ENN uses strategy to lead the company's growth

In order to implement strategic management and control at the group level, the growing scale of Chinese enterprise groups must focus on the formulation, implementation and evaluation of strategies. According to an online survey conducted by "CEConline" magazine, most Chinese enterprises cannot effectively carry out strategic control because they encounter three difficulties: 70.5% of the respondents believe that enterprises lack an effective strategic management system, and the key points of strategic control It is unclear; 44.8% of the respondents believe that the group leaders cannot effectively control the subsidiaries; 29.9% of the respondents believe that the business operations of the group subsidiaries are immature. Therefore, ENN Group, which is at the forefront of the group's strategic management and control, shows the advantages of the sample cases.

Starting from the gas business, ENN Group, through continuous industrial expansion and strategic upgrade, has built a diversified industry related to energy distribution, smart energy, solar energy, energy and chemical industry. As of the end of 2010, the group's total assets exceeded 36.8 billion yuan , more than 100 wholly-owned, holding companies and branches are distributed in more than 100 cities in China and in Asia, Europe, America, Oceania and other regions. Facing such a large-scale cross-regional and multi-level enterprise, ENN Group adopts the method of strategic control to manage and drives the enterprise with a unified strategy.

Circular and interactive strategy formulation process

ENN has a market and strategic performance department, which conducts industry and market analysis, and seeks new opportunities for development based on the advantages and disadvantages of corporate competition. Liang Zhiwei, chief performance director of the department, said: "Finding opportunities is not a short-term action, but a directional choice based on the long-term development of the company. Combining the proposals of the board of directors and various industry sectors, we form our overall strategy."

ENN's entire strategic planning has a complete set of processes. On the basis of continuous market insight, that is, analysis of the external environment and competitors, as well as internal resources and capabilities, the group will hold a strategic annual meeting in late July every year, attended by the management of the group and industry groups. Discuss new business models, future growth and development directions. After that, according to the overall strategy, combined with the characteristics of each industrial group, the overall strategic plan of the group is prepared, which includes the business objectives of each industrial group. In the second step, before "10.1", each industry segment and member enterprises will decompose and implement the group's overall strategy layer by layer, and formulate their own development goals accordingly, and interactively complete the formulation of the Sany Plan. The three-year plan of the "Three-One Plan" is adjusted year by year to implement the strategy, and during this process, the market prospects are constantly analyzed to strengthen the support for the gradual implementation of the strategy. The third step, from October to early December, enters the stage of formulating the annual plan and budget. At this time, it is necessary to fully implement the macro strategic planning from business planning, production, financial measurement, marketing, to specific resource allocation, including human resources and financial resources, based on detailed market insights. Form a detailed annual business plan in business, and form a planned budget in finance. The fourth step is to complete the formulation of the performance responsibility statement in January of the next year, in parallel with the annual plan and budget. Industrial groups and member enterprises at all levels incorporate the determined core assessment indicators into the performance assessment responsibility book according to the strategic plan. Of course, in addition to the assessment of various industrial sectors and enterprises, such assessment also includes the individual performance management of those managers who undertake strategic work. Groups, industry groups, and corporate members can communicate strategic goals according to the market environment of each segment of the business, and finally achieve a complete and effective group strategic plan.

Effectively decompose and transmit the strategic goals layer by layer

In 2004, ENN launched the gas station business on the basis of city gas. At that time, there was no attempt to use gas in automobiles in China. ENN saw this market opportunity and wanted to promote it to taxis. As a corporate behavior, when ENN strategically considers whether this kind of business is worth doing in China, it mainly sees the possibility of market expansion and the advantages of resource conditions. First, natural gas is cheaper than oil in price. At that time, although the gap between natural gas and oil prices was not too big, oil prices had already shown an upward trend. Second, natural gas is more environmentally friendly, and the emission standard of exhaust gas is much higher than that of oil. With these two advantages, ENN believes that the gas station business market is worth exploring. Furthermore, at that time, the National West-East Gas Pipeline Project was launched, which provided the basis for business operation in terms of gas source resources. As a result, ENN incorporated the gas station business direction into the overall strategic plan. Liang Zhiwei said: "Although the market has seen it clearly, the strategic business was not specified at that time, such as what resources and capabilities are needed." As a result, after a year of research, I found that there were only one or two stations in the country, which did not meet the requirements of the strategic expectations. "In the process of formulating a new business strategy, it is necessary to analyze the feasible conditions that need to be met in the process of research and implementation." At that time, ENN failed to find any problems in resource allocation in the gas station business. The so-called resources are not a matter of money, but a lack of technology and capabilities. CNG, the full name of compressed natural gas, is a very high-pressure technology that requires high safety requirements for steel cylinders and technology. At that time, there was no technical standard for this high-voltage technology in China, so ENN had to standardize the technological process, technical standards, staffing, etc. from scratch. Once the business and technical processes are clarified, new business can be launched smoothly in accordance with this procedure. Sure enough, in the second year, after preparing these resources, the new business of Xinao gas station started very quickly. "A new strategy needs to sort out the business model, and then continue to examine the capabilities and resources it needs to allocate, and gradually clarify it. It is not just a matter of technology and personnel, but requires collaboration between them to implement the new strategy. "Liang Zhiwei emphasized.

Being aware of the problems of unclear goals and inadequate resource allocation in the Group's strategy at the corporate level, ENN Group applied the balanced scorecard, a strategy execution tool, to strategy formulation, execution, supervision, review and other links, to Strategy translates into goals and measures that can be clearly communicated to all departments and employees. The Balanced Scorecard derived from the performance evaluation system follows the principle of "only quantitative indicators can be measured, and the indicators to be measured must be quantified". perspective, to translate the organization's strategy into actionable metrics and action plans. . Liang Zhiwei summed up the connotation of four levels: "The financial level is mainly targeted indicators such as income and investment return; the customer level is to seek where the target market is and what the customer's needs are; then the company must operate effectively to ensure that The goal is achieved; in the end, effective operation requires the ability of employees and organizations, as well as the support of informatization.” The four levels are linked together, and in turn, excellent internal operations support customer satisfaction and create value for customers. Only when customers are satisfied can the market be maintained. Only with customers can the value of the company and even the group be fundamentally realized. Therefore, "to implement the strategy in one sentence, we must consider several questions: where does business growth come from? What are the customer segments? What kind of internal operations are needed, and what capabilities need to be improved?" Liang Zhiwei said.

Testing and Adjusting for Deviations in Strategy Execution through Strategic Review

A closed-loop management system proposed by Harvard University's Robert T. Kaplan and David Norton to more closely integrate strategy and operations. The final stage in this system is to conduct strategic testing and adjustment. That is, the company should analyze the cost and benefit of existing products and customers, study the correlation between strategy and performance, consider whether the assumptions on which the strategy is based are outdated or have problems, and adjust the strategy in time if necessary, so as to start a new round system cycle.

ENN Ao, which implements strategic management and control, cannot lack such a closed-loop system. ENN Group conducts a strategic review every quarter to monitor the strategy implementation process. Therefore, when quick decisions or some strategic adjustments are required, ENN can respond quickly and rectify deviations in a timely manner. The content of the strategic review includes the implementation of the original strategic expectations of each business segment; if some did not achieve the goals, what is the reason? How to do it next quarter? At the next level of member companies, the cycle of this strategic review may be shortened to monthly. Through this kind of review, from the group headquarters, to the industrial group, and then to the member companies, the strategy implementation is analyzed layer by layer and adjusted in time. Problems that are difficult to solve can be solved at the meeting, and major problems can be formed after the meeting.

“Group strategic control is mainly through strategic communication, process monitoring and the main line of final performance and incentives. At the same time, the allocation of core resources, including the preparation of technology, capital and organizational capabilities, can be achieved. The Group's strategy has been gradually implemented, and it is moving towards the Group's strategic goals step by step." Liang Zhiwei concluded.

Interaction questions:

1. The strategic control department is usually independent of other business departments. Can their supervision and control effectively affect the business department?

2. Can top-down strategic control and bottom-up information feedback form a timely response?