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“Itisanimmutablelawinbusiness
thatwordsarewords,explanations
areexplanations,promisesare
promises butonlyperformance
isreality.”
HaroldS.Geneen
SolutionOverview
DeliveringSustainableResultsthrough
EffectivePerformanceManagement:
VisionorReality?
ApaperbyHitachiConsulting
MCRS®
Wemakeithappen.Better.
Improvingperformancecanseemlikea
thanklessandunendingtask. Intoday’s
businessworld,everymajorcompanyhas
PerformanceManagementtoolsinplace
andendeavorstoimprovetheirbusiness
results. Ofcoursethatboxisticked,butin
realitythereisahugedifferencebetween
somethingbeing‘inplace’anditbeing‘in
practice’andworkingwell.
Whatisneededisacomprehensive
managementsystemanddisciplined
decision-makingprocesssupplemented
withresults-orientedbehaviorsthatcuts
throughthemultitudeofoptionsanddraws
alltheessentialneededelementstogether,
aligningyourpeopleandorganization,
businesssystemsandprocessestoensure
thenecessaryfocusonperformance. For
manyyearsnowHitachiConsultinghave
deployedaprovenapproachtorationalize
managementdecisionmakingandbring
rigortoexecutionatalllevels.
Businessperformanceimprovementis
managedonacontinuousbasisviathe
HitachiConsultingMCRS®methodology,
enabledviaintegratedBusiness
Intelligence,CollaborationandKnowledge
Managementsolutionsandmonitored
throughtheuseofrobust&appropriateKey
PerformanceIndicators.
HowMCRS®CanHelpYourBusiness
FormanyyearsnowHitachiConsultinghas
deployedaprovenapproachtomanage
businessperformancebybringingrigorto
executionanddecision-makingatalllevels
ofanorganization.MCRS®providesa
frameworkbasedonKPIs,meetingsand
accountabilitiesthatfacilitatesbehavior
change,collaborationandcontinuous
improvementtoallowanorganizationto
achieveitsbusinessobjectives.The
approach,MCRS®,providesa
comprehensiveanddisciplinedprocess
whichcanbetailoredtoeffectivelymanage
innovationprojectsinanyindustry.
UsingMCRS®meansyoucanbeginwith
clearintent(Step1).Businessleaderscan
clarifytheirstrategyandwhatwilldrive
success.Facilitateddiscussionscanthen
articulatecorrespondingintentand
cascadingprioritiesatalllevelsandacross
allfunctionsandprocesses.Theinsights
neededtounderstandinternalbusiness
performancescanthenstarttobecaptured
alongsidewiderBusinessIntelligence(BI)1
prioritiesonareassuchascustomers,
suppliersandcompetitors.
WeeklyMonthlyQuarterly
Budget
Review
Forecast
Review
Planning
Standards
Review
Bill of
Materials
Master
Schedule
Production
Plan
Review
Production
Schedule
Review
SIC
Review
D.W.O.R
Review
Report
Review
Forecast Plan Control ReportCulture
Change
Behavior
Change
Procedural
Change
Awareness
Development
Installation
Compliance
Understanding
Usage
Improvement
Sustainability
0
20
40
60
80
100
0
20
40
60
80
100
0
20
40
60
80
100
We lost 9% of planned
production time
Meeting Meeting
Meeting
Status Report Status Report
Status Report
Clarify strategic/operational
intent of all target areas
Coach organization to new
behaviors, track transformation
Synchronize and integrate
meeting flow
Create guidelines for meetings,
dialogues and decision making
Define and refine KPIs; organize
into KPI trees
Report clear, compelling metrics
fit for purpose
• Develop more innovative solutions
• Be recognized as technology leader
• Reduce time to market
• Zero accidents
• Align production foot print
• Reduce material cost
• Pursuing organic growth
• Refresh brand image
• Collaboration between channels
R&D
Production
Sales
What
happened?
When did it
happen?
How many?
How often?
Where?
Where
exactly is the
problem?
What
actions are
needed?
Why is this
happening?
What if
these
trends
continue?
What will
happen
next?
How do
we do
things
better?
KPI
KPI KPI KPI KPI
KPI KPI
Business and Operational Systems
• Review progress against time / cost / performance
(last week / this week/longer term outlook)
• Address interface issues
• Raise escalation issues/ support requirements
• Identify risks
• Address change requests and consequences
Chair: PD PM
PD Engineers, Test Rep, NMO/NCO Lead, Production / Process
Rep, Purchasing Rep, Quality Rep
Optional: PD Department Manager
1) High level project overview – issues / critical path and
status of project KPIs (PD PM)
2) Review performance against weekly detailed activity
schedule – start with activities on critical path (All)
3) Outlook – next TG or Technical Review (All)
4) Review resource situation (All)
5) Review high risks and status of mitigation actions (All)
6) Review escalation points (All)
1) Individuals are responsible for delivering their own actions
2) Come prepared
3) Reporting by exception
4) Start and finish on time
5) Phones off
6) Ask for help
1) Lean Board
2) Project KPIs
1) Updated Lean Board
OBJECTIVES
INPUTS OUTPUTS
ATTENDEES
AGENDA
GROUND RULES
TIMING: Monday
FREQUENCY: Weekly
TIME: 10.00 - 11.00
VENUE: Project Room
Fig1:TheSixStepApproachtoDeployMCRS®
Step1
Step6
Step2
Step5
Step3
Step4
People&Organisations
ManagementSystems
Processes
02
1
Businessintelligence(BI)isanumbrella
termthatincludestheapplications,
infrastructureandtools,andbestpractices
thatenableaccesstoandanalysisof
informationtoimproveandoptimise
decisionsandperformance.
03
Thecriticalcontributionsneededfromeach
areaarenextcapturedinkeyperformance
indicators(KPIs);ametricthatmeasuresa
criticalbusinessactivityorprocess(Step2).
ManycompaniesalreadyuseKPIsorwhat
theysayareKPIs.However,oftentheseKPIs
arepoorlydefinedwithoutclear
accountabilitiesassigned,toonumerousin
number,incorrectlyreportedonand
mismanaged,anddisconnectedfromthe
sourcedata,limitingtheabilitytoinstantly
drilldowntounderstandtheunder-
performingareaofthebusinessprocesses.
Thetimetoreview,analyzeandmakea
decisioniseitherdelayedorlost.
ManycompaniesalsoimplementKPIsin
isolationandthusinadvertentlyreinforce
silothinking. Asaresultstaffmaystill
habituallydefaulttoemotionand‘gutfeel’
choicesbecausetheirKPIslacktheclear
relevancetocommandsustainedattention.
KPIsmustbealignedwiththebusiness
objectivesandstrategy,andmeasurethe
criticalprocessstepsthatimpactultimate
businesssuccess.Businessareasneedto
worktogethertooptimizetheirownKPIs
andunderstandandalignperformance
measureswithotherpartsofthe
organization.
Todriveresults-orientedbehaviors,clear
KPIaccountabilitiesneedtobeassignedat
alllevelstoensureemployeesmanagetheir
performanceseffectivelyandengagein
rationaldecisionmaking.RememberKPIs
shouldnotbeusedtopunishpeoplebutas
atooltolearnandadapt.
Acommercialaircraftmaintenanceand
supplyfirmachieveda$19millioninventory
reductionandtrimmedmorethan$1
millionfromitsstoragecosts.
WhendeployingMCRS®,wecoachyourstaff
tocraftKPIsthatdefineorganizational
success.Weensurethatdatais
unmistakablyrelevantaswellasreadily
available.Wealsoreinforcedecisionmaking
basedondataratherthanemotionand‘gut
feel’throughtheMCRS®clearsystemof
reviewsandaccountabilities.
MCRS®alsoorganizesKPIsintoKPItreesto
provideclearvisualizationofhowKPIs
interactacrossfunctions,andtolinkall
organizationallevelstothebusiness
strategy.KPItreesshowpeoplethatevery
choiceisimportantandhighlightshowthe
underlyingdatathatdriveseachKPI.This
reinforcesasatisfyingsensethatworkis
meaningful,fostersself-accountability,and
discouragesintuitivedecisionmaking.
Peoplearefarmorelikelytorelyonfacts
whentheyseehowmuchtrulyrideson
theirchoices(Step3).
Better
Performance
Decision
makingbasedon
cleardatainstead
ofemotionand
‘gutfeel’
FitforPurposeBusinessIntelligence
Reportsaredesignedtosimplyandvisually
conveywhetherareasaremeetingtargets
asperthedefinedKPIs.Thedatainthese
reportsarereliable,timelyandwoveninto
thefabricoftheorganization,becausethe
numbersaregathereddirectlyfromsource
systemsorfromyourpeopleinthecourse
ofeverydayoperations.
Reportsandmeetingsarecoremechanisms
familiartoeveryoneinbusiness.Ofcourse,
somereportsandmeetingscanbeof
questionablevalue,usuallybecausethey
lackclearpurpose.Incontrast,theMCRS®
reportsandmeetingsdemonstrablyhelp
staffateveryleveltoaccessimmediately
usefuldata,quicklydiscernproblemsand
issues,detecttrends,chooseeffective
coursesofactionandcoordinateefforts
(Step4).
Intoday’sdatarichworld,many
organizationsarelostinthepossibilities
thatdatacanbring. Reportsare
everywhereandoneverything,dataislying
aboutinunconnectedsilosandanalystsare
fightingtimepressurestocompletetheir
work-loads. Howeverthisneednotbethe
case:leveragingdataautomaticallyand
deliveringinsightstomanagerswhenand
wheretheyneeditisnowpossible. Hitachi
Consulting’sMCRS®solutiondeliversthe
necessaryaccesstoKPIs,accessto
supportingdrill-downdata,feedback
reportsanddashboardwarningsand
actionsviaatailoredsolutionappropriate
toyourbusiness.
Thelatestdrill-downcapabilitiesare
harnessedinthesolutionswedeploy;
exploitingforyouthebestanalytical
capabilitiesnowpossiblefromtoday’s
reportingsolutionstoallowtheconsumers
ofBIinyourorganizationtoseeataclicknot
onlythehigh-levelbusinessmeasuresbut
alsotoaccesstherelatedindividual
transaction-leveldetails. BIsolutionsare
designedwiththeend-consumersinmind;
forexample,ensuringaccesstorelevantBI
reportsanddashboardsfrommobile
devicesforstaffandmanagersonthemove.
LatestBIdeploymentstrategiesarealso
harnessedtoensuremosteffectiveuseis
madeofITbudgets;forexample,using
cloud-basedtechnologyinfrastructures
andsoftwareasaservice.
Relevantanalyticscanalsobeappliedto
datatosupportanddrivebusinessdecision
making:readilyidentifyingpatternsin
historicdata,identifyingkeyinfluencesand
performancedriverswithindata-setsand
predictingtrendsandanticipatedfuture
performancesforthebusiness. Data
scienceaddsnewinsightsandvaluetodata;
forexample,monitoringcustomerspend
patternsandidentifyinglikelydemandfor
futurepurchases.
MeetingswithinMCRS®arekeyedtothe
reportsandaresimilarlydesignedtobefit
forpurpose;ensuringthattheright
informationisconveyedtotherightpeople
attherighttimetohelpthemhavetheright
discussions,asktherightquestions,tomake
betterfact-baseddecisionsandtoquantify
resultingperformanceimprovements.
Eachmeetingisgovernedbyguidelines
thatanswer...Whatisthismeeting’sobjective?
Whoshouldparticipate?Whatactionsare
requiredcapturedandtowhomarethey
assigned?Whatdata/informationisrequired
toconductthemeetingeffectively?Whowill
providethedata?Whatcriticalquestionswill
beexploredhere?Howwillparticipantsensure
productivedialogueanddecisionmaking?
Whowillensurefollowthroughonthe
decisionsreachedhere? Clearguidelines
bringrigortoyourmeetingsandmaintain
theirfocusovertime(Step5).
Meetingsareintegratedwithinfunctions
andacrosstheorganizationtocreateone
routinesystemthroughwhichdecisions
worktogetherratherthanatcrosspurposes.
Synchronizedmeetingsareanotherstrong
counterto‘gutfeel’decisionmaking.The
decisionsreachedinanyonemeetingwill
visiblyaffectdecisionsreachedinthenext.
Meetingparticipantsarethusbracedbythe
knowledgethattheirdecisionsmustbe
defensible...thatis,basedonvaliddata,
logicalanalysis,andrealisticassumptions...
tostanduptothescrutinyofanintegrated
decisionmakingsystemthatisfirmly
governedbyanoverarchingbusiness
strategy.
Amajormanufacturerrealised$13millionin
ongoingannualsavingsfrominventory
right-sizingandproductrationalization,
eliminatedmorethan$5millioninnon-
valueaddedactivities,andsavedmorethan
$4millioninrailcarleases.
Similarly,MCRS®reportsareproducednot
forthesakeofproducingareport,but
becausetheyadd-valuetoabusiness
decisionthathasormayhavetobetaken. In
thisway,oneimmediatelyvisiblebenefitis
thatproliferationandfire-fightingis
reduced.Indeed,carefullysequenced
meetingsandthedisciplinedreviewlogicof
MCRS®ensuresthatvariancesinKPI
performanceareaddressedearly-long
beforetheybecomefires.Solutionsarealso
implementedattherightlevelofcontrol
andwithafocusonrootcauses,soinsights
areprovidesearlyandproblemscanbe
mitigatedbeforetheyflare-up.
Justasimportant,reportsaremade
availableandmeetingsaretimedtotake
placeatlogicalintervalsunderMCRS®.The
timingofKPIreviewsiscritical.Short-
intervalcontrolkeepsfrontlineoperations
ontrack.Workteamsmayreviewtheir
operatingdatahourly,orfollowingevery
shift.Seniorleaders,incontrast,mayreview
aggregatedbusinessperformancedata
monthly.Thecorrectfrequencyiswhatever
allowsthoseparticipatinginmeetingsto
sustaincontroloverthemetricsforwhich
they’reaccountable.
04
CollaborationisattheHeartofMCRS®
Thesuccessofanyenterprisereliesinno
smallpartonsystemsandprocessesthat
facilitatecommunicationandcollaboration.
Today,giventheevermoredispersedand
mobileworkforce,HitachiConsultingoffers
acollaborationplatformthatintegrateswell
withexistingline-of-businessapplications
tomanageandco-ordinatetheMCRS®.
Thisversatilesolutionletsyourbusiness
maximisetheefficiencyofbusiness
processesandimprovemeeting
productivity,whilstalsoaddingalayerof
securityandbusinesscontinuity.Bystoring
filesthatcanbeaccessedeasilyandquickly
byteammembers,andprovidingaccess
andrevisioncontrolfordocuments,ina
singledocumentlibrary,thesolutionallows
yourteamsandindividualstoeffectively
collaborate,create,shareandmanagefiles.
MCRS®providesaframeworkbasedonKPIs,
meetingsandaccountabilitiesthatalign
differentfunctionsalonganorganization’s
valuestream.TheMCRS®provides
enhancedfunctionality,bestofbreed
knowledgemanagementandembeddedBI
capabilities,toenablemanagement,control
andreportingonmultiplemeetingsand
actions,wherevertheirgeographical
location.Theintegralvisualmanagement
aspectgivesusersthepowerstointuitively
determinewhattodoandwhattoprioritize
andproactivelymonitoroutcomes.
Focus Accountability
Results (€)
Process Steps
Value Stream
Roles (RACI)
Organization
KPI
KPI KPI KPI KPI
KPI KPI
Performance
Scorecard
Decision
Rights
Terms of
Reference
Action & Decision
Log
Effective Meetings
Name A B C
Activity
1
3
2
Agreement
Development
Installation
Compliance
Understanding
Usage
Implementation
Continuous
Improvement
Measured Transformation
Organisation feels full ownership
and is self correcting
Usage spreads as organisation
follows lead of early adopters
Frequent prompts are required to
ensure users apply new approaches
New approaches designed,
Developed and ready to install
Users agree to explore new
and better ways of working
Users have been trained
Early adopters explore and experience
potential for improved performance
Time
05
Fig2:MCRS®CoreElementsFocussingonCollaborationandOrganizational
AlignmenttoDeliverSustainableResults
Fig3:AStructuredApproachtoAssesstheDegreeofTransformationwithinan
Organization
MeasuredTransformation
TheMCRS®ismorethanjustatechnology
solution.AtHitachiConsultingwe
understandthatinadditiontomakingthe
rightdataavailableandKPIstosupportfact
baseddecisionmaking,influencingand
changingpeople’sbehaviors,andsetting
clearroles,responsibilitiesand
accountabilitiesarecriticaltodelivering
sustainableresultsandperformance
improvements.
TheMCRS®programmeincorporates
implementationandcoachingsupportto
delivertherightperformancemanagement
frameworktohelpbusinessandoperational
userstoanalyzedata,toidentifyrootcauses
andtakecorrectiveactionsanddecisions
(Step6).
AbouttheAuthors
AstheEMEABusinessIntelligenceand
PerformanceManagementCapabilitylead
heisresponsibleforthedesignanddelivery
ofbusinesssolutionsthatdrive
performanceimprovementsforourclients.
Richardspecialisesinmanagingprojectsin
productdevelopment,business
intelligenceandapplicationdesignfor
variousindustries,includingpublicsector,
consumerandfinancialservicesand
hi-tech/software
AstheEMEAMCRS®CapabilityLeadin
HitachiJörghashelpedalargenumberof
clientsindifferentindustriestoanalyseand
improvetheirmanagementsystemsand
achievesustainableresults.
Jörgisalsoasubjectmatterexpertin
productdevelopmentandengineering.
JörgholdsadoctorateinInnovation
Managementfocussingonperformance
managementinnewproductdevelopment
projects.
TheperformancegainsrealizedMCRS®are
permanent,becauseMCRS®changesthe
cultureofyourorganization.Youcan
measuretheprogressofthecultural
transformationasitoccursbytracking
observablechangesinbehaviorstoward
whichyourpeoplearebeingactively
coachedandsystematicallyreinforced.
Aspeopleacrossyourorganizationwork
togethertobuildandimplementyour
managementsystemsusingMCRS®,
data-drivendecisionmakingandincreased
accountabilityforfollowthroughwill
becomethenorm.Peoplelearnnottofear
thefacts.Failuresbecomeatriggerforself
correction,notpunishment.Yourpeople
gainthecouragetodelveintorootcauses
ratherthansettleforsurfacesolutions.
Innovationincreasesexponentially.
Everyoneinyourorganizationbecomesan
agentofchange,relyingonfactsand
consistentlycoordinatingtheireffortsto
raiseyourbusinesstomuchhigherlevelsof
performance.
UltimatelytheMCRS®can
permanentlyenhanceyour
company’sperformance
managementcultureandbuild
competitiveadvantagethrough
successfulinnovation.
WhyHitachiConsulting?
HitachiConsultingistheglobal
managementconsultingandITservices
businessofHitachiLtd.,aglobaltechnology
leaderandacatalystofsustainablesocietal
change. Inthatsamespirit—andbuilding
onitstechnologyheritage—Hitachi
Consultingisacatalystofpositivebusiness
change,propellingcompaniesaheadby
enablingsuperioroperationalperformance.
Workingwithintheirexistingprocessesand
focusingontargetedfunctionalchallenges,
wehelpourclientsrespondtodynamic
globalchangewithinsightandagility. Our
uniqueapproachdeliversmeasurable,
sustainablebusinessresultsandabetter
consultingexperience.
Formoreinformationpleasevisit
www.hitachiconsulting.com
Email:info@hitachiconsulting.com
TheMCRS®
management
systemchanges
thecultureofthe
organisation
HitachiConsultingistheglobalmanagementconsultingandITservicesbusinessofHitachiLtd.,aglobaltechnologyleaderandacatalystofsustainablesocietalchange. Inthatsamespirit-andbuildingonitstechnology
heritage-HitachiConsultingisacatalystofpositivebusinesschange,propellingcompaniesaheadbyenablingsuperioroperationalperformance. Workingwithintheirexistingprocessesandfocusingontargetedfunctional
challenges,wehelpourclientsrespondtodynamicglobalchangewithinsightandagility. Ouruniqueapproachdeliversmeasurable,sustainablebusinessresultsandabetterconsultingexperience.
www.hitachiconsulting.com
RichardOsbourn
isaDirectorwiththe
HitachiUKMC&I
practice.
Dr.JörgPutzer
isaManagerwithin
theHitachiUKMC&I
practice.

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