Keynote from Architecture World 2009 in Bangalore. Explores the migration to Outside-In and its impact on the way we measure performance. More on this theme in the webinar series at http://www.bpgroup.org

1. Architecture World 09
Enterprise BPM09
Improve efficiency and customer service, increase revenue and reduce costs
Conference Keynote
BPM and Performance
Management, Scorecards
& Strategy Maps
Steve Towers
BP Group

2. Linking Process with Performance is a critical element
in ensuring ongoing success.
We will review the steps to achieve this alignment
and provide insights from leading companies
to fast track you approach.
Finally we will consider the process of
consolidating and maintaining
the performance gains to create the gift that keeps on giving.

3. www.bpcommunity.org
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• Certification
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• Online Support
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BUSINESS
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PROCESS
PROFESSIONAL
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Coaching
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INFORMATION
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RESEARCH • Conferences &
Seminars
www.successfuloutcomes.blogspot.com

4. The way we think about Performance is
wrong.

5. Houston, we have a problem
90% of businesses are
unable to execute the
strategy they have on
paper
70% of businesses project
performance they will
never attain
Source: Axon, L. Learning to lead: How Companies Grow Profits by Growing Leaders, Sept 22,2004
Source: Norton, D. Aligning your Strategy to the Customer Value Proposition, 13/9/2005

6. Few Organizations Execute
Strategy Well
“Strategy has never been more
important”
“Less than 10% of
strategies
effectively
formulated are
effectively
executed” Fortune Magazine

7. Only 5% of the workforce understands what the strategy is
Source: Norton, D. Aligning your Strategy to the Customer Value Proposition, 13/9/2005

8. Performance Measurement
“A process of assessing progress towards
achieving predetermined goals, including
information on [efficiency, quality, and]
outcomes….
Well if it is this easy why does it not
happen?
Source: “Serving the American Public: Best practices in performance measurement,” June 1997.

9. “We are measuring the wrong *******
things!”
Ryan Air’s CEO
Michael O’Leary
Ryan Air – Europe‟s largest
And most successful Airline.
“It‟s not rocket science.
You need to be measuring
What‟s important to the
customer. Then you make
sure everything you do is
achieving those measures.
******* simple really.
That way customers keep coming back for more”
.

10. • Growing Revenues
• Enhancing Service
• Reducing Costs
That is,
winning The Triple Crown
UTILISE REDIRECT IMPROVE DEVELOP PREPARE

11. To link process with performance we need
to rethink what we mean by performance.

12. Red Tape and cutting
through the
bureaucracy
This can be
overwhelming for
many people and
their organizations
because the
processes and
systems in place are
complex, expensive
and constrain our
agility… they were
built for a different
era

13. Legacy Principles of the Strategy Focused
Organization:
„MAKE STRATEGY EVERYONE‟S JOB‟ (telco)
CORP
SBU
Top-Down “Bridging • EDUCATION Bottom-Up Process
Process” To Share to Internalize &
the Strategy & Align Execute the Strategy
the Workforce • PERSONAL GOAL
ALIGNMENT
• BALANCED PAYCHECKS
The Strategy Focused Workforce

14. Only 5% of the workforce understands what the strategy is
Source: Norton, D. Aligning your Strategy to the Customer Value Proposition, 13/9/2005

15. Legacy Corporate and Division Scorecard (GE)
Sample from GE Lighting Business Group
Level of Organization Financial Customer Internal Process Learning & Growth
Corporate Scorecard Increase profit margin Improve customer Increase inventory turns Increase level of
satisfaction level Improve internal process employee competency
Division Scorecard Optimize cost of production Improve customer Increase inventory turns Increase level of
Reduce inventory levels satisfaction level Improve internal process employee competency
Plant Scorecard Optimize cost of production Increase percent of Increase inventory turns Number of "on the
Increase yields ratio on time delivery Reduce number of defects job training" delivered
Increase labor productivity Reduce customer per million Number of performance
Reduce inventory levels complaints per million Improve quality incoming coaching session
materials
Maintain optimum equipment
speed
Frontline Employee Reduce waste Reduce equipment downtime Number of "on the
Scorecard Reduce overtime Reduce number of poor job training" attended
Increase production rates solders Number of performance
Reduce number of cracked coaching session
bulbs attended
The above example shows how the scorecard at corporate level is
cascaded to division level, and further to plant level and employee level.
Are we measuring the Right Things?

16. The Legacy Balanced Scorecard Adopted for a
Government Organization
Stakeholder Perspective
The Mission of the organization is to
fulfill Public Policy expectations
Customer Perspective Budget / Financial Perspective
“To achieve our mission, how must we “If we succeed, how will we look to our
look to our customers?” financial donors?”
Internal Perspective
“To satisfy our customers, financial donors
and mission, what business processes must
we excel at?”
Learning & Growth Perspective
“To achieve our mission, how must our people
learn, communicate, and work together?”
This type of ‘inside-out’ thinking creates complexity and functional
specialization. On the surface it looks fine, dig deeper and you see the impact
of the legacy mindset – costs, confusion and inability to achieve a SCO.

17. What’s
Missing?

18. We don‟t focus on the Customer! CC company)
(US/UK
Our service centre hierarchy The service centre as a system
What have we focussed on? What we SHOULD pay attention to
How many of these
•Service measures does the Focus: creation of value for customers
Level customer care about? Measures: capability, predictability of
Mgr •Abandon
Mgr demand, response, failure
Rate Role: Acts on the system
•Costs What happens when
the actuals fall short of
targets?
Personal reviews Focus: creation of value for customers,
- Training & coaching removal of failure and waste
•# Call/Cases
- Personal Measures: achievement of purpose,
•Average
FLM Handle Time Development plans FLM reducing variation in system performance
- More people Role: Act on the system
•Quality
•AHT What about acting on
•Ability to the system? How
follow much of demand is
Focus: doing what the customer wants
Assoc policies/pro failure? Assoc
What % of demand are Measures: achievement of purpose,
cedures/scri variation in performance
pts we meeting?
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;
• 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.

19. Looking Outside-in we can then link our
existing programs to achieving improved
performance

20. www.cemmethod.com
EXECUTE
REVIEW
ASSESSMENT
DISCOVERY

21. We can make sure that the way we
measure and reward success is linked
explicitly with achieving Successful
Outcomes

22. What should the Outside-In Balanced
Scorecard look like?

23. BPM4 - Balanced Scorecard
PERSPECTIVE
FINANCIAL
1. Customer Growth New
2. Customer Growth Retained
3. Customer Relationship – Depth
4. Customer Relationship - Breadth
5. Revenue
6. Operation Cost
7. Profitability
CUSTOMER ALIGNMENT INTERNAL PERSPECTIVE
1. SCO Development 1. Process Optimization – Penetration %
2. SCO Alignment 2. Process Optimization - Lifecycle/Maturity
3. SCO Optimization 3. Process Optimization - Causes of Work
4. Process Optimization – IO v. OI
Customer 4. Process Optimization - Points of Failure
5. Innovation Landscape Index 5. Scorecard - IO v. OI
6. Business Efficiency Ratio 6. Scorecard -Rate of Progression
PERSPECTIVE
LEARNING
1. Organisation Maturity
2. Process Maturity
3. People Maturity
4. Technique Utilisation
5. Customer Wants/Needs Analysis
6. Innovation Index

24. How do we evolve that into the Outside-In
Strategy Map

25. A Complete Scorecard is a
Program for Action (successful us airline)
Strategic Theme:
Strategic Theme:
Objectives Measures Targets Initiatives
Operations Efficiency
Operating Excellence
FINANCIAL Profits and
RONA • Profitability • 30% CAGR
Grow Fewer • Grow Revenues • 20% CAGR
Revenues planes
• Fewer planes • 5% CAGR
CUSTOMER
Attract & Retain
More Customers • # Customers • 12% growth •Customer
ALIGNMENT • More Customers • Ranked #1 loyalty program
• FAA On Time
On-time Lowest
• Flight is on -time Arrival Rating • Ranked #1 • Quality
Service prices • Lowest prices • Market Survey
management
INTERNAL • 30 Minutes • Cycle time
PERSPECTIVE Fast ground • Fast ground • On Ground Time • 90% optimization
turnaround turnaround • On-Time
Departure
LEARNING • Ground crew • % Ground crew • yr. 1 70% • Ground crew
PERSPECTIVE alignment trained yr. 3 90% training
Ground crew yr. 5 100%
alignment • % Ground crew • ESOP
stockholders

26. Progressively...
• assess the Current State
e.g. Process Performance Audit
• Identify those areas needing rapid
attention
• Roll out a strategy to migrate the teams,
departments and divisions towards
Outside-In performance management

27. Migrate from the Legacy Strategy Performance system
Divisional
Process & Performance
Strategy Objectives
Management
Management
Budgets Incentives
Planning &
Decision Making
Top team
Knows best
Review Requests
and Adjust
Negotiation &
Horse trading Broken down into
specialism's

28. Devolve high level SCO‟s into individual
performance appraisal processes

29. Moving to the Outside-In
DEVELOP THE
Balanced Strategy STRATEGY
1
Scorecard
STAGE
6 2
DETERMINE THE
STAGE
STAGE
SCO’S
ADVISE & MATURE TRANSLATE THE
Performance Metrics Strategic SCO SCO’S into
THE OPERATION
Plan
OPERATIONS
Results
5 3
STAGE
STAGE
Operations Plan
OPERATIONAL DEVELOP , PLAN
Performance
REVIEWS – MANAGE Metrics & PREPARE
& REFINE
4
Results OPERATIONS
STAGE
DELIVER PROCESSES
& PROJECTS

30. Some elements that change …
From (Inside-out) To (Outside-In)
Processes Complex Simple
People Controlled Empowered
Structure Hierarchy/ Team
Functional
Systems Prescriptive Adaptive
Measurement Activities Results
Customer End of chain Inclusive
Segmented Individual

31. www.cemmethod.com
EXECUTE
REVIEW
ASSESSMENT
DISCOVERY

32. Business Process Professional
pathway
Level Objective Attainment Designation
CPP
7 Leadership Master Champion
6 Strategy Master CPP Master
5 Integrate Professional CPP 5
4 Perform Professional CPP 4
3 innovate Professional CPP 3
2 Align Professional CPP 2
1 Optimise www.bp2009.com
Practitioner CPP 1
www.icmgworld.c
Community
om
Everyone  
Business Analyst     South Africa –
Process Managers      June
Technologists      Gulf States –
Senior Managers      
June
Australia
Leaders       
India
US & Europe

33. In summary
To realise the
performance
improvements
from process…
We just need to
open our eyes
wider and see
things anew

34. Questions?

35. www.bpcommunity.org
• Global 34,000
COMMUNITY
• LinkedIn 2,350
www.bp2009.com
• Certification
(7 Levels)
TRAINING • Open & In house
Learning
• Online Support
www.bpgroup.org
BUSINESS
• Support Groups
PROCESS
PROFESSIONAL
• Mentoring &
Coaching
• Articles, News
INFORMATION
&
• Discussion
RESEARCH • Conferences &
Seminars
www.successfuloutcomes.blogspot.com

36. Architecture World 09
Enterprise BPM09
Improve efficiency and customer service, increase revenue and reduce costs
Conference Keynote
BPM and Performance
Management, Scorecards
& Strategy Maps
Steve Towers
BP Group