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Business Process Management - Building The BPM Balanced Scorecard

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How do you combine Scorecard and Strategy maps approaches. This shows you how others have done so.

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Business Process Management - Building The BPM Balanced Scorecard

  1. 1. Arlington, VABalanced Scorecard MastersBalanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy Managementan Office of Strategy ManagementSteve Towers© Steve Towers All Rights Reservedwww.bpgroup.orgwww.bennugroup.net      www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights ReservedArlington, VA – www.stevetowers.com
  2. 2. Arlington, VABalanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy ManagementStriving for Balanced Scorecard Success – we don’t always succeedwe don t always succeedEmbedding the scorecard as part of our i ti l DNAorganizational DNA Developing the Office of Strategic Management – the keys to the futurewww.bennugroup.net      www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights Reserved
  3. 3. S f lSuccessfulCustomerOutcomesTowersAssociates www.bennugroup.net      www.stevetowers.comOutcomes
  4. 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 TowersTowersAssociates www.bennugroup.net      www.stevetowers.com
  5. 5. About Me
  6. 6. Arlington, VABalanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy ManagementStriving for Balanced Scorecard Success – we don’t always succeedSuccess  we don t always succeedEmbedding the scorecard as part of our i ti l DNAorganizational DNA Developing the Office of Strategic Management – the keys to the futurewww.bennugroup.net      www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights Reserved
  7. 7. A New Landscape is emerging
  8. 8. ObjectiveBenefitsSERVICESERVICE&COSTSERVICE&COST&REVENUE11970-8021980-9531995-054post 2000INSIDE-OUT OUTSIDE-INScope of TransformationTotal QualityManagementBusinessProcessImprovementBusiness ProcessReengineeringSix SigmaLeanBusinessProcessManagementAdvanced BPM &Outside-InApproachesPERFORMANCE BENEFITS - PROCESS TRANSFORMATION EVOLUTION© Towers Associates 2013 – Research 800+companies 2006-2013
  9. 9. BSC Needs to be “aligned” (driven by) theStrategy MapObjectives MeasurementStrategic Theme:O ti Effi iInitiativeTargetgy pHarvard K&N Southwest Airlines Examplej• Market Value• Seat Revenue• Plane LeaseOperating Efficiencyg• 30% CAGR• 20% CAGR• 5% CAGRProfitabilityFinancialMoreCustomersFewer Planes• Profitability• MoreCustomersPlane LeaseCost• FAA On TimeArrival Rating• CustomerRanking (Market• Qualitymanagement• Customerloyalty5% CAGR• #1• #1CustomersLowestPricesCustomerFlightIs on Time• Fewer planes• Flight is on -time• Lowest pricesRanking (MarketSurvey)• On Ground Time• On-TimeDeparture• Cycle timeoptimizationprogramloyaltyprogram• 30 Minutes• 90%InternalFast GroundTurnaround• Fast groundturnaround• % Ground crewtrained• % Ground crewstockholders• ESOP• Ground crewtraining• yr. 1 70%yr. 3 90%yr. 5 100%LearningGround CrewAlignment• Ground crewalignment
  10. 10. 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.
  11. 11. “We were measuring the wrong ******* things!”MiRyichaelO’LeyanAir’sCERyan Air – Europe’s largestAnd most successful AirlineearyEOAnd most successful Airline.“It’s not rocket science.You need to be measuringWh ’ i hWhat’s important to thecustomer. Then you makesure everything you do isachieving those measures.achieving those measures.******* simple really.That way customers keep coming back for more”.TowersAssociates www.bennugroup.net      www.stevetowers.com
  12. 12. We don’t focus on the Customer!Our service centre hierarchyWhat have we focussed on?The service centre as a systemWhat we SHOULD pay attention toMgr•ServiceLevel•AbandonRate•CostsHow many of thesemeasures does thecustomer care about?What happens whenMgrFocus: creation of value for customersMeasures: capability, predictability ofdemand, response, failureRole: Acts on the systemFLM•# Call/Cases•AHT•Qualityppthe actuals fall short oftargets?Personal reviews- Training & coaching- PersonalDevelopment plansM lFLMFocus: creation of value for customers,removal of failure and wasteMeasures: achievement of purpose,reducing variation in system performanceRole: Act on the systemAssoc•AHT•Ability tofollowpolicies/pro- More peopleWhat about acting onthe system? Howmuch of demand isfailure? AssocRole: Act on the systemFocus: doing what the customer wantsM hi t fAssoc policies/procedures/scriptsWhat % of demand arewe meeting?AssocMeasures: achievement of purpose,variation in performanceWe 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.comThe 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. 13. Arlington, VABalanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy ManagementStriving for Balanced Scorecard Success – we don’t always succeedwe don t always succeedEmbedding the scorecard as part of our i ti l DNAorganizational DNA Developing the Office of Strategic Management – the keys to the futurewww.bennugroup.net      www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights Reserved
  14. 14. Successful BSc’s start with a Strategy Map Mobil (US Marketing & Refining)Map Mobil (US Marketing & Refining)Growth ThemeI lit f bProductivity ThemeReturn on CapitalImprove quality of revenue byunderstanding customer needsand differentiating ourselves accordingly.Maximize utilization of existingassets and integrate the businessto reduce total delivered cost.FinancialPerspectivepIncreased from 6% to 16%Competitive Position(profitability)From last (1993)to first (95, 96, 97, 98)Volume GrowthExceeds industry by 2-2.5% annuallyReduce Cash ExpensesDown by 20%Improve Cash FlowFrom -$500 M/Yr to +$700 M/YrCustomerPerspective Customer SatisfactionContinuous improvement for 3InternalPerspectivepconsecutive yearsSpeedpass ActiveIncreasing at rate of1M per yearDealer Quality Perfect OrdersContinuousimprovement for 4consecutive yearsProduct Innovation Customer ManagementContinuousimprovement for 4consecutive years consecutive yearsLearning &GrowthQuality Capacity Utilization SafetyLost work incidentsdown from 150 to 30per yearEnvironmentalNumber of incidentsreduced by 63%Continuousimprovement for 4consecutive yearsAnnual value of lostyield reduced from$175m to $50mOperational Excellence Good Neighborconsecutive yearsPerspective Motivated & Prepared WorkforceStrategic AwarenessAnnual employee survey shows awareness ofstrategy increased from 20% to 80%Source:Source:The Balanced ScorecardThe Balanced ScorecardD. Norton & R. KaplanD. Norton & R. Kaplan
  15. 15. STRATEGIC ALIGNMENT around SCO’sThe Process Performance LandscapeProvides the structureProvides the structure and language to align everything with the y gCustomer… then fromThere create the BSC/SM
  16. 16. Can You Imagine How DifferentThings Would Be?TowersAssociates www.bennugroup.net      www.stevetowers.com
  17. 17. Welcome toAn example of how to Innovate throughInnovate through Successful Customer OutcomesTowersAssociates www.bennugroup.net      www.stevetowers.comOutcomes
  18. 18. The FEDEX KINKO SCO... CHALLENGE 1SuHow could we make business travelers’ lives Simpler, Easier and more Successful?uccess1) I want to have a great presentation tomorrow.WhsfulCu2) I need to have packets to hand outatistustom3) I have to get the packets printed and bound.4) They need to be nice.themerOu) y5) They need to be ready when I need themutcomTowersAssociates www.bennugroup.net      www.stevetowers.com6) I need to have them when I go to my meetinge?
  19. 19. WHAT DID FEDEX KINKO’S DO?TowersAssociates www.bennugroup.net      www.stevetowers.com
  20. 20. Arlington, VABalanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy ManagementStriving for Balanced Scorecard Success – we don’t always succeedwe don t always succeedEmbedding the scorecard as part of our i ti l DNAorganizational DNA Developing the Office of Strategic Management – the keys to the futurewww.bennugroup.net      www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights Reserved
  21. 21. DashboardWelcome Joe User Today is Saturday, February 23, 2008 © 2007 Bennu Group LLC & AssociatesSummary (pre drill) Process AnalyticsDashboard Moments of Truth Breakpoints RulesMOT OverviewPrint | Help | Log OutPage 1 | Page 2 | Page 3(for representative purposes only)Diagnostic No StateMoment of Truth 35,722Breakpoints 181,220Rules 117,900Activity Name Assessment Trend COW (f) POF (f) OwnerGenerate the BusinessPromoteConversionDoneDoneTo Do23,00045,11289,77833,40064,02393,00023,00045,11289,778Bill S.Joey D.FrankPoints Of Failure (f) 16.4MAlertsAlerts from last 2 weeksGTB - ConversionCompletionGrant the BusinessOpen AccountUpsellVisit every dayTo DoTo DoDoneDoneTo DoBPs by Priority12,11034,00023,00045,11289 77845,11289,77842,11050,00090 00412,11034,00023,00045,11289 778SusieJillBob C.CharlesJimboGTB ConversionFrankCOW Improvement ratioMOT CreationVisit every dayKeep the CustomRetentionRenewalGrowthTo DoTo DoTo DoDoneTo Domore...89,77812,11034,00010,50066,99890,00412,00755,00912,88982,00289,77812,11034,00010,50066,998JimboBennyLindaGigiRoseProgramMOT under managementProcesses pending Asses 29President’s MessageI’d like to take this opportunity to publicly thank the Hercules X team for the incredible job thatthey’ve done. This is our most improved Successful Customer Outcome (SCO) period.Rules Analysiswww.bennugroup.net      www.stevetowers.com All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights ReservedLeast Improved -7%Months target +23%Most Improved 183% As a direct consequence of the improvements TRIPLE CROWN benefits this month exceededforecast in all categories including Cost Reduction, Service Improvement and Revenue Generation.Compliance has also improved with Regulatory sign-off now complete.
  22. 22. The good news.. We are not alone!The good news.. We are not alone!The BSCOL Hall of fameTowersAssociates www.bennugroup.net      www.stevetowers.com
  23. 23. So how do we:So how do we:1. Ensure the hard won benefits of initial BSC1. Ensure the hard won benefits of initial BSCinitiatives are secured2. Create a framework to ensure ongoing2. Create a framework to ensure ongoingsuccess3. Establish the strategic discipline and rigour3. Establish the strategic discipline and rigouracross the organization to encourage andgrow future success?4. Consolidate the gains and become a triplecrown + companyTowersAssociates www.bennugroup.net      www.stevetowers.com
  24. 24. STRATEGIC ALIGNMENT around SCO’sTowers
  25. 25. 5 Key attributes of the leader of the OSM• Strategist – owns the processStrategist owns the process• Scorekeeper – creates, manages and growsthe structure for how things should be donethe structure for how things should be done• Gatekeeper – sets the agenda• Guide ‐ Content – focuses the senior team andthe companies attention on what we must do• Guide ‐ Operations – provides the direction forimplementation and change managementTowersAssociates www.bennugroup.net      www.stevetowers.comp g g
  26. 26. TowersAssociates www.bennugroup.net      www.stevetowers.com
  27. 27. Skill‐sets within the OSM(US Bank)Project Managers to lead initiativesI iti ti di t d d b t• Initiative coordinators and drum beatersCertifed Process Professionals to align for SCOs• process improvements and a process• process improvements, and a processmanagement/documentation teamPerformance Analysts to count towards SCOsPerformance Analysts to count towards SCO s• Gather data, first level analysis, scorecardupdatesOD Expertise• Plan, Review & CheckTowersAssociates www.bennugroup.net      www.stevetowers.com• Communication• Training
  28. 28. Organizations achieving BSC successLeaders use the BSC/SM to make their customers’ lives Simpler, Easier and More SuccessfulThey focus Outside‐in and reduce complexity by applying focus to and fixing the Causes of Workapplying focus to and fixing the Causes of WorkThey Align everything they do through measurement to y g y g y gthe Customer and eradicate the things that don’tTh l t h l h t h lThey apply technology where technology adds CUSTOMER value!
  29. 29. A New Landscape is emerging
  30. 30. UPCOMING DATEShttp://www.bpgroup.org/certification-by-city.html
  31. 31. Arlington, VABalanced Scorecard MastersBuilding Your Scorecard: Working Towards an Office of Strategy ManagementStriving for Balanced Scorecard Success focus on Successful Customer OutcomesionEmbedding the scorecard as part of our organizational DNAf d ’clusiGet everyone focused on SCO’s thru the BSC & SMDevelop the Office of Strategic ManagementConDevelop the Office of Strategic Managementhelp on the journey to the Promised LandIn

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