CASE STUDY: FINDING GOLD IN THE MOUNTAINS

Over a period of two years, John Shuttleworth introduced and supported a process for all 22 management teams in Philips Worldwide to underpin strategy setting and business planning.

‘We are working in a different way with our strategy’, he says. ‘But at the end of the day we are all looking for the full potential in our business.

With SCORE we analyse the business drivers and then work bottom up to forecast the outcomes. We can then clearly quantify the gap with top down targets that have been set.

The teams then use their knowledge, experience and creativity to identify potential scenarios. Once the scenarios have been assessed for their impact on profitability, we finalize the strategy reaching a consensus and ownership the plan.

Further alignment has been achieved because it is now accepted that the first year of the strategy plan forms the framework for the following year’s budget. This will save much discussion and time in the later part of each year.’

Finally, the plan can be expressed in the form of Business Balanced Scorecards aligns perfectly with the Philips Business Excellence approach.

SCORE takes a management team through an eight step process, starting with creating awareness about the business environment, competitor behaviour, the market, technology and product road maps.

Analysis is done during a two days workshop. In this workshop we start with information gathered and discuss the possibilities to generate more income,’ explains Mr. Shuttleworth.

These possibilities, or “scenarios”, are fully assessed and some will be selected during the ‘SET THE STRATEGY’ workshop.

The process includes the formal steps of building the balanced scorecard to monitor and control deployment and realization of the strategy; and the communications plan in the form of the Strategy Review document.

The process is owned by the business manager and supported with a comprehensive simulation tool. Built on historical data, the tool allows the results of decisions or scenarios to be modelled for up to 4 years into the future.
SCORE was co-developed working in conjunction with Mercer Management Consulting under the sponsorship of Philips President, Adri Baan.

By the second strategy review round, SCORE was simplified and deployed as an entirely internal Philips process.

Experience shows that it works best as a facilitated process, a role that John Shuttleworth has taken with the majority of teams, especially those undertaking SCORE for the first time. ‘The picture of the business builds up - like solving a jigsaw - as we analyse the organisation bit by bit. All aspects on costs are reviewed and allocated as closely as possible to the drivers. Scenarios which could help to make more money come from looking more closely at existing revenues and from exploring new possibilities and business models. In the end, the workshops help them define and underpin business strategy. Managers who have worked with SCORE become coaches in the true sense of the word, for other groups and in deploying in practice the outcomes of the workshops.’

The SCORE approach assists in linking strategy and budget. The early adopters demonstrated that this was possible and it was implemented throughout with the complete coverage of SCORE. This ensures strategy gets deployed. A further benefit of SCORE is that it delivers a business balanced scorecard.

SCORE is helping Philips to address the feeling amongst financial analysts that Consumer Electronics may not have been performing to its full potential. In this way, SCORE, with its combination of analysis and scenario working, is helping to identify and unlock this potential…those ‘nuggets of gold’ that would otherwise lie undiscovered in the mountain.

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