Management of strategy execution

The July event of APMHK was held at the Royal Hong Kong Yacht Club on 17 July 2012 where Mr. Mark Simon addressed 20 members and guests under the title of the Management of strategy execution. In this presentation, Mark shared his specific experience in setting up strategic initiatives offices (SIOs) top down to completely manage strategic change in large companies.

Mr. Mark Simon is a senior executive, experienced portfolio and program manager, consultant and trainer. He has worked in the financial services industry for 20 years, specifically in Asia since 2004. Mark joined ABN AMRO Bank in the Netherlands in 1992 and after a few years switched to project management. Mark has since executed many large restructuring, integration/separation, operational efficiency, outsourcing, system implementation and infrastructure management around the globe, lastly for Fortis Bank and AIA in Hong Kong. At AIA, Mark was a portfolio director for the SIO IT Strategy portfolio, Group SIO PMO and Program Director for the AIA-AIG separation project, which was one of the key pre-requisites for AIAs successful listing on the Hong Kong Stock Exchange. (AIA tripled their assets in three years.) Currently, Mark is a freelance consultant and Lucidus Consulting Ltd. Associate in Hong Kong and wider Asia.

In his presentation, Mark focused on executive improvement, the establishment of formal sponsorship, setting up job families, budget control, road mapping, business casing, approval, project execution, audit and benefits management. To begin, Mark discussed the common situation analysis. He disclosed that larger organizations were subject to different systems being used for the same solution, no project accounting being in place, geographical spread, different legal jurisdictions and regulations, and business and market maturity levels. He defined SIO as a dedicated organization/catalyst for executing strategic change. It is a combination of governance, analysis, portfolio management and program/project management. It advocates no re-use (instead constant re-inventing wheels), no use of lesson learnt, and no skin in the game for sponsors and executives. Mark then highlighted the five SIO Principles: 1. Separation (full-time dedicated core team), 2. Sponsorship (every initiative has a business sponsor and accountability), 3. Specialism (specialist skills and behaviors), 4. Measurement (delivery/benefits measurement), and 5. Key people (getting the right people).

Mark also elaborated on SIOs company-wide platform, controlling all changes, particularly, the business change cycle. The cycle starts from strategic planning, delivery, to evidencing benefits realization. The control framework of the cycle consists of two parts: 1. Choosing and doing the right things at the right time, and 2. Doing things right, both from the business stakeholders perspectives for all operational initiatives. The former covers the choice of the best investment and the business change programs, and verification of delivery program, risks and benefits. The latter includes the management of each delivery phase to quality, time and cost (QTC) targets and achieving benefits through key performance indicators. In essence, the key elements of the SIO control frameworks are: people, portfolio roadmap, business case, execution and delivery, and benefits management.

In AIA, the Regional SIO Committee approves standards, roadmaps, business cases, portfolio reports and benefits reports. It meets monthly to ensure successful project implementation. It also gives decision power to local projects. On average, 25 business cases are processed a month. All business cases shall be under multiple reviews on each Gate of the program, both locally and regionally. Emphasis is placed on the financial justification; a payback period of longer than 18 months will only be considered in exceptional cases. The approved cases contain the baseline for measuring the quality of the project deliverable, delivery time and project costs. It is also emphasized that traditional QTC assessment should concentrate on strategies and not just investment projects. Ideally, the analysis should be applied to the strategic business unit. When asked is the SIO worthwhile, in the words of Mark, if done well SIO pays itself back.