Advantage: by having our highly-motivated employees work

collaboratively with our key suppliers, to produce

• innovatively designed,
• high performance
• competitively-priced, and
• reliable vehicles

that are sold and serviced through the best dealer

network in Brazil

Scope: to middle and upper-income consumers.

VW do Brasil’s Change Agenda
How must we change for our strategy to work?
from… …to

Operational, Tactical Management focus Strategic

Traditional 3 + French, Japanese,

Fiat, Ford, General Motors Competition
Korean, and Chinese automakers

Achieving profitability, eventually an

Losing money Financial performance
18% ROCE

Expanding : Regaining #1 position in

Declining: From # 1 to # 3 Market share
Brazil

Company brand and Exciting, innovatively-designed and

Stale brand, reliable, well-engineered cars
image high-performance vehicles

Highest among all auto manufacturers

Declining, below targeted performance Customer Satisfaction
in Brazil

Management decision- Empowered employees making

Slow, bureaucratic, hierarchical
making strategically-aligned local decisions

Partners with VWB to achieve highest

Not engaged Dealers and Suppliers
ratings in Brazil

Better and faster; high quality and low

Better, faster, cheaper Processes
cost

Highly motivated, collaborative,

Demoralized, alienated, adversarial Employees
participative
Stage 2 of the Management System: Plan the Strategy

2
PLAN THE STRATEGY DEVELOP THE STRATEGY 1
• Strategy Map / Themes • Mission, Values, Vision
• Measures / Targets • Strategic Analysis
• Initiative Portfolios • Strategy Formulation
• Funding / Stratex

TEST & ADAPT 6

3 ALIGN THE ORGANIZATION
• Profitability Analysis
• Business Units Strategic Plan
• Support Units performance measures • Strategy Correlations
• Strategy Map • Emerging Strategies
• Employees
• Balanced Scorecard
• Board of Directors
• Stratex

results
Operating Plan
MONITOR & LEARN 5
4 PLAN OPERATIONS
• Dashboards performance measures • Strategy Reviews
• Key process improvement • Sales Forecast • Operating Reviews
• Sales planning • Resource Requirements
• Resource capacity plan • Budgets
• Budgeting
results

EXECUTION
Process
Initiative
VWB’s Strategy Map: Acao para Vencer (Act to Win)
Volkswagen do Brasil Balanced Scorecard: Metrics and Accountability
VP Finance & Corporate Strategy
VP Sales & Marketing Achieve sustainable Metrics:
Achieve Market Metrics:
and positive 1.1 EBITDA
Share growth 2.1 Market Share 1.2 Return on Investment
2.2 Price Index
financial results
1.3 Operating Profit as % of Revenue
2.3 Contribution Margin 1.4 Facility & Tool Investments
2.4 Vertriebsleistung 1.5 Net Cash Flow
Director Quality Assurance Director Corp. Affairs & Press
Satisfy the Metrics: Metrics:
3.1 Things Gone Wrong Improve company
customer’s 4.1 Image Quality Index
3.2 Repair per 1000 image 4.2 New Car Buyer
expectations 3.3 Costumer Satisfaction Index 4.3 Employees Image Index
3.4 Audit Note

Develop dealer Guarantee

VP Product VP Create and manage VP Operations
Increase direct a robust production
organization into customer oriented Development Operations volume strategy to
Metrics:
Metrics: processes 10.1 Accomplish Prod.
more service innovation Metric: adapt to industry
efficiency Planning
direction management 6.1 Implementation of volatility
.

8.1 Hours per Vehicle 10.2 Achieve Installed

unique selling point
Capacity
VP Sales & Mkt VP Product VP HR &
Guarantee reliable VP Supply
Metrics: Organization
5.1 High Performance
Achieve launch Development Increase indirect
Metrics:
Supplier → Metrics:
management Metrics: processes Manufacturer 11.1 Cripple Index
Program .
9.1 Efficiency
5.2 Quality Index Service efficiency 7.1 Releases at right efficiency processes 11.2 Supply Program
Indicator Management
5.3 Customer Satisfaction moment 9.2 # of Kaizen
with Last Visit 7.2 Change of Parts 11.3 Quality Rates
Projects Supplier
5.4 Repeated Repair at critical phases
Develop attractive and Become sectorial
Achieve high performance Develop sustainability as
innovative product reference for authorities
culture management principle New
portfolio and representative entities
Director Product VP HR & Organization Director Governmental VP HR & Organization
Planning Metrics: Affairs Metric:
Metrics: 13.1 Gallup Index Metrics: 15.1 Ethos Indicator
12.1 Brazilian Market Survey 13.2 Cooperation Barometer 14.1 Radar report
12.2 Launching Strategy 13.3 Training hours/employee .
14.2 Agreements Success Index
12.3 Product Portfolio Renew 13.4 Fitness Index 14.3 Representative Level in
13.5 Executive Competence Index external entities
13.6 Cell Leaders Screening
Dashboard for Dr. Senn, Vice President Human Resources , the
“objective owner” for “Achieve a High Performance Culture.”
General Status Info Metrics Target FC (8+4) YTD
Achieve a High 13.1 Gallup
Index 100% 100%
Performance Culture W = 30%
2007 2008 2009 2010

Champion: 13.2
Cooperation 100% 100%
Dr. J.-F. Senn Barometer
W = 10% 2008 2009 2010

13.3 Training
Projects Status hours/
employee
100% 98%
Establish a VW School of Excellence
W = 10% 2007 2008 2009 2010
Fitness Contest
13.4 Fitness
Competence Appraisal Improvements Index 100% 100%
W = 20% 2008 2009 2010
PID for Cell Leaders
13.5
Executive
Summer Scholl 100% 100%
Competence
Index 2008 2009 2010
W = 15%

13.6 Cell
Leaders 100% 100%
Screening
W = 15% 2009 2010

FC(8+4) PageVOLKSWAGEN
13 DO BRASIL
Each strategic objective has at least one strategic initiative selected
to drive short-term improvements

Project Achieve High

Performance Culture
Establish a Volkswagen School of Excellence
General Status Objective Project Metric

92
Unify and standardize training and development programs for % Training Programs for Cell Leaders included
the Cell Leaders providing a continuous professional in the courses structure - Pre Requirement
10
improvement (2009 - Based on Lider Executor II - 95%)
2009 2010

Scope Project Metric

80
Develop the structure, process and support for all training and development
programs for the Cell Leaders including more than 40 courses divided into classroom Participants Index New
training (29 courses) and online training (12 courses).
2009 2010

Sponsor Coordinator Start Date Final Due Date

Dr. Senn R. Ramos CW* 07/10 CW 52/10
Project Team Main Milestones Planned Date Real Date Status
Presentation VP HR / VP Operations CW 07/10 CW 05/10
L. Moreira
A. Ferreira Pre Requirement Module - Start Group (Leader Cell) CW 12/10 CW 12/10
Local HR Managers
Courses content presentation at Werkleiterrunde CW 14/10 CW 14/10
Involved areas Pre Requirement Module - Content Conclusion CW 17/10 CW 17/10
Start Communication process: all Employees CW 22/10 CW 17/10
Operations Validate Reward process to Instructors CW 26/10 CW 25/10
Basic Module - Content Aplication CW 28 to 52/10 on going
Information Investiments on Sign-Off (R$000) Real (R$000) Status
Updated on: CW 30/10 Investiments are related to: Content development;
R$ R$
by: V. Berdague Infrastructure and implementation.
*CW = Calendar Week
The Eight Step Process for Leading Successful Change:
John Kotter, Leading Change (Harvard Business Press).

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for Achieving It

4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

Stage 3 of the Management System: Align the Organization

1 DEVELOP THE STRATEGY

2 TRANSLATE THE STRATEGY

• Strategy Map / Themes • Mission, Values, Vision

• Measures / Targets • Stretch Targets
• Initiatives • Strategic Analysis
• Funding / Stratex • Strategy Formulation

3 ALIGN THE ORGANIZATION

TEST & ADAPT
6
Strategic Plan • Profitability Analysis
• Business Units
• Support Units performance measures • Strategy Correlations
• Strategy Map • Emerging Strategies
• Employees
• Balanced Scorecard
• Board of Directors
• Stratex

results
Operating Plan
MONITOR & LEARN
5
PLAN OPERATIONS
performance measures
4 • Key process improvement
• Sales Forecast
• Resource Requirements
• Strategy Reviews
• Operating Reviews
• Sales planning • Dashboards
• Resource capacity plan • Budgets
• Budgeting
results

EXECUTION
Process
Initiative
Align employees to strategy. Communicate “seven times seven
different ways”

Mr. Thomas Schmall, CEO of

Volkswagen do Brasil used the
strategy map when he addressed the
meeting of 400 senior managers. In
this way, he demonstrates his
personal commitment to using the
Balanced Scorecard as his strategy
management system.
The VWB BSC project team introduces a robot, “Giga,” as the brand
for the new strategy execution system.
GIGA congratulates a visitor to the VWB plant
about his understanding of the strategy.
Comic strips in the company newspaper feature GIGA discussing the
VWB strategy with employees
Employees use a Learning Map to analyze the VWB strategy and
competitive environment during 90 minute training sessions
Facilitators train 20,000 employees on the strategy’s “Learning Map”
VW do Brasil employees study the strategy map
between assembling cars.
The monitor plays a 70 second tutorial about some aspect of the VW
do Brasil strategy.
The Eight Step Process for Leading Successful Change:
John Kotter, Leading Change (Harvard Business Press).

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for Achieving It

4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

Stage 4 of the Management System: Plan Operations

2
TRANSLATE THE STRATEGY DEVELOP THE STRATEGY 1
• Strategy Map / Themes • Mission, Values, Vision
• Measures / Targets • Strategic Analysis
• Initiative Portfolios • Strategy Formulation
• Funding / Stratex

TEST & ADAPT 6

3 ALIGN THE ORGANIZATION
• Profitability Analysis
• Business Units Strategic Plan
• Support Units performance measures • Strategy Correlations
• Strategy Map • Emerging Strategies
• Employees
• Balanced Scorecard
• Stratex

results
Operating Plan
MONITOR & LEARN 5
4 PLAN OPERATIONS
• Sales Forecast performance measures • Strategy Reviews
• Key process • Resource Requirements • Operating Reviews
improvements • Dashboards
• Dashboards • Budgets
• Budgeting
results

EXECUTION
Process
Initiative
Empower Others to Act on the Vision and Strategy
Align all organizational units and employees to the strategy.

Scorecard Cascade

Headquarters Scorecard

Shared Services

Business and
Regional Units

Departments

Teams &
Individuals
Dashboards articulate the critical link between strategy management
and operations management.

Cause-and-Effect Model Web-based Dashboard of

Strategy Map metrics used to manage a
of Each Key Process
Key Process

THEME linked to
PROCESS
PROCESS linked to
METRICS
PROCESS supports METRICS improve
THEME PROCESS

Identify operational processes key to executing strategy and manage those

processes with frequent feedback on dashboard KPIs
VW do Brasil posts a dashboard of operational indicators on the wall
of its assembly plant
A display of Top 500 dealer performance indicators is posted in the
hall of VWB’s senior executive office suite.
The Eight Step Process for Leading Successful Change:
John Kotter, Leading Change (Harvard Business Press).

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for Achieving It

4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

VWB recognizes employees for outstanding local projects aligned to
Balanced Scorecard objectives

More than 3,000 local projects

enrolled for driving operational
improvements.
The Eight Step Process for Leading Successful Change:
John Kotter, Leading Change (Harvard Business Press).

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for Achieving It

4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

Stage 5 of the Management System: Monitor and Learn

2
TRANSLATE THE STRATEGY DEVELOP THE STRATEGY 1
• Strategy Map / Themes • Mission, Values, Vision
• Measures / Targets • Strategic Analysis
• Initiative Portfolios • Strategy Formulation
• Funding / Stratex

TEST & ADAPT 6

3 ALIGN THE ORGANIZATION
• Profitability Analysis
• Business Units Strategic Plan
• Support Units performance measures • Strategy Correlations
• Strategy Map • Emerging Strategies
• Employees
• Balanced Scorecard
• Stratex

results
Operating Plan
MONITOR & LEARN 5
4 PLAN OPERATIONS
• Sales Forecast performance measures • Strategy Reviews
• Key process improvement • Resource Requirements • Operating Reviews
• Sales planning • Dashboards
• Resource capacity plan • Budgets
• Budgeting
results

EXECUTION
Process
Initiative

46
Stages 6 of the Management System: Test, Learn, and Adapt

2
TRANSLATE THE STRATEGY DEVELOP THE STRATEGY 1
• Strategy Map / Themes • Mission, Values, Vision
• Measures / Targets • Strategic Analysis
• Initiative Portfolios • Strategy Formulation
• Funding / Stratex

TEST & ADAPT 6

3 ALIGN THE ORGANIZATION
• Strategy Correlations
• Business Units Strategic Plan
• Support Units performance measures • Emerging Strategies
• Strategy Map
• Employees
• Balanced Scorecard
• Stratex

results
Operating Plan
MONITOR & LEARN 5
4 PLAN OPERATIONS
• Sales Forecast performance measures • Strategy Reviews
• Key process improvement • Resource Requirements • Operating Reviews
• Sales planning • Dashboards
• Resource capacity plan • Budgets
• Budgeting
results

EXECUTION
Process
Initiative
7. Sustain the Effort: Produce Still More Change
Continually Test and Adapt the Strategy
The Strategy Test and Adapt the
Financial
Perspective
Strategy
Customer
Perspective

• Are the data consistent

Internal
Perspective
with our strategic
hypotheses?
update the Learning
Perspective incorporate • Has the environment
strategy learning changed in a
fundamental way?
Strategy Learning Loop • Have new strategic
options emerged?
Balanced Scorecard
Financial

Strategic Objectives Strategic Measures

Financially Strong
Return of Capital Employed

Delight the Consumer
Mystery Shopper Rating
Strategy Review Questions
Cust

Win-Win Relationship
Dealer/Pioneer Gross Profit Split

Safe & Reliable
Manufacturing Reliability Index

corrections result • Why did we miss the target?

Internal

Days Away from Work Rate

Competitive Supplier
Laid Down Cost vs. Best Competitive
Ratable Supply
• What correcting actions should
L&G

Motivated & Prepared
Strategic Competency Availability

we consider?
• Are initiatives on schedule?
Strategy Review Loop
• Do you need more resources?
Performance • Would an multi-functional task
force help?
Initiatives & Programs
input output
48
The Eight Step Process for Leading Successful Change:
John Kotter, Leading Change (Harvard Business Press).

1. Establish a Sense of Urgency

2. Form a Powerful Guiding Coalition

3. Create the Vision for Change and a Strategy for Achieving It

4. Communicate the Vision and Strategy

5. Empower Others to Act on the Vision and Strategy

6. Produce Short-Term Wins

7. Sustain the Effort: Produce Still More Change

8. Institutionalize the New Culture

8. Institutionalize the New Culture: A New Strategy Management
Office Coordinates the Six Stage Management System
1
2 TRANSLATE THE DEVELOP THE
STRATEGY STRATEGY
• Mission, Values,
• Strategy Map / Vision
Themes • Strategic Analysis Plan the Strategy:
• Measures / Targets • Strategy
• Initiative Portfolios Formulation
• Funding / Stratex Develop, Translate and
6
Align
TEST & ADAPT
3
ALIGN THE
ORGANIZATION • Profitability
(Stages 1-3)
Strategic Plan Analysis
performance measures • Strategy
• Business Units • Strategy Map Correlations
• Support Units • Balanced
• Emerging
• Employees Scorecard
Strategies
• Stratex

results 5
MONITOR & LEARN
4 Operating Plan
PLAN OPERATIONS
performance measures
SMO
• Key process • Sales Forecast • Strategy Reviews
improvement • Resource • Operating Reviews
• Sales planning Requirements
• Resource capacity plan • Dashboards
• Budgeting • Budgets

Execute the Strategy:

results Link to Operations,
Monitor, Learn and Test
EXECUTION

Process (Stages 4-6)

Initiative
VW do Brasil established a new Strategy Management Office

Strategy/BSC Committee

T. Schmall / J.-F. Senn / C. Isensee

Strategy BSC
Formulation Management
O. Garcia C. Davies

BSC Team

Presidency HR & Finance Operations Sales & Supply Product Product

Organization Marketing Development Planning

Quality Government Legal Corporate Kaizen Autovision Environment

Information
Assurance Affaris Affaris Affairs and
Technology
Press Relations
G. Merendi H. Araujo E. Barros
Volkswagen do Brasil Performance Improvements

2006
Measure (pre-BSC) 2008 2010

Revenue (billions) € 5.2 € 7.0 € 9.2

Profit before taxes (index) 100 443 425

Return-on-Investment 100 900 462

Domestic Sales units 413,000 585,000 697,000

Production (units) 594,000 717,000 825,000

Market share (autos) #2 #1 #2

Employee engagement index 100 200 230

Executive engagement 100 600 680

Leadership and Strategy Execution

QUESTIONS?