beyond hpt new frontiers for the theory and practice of performance improvement session by: mariano...
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Beyond HPT
Beyond HPTNew frontiers for the theory and
practice of performance improvement
Session by:
Mariano Bernárdez, PhD., CPT
Director of the Performance Improvement & Senior Scholars Institute, Technological Institute of Sonora, Mexico.
ISPI Board Director 2004-2006Performance Improvement Global Network Chapter, ISPI,
President
Sources & methodology Meta-analysis of current research & classic literature
in US, Europe, Asia and Americas Historical review of organizational practice from 1916
to present Economic and social 2003-2005 surveys from
The Economist WSJ/Heritage Foundation Business Week UNDP
Collaborative study involving CPTs in 16 countries Performance Improvement Global Network survey 2003-2005 PI Workshops & Conference discussions in
Europe, US and Latin America Inputs from 28 CEOs of client companies
Special thanks to
Miguel Bianchetti – CEO Refinor Glenn Tilton – CEO United Airlines Gonzalo Rodriguez Villanueva –
President ITSON Roger Kaufman C.K. Prahalad
Objectives
Revisit & expand PI roots Branch out, explore strategic
trends “Map” the new territory Draw lessons from practice
Why?
New realities, new frontiers Globalization Knowledge-Based economy BOP, emerging markets E-Performance
Crossroads Outgrow “process improvement” Global, multinational or international?
Expanding the roots Growing inside-out
From programmed instruction to process improvement
From training to performance Growing outside-in
Business perspective Outside-in disciplines:
Strategic planning Economics Marketing Business development
Economics, market, social realities Knowledge-based economics
Expanding the roots Inside-Out approach “NSPI” legacy Focus on “improvement” Internal focus
Source: Ripley & Dean (1997)
Performance improvement pathfinders
Expanding the roots
Branching out
Management dimension Business dimension From operations to tactics to strategy From educational, HR reformers to
business partners From “improving” existing organizations
to create new organizations Learning from the “practitioners”,
movers & shakers A little history of business & organization
Mapping the new territory
Knowledge-based economics The world is flat & spiky
Emerging markets, BOP realities Serving the poor, profitably Unlearning CW
E-Performance From e-training, to e-learning to e-
performance
Knowledge-based economics
The world is flat & spiky Serving & developing the 21st
century New Frontier: emerging markets
Performance new frontier:Knowledge-based economy
Population
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland
Performance new frontier:Knowledge-based economy
Emisión de luz
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland
Light emissions
Performance new frontier:Knowledge-based economy
Patents
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland
Performance new frontier:Knowledge-based economy
Citaciones académicas
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland
Papers
Performance new frontier:Knowledge-based economy
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland
New realities: the digital divide
Knowledge Consumers
Knowledge producers
Performance new frontier:Knowledge-based economy
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland
PI as a vehicle for crossing the digital divide
PI new frontier:Emerging markets, BOP realities
Bangalore: India From 900,000 to 6,000,000
inhabitants (1990-1999) From agriculture to 30%
India’s tech exports More than 1,000 tech
companies outshored Exporting online professional
and technological services Software code to Microsoft K-12 coaching to US Bioegineering to France
Key: Technological clusters & IIT using e-performance
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland
PI new frontier:Emerging markets, BOP realities
China Second largest online population 400% yearly growth Digital Olympics 1,000,000 PhD. graduated x year Software development for US &
Europe Technology and business
incubation clusters Shangai – Jiading (143 companies) Shandong Quingdao Shandai Weifang
4,2 billion dollars in foreign technological investment in new IPOs
E-Performance
From e-learning to collaboration From knowledge management to
knowledge creation Virtual organizations Knowledge factories
ONLINE MIGRATION OF. ONLINE MIGRATION OF.
• JobsJobs• WorkplaceWorkplace• OrganizationOrganization• PerformancePerformance
PI New frontier: E-Performance
PI New frontier: E-Performance
0
10
20
30
40
50
60
70
IM
Cellphones
% US workforce using IM, email y cell phones for work
Fuente: Wall Street Journal
PI New frontier: E-Performance
1991 1999 20052005 20202020
1,4 % 5 % 20 %20 % 40 %40 %
OnlineOn site
Fuente: Business Week
PI New frontier: E-Performance
Know-how and learning embedded in technological environment
From Information Technology to Collaboration Technology
Collaboration technology for BOP markets
PI New FrontierEmerging markets, BOP realities
12% equity markets for 2006
9 % annual GDP growth Largest inflow of
business investment Does your company
have a BOP strategy? Challenges
Microfinance New business
development Knowledge-intensive High-end, smart
technologies
PI New FrontierEmerging markets, BOP realities
World Economy Growth Forecast
2004 2025 2050
USA 28% 27% 26%
EU 34% 25% 18%
Japan 12% 7% 4%
China 4% 15% 28%
India 2% 5% 17%
Others
20% 21% 10%
PI New frontiers:Leading cases
Achieving business success by developing clients & market (Refinor case)
The new economy generator Performance centered university Incubation Acceleration
Refinor
Achieving business success by improving market and social conditions
9 years case study Two 3-year “conventional” PI One 3-year strategic PI
The company
Privatized in 1994 Gas production & distribution North of Argentina MERCOSUR Underdeveloped region Underdeveloped market “Island” in a sea of social
problems Management development
1994-1996
Refinor
Strategic Performance Indicators (SPI)
Year K hours of social work (*)
Market share
Local unemployment rate
Property loss
Riots & incidents
1994 8 4 25 8 20
1995 8.5 4.5 23 7.5 40
1996 9 4.8 21 7.3 50
1997 12 5 15 4 35
1998 14 6 12 2 15
1999 16 8 10 1 20
2000 4 4 25 6 50
2001 4.5 4.5 28 8 145
2002 6 4.6 32 7.8 60
n 82 45.4 191 51.6 435
Mean 9.1 5 21 6 48
Median 8.5 5 23 7 40
PI New frontier: Business, Social and Environmental bottom line
Investment
Bottom line• Macro• Mega
PI New frontier: Business, Social and Environmental bottom line
ITSON: strategic PI in Mexico
First PhD. in Performance Improvement
Kaufman, Rummler, Brethower, Carleton, Gerson, Bernardez, Guerra
From developing individuals to developing organizations
Three tracks Doctoral candidates Executives & supervisors Corporate sponsors
Business case Social bottom line Conventional bottom line
Three steps to develop new businesses:
Pre-Incubation Incubation Acceleration
PI New Frontier: Business incubation
Business-centered
Social impact
PI New Frontier: Business incubation
Three-tiered project teams:
Doctoral candidates
Executives Sponsors
2006: 13 new organizations
Job creation Graduates
employment Social &
regional impact
Reverse migration
PI Process: Get your company a PhD
New competencies From improving performance to creating new
business From operational to strategic planning & thinking Creating clients, markets Developing a true international strategy and
approaches Thinking outside of the traditional “process & micro” box Redefining performance for BOP, emerging markets Developing social strategies for business success: “triple
bottom line”, megaplanning Using online technology to produce and deliver e-
performance Integrating “external” disciplines and approaches:
economics, social sciences, business, culture
Q&A
New Performance metrics
DJSI outperforming “conventional” DJGI across industries
MNC adopting “green strategy” (GE, BP)
MNC adopting BOP strategy (Citibank, GE, Microsoft, Google, IBM)
A little history…of actual practice
Performance improvement pioneers:from practice to principles
Arsenal of Venice (1435) Pre-Manufacturing & assembly Charles Babbage (1792-1871) First computer, Economy of machinery & organizations Samuel Slater (1768-1835) English Manufacturing system Eli Withney, Simeon North (1795) American Manufacturing system (Springfield, Colt,
McCormick’s reaper) Daniel McCallum (1815-1878) US railroads: Functional organization Andrew Carnegie (1835-1919) Vertical integration, Bessemer converters Henri Fayol (1911) General Management principles, functional organization methods
& principles Frederick W. Taylor (1914), Carl Barth , H.L. Gantt (1916) ; Frank & Lilian Gilbreth
(1912) Process improvement, industrial psychology, task and process analysis Henry Ford (1913) Assembly line, serial production, mass market Alfred P. Sloan (1922) –first CEO- Divisional organization (GM) Kaoryu Ishikawa (1949), Joseph Juran (1951) & W. Edwards Deming (1952) , TQM in
Japanese industry Taiichi Ohno (1958) JIT, kanban, kaizen in Toyota Ray Kroc (1952) Franchising (McDonalds) Jack Welch (1981) Network organization, boundaryless organization HP & 3M: Matrix organization, self-directed work teams Tim Berners-Lee (1989) Internet, Mosaic Amazon, eBay, Google, Dell: virtual organizations
A little history…
Sources: Chandler, A.D. (1962) Chapters in the history of
the American Industrial enterprise. Cambridge, MA: MIT
Chandler, A.D. (1977) The visible hand: The managerial revolution in American business. Cambridge, MA: Belknup/Harvard
Chandler, A.D. (1990) Scale and scope: The dynamics of industrial capitalism. Cambridge, MA: Belknup/Harvard
Wren, D.A. (2005) The History of Management Thought. Hoboken, NJ: Wiley
PI New FrontierCompeting for the future
PI New FrontierCompeting for the future
Quiz: who said this? “The right price is not what the traffic well bear. The
right wage is not the lowest sum a man will work for. The right price is the lowest price an article can steadily de sold for. The right wage is the highest wage the organization can steadily pay. That is where the ingenuity of the organization comes in. It has to create customers, and if it is making a commodity, then its own workers are among his best customers.
We have about two hundred thousand first-class
customers in our company –in the people we directly pay wages to. And we are creating more customers everyday in the workers of the companies we buy from. For every dollar we pay in wages, we pay two for materials and parts made on the outside. “
Quiz: who said this? “The right price is not what the traffic well bear. The
right wage is not the lowest sum a man will work for. The right price is the lowest price an article can steadily de sold for. The right wage is the highest wage the organization can steadily pay. That is where the ingenuity of the organization comes in. It has to create customers, and if it is making a commodity, then its own workers are among his best customers. We have abvout two hundred thousand first-class customers in our company –in the people we directly pay wages to. And we are creating more customers everyday in the workers of the companies we buy from. For every dollar we pay in wages, we pay two for materials and parts made on the outside. “
Heny Ford (1924) Today and tomorrow. New York, NY: Productivity Press, Page 140
Ford Internal performance improvement
Assembly line Serial production
External performance improvement Mass market Developing market purchasing power Vertical integration Horizontal integration Alliances
Systemic vision of business Supply <-> demand Relating external & internal performance
Creating a customer, market
Emerging markets, BOP realities
Competing for the future From Bottom line to Top line management Breaking with “old future”, extension of past success
Serving the poor, profitably Rewriting the rules of CW
New organizations Network Virtual
KSF Incubation Acceleration
E-Performance in BOP markets
Village Collection Centers (VCC)
Automatic weighing
Fat control Pricing Market price
for rural producers
10,675 interconnected villages
Control and information to producers
Eliminating middlemen
Purchasing & pricing power to the producers
PI New Frontier: Business incubation
Integrating learning, consulting & research
PI new frontier: Business acceleration
Leveraging companies growth
Access to global markets
Integration to knowledge-economy’s value chain
“Match-making”
Agenda
Revisiting & expanding the roots Branching out Mapping the new territory Lessons from practice