Strategic Planning at the Deutsche Bundesbank

Transcription

1 Strategic Planning at the Deutsche Bundesbank

2 Agenda General remarks on strategic planning and strategic management Strategic framework Strategy development Where are we now? Strategic Planning at the Deutsche Bundesbank

3 Role of strategic planning unit C Controlling, Accounting and Organisation C 1 Corporate Controlling and Strategic Planning C 2 Accounting C 3 Organisation. Strategic Planning Strategic Planning at the Deutsche Bundesbank

4 Role of strategic planning unit The strategic planning unit supports Executive Board in planning the strategy for the Bundesbank and in reaching organisational objectives clearly communicates strategy and objectives internally and externally makes efficiency analysis to safeguard and improve quality and minimise risks reports on essential bank projects to Executive Board coordinates all kinds of organisational issues reviews planned operational measures for preceding period (budget/performance analysis) and reports on operational planning for forthcoming year Using our reports as a basis, Executive Board decides on long-term orientation of the Bundesbank. Strategic Planning at the Deutsche Bundesbank

5 Strategic instruments Strategy development and review 1. Formulate a strategy for the Bundesbank as a whole, taking into account the results of the SWOT analyses; derive concrete strategic objectives and determine development targets; draw up a strategy map 2. Review the strategic parameters Targeted measures analysis from a strategic point of view Translate strategic objectives into concrete operational measures (prepare related decisions, evaluate business unit-specific policy considerations, implement strategic decisions of the Executive Board), viewed on an annual and multi-year basis SWOT analysis Evaluate information about opportunities and threats as regards the Bundesbank (market developments, European developments, legislator activities) as well as strengths and weaknesses of the Bundesbank in individual business areas Strategic Planning at the Deutsche Bundesbank

6 Agenda General remarks on strategic planning and strategic management Strategic framework Strategy development Where are we now? Strategic Planning at the Deutsche Bundesbank

7 Objectives of a central bank?! Fulfilment of tasks Cost effectiveness Risk mitigation Strategic Planning at the Deutsche Bundesbank

8 Bundesbank s planning structure Mission Statement Strategic Intents Organisational Principles of the Eurosystem Goal and value planning of the Eurosystem Strategic business line planning Organisational planning Strategic management of Bundesbank Operational controlling instruments Cost accounting Organisational analyses Personnel assessment procedure Operational management of Bundesbank Strategic Planning at the Deutsche Bundesbank

9 Mission of the Eurosystem INTENTIONS Maintenance of price stability Safeguard Financial stability Promotion of the European financial integration OBJECTIVES Credibility Trust Transparency, accountability und effective communication PRINCIPLES Decentralisation Good Governance Effectiveness and efficiency in a spirit of cooperation and teamwork Shared identity Strategic Planning at the Deutsche Bundesbank

10 Agenda General remarks on strategic planning and strategic management Strategic framework Strategy development Where are we now? Strategic Planning at the Deutsche Bundesbank

11 Five core business areas Deutsche Bundesbank Safeguarding stability Cash management Financial and monetarysystem Monetary policy Banking supervision Payment systems Efficient cash supply and infrastructure Stable financialand monetary system PRICE STABILITY in the euro area Functioningofof German credit and financial services institutions Security and efficiencyof payment and settlement systems International cooperation / membership in international bodies Research / economic policy analysis Strategic Planning at the Deutsche Bundesbank

12 Strategy development process Analysis of Strategic Specifiying SWOT-results and operat. objectives, evaluation based specification of activities and on SWOT analysis strat. objectives indicators SWOT-workshops with all 14 departments Information gathering High-level workshops to analyse the SWOT-results, determine strategic intents and objectives, arrange objectives in strategy map Specifying operational objectives Working out strategic activities as well as indicators to controll the implementation of the strategy Decision by Executive Board Executive Board discussions and decisions Strategic Planning at the Deutsche Bundesbank

13 SWOT analysis Internal perspective Strengths Weaknesses Analysis of External perspective Opportunities Threats Strategic Planning at the Deutsche Bundesbank

14 Analysis of SWOT results and specification of objectives - strategic filter Strategic relevance Would accomplishing the objective really represent a decisive step towards longterm success of the Bank? Only important in the case of deviations (exceptional report, diagnostic element) The few decisive objectives on which the success of the strategy depends Low priority Selective attention Strategic need for action Is extra effort necessary to accomplish or defend the objective in the face of resistance? Strategic Planning at the Deutsche Bundesbank

15 Strategy map Addressees Price stability in the euro area Stable financial and monetary system Systematically reinforce influence at international levels Safeguarding stability Stability and functioning of credit and financial services institutions in Germany Efficient cash supply and infrastructure Communicate clearly internally and externally Security and efficiency of payment and settlement systems Publicly comment on economic topics Processes Continuously combat bureaucracy Tailor supply of services more closely to demand Network knowledge Bankwide to exploit synergies Finances Optimise operational cost-efficiency Ensure targeted resource management Potentialities Offer attractive, performanceoriented employment conditions Embrace and actively manage change process Foster adequate pool of knowledge and know-how Intensify research and analysis Strategic Planning at the Deutsche Bundesbank

16 Specify measures/ tasks/activities to achieve the objectives Compilation of previous results in objective sheets Name of objective description of the objective operational objectives current measures / tasks / activities to achieve the strategic objective new measures / tasks / acitivities indicators Strategic Planning at the Deutsche Bundesbank

17 Indicators for achieving objectives For each strategic objective at least one indicator Mixture of qualitative indicators (internal or external assessment) and quantitative indicators (e. g. from business statistics) Deutsche Bundesbank uses: - 40 quantitative indicators - 20 qualitative indicators Traffic light approach for management reporting purposes Idea: Management is steering the Bank by means of a controlling-cockpit Strategic Planning at the Deutsche Bundesbank

18 Guiding ideas of new strategy Strategy 2012 Guiding ideas raising the Bank s profile continuing the consolidation process The aim is to raise the Bundesbank s profile as a stability-oriented, independent institution both in Germany and within the European System of Central Banks. (annual report) Strategic Planning at the Deutsche Bundesbank

19 Strategy development raising the bank s profile Refining strategic objectives Examples for further oper. objectives Core business area Monetary Policy Financial and Monetary System Banking Supervision Payment Systems Cash Management operational objectives Intensifying research in monetary policy Conducting more operational tasks for ESCB in relevant business areas Intensifying economic research High profile in international academic debates Extending analysis instruments (eg stress testing) Further development of regulatory framework Promoting European integration process Leading position in liquidity provision and transfer Bundesbank will remain in cash cycle Bundesbank strives for a 50% share in banknote processing Promoting ESCB recycling framework Strategic Planning at the Deutsche Bundesbank

20 Example for strategic objectives, operational objectives and activities Perspective: Addressees Strategic objective: Price stability in the Euro area Description of objective Our primary objective is to maintain price stability. The President of the Deutsche Bundesbank is a member of the Governing Council of the European Central Bank (ECB) and takes part in the monetary policy decision-making of the Eurosystem. The Bundesbank also contributes to monetary policy with in-depth academic analyses of macroeconomic developments and sound research results. Another of the Bundesbank s functions is to advise the Federal Government. Furthermore, the Bundesbank ensures that the monetary policy measures agreed are implemented in what is the largest economy in the European Union. It explains the aims of the single monetary policy of the Eurosystem to the German public and thereby promotes awareness of the need for price stability. Strategic Planning at the Deutsche Bundesbank

21 Example for strategic objectives, operational objectives and activities Strategic objective: Price stability in the Euro area Operational objectives (development goals) Example The Bundesbank plays a key role in the implementation of monetary policy for the euro area and therefore aims to take on joint operational tasks. It will also contribute to the further development of efficient instruments and management procedures in this context. Activities Example Assessment of collateral without market price (no ABS) for the Eurosystem (Valuation hub). Strategic Planning at the Deutsche Bundesbank

22 Strategy 2012 Linking strategic with operational planning Next strategic cycle Strategy Review 2012 PKR PIA Bord decision on Strategy Strategy Review 2008 PKR PIA Strategy Review 2011 PKR PIA PKR PIA Strategy Review 2009 Strategy Review 2010 Strategic Planning at the Deutsche Bundesbank

23 Strategy 2012 Linking strategic with operational planning Connecting the strategy with the operational management systems August December Operational planning for forthcoming year (incl. planning of needed financial and personnel resources) Integration of strategic and operational management in annual planning process Strategy 2012 Linking strategic with operational planning February/March Budget/performance analysis for preceding period April - June Strategy-Review: Evaluation of success of defined operational measures regarding strategic goals, if necessary strategy update Strategic Planning at the Deutsche Bundesbank

24 Three questions to evaluate the implementation status of the strategic objectives 1. Have all planned activities started / been implemented? If not, why? 2. Did the implemented activities achieve their strategic goals? Assessment could be supported with indicators. 3. Is there information about changes of the external or internal conditions that make it necessary to adjust the strategy? Strategic Planning at the Deutsche Bundesbank

25 Traffic light approach How do you assess the status of the sub-objectice? Justify your assessment by answering the following three questions. Assessment of current status: Red Decision of the Executive Board is required. Yellow Development needs monitoring; potential need for adjustments. Green Development according to plan; no need for action Strategic Planning at the Deutsche Bundesbank

26 Strategy map Addressees Price stability in the euro area Stable financial and monetary system Systematically reinforce influence at international levels Safeguarding stability Stability and functioning of credit and financial services institutions in Germany Efficient cash supply and infrastructure Communicate clearly internally and externally Security and efficiency of payment and settlement systems Publicly comment on economic topics Processes Continuously combat bureaucracy Tailor supply of services more closely to demand Network knowledge Bankwide to exploit synergies Finances Optimise operational cost-efficiency Ensure targeted resource management Potentialities Offer attractive, performanceoriented employment conditions Embrace and actively manage change process Foster adequate pool of knowledge and know-how Intensify research and analysis Strategic Planning at the Deutsche Bundesbank

27 Strategy map Addressees Price stability in the euro area Stable financial and monetary system Systematically reinforce influence at international levels Safeguarding stability Stability and functioning of credit and financial services institutions in Germany Efficient cash supply and infrastructure Communicate clearly internally and externally Security and efficiency of payment and settlement systems Publicly comment on economic topics Processes Continuously combat bureaucracy Tailor supply of services more closely to demand Network knowledge Bankwide to exploit synergies Finances Optimise operational cost-efficiency Ensure targeted resource management Potentialities Offer attractive, performanceoriented employment conditions Embrace and actively manage change process Foster adequate pool of knowledge and know-how Intensify research and analysis Strategic Planning at the Deutsche Bundesbank

28 Agenda General remarks on strategic planning and strategic management Strategic framework Strategy development Where are we now? Strategic Planning at the Deutsche Bundesbank

29 Where are we now? external communication External communication: five pillars of the Bundesbank to safeguard stability: public Strategic Planning at the Deutsche Bundesbank

30 Where are we now? Internal communication: Regional Offices Service Centres seminar events: Animating Strategy 2012 Branches Training for management personnel of regional offices (incl. service centres) and branches for locally implementation of Strategy 2012 Aims: Et al. improved comprehension of the strategy, preparation for strategy implementation Strategic Planning at the Deutsche Bundesbank

31 Conclusions Creation of a strategic management system is important for central banks Development of strategic and operational controlling instruments is ongoing task Close integration between strategic definitions/further developments and strategy implementation essential for successful management Strategic Planning at the Deutsche Bundesbank