Strategic Framework Dennis Schoff

strat e gy agile strategy strategic mindset practice b a strategic framework think critically practice strat e gy strategic mindset should we zig or zag? b Talking Points: Simply put, strategy is our plan to get us from point A to point B The Strategic Framework is the process by which we think critically about the path we choose While the framework can be characterized as a process, it’s important to stress that this process is intended to build the skills and competencies necessary to have a strategic mindset – and as we learned yesterday, a strategy mindset is what makes us agile We must invest our time and attention into understanding this process and how we can transform the process into a practice and eventually into a mindset Transition: Now, let’s review the framework a we can do both! agile strategy

Trustmark’s Strategic Framework Execution Identification Formulation Core Values (How/Who we are) Vision (Where We Are Going) Who We Are Strategy (How We Are Going to Get There) Getting it Done PERSONAL. FLEXIBLE. TRUSTED Selection Situation Ideation Environment Possibilities Course of Action Mission (Why we exist) Task: Discover/ Determine the organization’s core identity Task: Accurately assess all internal & external conditions Task: Create sufficient requisite variety of good ideas Task: Select the best strategic initiatives for the business Task: Create future state by executing flawlessly on strategic initiatives Talking Points: Strategy planning begins with a firm understanding of who we are, or our DNA – what makes us strong, how we bring value to the market, why people should do business with us. Our values and mission are the DNA that units us all. By all committing to our Enterprise identity we will be the new “being”-- as we saw in our vision activity yesterday -- who drives “well-being” in the marketplace. Transition I want to focus our time on the next three phases, strategy formulation, which include the more iterative phases of our process, and are what put the “agile” into “agile strategy” . Helping people increase well-being through better health and greater financial security

Trustmark’s Strategic Framework Execution Identification Formulation Vision (Where We Are Going) Strategy (How We Are Going to Get There) Who We Are Getting it Done Ideation Selection Situation Environment Possibilities Course of Action Task: Discover/ Determine the organization’s core identity Task: Accurately assess all internal & external conditions Task: Create sufficient requisite variety of good ideas Task: Select the best strategic initiatives for the business Task: Create future state by executing flawlessly on strategic initiatives Talking Points: Formulation includes Vision, “where we are going”, and Strategy, “how we are going to get there”. After  we  formulated our vision and captured our current strategy, to look at new opportunities and keep our strategy current, agile strategy has three phases, Situation, Ideation, and Selection. Transition: Earlier, I mentioned the importance of using this process to enable critical thinking. From the prework, you may remember the tools within these phases.

Trustmark’s Strategic Framework Environment Situation Course of Action Selection Possibilities Ideation Vision (Where We Are Going) Formulation Strategy (How We Are Going to Get There) Diamond Talking Points: A majority of the tools like the PESTEL, Porter’s Five Forces, Value Curves, and Capabilities and Resources are tools that we generally use to assess our environment in the Situation phase. And the VRINE is a tool we generally use in the selection phase. While all of these tools have their merits, this is not an exhaustive list. The last tool that you see is the strategy diamond. Strategies diamonds are an output of the strategy formulation process. And as we saw yesterday, strategy diamonds are a great way to capture the key elements of an effective strategy. What the ELT learned by going through this process is that our existing strategies are sound. This process did help us better articulate our current path and understand the challenges and opportunities that lay ahead of us as we execute our strategies. Transition We still have gaps in our processes, primarily around how we adopt changes to our strategy, or make it agile. Let me turn to that process and those gaps now.

Trustmark’s Strategic Framework Environment Situation Course of Action Selection Possibilities Ideation Vision (Where We Are Going) Formulation Strategy (How We Are Going to Get There) Diamond What we learned…. Situation Internal Perspective External Perspective Data Ideation Opportunity Identification New Markets Selection Process Stopping Budgets Talking Points: In an off-site meeting in April, we assessed both our achievements and gaps within each phase. Situation Internal Perspective External Perspective Data Ideation Next slide

Trustmark’s Strategic Framework Environment Situation Course of Action Selection Possibilities Ideation Vision (Where We Are Going) Formulation Strategy (How We Are Going to Get There) Diamond What we learned…. Situation Internal Perspective External Perspective Data Ideation Opportunity Identification New Markets Selection Process Stopping Budgets

Trustmark’s Strategic Framework Environment Situation Course of Action Selection Possibilities Ideation Vision (Where We Are Going) Formulation Strategy (How We Are Going to Get There) Diamond What we learned…. Situation Internal Perspective External Perspective Data Ideation Opportunity Identification New Markets Selection Process Stopping Budgets Talking Points: In an off-site meeting in April, we assessed both our achievements and gaps within each phase. Situation Internal Perspective External Perspective Data Ideation Opportunity Identification New Markets (more than new customers – new distribution, new products, etc. as well) Selection Develop and Refine Process Stopping Budgets Consequently, the ELT is currently developing and refining processes to fill the gaps From this initial work, we realized we needed to fill some gaps by developing new or refining current processes. To accomplish this, we have organized the ELT into 3 groups (one for each phase in formulation) to review gaps and provide recommended solutions. Together and including some of you, we will work to finalize. Later in the year, the ELT will be working with the University of Wisconsin to explore additional tools to add in the execution phase of this process. We have explored past practices to leverage past success as well as explored external solutions that will help us shape our future. We will share future enhancements with you once finalized. Transition In a few minutes, Paul, Alex, and Nancy will share with you an opportunity diamond. Because markets have the potential to change quickly, as new opportunities arise strategy diamonds will exists for both core business strategies as well as new opportunities. Let’s take a look at the opportunities that we are exploring.

Opportunities Being Explored Middle Market Strategy Private Label Strategy Talking Points: Advance mid-size market health management products/services & develop marketing strategy private label strategy Transition Now let’s look at potential opportunities

Potential Opportunities Expansion Into Large Employer Market (5,000+) Nippon-like Fully Insured Group Medical Administration On-site Clinics Accountable Care Organizations (ACOs) Private Exchanges Talking Points: Expansion into large ER market (5,000+) Nippon-like fully insured group medical admin opportunities On-site clinics opportunity Accountable Care Organizations (ACOs) Private exchanges Transition Lastly, let’s take a look at the role of leadership in this framework.

Strategic Leadership Execution Identification Formulation Ideation Selection Situation Who We Are Vision & Strategy Getting it Done Environment Possibilities Course of Action Leaders must have the capacity to ask and answer the big questions like: What is our higher purpose as an organization? What is my higher purpose as a leader? Who are we as an organization? Who are we as a culture? Talking Points: In the Identification phase, leaders must have the capacity to ask and answer the big questions like: What is our higher purpose as an organization? What is my higher purpose as a leader? Who are we as an organization? Who are we as a culture? This skill aligns with: Inspire a Shared Vision #7 – Describes a compelling image of what our future could be like. It also aligns with: #27 – Speaks with genuine conviction about the higher meaning and purpose of work. Model the Way #26 – Is clear about his/her philosophy of leadership. TLC Inspire a Shared Vision #7 – Describes a compelling image of what our future could be like.

Strategic Leadership Execution Identification Formulation Ideation Selection Situation Who We Are Vision & Strategy Getting it Done Environment Possibilities Course of Action Leaders need to have the capacity for broad and deep scanning, data regard, benchmarking, critical thinking, tough conversations, brutal facts. TLC Challenge the Process #13 – Searches outside the formal boundaries of his/her organization for innovative ways to improve what we do. Talking Points: In Phase 2, Situation, leaders need to have the capacity for broad and deep scanning, data regard, benchmarking, critical thinking, tough conversations, brutal facts. These skills align well with: Challenge the Process #3 – Seeks out challenging opportunities that test his/her own skills and abilities. It also aligns with: #13 – Searches outside the formal boundaries of his/her organization for innovative ways to improve what we do. Encourage the Heart #10 – Makes it a point to let people know about his/her confidence in their abilities.

Strategic Leadership Execution Identification Formulation Ideation Selection Situation Who We Are Vision & Strategy Getting it Done Environment Possibilities Course of Action Leaders must have the capacity for multiple voices being heard, all ideas considered, including those out of the box, ideation not just happening at the senior team level. Talking Points: In Phase 3, Ideation, leaders must have the capacity for multiple voices being heard, all ideas considered, including those out of the box, ideation not just happening at the senior team level. Those skills align with: Challenge the Process #8 – Challenges people to try out new and innovative ways to do their work. It also aligns with: Enable Other to Act #9 – Actively listens to diverse points of view. Encourage the Heart #20 – Publicly recognizes people who exemplify commitment to shared values. TLC Challenge the Process #8 – Challenges people to try out new and innovative ways to do their work.

Strategic Leadership Execution Identification Formulation Ideation Selection Situation Who We Are Vision & Strategy Getting it Done Environment Possibilities Course of Action Leaders much have the capacity for rigorous debate, fact based analysis, enterprise thinking, data regard, clear decision making TLC Challenge the Process #3 – Seeks out challenging opportunities that test his/her own skills and abilities. Talking Points: In Phase 4, Selection, leaders much have the capacity for rigorous debate, fact based analysis, enterprise thinking, data regard, clear decision making. These skills align well with: Challenge the Process #3 – Seeks out challenging opportunities that test his/her own skills and abilities. It also aligns with: Model the Way #21 – Builds consensus around a common set of values for running our organizations. Encourage the Heart #5 – Praises people for a job well done

Strategic Leadership Execution Identification Formulation Ideation Selection Situation Who We Are Vision & Strategy Getting it Done Environment Possibilities Course of Action Leaders must have the capacity for disciplined focus, prioritization, synergy, enterprise thinking and action. TLC Model the Way #6 – Spends time and energy making certain that the people he/she works with adhere to the principles and standards that we have agreed on. Talking Points: And lastly, in Phase 5, Leaders must have the capacity for disciplined focus, prioritization, synergy, enterprise thinking and action. These skills align well with: Challenge the Process #18 – Makes certain that we set achievable goals, make concrete plans, and establish measureable milestones for the projects and programs we work on. Model the Way #6 – Spends time and energy making certain that the people he/she works with adhere to the principles and standards that we have agreed on. Encourage the Heart #15 – Makes sure that people are creatively rewarded for their contributions to the success of projects.

Trustmark’s Strategic Framework Execution Identification Formulation Vision (Where We Are Going) Strategy (How We Are Going to Get There) Who We Are Getting it Done Ideation Selection Situation Environment Possibilities Course of Action Task: Discover/ Determine the organization’s core identity Task: Accurately assess all internal & external conditions Task: Create sufficient requisite variety of good ideas Task: Select the best strategic initiatives for the business Task: Create future state by executing flawlessly on strategic initiatives Talking Points: Formulation includes Vision, “where we are going”, and Strategy, “how we are going to get there”. After  we  formulated our vision and captured our current strategy, to look at new opportunities and keep our strategy current, agile strategy has three phases, Situation, Ideation, and Selection. Transition: Earlier, I mentioned the importance of using this process to enable critical thinking. From the prework, you may remember the tools within these phases.