S f lSuccessfulCustomerOutcomesTowersAssociates www.bennugroup.net www.stevetowers.comOutcomes
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
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
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.
“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
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.
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
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
Can You Imagine How DifferentThings Would Be?TowersAssociates www.bennugroup.net www.stevetowers.com
Welcome toAn example of how to Innovate throughInnovate through Successful Customer OutcomesTowersAssociates www.bennugroup.net www.stevetowers.comOutcomes
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?
WHAT DID FEDEX KINKO’S DO?TowersAssociates www.bennugroup.net www.stevetowers.com
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
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
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
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
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!
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