business process management - building the bpm balanced scorecard

Arlington, VA

Balanced Scorecard MastersBalanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy Managementan Office of Strategy Management

Steve Towers© Steve Towers

All Rights Reserved

www.bpgroup.org

www.bennugroup.net www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights ReservedArlington, VA – www.stevetowers.com

Arlington, VA

Balanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy Management

Striving for Balanced Scorecard Success – we don’t always succeedwe don t always succeed

Embedding the scorecard as part of our i ti l DNAorganizational DNA

Developing the Office of Strategic Management – the keys to the future

www.bennugroup.net www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights Reserved

S f lSuccessful

Customer

OutcomesTowers

Associates www.bennugroup.net www.stevetowers.com

Outcomes

BP Group.org

• Launched in 1992• Research, mentoring and training organization

• Performance & Process Management• Thought leadership• Process Qualifications

• Incubates social networks• Incubates social networks• www.bpcommunity.org

• Main Office, London, UK• Associates in more than 110 countries• Led by John Corr & Steve Towers

TowersAssociates www.bennugroup.net www.stevetowers.com

About Me

Arlington, VA


Striving for Balanced Scorecard Success – we don’t always succeedSuccess we don t always succeed




A New Landscape is emerging

Ob

jec

tive

Be

nefit

s S

ERV

ICE

SER

VIC

E &

CO

ST

SER

VIC

E &

CO

ST &

REV

ENU

E

11970-80

21980-95

31995-05

4post 2000

INSIDE-OUT OUTSIDE-IN Scope of Transformation

Total Quality Management

Business Process

Improvement

Business Process Reengineering

Six Sigma

Lean

Business Process

Management

Advanced BPM & Outside-In

Approaches

PERFORMANCE BENEFITS - PROCESS TRANSFORMATION EVOLUTION© Towers Associates 2013 – Research 800+companies 2006-2013

BSC Needs to be “aligned” (driven by) the Strategy Map

Objectives MeasurementStrategic Theme:O ti Effi i InitiativeTarget

gy pHarvard K&N Southwest Airlines Example

j

• Market Value

• Seat Revenue

• Plane Lease

Operating Efficiency g

• 30% CAGR

• 20% CAGR

• 5% CAGR

ProfitabilityFinancial

MoreCustomersFewer Planes

• Profitability

• MoreCustomers Plane Lease

Cost• FAA On Time

Arrival Rating• Customer

Ranking (Market

• Qualitymanagement

• Customerloyalty

5% CAGR

• #1

• #1

Customers

Lowest Prices

CustomerFlight

Is on Time

• Fewer planes• Flight is on -

time• Lowest prices

Ranking (Market Survey)

• On Ground Time• On-Time

Departure

• Cycle timeoptimizationprogram

loyaltyprogram

• 30 Minutes• 90%

Internal

Fast Ground Turnaround

• Fast groundturnaround

• % Ground crewtrained

• % Ground crewstockholders

• ESOP

• Ground crewtraining

• yr. 1 70%yr. 3 90%yr. 5 100%

Learning

Ground Crew Alignment

• Ground crewalignment

Why doesn’t it always work? Let’s review what we mean…

Performance Management“The use of performance measurement information toThe use of performance measurement information to

help set agreed‐upon performance goals, allocate and prioritize resources, inform managers to either confirm or change current policy or program directions to meetor change current policy or program directions to meet those goals, and report on the success in meeting those goals.”

Performance Measurement“A process of assessing progress towards achievingA process of assessing progress towards achieving

predetermined goals, including information on [efficiency, quality, and] outcomes….

TowersAssociates www.bennugroup.net www.stevetowers.comSource: “Serving the American Public: Best practices in performance measurement,” June 1997.

“We were measuring the wrong ******* things!”

Mi

Ry ichael O

’Leyan A

ir’s CE

Ryan Air – Europe’s largestAnd most successful Airline eary

EOAnd most successful Airline.

“It’s not rocket science. You need to be measuringWh ’ i hWhat’s important to the customer. Then you make sure everything you do is achieving those measures.achieving those measures.

******* simple really.That way customers keep coming back for more”.


We don’t focus on the Customer!Our service centre hierarchyWhat have we focussed on?

The service centre as a systemWhat we SHOULD pay attention to

Mgr•ServiceLevel•AbandonRate•Costs

How many of these measures does the customer care about?

What happens when

MgrFocus: creation of value for customersMeasures: capability, predictability of demand, response, failureRole: Acts on the system

FLM•# Call/Cases •AHT•Quality

ppthe actuals fall short of targets?Personal reviews- Training & coaching- Personal Development plans

M lFLM

Focus: creation of value for customers, removal of failure and wasteMeasures: achievement of purpose, reducing variation in system performanceRole: Act on the system

Assoc

•AHT•Ability tofollow policies/pro

- More people

What about acting on the system? How much of demand is failure? Assoc

Role: Act on the system

Focus: doing what the customer wantsM hi t fAssoc policies/pro

cedures/scripts

What % of demand are we meeting?

Assoc Measures: achievement of purpose, variation in performance

We focus on numbers/targets which we think will mean good service for our customers. The problem is that these numbers aren’t set by the customer and;


The problem is that these numbers aren t set by the customer and;

• don’t relate to what the customer is contacting us about• don’t tell us how effectively we deal with their demands• Don’t give us a means of explicitly and progressively achieving the Successful Customer Outcomes.

Arlington, VA






Successful BSc’s start with a Strategy Map Mobil (US Marketing & Refining)Map Mobil (US Marketing & Refining)

Growth ThemeI lit f b

Productivity ThemeReturn on CapitalImprove quality of revenue by

understanding customer needs and differentiating ourselves accordingly.

Maximize utilization of existing assets and integrate the business to reduce total delivered cost.

Financial Perspective

pIncreased from 6% to 16%

Competitive Position(profitability)

From last (1993)to first (95, 96, 97, 98)

Volume GrowthExceeds industry by 2-2.5% annually

Reduce Cash ExpensesDown by 20%

Improve Cash FlowFrom -$500 M/Yr to +$700 M/Yr

Customer Perspective Customer Satisfaction

Continuous improvement for 3

Internal Perspective

pconsecutive years

Speedpass ActiveIncreasing at rate of

1M per year

Dealer Quality Perfect OrdersContinuous

improvement for 4 consecutive years

Product Innovation Customer Management

Continuous improvement for 4 consecutive years consecutive years

Learning & Growth

Quality Capacity Utilization Safety Lost work incidents

down from 150 to 30 per year

EnvironmentalNumber of incidents

reduced by 63%Continuous

improvement for 4 consecutive years

Annual value of lost yield reduced from

$175m to $50m

Operational Excellence Good Neighbor

consecutive years

Perspective Motivated & Prepared WorkforceStrategic Awareness

Annual employee survey shows awareness of strategy increased from 20% to 80%

Source:Source:The Balanced ScorecardThe Balanced ScorecardD. Norton & R. KaplanD. Norton & R. Kaplan

STRATEGIC ALIGNMENT around SCO’s

The Process Performance Landscape

Provides the structureProvides the structure and language to align everything with the y gCustomer… then from

There create the BSC/SM

Can You Imagine How Different Things Would Be?


Welcome to

An example of how to Innovate throughInnovate through

Successful Customer Outcomes


Outcomes

The FEDEX KINKO SCO... CHALLENGE 1 SuHow could we make business travelers’ lives

Simpler, Easier andmore Successful?uccess

1) I want to have a great presentation tomorrow.

Wh

sful Cu

2) I need to have packets to hand out

at is tustom

3) I have to get the packets printed and bound.

4) They need to be nice.

the m

er Ou) y

5) They need to be ready when I need them

utcom


6) I need to have them when I go to my meeting

e?

WHAT DID FEDEX KINKO’S DO?


Arlington, VA






DashboardWelcome Joe User Today is Saturday, February 23, 2008 © 2007 Bennu Group LLC & Associates

Summary (pre drill) Process Analytics

Dashboard Moments of Truth Breakpoints Rules

MOT Overview

Print | Help | Log Out

Page 1 | Page 2 | Page 3

(for representative purposes only)

Diagnostic No State

Moment of Truth 35,722

Breakpoints 181,220

Rules 117,900

Activity Name Assessment Trend COW (f) POF (f) Owner

Generate the Business

Promote

Conversion

Done

Done

To Do

23,000

45,112

89,778

33,400

64,023

93,000

23,000

45,112

89,778

Bill S.

Joey D.

Frank

Points Of Failure (f) 16.4M

Alerts

Alerts from last 2 weeks

GTB - Conversion

Completion

Grant the Business

Open Account

Upsell

Visit every day

To Do

To Do

Done

Done

To Do

BPs by Priority

12,110

34,000

23,000

45,112

89 778

45,112

89,778

42,110

50,000

90 004

12,110

34,000

23,000

45,112

89 778

Susie

Jill

Bob C.

Charles

JimboGTB Conversion

Frank

COW Improvement ratio

MOT Creation

Visit every day

Keep the Custom

Retention

Renewal

Growth

To Do

To Do

To Do

Done

To Domore...

89,778

12,110

34,000

10,500

66,998

90,004

12,007

55,009

12,889

82,002

89,778

12,110

34,000

10,500

66,998

Jimbo

Benny

Linda

Gigi

Rose

Program

MOT under management

Processes pending Asses 29

President’s Message

I’d like to take this opportunity to publicly thank the Hercules X team for the incredible job that

they’ve done. This is our most improved Successful Customer Outcome (SCO) period.

Rules Analysis


Least Improved -7%

Months target +23%

Most Improved 183% As a direct consequence of the improvements TRIPLE CROWN benefits this month exceeded

forecast in all categories including Cost Reduction, Service Improvement and Revenue Generation.

Compliance has also improved with Regulatory sign-off now complete.

The good news.. We are not alone!The good news.. We are not alone!

The BSCOL Hall of fame


So how do we:So how do we:

1. Ensure the hard won benefits of initial BSC1. Ensure the hard won benefits of initial BSCinitiatives are secured

2. Create a framework to ensure ongoing2. Create a framework to ensure ongoingsuccess

3. Establish the strategic discipline and rigour3. Establish the strategic discipline and rigouracross the organization to encourage andgrow future success?

4. Consolidate the gains and become a triplecrown + company


STRATEGIC ALIGNMENT around SCO’s

Towers

5 Key attributes of the leader of the OSM

• Strategist – owns the processStrategist owns the process

• Scorekeeper – creates, manages and growsthe structure for how things should be donethe structure for how things should be done

• Gatekeeper – sets the agenda

• Guide ‐ Content – focuses the senior team andthe companies attention on what we must do

• Guide ‐ Operations – provides the direction forimplementation and change management


p g g

Skill‐sets within the OSM(US Bank)

Project Managers to lead initiativesI iti ti di t d d b t• Initiative coordinators and drum beaters

Certifed Process Professionals to align for SCO's• process improvements and a process• process improvements, and a processmanagement/documentation team

Performance Analysts to count towards SCO'sPerformance Analysts to count towards SCO s• Gather data, first level analysis, scorecardupdates

OD Expertise• Plan, Review & Check


• Communication

• Training

Organizations achieving BSC success

Leaders use the BSC/SM to make their customers’ lives Simpler, Easier and More Successful

They focus Outside‐in and reduce complexity by applying focus to and fixing the Causes of Workapplying focus to and fixing the Causes of Work

They Align everything they do through measurement to y g y g y gthe Customer and eradicate the things that don’t

Th l t h l h t h lThey apply technology where technology adds CUSTOMER value!

A New Landscape is emerging

UPCOMING DATES

http://www.bpgroup.org/certification-by-city.html

Arlington, VA


Striving for Balanced Scorecard Success focus on Successful Customer Outcomesio

n

Embedding the scorecard as part of our organizational DNAf d ’

clus

i

Get everyone focused on SCO’s thru the BSC & SM

Develop the Office of Strategic Management

Con

Develop the Office of Strategic Managementhelp on the journey to the Promised LandIn

business process management - building the bpm balanced scorecard

Business

ground time

ground crewtrained

creation of value

achievement of purpose

rights reservedarlington

time fewer planes flight

service centre hierarchywhat

successful airlineearyeoand