Presentation material for begining module.ppt

AROUSALAROUSALAA RReal eal OOrganisational rganisational UUnit nit SSimulated imulated AAs s LLifeife

IImproving the Competitivenessmproving the Competitivenessof A UK Construction Companyof A UK Construction Company

Steve Male & Krisen MoodleySteve Male & Krisen MoodleyUniversity of LeedsUniversity of Leeds

&&Sue ArmstrongSue Armstrong

University of SheffieldUniversity of Sheffield

THE KEY TO SUCCESSFUL THE KEY TO SUCCESSFUL BUSINESS STRATEGIES AND BUSINESS STRATEGIES AND

IMPROVING THE FIRMIMPROVING THE FIRM

Objective of PresentationObjective of Presentation

Provide a Framework To Assist Developing Provide a Framework To Assist Developing Integrated Business Strategies In A Structured Integrated Business Strategies In A Structured Way Using a Construction Business Simulation Way Using a Construction Business Simulation

PackagePackage

Transfer Lessons From a Business Simulation – Transfer Lessons From a Business Simulation – AROUSAL – into Real LifeAROUSAL – into Real Life

The Construction Business ChainThe Construction Business Chain

Client Design Team Main Contractor On Site Production

Suppliers & Sub Contractors

The Board of Directors

AROUSALAROUSAL

You will be set up as a Board of DirectorsYou will be set up as a Board of Directors You will need to analyse where the You will need to analyse where the

contracting company is nowcontracting company is now You will need to analyse where the You will need to analyse where the

company needs to be over the next three company needs to be over the next three months, twelve months and two yearsmonths, twelve months and two years

You will need to make a range of decisions You will need to make a range of decisions on various components of the firm and on various components of the firm and enter them into the simulation softwareenter them into the simulation software

The Decision AreasThe Decision Areas

Analyse the external marketAnalyse the external market Which clients?Which clients? Which projects?Which projects? Which locations?Which locations? Which services do we want to offer?Which services do we want to offer?

Traditional procurement, design and build etcTraditional procurement, design and build etc Civil engineering – which types of technologyCivil engineering – which types of technology Buildings – which types of technologyBuildings – which types of technology

What is our financial situation?What is our financial situation?


What are we good at – where are our core What are we good at – where are our core competencies?competencies?

What are we not good at?What are we not good at? Where do we make a profit?Where do we make a profit? What projects should we bid on?What projects should we bid on? How are our staff performing?How are our staff performing? How good is our marketing?How good is our marketing? How good is our estimating?How good is our estimating? Are we structured correctly?Are we structured correctly?

The Decision AreasThe Decision Areas How good is our site management and on How good is our site management and on

site production?site production? Is it better for some projects than others?Is it better for some projects than others? Why?Why?

Have we got good staff, are we paying Have we got good staff, are we paying them enough, are they satisfied, should them enough, are they satisfied, should we recruit better staff, should we sack we recruit better staff, should we sack some from the firm?some from the firm?

What is the competition up to?.What is the competition up to?. How good are we against them?How good are we against them? How could we become better?How could we become better? Which projects, which clients, which locations?Which projects, which clients, which locations?


What is our vision for the company?What is our vision for the company? What is our business strategy?What is our business strategy?

In the short term – 3 monthsIn the short term – 3 months In the medium term – 12 monthsIn the medium term – 12 months In the long term – 24 months and In the long term – 24 months and

beyondbeyond What can go wrong and why?What can go wrong and why?

Core Competencies: Core Competencies: What are we good at?What are we good at?

Core competencies – skills and knowledge Core competencies – skills and knowledge which can exist in a number of places in a firmwhich can exist in a number of places in a firm

They give a firm an edge over the competitionThey give a firm an edge over the competition The firm could be good at particular types of The firm could be good at particular types of

projectsprojects The firm could be good at working for The firm could be good at working for

particular types of clientsparticular types of clients The firm could be good at working in particular The firm could be good at working in particular

locationslocations

WHERE ARE OUR CORE WHERE ARE OUR CORE COMPETENCIES?COMPETENCIES?

Board of Directors

WHAT IS OUR STRATEGY?

Which Clients – Why?

Which Locations – Why?

Which Projects – Why?

STRATEGY FOR THE FUTURE

STRATEGY NOW

Core Competencies: Core Competencies: What are we good at?What are we good at?

Other examples could include:Other examples could include: Core knowledge and skills in estimatingCore knowledge and skills in estimating Core knowledge and skill in managing on Core knowledge and skill in managing on

site productionsite production Core knowledge and skills in knowing Core knowledge and skills in knowing

what to purchase and whenwhat to purchase and when Core knowledge and skills in particular Core knowledge and skills in particular

types of technical and logistical projectstypes of technical and logistical projects

In order to make decisions in these areas In order to make decisions in these areas you will need a framework to help you you will need a framework to help you think through the issues, come up with think through the issues, come up with

options and implement them in the options and implement them in the simulation packagesimulation package

As in real life there are no right or wrong answers – As in real life there are no right or wrong answers – only shades of grey. You will need to balance the only shades of grey. You will need to balance the evidence, facts and discussions when you make evidence, facts and discussions when you make

your choices. your choices.

The next series of slides will provide you with a The next series of slides will provide you with a series of models and a framework to help you series of models and a framework to help you

make choices. make choices.

BALANCING THE SCALES OF STRATEGYBALANCING THE SCALES OF STRATEGY

Understand The Firm’s

Current Situation

Understand the Firm’s Potential Future

Situation

Time

THE BASICS OF BUSINESS STRATEGY

Understand Current

Situation

Potential Future

Situation

Time

Use a Diagnostic Framework

Where are we now?

What do I need to change?

Why?


Understand Current

Situation

Potential Future

Situation

Time

Diagnostic Framework

Where do you want to go?

Where are you now?

Vision


Why?


Understand Current

Situation

Future Situation

Time


How do I get there?

How do I measure performance and improve performance?

Where, why, how?


Vision

Strategy

Why?


Where are you now?


Why?

Industries and MarketsIndustries and Markets

Positioning the Contracting Positioning the Contracting Firm Against the CompetitionFirm Against the Competition

Use Techniques for AnalysisUse Techniques for Analysis SWOT SWOT

Strengths, Weaknesses, Opportunities, ThreatsStrengths, Weaknesses, Opportunities, Threats Competitor Analysis – who, where, why, Competitor Analysis – who, where, why,

when?when? Boston Matrix, which projects fall into the Boston Matrix, which projects fall into the

following:following: Cash cows – good for cash flowCash cows – good for cash flow Dogs – Loosing money: DivestDogs – Loosing money: Divest Stars – will need investment but can become Stars – will need investment but can become

cash cows in the futurecash cows in the future ? – watch and decide? – watch and decide

Porter’s Five ForcesPorter’s Five Forces

INDUSTRY STRUCTUREAND

RESTRUCTURING

MARKETPRESSURES- Five Forces

PROJECTTECHNOLOGIES AND

DRIVERS

Power of Clients

Rivalry between Competitors

SubstituteMaterials

New EntrantCompanies

Civil Engineering

THE NEEDTO CHANGE

Simple & Routine

Power of Suppliers

Building Engineering

Complex & Specialist

Time Pressures/Urgency

High Value/Low Value

HIGHADDED VALUE

HIGHVOLUME

Engineering Specialists Simple & Routine

Stay Local

INDUSTRY STRUCTURE &

RESTRUCTURING

Complex & SpecialistProjects

May need to Travel

POSSIBLE STRATEGIES?

Bid Low Cost

COMBINATION

The European Business The European Business Excellence ModelExcellence Model

The Business Excellence model provides The Business Excellence model provides a framework for thinking through where a framework for thinking through where the success or failure of a firm might liethe success or failure of a firm might lie

It gives weightings to certain It gives weightings to certain componentscomponents

It sees some components as enablers to It sees some components as enablers to successsuccess

It sees other components as outcomes It sees other components as outcomes or resultsor results

A Business Excellence ModelA Business Excellence ModelEuropean Quality Foundation ModelEuropean Quality Foundation Model

Leadership

10%

Processes

14%

Business

Results

15%

People

Management

9%

Policy &

Strategy

8%

Resources

9%

People

Satisfaction

9%

Customer

Satisfaction

20%

Impact on

Society

6%

Enablers 50% Results 50%

Leadership describes the behaviour and example set by all the people with a responsibility for leading others within the firm. Policy & Strategy describes how the principles of

business excellence form the basis of the plans and actions to which everyone can contribute, and how we ensure that the relevance of these plans are reviewed and improved.

Resources describes how we maximise the use of resources available to us. These include finance, materials, buildings, equipment, information and and technology. Under this enabler we also consider how we develop and manage supplier and sub contractor relationships.

People Management describes how we identify, plan and realise the full potential of the people who work in our firm.

Processes describes how we identify and improve the business processes by which we operate. It asks us to consider how we manage these processes, review their performance and improve

Enablers

Customer Satisfaction asks if we are satisfying our customers and how we know if we are. We are asked to look at feedback from our customers and show in measurable terms the customers’ view of us. We examine any internal data we have relating to customer satisfaction.

Impact on Society examines how the firm affects the surrounding community, the environment at large and how its actions are perceived.

People Satisfaction examines what we are achieving in terms of the satisfaction of those who work in the firm? What measures do we have for this and how good are the results?

Business Results covers what the firm is achieving in relation to its planned performance in terms of both financial and non-financial measures. The latter may include areas such as market share, process capability, cycle times, staff motivation

Results

The Next Series of Slides The Next Series of Slides Provides a More Provides a More

Comprehensive Framework Comprehensive Framework that can be used with the that can be used with the

other Management Modelsother Management Models

A Diagnostic FrameworkA Diagnostic Frameworkfor a Firmfor a Firm

How Can The How Can The Framework Help?Framework Help?

Assists managers to think through Assists managers to think through and structure causes and effects that and structure causes and effects that can impact the companycan impact the company

Assists managers to look at Assists managers to look at interactions and linkages between interactions and linkages between the various components of the the various components of the companycompany

Assists managers to target areas for Assists managers to target areas for change and improvementchange and improvement

A Diagnostic FrameworkA Diagnostic Framework

Structure Style

ResourcesProcesses

Strategy

Vision

Systems


Structure

ResourcesProcesses

•Vision•Business plans•Market Analysis•Competitor Analysis•Core Competencies

Strategy

Vision

SystemsStyle


Structure

ResourcesProcesses


•Leadership•Culture•Impact on Individuals

Strategy

Vision

SystemsStyle


Structure

ResourcesProcesses

•Quality•Safety•External Relations•Co-ordination•Planning



Strategy

Vision

SystemsStyle


Structure

ResourcesProcesses•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management




Strategy

Vision

SystemsStyle


Structure

ResourcesProcesses•People - core skills•Technology•Finance•Facilities



Strategy

Vision

SystemsStyle

•Selling/Marketing•Design•On site Production•Purchasing/procurement•Financial Management



Structure

ResourcesProcesses

•Ownership•Subsidiaries•Organigrams•Roles & Responsibilities

•People - core skills•Technology•Finance•Facilities



Strategy

Vision

SystemsStyle




Structure Style

ResourcesProcesses





Strategy

VisionExternal Environment

Systems




Structure Style Systems

ResourcesProcesses





Strategy


Performance Measures



The Constituent Parts of the Framework

Vision…. is the purpose and future direction of the company.

Where does it want to be, why does it exist

Vision can be set by the Chief Executive, the Managing Director or by a Board of Directors

It can be shared throughout a firm or remain at Director level

Strategy…..is the implicit or explicit means by which

management allocate resources to achieve the objectives of the company and guide

the company’s behaviour over the long term towards its vision

Put simply it is how the companygets from A to B over time

StyleThe nature and “personality” of the organisation - how people behave in the firm to achieve the

firm’s objectives and vison – “the way we do things around here”

Leadership… is the capacity to mobilise, in competitionor conflict, someone who is prepared tofollow. There are a range of leadership styles:autocratic, democratic etc.

CultureThe shared values and beliefs of the membersof the firm

IndividualsThe behavioural traits and motivationalneeds of the members of the company

SystemsThe procedures, reports and routinised processes

that define the operations and supportthe competitive processes of the firm

QualitySystems to assists achievingthe level of quality required bythe customer and reducing theoccurrence of errors.

Safety Systems for minimisingaccidents and harm at work.

External RelationsThe policies and procedures that governinteraction with external organisations, e.g. clients, professional teams and project sponsors. Ensuring customer satisfaction

Co-ordinationSystems that overview projectprocesses and achieve co-ordinationof single and multiple projects.

PlanningScheduling single and multiple projects.

FinancesManaging the financesof the firm, and, single and multiple projects.

Processes… are a series of linked activities

that add value to inputs to create outputsfor the customer

Selling/MarketingCreating opportunities for profit bywinning project orders where the price allows thepotential to make a profit.

DesignCollection and creationof all the informationrequired to detaila project for production

Purchasing/ProcurementProviding the materialinputs for production

On-Site ProductionConverting information andmaterials to assembled components to produce the final product on site

Resources… the assets a firm usesto conduct its business

PeopleThe staff (and their skills)thatmake up the firm, one of thekey resources of a company.

TechnologyThe equipment, hardware and software systems usedby the firm. It can also refer to the types of project that a firm is good at doing

FinanceThe financial basis ofthe company; cashflow,debts and assets.

FacilitiesThe physical assets ofthe company; offices,location etc.

Structure… is the formal and informal co-ordination and linkages

between activities in the company

OwnershipThe nature of the financialstakeholders of the firm.

SubsidiariesDivisions and companieswithin a large firm

OrganigramsThe organisation’s hierarchicalstructure that set out the roles and responsibilities ofpeople

Roles & ResponsibilitiesThe allocation of tasks to peoplewithin a firm

The Diagnostic FrameworkThe Diagnostic Framework


ResourcesProcesses





Strategy





The Influence of TimeThe Influence of Time


ResourcesProcesses


•People -core skills•Technology•Finance•Facilities



Strategy


Operational/TacticalShort and medium term strategies

StrategicLong term strategies




Strategic FlexibilityStrategic Flexibility

A firm needs to have the capability A firm needs to have the capability to be flexible over time and survive to be flexible over time and survive through expansion and recessionthrough expansion and recession

SummarySummary

Understand Current

Situation

Future Situation

Time


How do I get there?

How do I measure performance and improve performance?


Vision

Strategy

Why?


Where are you now?


Why?

The Influence of TimeThe Influence of Time


ResourcesProcesses


•People -core skills•Technology•Finance•Facilities



Strategy


Operational/TacticalShort & Medium Strategies

StrategicLong term strategies




Presentation material for begining module.ppt

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