September 2008 Business Design www.stankirkwood.com

Business Entities Business Blueprints ™ Copyright: www.stankirkwood.com Entity College Large corporation Non-profit org Individual employee Department Government agency What do these entities have in Common?

What do they have in Common? Business Blueprints ™ Copyright: www.stankirkwood.com Entity College Large corporation Non-profit org Individual employee Department Government agency Students Shoppers Refugees Other employees Internal/External Citizens Each entity creates products or services for customers Customer

What do they have in Common? Business Blueprints ™ Copyright: www.stankirkwood.com Entity College Large corporation Non-profit org Individual employee Department Government agency Students Shoppers Refugees Other employees Internal/External Citizens Board of Directors Board of Directors Donators Manager CEO Tax Payers Each entity creates products or services for customers Each entity has stakeholders looking for a return on their investment Stakeholder Customer

Common Structure Business Blueprints ™ Copyright: www.stankirkwood.com Entity This is the Fundamental Structure of every business, agency, department, process or employee. Each entity has processes to create products and/or services for internal or external customers. - and – Each entity has stakeholders looking for a healthy return on their investments. The type of entity will determine the form of investment return.

Metrics Common Structure Business Blueprints ™ (VP) Value Proposition - Measures market satisfaction o Desirability o Price o Quality o Lead time (ROI) Return on Investment - Measures stakeholder satisfaction o Customer satisfaction o Financial Success o Operational Effectiveness o Management Effectiveness In order to be managed every entity needs to be measured. These are the metrics for a Balanced Scorecard applicable to every level of the business. Common Metrics Copyright: www.stankirkwood.com

Framework Common Structure Business Blueprints ™ All businesses perform these four overarching processes regardless of the size of the business or the industry. Common Framework Copyright: www.stankirkwood.com

Common Framework Business Blueprints ™ A process perspective of the entity Copyright: www.stankirkwood.com Framework

Common Components Business Blueprints ™ A model perspective of the entity. These are the 5 components of every business model. Copyright: www.stankirkwood.com Components

Alignment Business Blueprints ™ Expectations of market for services Competitor offerings of services How services designed to meet customer expectations How processes designed to deliver services How organization designed to execute processes How Systems are designed to support The 5 components of a business must work together just like the parts of a finely tuned automotive engine. Each part is interrelated. The business design starts with the Capstone and cascades down to the Systems Model. Copyright: www.stankirkwood.com

Business Blueprints ™ Market Performance Focus on what is Important! Which Market will you go after? Copyright: www.stankirkwood.com

Focus on what is Important!

Which Market will you go after?

Business Blueprints ™ Customer Performance Focus on what is Important! Customers use your products and services. Which customers will you appeal to? Copyright: www.stankirkwood.com

Focus on what is Important!

Business Blueprints ™ Product Performance Focus on what is Important! Your products and services must have a compelling Value Proposition. Copyright: www.stankirkwood.com

Focus on what is Important!

Business Blueprints ™ Process Performance The Process designs must support Market design How are your processes designed? Process Designs affect the Value Proposition Copyright: www.stankirkwood.com

Business Blueprints ™ Organizational Performance Organizations use Processes to create Products / Services Right People on Bus Wrong People off Bus Right People, Right Seats Does your organization have the right: - Skills - Talents - Knowledge - Experience? Copyright: www.stankirkwood.com

Business Blueprints ™ Systems Performance Systems are used by Organizations to execute Processes Are your IT systems designed to support your organization? Do you have the right equipment? Copyright: www.stankirkwood.com

Business Blueprints ™ Business Performance To have maximum performance parts must be aligned Don’t start with IT systems and work your way up. IT is not the silver bullet. Copyright: www.stankirkwood.com

Four steps necessary for sustained maximum performance: Quality Design Implementation of design Execution of design Management of design and execution Business Performance Business Blueprints ™ Boils down to: Performance = Design X Execution Copyright: www.stankirkwood.com

Four steps necessary for sustained maximum performance:

Quality Design

Implementation of design

Execution of design

Management of design and execution

Boils down to:

Performance = Design X Execution

Performance = Design x Execution Business Blueprints ™ Designs become obsolete as the environment changes. If your design only rates a 2 the level of performance you can ever achieve is a 20 Businesses and agencies waste money with Execution Improvement Activities Need an updated design and good execution of the design to achieve performance goals Copyright: www.stankirkwood.com

What if: Uncertain what to do next Uncertain of where to go Confidence Business Blueprints ™ What if: Confident of what to work on Confident of direction of agency Copyright: www.stankirkwood.com You want confidence in your business design

What if:

Uncertain what to do next

Uncertain of where to go

What if:

Confident of what to work on

Confident of direction of agency

What does a business design need to look like to instill confidence? “ It depends” Goals Environment Desired strategies Existing business design Execution by organization Business Design Business Blueprints ™ Copyright: www.stankirkwood.com

What does a business design need to look like to instill confidence?

“ It depends”

Goals

Environment

Desired strategies

Existing business design

Execution by organization

Updated designs should be based upon these five inputs Updated Business Design Business Blueprints ™ A company moving forward without the consideration of each of the above five factors incurs significant risk. Environments are changing faster and faster which means designs are becoming obsolete sooner and sooner. Copyright: www.stankirkwood.com

1917 - 1987 Forbes 100 61 of those companies no longer existed 18 were still in the top 100 2 out performed the market * 1957 – 1997 S&P 500 426 companies ceased to exist 2% out performed the market* * From Tom Peter’s Re-Imagine Designs become Obsolete Business Blueprints ™ Copyright: www.stankirkwood.com

1917 - 1987 Forbes 100

61 of those companies no longer existed

18 were still in the top 100

2 out performed the market *

1957 – 1997 S&P 500

426 companies ceased to exist

2% out performed the market*

* From Tom Peter’s Re-Imagine

Business Blueprints ™ Deliverables Road Map Updated set of Business Blueprints Strategic Plan Governance Model At the end of the day each business should have these four documents to work from. Copyright: www.stankirkwood.com

Business Blueprints ™ Business Blueprints ™ Senior Management Employees Copyright: Business Design Concepts™ 2004 Without the set of business blueprints your management teams will never know if they are saying the same thing. Can not implement effective change with only a strategic plan, project plan and a budget

Business Blueprints ™ Blueprints provide context and common understanding Business Blueprints ™ Design team Implementation Team Without the set of Blueprints how likely is it that the Implementation Team will build what the Design Team had in mind? The same is true in business. Copyright: www.stankirkwood.com