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
Balanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy Management
Striving for Balanced Scorecard Success – we don’t always succeedSuccess we 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
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”.
TowersAssociates www.bennugroup.net www.stevetowers.com
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;
TowersAssociates www.bennugroup.net www.stevetowers.com
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
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
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?
TowersAssociates www.bennugroup.net www.stevetowers.com
Welcome to
An example of how to Innovate throughInnovate through
Successful Customer Outcomes
TowersAssociates www.bennugroup.net www.stevetowers.com
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
TowersAssociates www.bennugroup.net www.stevetowers.com
6) I need to have them when I go to my meeting
e?
WHAT DID FEDEX KINKO’S DO?
TowersAssociates www.bennugroup.net 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
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
www.bennugroup.net www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights Reserved
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
TowersAssociates www.bennugroup.net www.stevetowers.com
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
TowersAssociates www.bennugroup.net www.stevetowers.com
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
TowersAssociates www.bennugroup.net www.stevetowers.com
p g g
TowersAssociates www.bennugroup.net www.stevetowers.com
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
TowersAssociates www.bennugroup.net www.stevetowers.com
• 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
Balanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy Management
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