FCB Partners Webinar: Measure What Matters

1. Measure What Ma+ers Steve Stanton, Managing Director Webinar August 26, 2015 For more informa8on, go to fcbpartners.com or call Lindsay Field 617.245.0265

2. 1 ©2015 FCB Partners. All rights reserved. One Underlying Issue “We measure far too much and get far too li9le for what we measure because we never ar<culated what we need to get be9er at and our measures aren’t <ed together to support higher-‐ level business goals.” We measure the visible, the easy, the familiar, and the intui8ve, rather than the important

3. 2 ©2015 FCB Partners. All rights reserved. Why Is Process Measurement so Diﬃcult? Requires Deep Insight how this process creates value what this process’s customers really want how this process serves the organiza8on’s strategy how this process connects with other processes intui8on and history are no longer enough In Addi8on the environmental trifecta of complexity, novelty, and speed digi8za8on provides even more opportuni8es we’re now entering the age of data-‐driven decision making

4. 3 ©2015 FCB Partners. All rights reserved. Principles of Process Measurement The primary goal of measurement is not to measure, but to improve business performance Measurement must be driven by an understanding of causality and focused on what you can control Processes are where strategy becomes opera8onal Measure as liQle as possible and pilot metrics before ins8tu8onalizing Metrics are how importance is communicated

6. 5 ©2015 FCB Partners. All rights reserved. Measurement Language The Process Scorecard deﬁni8on – the few vital measures needed to assess performance, progress, and opportuni8es for improvement Key Terms lagging indicators that tell you where you’ve been, generally outcome metrics used for repor8ng leading indicators that tell you where you may be going, generally in-‐ process metrics that illuminate improvement opportuni8es key metric – the performance aspect worthy of measurement baseline – current performance target – desired performance

7. 6 ©2015 FCB Partners. All rights reserved. The Process Scorecard Roughly 7 key measures (plus/minus 2) plus or minus 2 requires serious discipline Mix of leading and lagging err on the side of leading One or two per cri8cal stakeholder and manage tradeoﬀs Updated frequently and communicated oSen

8. 7 ©2015 FCB Partners. All rights reserved. APA Scorecard DPS PC Scorecard Page 3 Region NReg Zone Nor-E Site Durham Name Vaughn Report Period Mar99 Current Actual Current Perf Current Performance Req'd for S2 Rating Yearend Performance Required for S1 S2 S3 S4 Customer Service %Customer Svc Orders On-time Site 98% 95% 4 94% 95% 97% 98% %Repeat Customer Service Work Site 10% 16% 3 18% 16% 12% 10% Reliability & Integrity %SMEI Inspect Comp vs Plan Region 110% 93% 4 90% 93% 97% 100% Business Expansion Cost Routine Outages $/outage Region 277 226 0 232 226 212 206 Customer Premise $/Order Region 57.58 31.21 0 31.82 31.21 29.99 28.76 Bus Expansion $/Cust Add Region 1,769 1,975 4 2,033 1,975 1,897 1,839 Workforce Effectiveness Lost & Restricted Work Days Region - 56 4 300 225 175 100 SUMMARY - CURRENT SCORECARD PERFORMANCE 2.7 The Scorecard

9. 8 ©2015 FCB Partners. All rights reserved. Hil8’s Measurement System Began with a set of strategic business objec8ves derived from the corporate strategic plan Iden8fied 11 enterprise KPI’s related to strategic objec8ves customer sa8sfac8on, profit per employee, perfect orders, repair cycle 8me, etc. some process-‐specific, some cross-‐process Translated these into 60 performance drivers drivers of KPI’s or more detailed outcomes all associated with specific processes e.g., complaint solu8on finding 8me, complaint solu8on execu8on 8me, open complaints, number of orders per customer, etc. Managing process around these drivers cockpits, design, rewards Source: Hil<

10. 9 ©2015 FCB Partners. All rights reserved. Summary: CSF’s of Process Metrics Focus on end-‐to-‐end outcomes and performance transcending boundaries Rigorously derive from customer needs and enterprise goals via causal model Encompass mul8-‐dimensional performance goals the world is not a simple place Avoid being distracted by sub-‐measures the case of the airline pilot Create universal understanding and awareness to focus people’s aQen8on Align rewards with metrics to reinforce them Use to monitor performance, shape behavior, and drive change making abstrac8ons concrete

11. 10 ©2015 FCB Partners. All rights reserved. FCB Fall 2015 Courses Event Descrip8on Process Redesign Hammer Cer<fica<on Course Boston, MA September 15-‐18 Reengineering Innova8on Advanced Cer<fica<on Course Boston, MA September 16-‐18 Process Owners in Ac8on Advanced Cer<fica<on Course Boston, September 16-‐18 Power of Process Hammer Cer<fica<on Course Boston, MA November 16-‐17 Leading Transforma8on Hammer Cer<fica<on Course Boston, MA November 18-‐20 Measurement Excellence Master Class Boston, MA November 18 For more informa8on go to fcbpartners.com or call Lindsay Field 617.245.0265

FCB Partners Webinar: Measure What Matters

FCB Partners Webinar: Measure What Matters

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FCB Partners Webinar: Measure What Matters