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![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.](https://image.slidesharecdn.com/4-building-the-bpm-balanced-scorecard-1203815427493756-3/75/Business-Process-Management-Building-The-BPM-Balanced-Scorecard-10-2048.jpg)
Uploaded bySteve Towers, CEO and CPP Champion
Business Process Management - Building The BPM Balanced Scorecard
This document discusses developing an Office of Strategic Management (OSM) to ensure ongoing success with the Balanced Scorecard approach. It outlines key attributes for leading an OSM, including being a strategist who owns the strategic process, a scorekeeper who manages how strategy is structured and implemented, and a gatekeeper and guide who focuses attention and provides direction. The document also discusses how focusing on successful customer outcomes can help align organizations and drive innovation when developing a balanced scorecard.
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Business Process Management - Building The BPM Balanced Scorecard
- 1. Arlington, VA Balanced Scorecard MastersBalanced Scorecard Masters Building Your Scorecard: Working Towards anOffice 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
- 2. Arlington, VA Balanced Scorecard Masters Building Your Scorecard: Working Towards an Office of Strategy Management Striving for Balanced Scorecard Success – we don’talways 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
- 3. S f lSuccessful Customer OutcomesTowersAssociateswww.bennugroup.net www.stevetowers.com Outcomes
- 4. 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
- 5.
- 6. Arlington, VA Balanced Scorecard Masters Building Your Scorecard: Working Towards an Office of Strategy Management Striving for Balanced Scorecard Success – wedon’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
- 7. A New Landscapeis emerging
- 8. ObjectiveBenefits SERVICESERVICE&COSTSERVICE&COST&REVENUE 11970-80 21980-95 31995-05 4post 2000 INSIDE-OUT OUTSIDE-IN Scopeof 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
- 9. BSC Needs tobe “aligned” (driven by) the Strategy Map Objectives Measurement Strategic Theme: O ti Effi i InitiativeTarget gy p Harvard K&N Southwest Airlines Example j • Market Value • Seat Revenue • Plane Lease Operating Efficiency g • 30% CAGR • 20% CAGR • 5% CAGR Profitability Financial More Customers Fewer Planes • Profitability • More Customers Plane Lease Cost • FAA On Time Arrival Rating • Customer Ranking (Market • Quality management • Customer loyalty 5% CAGR • #1 • #1 Customers Lowest Prices Customer Flight Is on Time • Fewer planes • Flight is on - time • Lowest prices Ranking (Market Survey) • On Ground Time • On-Time Departure • Cycle time optimization program loyalty program • 30 Minutes • 90% Internal Fast Ground Turnaround • Fast ground turnaround • % Ground crew trained • % Ground crew stockholders • ESOP • Ground crew training • yr. 1 70% yr. 3 90% yr. 5 100% Learning Ground Crew Alignment • Ground crew alignment
- 10. Why doesn’t it always work? Let’s review what we mean… Performance Management “The use ofperformance 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.
- 11. “We were measuring the wrong ******* things!” Mi Ry ichaelO’Le yanAir’sCE Ryan Air –Europe’s largest And most successful Airline eary EO And most successful Airline. “It’s not rocket science. You need to be measuring Wh ’ 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
- 12. We don’t focus on the Customer! Our service centrehierarchy What have we focussed on? The service centre as a system What we SHOULD pay attention to Mgr •Service Level •Abandon Rate •Costs How many of these measures does the customer care about? What happens when Mgr Focus: creation of value for customers Measures: capability, predictability of demand, response, failure Role: Acts on the system FLM •# Call/Cases •AHT •Quality pp the actuals fall short of targets? Personal reviews - Training & coaching - Personal Development plans M l FLM Focus: creation of value for customers, removal of failure and waste Measures: achievement of purpose, reducing variation in system performance Role: Act on the system Assoc •AHT •Ability to follow 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 wants M hi t f Assoc policies/pro cedures/scri pts 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.
- 13. Arlington, VA Balanced Scorecard Masters Building Your Scorecard: Working Towards an Office of Strategy Management Striving for Balanced Scorecard Success – we don’talways 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
- 14. Successful BSc’s start with a Strategy Map Mobil (USMarketing & Refining)Map Mobil (US Marketing & Refining) Growth Theme I lit f b Productivity ThemeReturn on Capital Improve 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 p Increased from 6% to 16% Competitive Position (profitability) From last (1993) to first (95, 96, 97, 98) Volume Growth Exceeds industry by 2-2.5% annually Reduce Cash Expenses Down by 20% Improve Cash Flow From -$500 M/Yr to +$700 M/Yr Customer Perspective Customer Satisfaction Continuous improvement for 3 Internal Perspective p consecutive years Speedpass Active Increasing at rate of 1M per year Dealer Quality Perfect Orders Continuous 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 Environmental Number 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 Workforce Strategic Awareness Annual employee survey shows awareness of strategy increased from 20% to 80% Source:Source: The Balanced ScorecardThe Balanced Scorecard D. Norton & R. KaplanD. Norton & R. Kaplan
- 15. STRATEGIC ALIGNMENT aroundSCO’s The Process Performance Landscape Provides the structureProvides the structure and language to align everything with the y g Customer… then from There create the BSC/SM
- 16. Can You ImagineHow Different Things Would Be? TowersAssociates www.bennugroup.net www.stevetowers.com
- 17. Welcome to An example of how to Innovate throughInnovate through Successful Customer Outcomes TowersAssociateswww.bennugroup.net www.stevetowers.com Outcomes
- 18. The FEDEX KINKOSCO... CHALLENGE 1 Su How could we make business travelers’ lives Simpler, Easier and more Successful? uccess 1) I want to have a great presentation tomorrow. Wh sfulCu 2) I need to have packets to hand out atist ustom 3) I have to get the packets printed and bound. 4) They need to be nice. the merOu ) 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?
- 19. WHAT DID FEDEXKINKO’S DO? TowersAssociates www.bennugroup.net www.stevetowers.com
- 20. Arlington, VA Balanced Scorecard Masters Building Your Scorecard: Working Towards an Office of Strategy Management Striving for Balanced Scorecard Success – we don’talways 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
- 21. Dashboard Welcome Joe UserToday 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.
- 22. 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
- 23. So how dowe:So how do we: 1. Ensure the hard won benefits of initial BSC1. Ensure the hard won benefits of initial BSC initiatives are secured 2. Create a framework to ensure ongoing2. Create a framework to ensure ongoing success 3. Establish the strategic discipline and rigour3. Establish the strategic discipline and rigour across the organization to encourage and grow future success? 4. Consolidate the gains and become a triple crown + company TowersAssociates www.bennugroup.net www.stevetowers.com
- 24. STRATEGIC ALIGNMENT aroundSCO’s Towers
- 25. 5 Key attributes of the leader of the OSM • Strategist –owns the processStrategist owns the process • Scorekeeper – creates, manages and grows the structure for how things should be donethe structure for how things should be done • Gatekeeper – sets the agenda • Guide ‐ Content – focuses the senior team and the companies attention on what we must do • Guide ‐ Operations – provides the direction for implementation and change management TowersAssociates www.bennugroup.net www.stevetowers.com p g g
- 26.
- 27. Skill‐sets within the OSM(US Bank) Project Managers to lead initiatives I iti tidi 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 process management/documentation team Performance Analysts to count towards SCO'sPerformance Analysts to count towards SCO s • Gather data, first level analysis, scorecard updates OD Expertise • Plan, Review & Check TowersAssociates www.bennugroup.net www.stevetowers.com • Communication • Training
- 28. 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 toand 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 g the Customer and eradicate the things that don’t Th l t h l h t h lThey apply technology where technology adds CUSTOMER value!
- 29. A New Landscapeis emerging
- 30.
- 31. Arlington, VA Balanced Scorecard Masters Building Your Scorecard: Working Towards an Office of Strategy Management Striving for Balanced Scorecard Success focus on Successful Customer Outcomes ion Embedding the scorecard as part of our organizational DNA f d ’ clusi Get everyone focused on SCO’s thru the BSC & SM Developthe Office of Strategic Management Con Develop the Office of Strategic Management help on the journey to the Promised Land In