VDO Service Statement September 2012 V2.2 Final
- 1. www.pwc.com/my Values Driven Organisation Helping you walk the talk September 2012 “ Vision without action is daydream. Action without vision is nightmare” Japanese proverb
- 2. PwC Value as an enabler of growth A values driven organisation utilises values as levers to influence organisational culture to enable process excellence. An organisation’s values must be developed through collaboration and consultation with the organisation and must be aligned to the organisation’s strategy and embedded within its operations. Whilst most organisations are typically value driven, there are two critical issues that are often overlooked. The first is if the values are conscious, shared and lived by the organisation whilst the second is if the values are operationalised within the organisation. Why revisit values 2 Research demonstrates that values driven organisations have superior profit performancesof up to 750 times higher than companies without cultures of shared value and adaptability (Kotter and Heskett, Corporate Culture and Performance). The values driven organisation must consciously create the future it desires by aligning the paradigmsof people, customers, community and products to develop a consistent ethical basis for decision making. The values bridge people aspirations to the corporatesoul. The values stem the tide of disenchantment converting it instead to positive engagement. At PwC, our model for a values driven organisationwill guide you through your transformation journey from definitionand formulationof values, through to the alignment and integration of operationalising values to realise benefits. Shape Drives Influence Enables Align to Strategy Embed in Operations Typically organisations start with process changes to drive behaviour with limited success VDO will leverage values to enable greater success in process excellence StartEnd Start End You need a high performance culture Your recent products failed to deliver expected margin improvements Your talent lack initiativeand innovation Your competition is growing faster than you Your operating costs are out of control Your process changes are repeatedly failing Your customers are disengaged and dissatisfied Risk management is an issue in your organisation Your staff turnover is unusually high
- 3. PwC 3 We will help define new values or refresh existing ones to better reflect the beliefs and principles of the organisation. Values driven organisations are effective only when the values espoused are collectively determined by the organisation as opposed to simply selected by the leadership. We guide your value development through the quad lenses of people, products, community and customers. Shaping your values Typicallyexternal facing values of community and customers will include social concerns such as the environment and customer experience. Internal facing values of people and productswill include commitment for continuous improvement, leadership by example, ethics and product research. Each paradigmwill have a customised set of metrics to guide value formation and definition for the organisation through an inclusive facilitative approach. Values driven organisations tend to have more emphasis on self-prescriptive behaviour based on their values and thus prescriptive governance for human capital management is reduced. A culture of self-governance will be inculcated within the organisation which will drive behaviour to enable the maintenance of a high performance culture. People Customers Community Products Vision tells you where you are headed Mission outlines what you will need to do to get there Values illustrate how you will get there Our new tool which gives you a snapshot of where you are and an in-depth analysis of how to get where you need to be.
- 4. PwC 4 Resurfacing Embedding & Sustaining Strategy Formulation& Validation Business Case Definition & Analysis Strategic Planning & Implementation VISION Pillar 1 Pillar 2 Pillar 3 Pillar 4 Value 2 Value 3 Value 4 Value 5 Value 6 Metrics Value 1 Metrics KPI KPI KPI KPI KVI KVI KVI KVI KVI CORPORATE CORPORATE INDIVIDUAL INDIVIDUAL Tools Achieved Partially achieved Not achieved Surveys Value Dashboards ContinuousEducation Operationalising Values The alignment of values to strategy will ensure that values will guide strategic initiatives along a clearly defined path. The embedding of values into the operations of the organisation through linkage to KPIs and KVIs will enable management with a tool to shape behaviour to enable cultural change. The use of other tools such as surveys will provide periodic pulse checks on progress and indicate areas for attention. Thus it is possible to make progressive advances to the organisational culture with a view to achieving a clearly defined end state.
- 5. PwC Source: Thomas T., Schermerhorn J.R., Dienhart J.W., Strategic Leadership of Ethical Behaviour in Business, Academy of Management Executive, Vol.18, No.2, 2004. Sharon Beder, 'Putting the Boot In', The Ecologist 32(3), April 2002, pp. 24-28, 66-7 McLean & Elkind, The Smartest Guys in the Room, 2003. Mall’s sarcastic ‘magic’ remark gets a virtual bashing, Yahoo! News, May 31, 2012. “A global utilities company scandalgrew out of a steady accumulationof habits and values and actions that began years before and finally spiraled out of control.” - McLean & Elkind (2003), The Smartest Guys in the Room Canbemanagedthrough“prescription”andprocess changes Canbemanagedthrough“self-prescription”,processandcultural changes Governmentfinesand penalties Administrativeandaudit Legalandinvestigative Remedialeducation Corrective actions Governmentoversight Customerdefections Loss ofreputation Employee cynicism Lostemployeemorale Employee turnover Governmentcynicism Governmentregulation Level1Costs Level2Costs Level3Costs Lessdamagingcosts Leastunderstated Getsmoreexecutive attention Moredamagingcosts Mostunderstated Getslessexecutive attention As the digital age progresses, businesses jump onto the social media bandwagon in the hopes of getting a wider reach. But knowing how to use a social media platform is not enough – businesses have to embed and portray the right culture and identity at the risk of harming their brand and reputation A prominent sportswear apparel came under fire for its child labor practices and poor working conditions.By the late 1990s, this company had become synonymous with sweatshop labour, and the damage to their reputation was beginning to show in their account books. 5 Visibility of Cost High Low FinancialImpact ThousandsBillions Cost of ignoring values and culture
- 6. PwC How we can help you Value definition and validation 1 Value alignment to strategy and embedding to operations 2 Value implementation and benefits realisation 3 ResurfacingValues Our Offerings What We Do We help you by assessing the relevance of current values and facilitating the exploration of new values through an inclusive approach that aims to obtain the support and collaborationof the organisation for new ways of working. We involve the organisation with developing value themes and initiatives and work with stakeholders to assign owners for key initiatives. We guide your organisation in defining your concept for value transformation.This will include identifying the benefits of a values driven organisation be it financial or non-financial.Our research team will draw on our global thought leadership and subject matter experts to investigate new value paradigms or refresh existing ones whilst carefully identifying industry trends and analysing shifting global trends. Our guidance extends to developing comparative analysis of your organisation to benchmark against industry and competitors. Our facilitative approach of guiding the organisation utilising proven methodology aims to align prioritized values to strategy and develop high level implementationplans to operationalise your values to achieve your vision. Sustaining&Embedding Values We facilitate and guide the implementation of a value framework to monitor, manage and influence culture in the organisation to achieve business outcomes. Values defined by the organisation are embedded into operations by way of scorecards and dashboards that link performance indicators to value indicators. The tools provide for a mechanism that can influence and shape organisational culture allowing for a highly adaptable and change ready organisation. 6
- 7. PwC Value definition and validation 1 How we can help you • Engage the organisation with defining and refreshing organisational values • Identify best in class features of values driven organisations and tailor to individual requirements • Obtain consensus from across the organisation on shared values and beliefs • Deploy organisation wide change management communications • Validate identified values with relation to value to organisation and impact to market 7 Client What we did Medical University We performed focus group interviews with internal and external stakeholders to analyse their strengths and weaknesses and identified opportunities and threats in the current and potential future industry environment. We then mapped the industry critical success factors (strategic canvas) based upon the Medical University against their peer group and best practices. By using the Blue Ocean concept, participants were forced to think out of the box and challenged the 5-year strategy to the next level. As a result, a refined ambition was developed for the coming 5 years. This ambition was translated into strategy maps with key value driversand key activities supporting the organisation’s strategic focus. Implementation plans were also drawn up to align the organisation, processes, systems and people to execute the refined 5-year strategy.
- 8. PwC How we can help you 8 Value alignment to strategy and embedding to operations 2 Client What we did Media Company PwC facilitated the development and validation of the company’s 5-year business plan through workshops that were conducted with senior management. The workshops were conducted to agree on the overall strategy and assess the viability of each business plan to determine implementationpriority. Concepts such as the Blue Ocean Strategy was shared to stimulate participants to strategise how the company can create uncontested market space and win out the competition.Strategy canvases were also developed and presented to discuss on the strategy and positioning for the company’s core product offerings. In addition to the overall strategic business plan, a Human Resource and Technologyblueprint were also developed to support the implementation of the strategy. • Prioritise organisational values identified • Facilitate alignment of organisational values to strategy • Develop tailored value driven framework • Engage organisation to evaluate embedding options for operationalising value framework • Develop and assess suitable business cases
- 9. PwC Client What we did A Market Regulator PwCAS was engaged to review and improve business processes within the organisation, with the aim of improving effectiveness, efficiency and institutionalisation of key processes. Two key areas were selected i.e. Performance, Planning and Management (which includes Key Performance Indicators) and Human Capital Management. The engagement involved reviewing existing processes, conducting discussions with key stakeholders, and improving/developing new policies and procedures. In addition to the policies and procedures developed, several new frameworks (e.g. a scorecard frameworkand a succession management framework) were also developed. Several 'roll-out' sessions were held to communicate the changes made and address any concerns. The engagement resulted in several new policies and proceduresbeing developed and executed. Throughout the engagement, PwCAS worked closely with an internal team, to ensure that the project would be sustainable (after PwCAS's formal involvement). The organisation now has an internal team that is not only monitoring the progress of policies and proceduresdeveloped, but are also undertaking new initiatives to improve processes within the organisation. Value implementation and benefits realisation 3 How we can help you • Develop and implement roadmap for value framework implementation • Develop roadmap of benefits to be realised • Develop key value indicators and align to performance framework • Operate and review values driven organisational framework through continuousorganisation wide engagement 9
- 10. Naresh Alagan Manager Email: [email protected] Direct line: 60 (3) 2173 0971 Mobile phone: 60(12) 546 1057 Fax: 60 (3) 2173 1288 Experience Naresh works within PwC Consulting’s Strategy, Sustainability and Transformation practice in Kuala Lumpur. He has developed and implemented strategy frameworks including governance and benefits management for clients within the financial services, education, telco and airline industries. Naresh has proven expertise in building sustainable revenue growth, identifying profitable opportunities, developing strategic focus and applying consultative techniques to deliver winning business solutions. He has improved stakeholder value for organisations such as Westpac Banking Corporation, Bankers Trust, Swiss Banking Corporation, NRMA Finance, Rothmans, Lend Lease, University of Sydney, Raidnet Australia, Commercial Metals Company, Malaysia Airlines MRO and Bursa Malaysia (Malaysian Securities Exchange). Qualifications • Bachelor of Law (Honours) • Bachelor of Business (Accounting) • Master of Management • Master of Business Administration (MBA) • Certificate in Global Strategy and Operations Management • Certificate in Legal Practice • CPA Professional Program • CPA Public Practice Program • Lawyer – Supreme Court of NSW Australia • Accountant – CPA Australia Our Team Thought Leadership This survey explores CEO confidence in their company’s growth prospects, and how they’re building local capabilities and creating new stakeholder networks in new markets. We spoke to 1,258 CEOs based in 60 countries, and carried out a further 38 in- depth CEO interviews. This report was prepared in cooperation with the Economist Intelligence Unit and discusses the outlook for six retail and consumer products sub-sectors in Asia. 15th Annual Global CEO Survey Strong & steady: 2011 Outlook for the retail and consumer products sector in Asia Driving enterprise performance This paper introduces and explains several emerging developments in enterprise information management (IM) that will likely pave the way for dramatic advances in the next two to five years. Big data mining, discovery, unwritten knowledge, security, social machines, cloud and mobile enhancements, and the emergence of “The Participative Web” are some of the developing areas which will have significant impact for individuals and organisations. Qualifications • PhD in Social Sciences • Master in Social Sciences (German Diploma) Dr Jens Ballendowitsch Associate Director Email: [email protected] Direct line: 60 (3) 2173 0600 Mobile phone: 60 (12) 323 0890 Fax: 60 (3) 2173 1288 Experience Jens has extensive experience in the areas of Employee, Customer Engagement and Organisational Change. He has led consulting engagements in various GLCs, MNCs and large local companies in Malaysia, Germany and Australia. Jens has significant expertise in data architecture and dissemination strategy. In addition to this, he has significantly developed thought leadership in the areas of human governance and is an active speaker and researcher in this area.
- 12. Let us help you build your value proposition today This publication has been prepared for general guidance on matters of interest only, and does not constitute professional advice. You should not act upon the information contained in this publication without obtaining specific professional advice. No representation or warranty(express or implied) is given as to the accuracy or completeness of the information contained in this publication, and, to the extent permitted by law, PricewaterhouseCoopers Advisory Services Sdn Bhd, its members, employees and agents do not accept or assume any liability, responsibility or duty of care for any consequences of you or anyone else acting, or refraining to act, in reliance on the information contained in this publication or for any decision based on it. © 2012 PricewaterhouseCoopersAdvisory Services Sdn Bhd. All rights reserved. "PricewaterhouseCoopers"and/or "PwC" refers to the individual members of the PricewaterhouseCoopersorganisation in Malaysia, each of which is a separateand independent legal entity. Please see www.pwc.com/structurefor further details. pwc.com/my