Corporate Storyboard

Company Profile Selected Statistics

Rolls-Royce, the second-largest aircraft engine maker in the • FY2004 Revenue: £5.9 Billion
world, manufactures, sells, and supports gas turbine engines
and ancillary equipment for aircraft and for industrial and • FY2004 Earnings: £204 Million
marine applications. • FY2003 Employees: 35,200

Source: http://www.hoovers.com; http://global.factiva.com; “Rolls-Royce

Group plc Final Results,” Press Release (10 February 2005).

85
 Building Support for Change 86

Difficulty in Engagement
• To maximize decision speed, and due to the defense- CSB View
related sensitivity of some of the detail, Rolls-Royce limits
participation in corporate strategy development. Target different-in-kind communications to a “critical middle” manager
layer that controls day-to-day resource allocation but is not personally
• Restricted access to planning and a commercially and involved in strategy development.
military-sensitive document means that the heads of strategy
are limited in their ability to engage business leaders.
• As a consequence, many communications are essentially
public relations–based and fail to sufficiently engage top
managers, negatively impacting the quality of strategy
execution and understanding.
• This has limited impact on a day-to-day basis, since the
strategy for such a long-cycle business generally evolves
slowly, but over time this leads to uncertainty about strategic
direction.
 Trading Off Decision Speed and Engagement
Companies observe diminishing returns to decision-
making effectiveness as group size increases…
Trade-Off Between Decision Speed and Engagement
Illustrative
…but often fail to engage the broader organization
with broadcast communication methods
Failure Points of Broadcast Communication
Illustrative

Number of Strategy Development Participants

Broadcast Message

Many Few

Pros Many people engaged Fast decision speed Prepackaged One-Way Generalized
Overly “crafted” Few opportunities for Strategy framed in
Cons Slow decision speed Failure to engage corporate message direct interaction with broad enterprise
the managers key for causes message strategy developers context without
successful execution recipients to tune out leaves real questions connection to unit-level
unanswered initiatives

The Downside of Not Having Losing the Troops

Everyone in the Room
“We used to call the Corporate Strategic Plan the ‘Corporate Secret
Plan’ and produced only a handful of individually numbered copies.
If you didn’t have a copy, it was difficult to understand corporate
strategy, let alone how to execute it.”
Senior Executive
Rolls-Royce plc
“A CEO talking corporate strategy to a room of 100 middle managers
risks that people will not march when directed and will not make
necessary trade-offs in the moment when obstacles arise.”
Senior Executive
Rolls-Royce plc

Source: Rolls-Royce plc; Corporate Strategy Board research.

Corporate Storyboard 87
 Building Support for Change 88

The Power of a Story

• To engage top managers in major changes to strategy, CSB View
Rolls-Royce reserves an entire room for a period of a few
months at the corporate headquarters (designated the Discuss rejected strategic alternatives and detail the cross-silo strategic
“CEO Room”) to present the story of how the executive themes to managers responsible for executing a corporate strategy, but
whose roles lack an enterprisewide perspective, to improve understanding,
team developed current strategy.
cultivate support, and surface unanticipated issues requiring resolution.
• Facilitating debate with groups of 6 to 10, the strategist
discusses the evolving background to the company’s strategic
position as well as strategy alternatives considered but not
chosen in the form of a story, lifting the veil of secrecy often
surrounding the strategy process.
• Most participants attend the CEO Room, elevating the
importance of the storyboard; however, in some instances, a
mobile version is used to reach global locations.
• Rolls-Royce also uses more traditional strategy
communication methods, such as performance dashboards,
business plan alignment and deployment systems, and
incentives, to supplement the storyboard.

Form and Substance

“The storyboard gives you the total story—where everything fits in, the detail, whether it is a weak
point or a strong point, and whether the context is relevant to a tenth or a hundredth of the rest of the
story—all in the blink of an eye.”
Chris Marshall, Head of Strategy Development,
Civil Aerospace, Rolls-Royce plc
 Pulling Back the Curtain
Significant investment in a different-in-kind method …engages Rolls-Royce’s 300 middle managers
to communicate major strategy shifts… in the story of how strategy was developed
CEO Room with Corporate Storyboard
Chapter: The Story to Date 1 Revealing Alternatives
Rolls-Royce plc
Unveiling the “paths not taken” provides
Chapter I Chapter II Chapter III
Ch a p t insight into the executive decision-making
er I V process.
Ch a p t
er V
Ch a p t
er V I

Chapter: Creating Growth— 2 Facilitating Debate

What Could We Do?
Strategists and participants challenge each other
The story is divided to think differently about company strategy,
into five to six “walk- provoking unscripted discussion; unresolved
away” themes. issues are catalogued on Post-It notes.

Traditional Strategy Rolls-Royce Strategy

Communication Communication
• Large groups (100+) • Small groups (6–10) Chapter: Service—Where Have We 3 Showing Where You Fit
Got to, and Where Are We Going?
• 5–6 presentations • 50–60 presentations Putting individual’s activity in the context
• One-hour sessions • Three-hour sessions of what others are doing illustrates non-
Supply Chain obvious impact on strategy.
• 15 minutes of Q&A • Structured conversation Impact on
Solutions
• Linear sequence • Non-linear format Strategist guides conversation to the most relevant
parts of the story for each group, drawing on unit-
level anecdotes to personalize the storyboard.

Source: Rolls-Royce plc; Corporate Strategy Board research.

Corporate Storyboard 89
 Building Support for Change 90

Expanding the Services Horizon

• In 2001, storyboard participants from across functions focus
intensely on the “services” slide in the storyboard; attention
to this less-developed part of the Rolls-Royce business model
signals a demand for a change in strategy of the underlying
businesses.
• In response, the 2002 storyboard tells the complete story of
service initiatives across the organization.
• The services storyboard shores up enterprise-wide support
for a corporate services organization to coordinate cross-
enterprise operations for customer service, implement
common standards, and share best practices.
• The power of the storyboard drives a significant increase
in demand for strategy group support from across the
organization.
 A Story with Impact
The storyboard impacts top-line performance… …and promotes the strategy
group’s visibility within the organization
Storyboard Impact on Corporate Strategy Development Benefits to the Strategy Group
Rolls-Royce plc Rolls-Royce plc
Storyboard Services Organization
2002 Late 2002
Chapter: Services Civil Engagement with Senior Executives
Aerospace
Marine
Issues Log
Issues collected from storyboard sessions provide
Issues Log
Services
Org •
• new information to engage senior team on next-
Defense
Aerospace •
• generation strategy
Energy Strategy group asked by CEO to kick off
annual senior planning meeting with review of
critical issues surfaced

Engagement with Business Units

Business units use storyboards as an impromptu
brainstorming session
Requests for strategy group involvement with
The creation of a …reveals the need for business units increase four to five times from
comprehensive picture cross-functional oversight of requests in 2000
of services efforts services initiatives to ensure
enterprise-wide… execution success.

Service Results
• Revenue from services increases 14% from 2003 to 2004
• Services accounts for 55% of total sales in 2004, up from
50% of total sales in 2003

Source: Peter Barnes-Wallis Address to Shareholders, “Power Systems and Services for
Land, Sea, and Air,” (2005); Rolls-Royce plc; Corporate Strategy Board research.
Corporate Storyboard 91