BECOMING A STRATEGY-FOCUSED ORGANIZATION Presented by Paul Kenny Chief Executive Officer June 16, 2011
In 2010, MFG was inducted into Palladium Balanced Scorecard Hall of Fame for Executing Strategy We had the distinction of being the first Asia Pacific representative from the food & beverage industry 1
Who Are We Minor Food Group (MFG) is Thailand s largest QSR operator with a combined 33% share of the QSR market 100% owned subsidiary of Minor International, listed company on The Stock Exchange of Thailand Owns, operates or franchises more than 10 brands and a profitable system of 1148 restaurants, in 15 countries across Asia Pacific In 2010, MFG s system of company owned and franchised restaurants served more than 88 million customers and generated sales of THB21.4 billion 2
We were inducted for exemplifying these Strategy-Focused Organization principles 3. Align the organization to the strategy 2. Translate strategy to operational terms 1. Mobilize change through executive leadership 4. Motivate to make strategy everyone's job 5. Govern to make strategy a continual process 3
The change catalyst Thailand s financial crisis in 1997 Financial measurements as key performance measures were no longer enough 4
An eye-opener The Balanced Scorecard Ideas on how to translate strategy into actions Tested some ideas Confirmed the need for change
Securing top leadership buy-in Our top leadership team were convinced of the need for change We then engaged several small consultancies to work on implementing a strategy execution system, over several years
If at first you don t succeed It turned out to be a poor investment of time and efforts example of a complex chart that defeats understanding! 7
Meanwhile, the business was becoming more complex due to rapid expansion 2007 7 Brands 676 Outlets 8 Countries Middle East China SEA
Learning #1: Engage the right professionals to improve chances of implementation success In 2007, we engaged Palladium to embark on our journey to become a strategy-focused organization Palladium started working with one of our Brands (Their logo sums it up.) 9
Learning #2: Total commitment from the CEO is critical for success The buck stops here! 10
We used our strategic framework (adopted from the 6-step Execution Premium) to work with the Brand 2 Align Brand Strategy 3 Link with Organization Brand vision/mission Strategic analysis Strategic formulation Performance measure and target 1 Develop Corporate Strategy Functional focus Initiative definition including work plan and milestones Performance measure and target Corporate Strategy & Plan Brand Budget Book (Strategy & Plan) Company vision/mission Strategic analysis Strategic formulation Performance measure and target 4 Cascade to Individual Individual action plan including milestones Performance measure and target Personal development plan Functional Plan (Operational) Individual Plan 5 Control and Learn Corporate performance review Brand performance review Functional performance review Individual performance review Execution 11
Learning #3: Be prepared for implementation challenges This is a waste of time! 12
L & G Int.Process Customer Finance Learning #4: Analyze the organization culture to find solutions Profits Sales 100% Customer Satisfaction Increase Customer Loyalty Increase Customer Frequency QSC Checklist Product Quality Services Cleanliness QSC is one part of Operation Excellence Training Sample QSC training materials and in-store QSC checklist.
Learning #5: Be flexible and adapt the approach We changed to a top-down approach, where we defined the Group s 5-year Strategic Direction and cascaded it the business units Vision To be A Global Integrated Operator of Multiple Food Brands with the objective of providing 100% satisfaction to all stakeholders Sustain Growth of Thailand Business Transform International Franchising Drive Growth through Strategic Acquisition and Alliance Transform China into Our Key Growth Market 1 2 3 Develop and Deploy Global Functional System Create and Execute Operational Excellence (OE) Build Human Capital and Develop Partner Management Capabilities
L & G Int.Process Customer Finance Once again, Operations Excellence was the link that connected successfully with our operations-oriented team Profits Sales 100% Customer Satisfaction Increase Customer Loyalty Increase Customer Frequency QSC Checklist Product Quality Services Cleanliness QSC is one part of Operation Excellence Training Sample QSC training materials and in-store QSC checklist.
Learning #6: Change how the business is managed to change mindset Weekly Support Function Meeting Fortnightly Brand Meeting * (Executive Committee) Monthly Excom* Meeting Quarterly Business Review (3 days) Answers to 3 questions: What are our Goals? Where do we Play? How do we Win? Result- Oriented and Strategy-Focused
Learning #7: Govern to make strategy a continual process and instil discipline Established an Office of Strategy Management (OSM) that reports directly to the COO, with direct access to the CEO Resource to govern and sustain the process of strategy management in the organization CEO COO Office of Strategy Management (OSM) 17
Finally, our breakthrough results from 2007-2009 are a testament that the system works! Total customers: 101,736,000 increase of 29% NPAT: 530M THB increase of 72% Combined sales: 19,338M THB increase of 123% Number of outlets: 1,112 outlets increase of 65% Financial Customer MC (Mystery Customer) survey results: 97% - increase of 5% Brand perception index: The Pizza Company: 100% - increase of 5% Swensen s: 100% - increase of 6% Sizzler: 94% - increase of 7% BSC Talent retention: 95% increase of 21% Succession planning number of identified leaders per position for executive team and middle management: 3 increase from 1 candidate to 3 candidates for each position Employee satisfaction survey results: 90% - increase of 5% Learning & Growth Internal Process Franchise satisfaction score: 93% increase of 22% Quality/Service/Cleanliness score: 92% increase of 4% Supply chain delivery KPI In Full On Time %: 97% - increase of 4% 18
And it can only be achieved with partnership and teamwork Palladium and MFG Teams at the 2010 Hall of Fame award ceremony 19
THANK YOU