Getting From Understanding to Execution: Making Implicit Processes Actionable & Measurable

Slide 1: Welcome Angelo Baratta President Performance innovation Getting From Understanding to Execution

Slide 2: What is the constraint? At any given point in time • There is at least one constraint • Which limits a system's performance • Relative to its goal Finding that constraint and dealing with it should be a key management activity. April 21-23, 2008 2 Renaissance Washington, DC

Slide 3: OrgChart view  Command & Control Vantage Point • Who is responsible? • Who did this or didn’t do this? • Who gets blame/credit? Business Unit • Who should we replace ….? responsibility • Single component – people • Personal vantage point. • Doesn’t provide a full picture. April 21-23, 2008 3 Renaissance Washington, DC

Slide 4: Process Vantage Point  Customer View Business Unit responsibility Process B Customer Need Process A Need Fulfillment Process C  accountability  1. Do we understand the need that we are trying to fulfill? 2. How well is the process fulfilling the needs? 3. How effectively is the need being fulfilled? How much waste is in the process? 4. What element should we change in order to do better?  Multiple integrated components April 21-23, 2008 4 Renaissance Washington, DC

Slide 5: Performance Management Process Model Blueprint Process Performance Measurement 1 2 Process A Tools & Techniques (Lean, Root-Cause …) people THROUGHPUT PROCESS-RISK (capability ) PERFORMANCE CAPABILITY M M ATTRIBUTES VALUE - Integrity (Quality) - Customer input method output - Capability - Employee - Demand-Capacity - Supplier E - Availability - Shareholder M technology - Responsiveness (capability ) CAPABILITY - ... Process Change Management Process Performance Management 4 3 . th Process a ig m me Performance M 6S BP Management Gap April 21-23, 2008 5 Renaissance Washington, DC

Slide 6: Process Full Process THROUGHPUT + PERFORMANCE-RISK people Framework (capability) M M Transform input output method E M technology (capability) A process is a mechanism of interdependent components for fulfilling a customer need: 1. That produces a defined output 2. From some consumed input 3. Using a sequence of operations – the transform method 4. Executed by an operator - people and/or technology 5. Based on a mental model and emotional mindset. 6. Exhibiting measurable performance April 21-23, 2008 6 Renaissance Washington, DC

Slide 7: Anatomy of a process 135 We sell the product of 3 by 3 numbers X357 9 4 5 S1 7 DASHBOARD 6 75 S2 5 - Defectives Product Process - Effort/Cost 40 5 S3 3 - Time2deliver - $Revenue People Capability 4 8 1 9 5 S4 T 1. Multiply times tables 0 – 9 h 2. Add column with max 3 rows e o r out put input y Product Method 2 factors B Lead of 3# Last Operations required to get the product (2) (3) e (1) (4) h a v i Technology Capability orders o Result 1. Paper for recording u r 2. Pen/pencil to write April 21-23, 2008 7 Renaissance Washington, DC

Slide 8: Task Method via example 5. Add 1. Multiply 3 1. Since 15 2. Multiply 3 2. Since 15 3. Multiply 3 4. Multiply 2 columns: & 5 to get 15 > 9 carry 1 & 5 to get 15 > 9 carry 1 & 3 to get 9 & 3 to get 6 805 PP PP PP PP PP PP PP 11 11 11 11 1 23 23 23 23 23 X 35 X 35 X 35 X 35 X 35 115 115 115 115 5 69- 9- 69- 805 Alternative ways to define the method: 2. Task level flow 3. Example 4. Procedure 5. … April 21-23, 2008 8 Renaissance Washington, DC

Slide 9: 3 Tier Model for Accountability  What we got out of it. Outcome We achieve an outcome to fulfill a vision. Outcomes relate to system goals. manages m What’s left when we’re done. Output We produce an output in order to achieve an outcome. Outputs relate a culmination of accountable tasks & the flow of value. n What we do. Task We execute tasks to produce an output. Tasks relate to functions and jobs. responsible April 21-23, 2008 9 Renaissance Washington, DC

Slide 10: Throughput Output Model IS Targ Demand 240k 240k 135 DPMR 4000 4 X357 Revenue $ 360k 360k 9 4 5 S1 7 Contrib$ 60k 120k 6 75 S2 5 40 5 S3 3 Hundreds Answer 4 8 1 9 5 S4 IS Tar IS Tar 3x3 Order DPMO DPMO Effort Effort 3x3 Product Ones Tens Hundreds Delivered Product Product Product Answer S1 S2 S3 S4 April 21-23, 2008 10 Renaissance Washington, DC

Slide 11: Separate value effort from drag effort – 3 Streams control value n e urd Value b throughput drag waste pu re w ast e failure April 21-23, 2008 11 Renaissance Washington, DC

Slide 12: 3 Tiers + 3 Streams = big picture Value Stream Control Stream Failure Stream Outcome Outcome Outcome manages manages manages m m m Output Output Output accountable accountable accountable n n n Task Task Task responsible responsible responsible Actual Predicted Ideal – RE/FM RE/FM Zero Risk April 21-23, 2008 12 Renaissance Washington, DC

Slide 13: Add controls Corrected Failure Corrected Stream Answer Failure Compare Rework Rework manages all cells wrong cells wrong cells Quality Optimized not = Product Resources Control Stream manages manages Scheduled Verified Order Answer S0 Throughput = Delivered Ones Tens Hundreds IS Targ 3x3 Value Stream Answer Answer Product Product Product Demand 240k 240k 3x3 Order S1 S2 S3 S4 DPMR 4k 1k Revenue 360k 360k Sum Contrib 60k 120k products operator April 21-23, 2008 13 Renaissance Washington, DC

Slide 14: Add failure Corrected Failure Corrected Stream Answer Failure Compare Rework Rework manages all cells wrong cells wrong cells Quality Optimized not = Product Resources Control Stream manages manages Scheduled Verified Order Answer S0 Throughput = Delivered Ones Tens Hundreds IS Targ 3x3 Value Stream Answer Answer Product Product Product Demand 240k 240k 3x3 Order S1 S2 S3 S4 DPMR 4k 1k Revenue 360k 360k Sum Contrib 60k 120k products operator April 21-23, 2008 14 Renaissance Washington, DC

Slide 15: Org Chart focused view  Task objective bias External Stimulus Business Objective Strategy Business Unit Functional/Individual objectives Operationalize Strategy Individual Performance Monitoring/ Assessment April 21-23, 2008 15 Renaissance Washington, DC

Slide 16: Process Performance Framework P Business Objective Business Unit Feedback Strategy Process Performance Management Framework D Customer Operationalize Process actual Process A Need PERFORMANCE Strategy targets DASHBOARD Process A VALUE Process B people - Customer change (capability ) people - Shareholder M (capability ) M M M CAPABILITY input method output input method output E Individual M E technology M (capability ) technology Performance (capability ) Monitoring/ Assessment Process C Performance Management change Gap A Change April 21-23, 2008 Process 16 Renaissance Washington, DC

Slide 17: Thank You! Angelo Baratta President Performance Innovation Contact Information: 905-270-7591 ABaratta@PerformanceInnovation.com April 21-23, 2008 17 Renaissance Washington, DC