driving business value through strategic process management sloan global holdings tom coleman chief...
TRANSCRIPT
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Driving Business Value Through Strategic Process
ManagementSloan Global HoldingsTom ColemanChief Information & Process [email protected] Seymour AvenueFranklin Park, IL 60131
April 12, 2013
Step1 • Strategic Planning
Step2 • BPM
Step3 • HCM & IT
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About Sloan• Founded in Chicago, Illinois, USA in 1906 by William Elvis Sloan• 9 Major locations IL, China (3), PA, MA, AR, Mexico, CA• 4,300 distributors, 69 Rep offices, 60 countries• Privately Held, U.S. Based Commercial Plumbing Products Manufacturer• The leader in water and energy high efficiency solutions• The most comprehensive line of commercial restroom solutions • Proven reputation for innovative designs, sustainable business
practices, commitment to quality, and devotion to serving our customers
• Global supply chain and wholesaler distribution network• SAP Business Systems enabling breakthrough business processes
SLO
AN
C
om
pany O
verv
iew
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Product Offering
Flushometers
Sensor Faucets
Vitreous China Toilets, Urinals and Lavatories
Sink Systems
Health & Hygiene Solutions
Water Reuse Systems
Water Monitoring & Control Systems
Water & Energy Efficient
Commercial Restroom Solutions
High Efficiency | Hygienic Solutions | Trusted Performance
SLO
AN
C
om
pany O
verv
iew
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Sample Enterprise “Toolkit”• Lean – Waste elimination• TOC – Eliminate the constraint (bottleneck)• Six Sigma – Reduce variability, solve problems• BPR – Holistic redesign of end-to-end processes• ADKAR – Manage the human side of change• BSC/Hoshin – Connect strategy to action/KPIs• 4DX (Four Disciplines of Execution)
– Create a few must do must succeed goals (WIGs)– Act on the lead measures that impact goal
achievement– Create a compelling scoreboard– Create a cadence of accountability
• Engage IT and HR “technologies”
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Conclusion• Companies must take an end-to-end,
holistic view of their strategy• Corporate Strategy is a governance process• Corporate Strategy is not the same as
Business or Marketing Strategy• The strategy framework must tie core
ideology to the value prop, core processes, Human Capital Management, Information Capital Management, and Corporate Culture
• Improvement ≠ Transformation5
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What Are We Trying To Do?CashA/R
InventoryEquipmentPropertyGoodwill
Human CapitalInformation CapitalOrganization Capital
Tangible Assets
Intangible Assets
Liqui
dity
Read
ines
s
Adapted from: Kaplan and Norton 2004
Strategy and Process
What? How?
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• Creating a unique and sustainable competitive position
• Assimilating, attaining, and extending best practices
OperationalEffectiveness
ValueDiscipline
Run the same races “faster”
(Efficiency)
Choose to run a different race
(Effectiveness)
Achieving Superior PerformanceOperational Effectiveness is Not Strategy
7Source: Michael Porter
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“Strategy is not about ways to get better…
strategy formulation is about finding ways to
get…
different”Source: Michael Porter
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Five Tests of a Good Strategy• A unique value proposition compared
to other organizations
• A different, tailored value chain
• Clear tradeoffs, and choosing what not to do [as well as what to do]
• Activities that fit together and reinforce each other
• Continuity of strategy with continual improvement in realizing the strategy
• A unique value proposition compared to other organizations
• A different, tailored value chain
• Clear tradeoffs, and choosing what not to do [as well as what to do]
• Activities that fit together and reinforce each other
• Continuity of strategy with continual improvement in realizing the strategy
Adapted from: Michael Porter (2006) 9
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Translating the Mission/Vision into Desired Outcomes
MissionWhy we exist
Core ValuesWhat we believe in
VisionWhat we want to be
StrategyOur game plan
GoalsOutcomes we need to accomplish
Strategic InitiativesWhat we need to do
Personal ObjectivesWhat I need to do
Strategic Outcomes
SatisfiedShareholders
DelightedCustomers
EffectiveProcesses
Motivatedand Prepared
Workforce
Kaplan and Norton 2001
CULT
URE
CULTURE
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CoreValues
1.0
Vision
3.0
Mission(Purpose)
2.0
MarketNeeds
4.0
SWOT
6.0
CompetitiveAnalysis
5.0
CustomerValue
Proposition& Discipline
7.0
Develop Strategic WIGs& Key Initiatives
8.0
Communication,Review,
Feedback
10.0
2013 Sloan Strategic Planning ProcessCore
IdeologyDiscoveryValuePlan
Strategic Goals Realization
EmployeePerformanceManagement
Process
17.0-N
BudgetProcess
17.0
FinancialValue
Proposition
18.0
StrategicImperatives
21.0
Reconcilation
What can wediscover aboutthe market, the
competition, andourselves?
What is our visionof today and of thefuture? What do
we value?
What must weachieve over the
next 5 years?
To achieve ourvision, what mustwe deliver to ourcustomers andstakeholders?
What is wildly important thisyear? How shall we achieveour financial and customer
goals?
How does the strategicplan reconcile with thebudget? How can we
communicate the strategicplan? How can we alignthe WIGs and initiatives
to employee action?
11Note 1: This is an example of a strategic planning process Note 2: WIG = Wildly Important Goal
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CoreValues
1.0
Vision
3.0
Mission(Purpose)
2.0
MarketNeeds
4.0
SWOT
6.0
CompetitiveAnalysis
5.0
CustomerValue
Proposition& Discipline
7.0
Develop Strategic WIGs& Key Initiatives
8.0
Communication,Review,
Feedback
10.0
2013 Sloan Strategic Planning ProcessCore
IdeologyDiscoveryValuePlan
Strategic Goals Realization
EmployeePerformanceManagement
Process
17.0-N
BudgetProcess
17.0
FinancialValue
Proposition
18.0
StrategicImperatives
21.0
Reconcilation
What can wediscover aboutthe market, the
competition, andourselves?
What is our visionof today and of thefuture? What do
we value?
What must weachieve over the
next 5 years?
To achieve ourvision, what mustwe deliver to ourcustomers andstakeholders?
What is wildly important thisyear? How shall we achieveour financial and customer
goals?
How does the strategicplan reconcile with thebudget? How can we
communicate the strategicplan? How can we alignthe WIGs and initiatives
to employee action?
Note: This is an example of a strategic planning process
Part 1
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Sample Market Needs Analysis Fragment
Value Attributes Vs. Products(Survey Sample)
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Note: This analysis is done by product and also by value chain participant (customer)
ValueAttribute
Sloan sample portion of a comprehensive market needs Analysis
SAMPLE PORTIO
N OF M
ARKET NEEDS A
NALYSIS
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Sample Components of Competitive Analysis(Four-Phase Analysis)
Competitor’s Response ProfileIs the competitor satisfied with their
current position?What likely moves or strategy shifts
will the competitor make?Where is the competitor vulnerable?What will provoke the greatest and
Most effective retaliation by the competitor?
FutureGoals
Current StrategyHow the business
Is currentlycompeting
CapabilitiesBoth weakness
& strengths
AssumptionsHeld aboutitself & the
industry
What drives thecompetitor?
What the competitor isdoing and can do
Source: Michael E. Porter Competitive Strategy 14
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IndustryCompetitors
(Intensity of Rivalry)
Five-Forces Framework(“Industry Structure”)
Source: Michael E. Porter (Competitive Strategy)
Suppliers(Bargaining Power)
Buyers (Customers)(Bargaining Power)
Substitutes(Substitution Threat)
NewEntrants
(Threat)
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CoreValues
1.0
Vision
3.0
Mission(Purpose)
2.0
MarketNeeds
4.0
SWOT
6.0
CompetitiveAnalysis
5.0
CustomerValue
Proposition& Discipline
7.0
Develop Strategic WIGs& Key Initiatives
8.0
Communication,Review,
Feedback
10.0
2013 Sloan Strategic Planning ProcessCore
IdeologyDiscoveryValuePlan
Strategic Goals Realization
EmployeePerformanceManagement
Process
17.0-N
BudgetProcess
17.0
FinancialValue
Proposition
18.0
StrategicImperatives
21.0
Reconcilation
What can wediscover aboutthe market, the
competition, andourselves?
What is our visionof today and of thefuture? What do
we value?
What must weachieve over the
next 5 years?
To achieve ourvision, what mustwe deliver to ourcustomers andstakeholders?
What is wildly important thisyear? How shall we achieveour financial and customer
goals?
How does the strategicplan reconcile with thebudget? How can we
communicate the strategicplan? How can we alignthe WIGs and initiatives
to employee action?
Part 2
18Note: This is an example of a strategic planning process
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The Envisioned Future
1. Vision: What we need to become– Vivid description of new tomorrow
– Vibrant and engaging – yet tangible
– Paints a vivid picture into people’s minds
2. Strategic Imperatives(AKA BHAGs – Big, hairy, audacious goals)– Ambitious plans – an “audible gulp”
– Reachable plans (unlike core purpose)
– Rev up the organization / source of motivation
– Will require 10 or more years to achieveInspired by Jim Collins
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Compelling Vision Questions“What”
What does our organization look like in 5 years?
How big?
What are we famous for?
Why does anyone care about what we do?
How do our people feel about being part of our organization?
example
Sloan Compelling Vision Bullets“What”
Private Company
Global Leader
Manufacturing Company
Serving the Commercial Market
Innovation that saves $ for clients
Innovation that benefits the environment by saving water
“X” revenues (to $X billion)
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Compelling Vision“What”
By 2017, Sloan will be a $X billion global manufacturing leader of innovative commercial plumbing solutions, enabling millions of people to preserve life by minimizing water consumption.
example
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Compelling Vision“What”
By 2017, Sloan will be a $X billion global manufacturing leader of Innovative commercial plumbing solutions, enabling millions of people to preserve life by minimizing water consumption.
Strategic Imperatives (BHAGs)“What”
• How should we behave while executing on our goals.
Values[More here later]
example
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CoreValues
1.0
Vision
3.0
Mission(Purpose)
2.0
MarketNeeds
4.0
SWOT
6.0
CompetitiveAnalysis
5.0
CustomerValue
Proposition& Discipline
7.0
Develop Strategic WIGs& Key Initiatives
8.0
Communication,Review,
Feedback
10.0
2013 Sloan Strategic Planning ProcessCore
IdeologyDiscoveryValuePlan
Strategic Goals Realization
EmployeePerformanceManagement
Process
17.0-N
BudgetProcess
17.0
FinancialValue
Proposition
18.0
StrategicImperatives
21.0
Reconcilation
What can wediscover aboutthe market, the
competition, andourselves?
What is our visionof today and of thefuture? What do
we value?
What must weachieve over the
next 5 years?
To achieve ourvision, what mustwe deliver to ourcustomers andstakeholders?
What is wildly important thisyear? How shall we achieveour financial and customer
goals?
How does the strategicplan reconcile with thebudget? How can we
communicate the strategicplan? How can we alignthe WIGs and initiatives
to employee action?
Part 3
23Note: This is an example of a strategic planning process
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Financial Value Proposition
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Value Discipline (Strategic Position)Best Total Cost
Best Total Solution Best Product Innovation
Adapted from: Norton and Kaplan 2003/2004
Achieve the low cost position on
product and service support
Solve the customer’s
broader problem and share in the
benefit
Build a better product for which
customers will pay a premium
Lock-in
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Lock customer in to highswitching costs
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The Discipline of Best Total CostCulture
Disciplined teamworkProcess focusedConformance to
“one size fits all” mindset
OrganizationCentralized functions
High skills at core
I.T.Integrated
Low-cost transaction sysActivity-based mgt (ABM)
Fulfillment systems
Mgt SystemsCommand and controlCompensation fixed to
cost & qualityTransaction profitability
Adapted from: Michael Treacy and Fred Wiersema
Core ProcessesProduct delivery
Basic service cycleBuilt on standards
No frills fixed assets
Wal-MartDellSouthwest AirlinesAMDFedEx
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The Discipline of Best Product Innovation
CultureConcept, future driven
ExperimentationOut of the box mindset
Attack, go for it, win
OrganizationOrganic, cellular
Technical skills aboundLoose-knit structures
I.T.1-to-1 systems
1-to-many systemsMany-to many systems
Knowledge mgtTechnology enablement
Mgt SystemsDecisive and risk oriented
Reward individuals forinnovation capacity
Product life-cycle profits
Adapted from Michael Treacy and Fred Wiersema
Core ProcessesInvention
Market exploitationCommercialization
Life cycle mgt
3MNikeMercedesBMWSonyIntel
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The Discipline of Total Customer Solutions
CultureClient and field driven
“Have it your way” mindset
OrganizationEntrepreneurial client teams
High skills in the field
I.T.Customer databases
Link of internal/external infoKnowledge/analytics sys
Customer relationship mgt
Mgt SystemsRevenue/share of wallet
Rewards based on feedbackLifetime value of client
Adapted from: Michael Treacy and Fred Wiersema
Core ProcessesClient acquisition
Client developmentSolution developmentResponsive procedures
IBMNordstromHome DepotHPGoldman-SachsEmpire Carpet
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Customer Value Proposition AttributesValue Discipline* Vs. Customer Value Attributes
Michael Treacy and Fred WiersemaChart Adapted from Kaplan and Norton 2001
Image
Price Quality Time Selection Functionality Service Relationships Brand
Best TotalCost
n n n n o o o n SmartShopper
Best CustomerSolution
o o o o o n n n TrustedBrand
Best ProductInnovation
o o n o n o o n BestProduct
n Differentiator Strategy
o General Requirement
Adapted from Kaplan and Norton 2001
Product and Service Attributes Relationship
* Value discipline is a term used by Treacy and Wiersema which parallels strategic positioning
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Best TotalCost
Best ProductInnovation
Best TotalSolution
SystemLock-in
Value Proposition
● Low total cost● Speedy purchase● Very high quality
● Best performance products● First to market
● Best total solution● Best solution● Standards based
Golden Rule
● Variety kills efficiency● Cannibalize your success with new breakthroughs
● Solve the customer's broader problems
● Cannibalize your success with new breakthroughs and extensions
Core Processes
● End-to-end order fulfillement and supply chain
● Invention● Product development● Market exploitation
● Customer acquisition and development● Solution development● CRM processes
● Invention● Product development● Market exploitation
Improvement Levers
● Fulfillemt process redesign● Continuous Improvement
● Product technology● R&D cycle time● Product lifecycle mgt
● Problem expertise● Service customization● Relationships
● Product technology● R&D cycle time● Proprietary solutions
Major Improvement Challenges
● Shifting to a new asset base● Shift to new products
● Jumping to new technology
● Change in the solution paradigm
● Jumping to new technology● Standardization
Adapted from: Treacy and Wiersema
Strategic Position
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Source: Michael E. Porter
Low CostNiche Market
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FinancialPerspective"To sustainour mission,
on what mustwe focus?"
CustomerPerspective“To achieveour vision,how shouldwe appear
to ourcustomers?”
ProcessPerspective“To satisfy
ourcustomers
whichprocessesmust weexcel?”
ResourcePerspective"How will wesustain ourability tochange &improve?"
Organization Capital
skills
training
knowledge
teamwork
Human Capital
key positions & skills
education & training
knowledge mgt
Supply ChainProcesses
processes that produceand deliver products and
services
CustomerManagement
Processes
processes that supportand enhance customer
value
Product DevelopmentProcesses
processes that createnew products and
services
Customer ValueProposition
price quality Time selection functionality service partnership brand
Product/Service Attributes Relationships Image
Sloan Vision & MissionProductivity Strategy Revenue Growth Strategies
Improve CostStructure
Increase AssetUtilization
EnhanceCustomer Value
Expand RevenueOpportunities
+ +
Information Capital
systems
databases
networks
collaboration
key positions/skillseducation/trainKnowledge mgtteamschange management
capital asset mgmtrisk mgmtfiduciary controlsbudget controlsfinancial planning
Process mgmtSystems mgmtKnowledge mgmtDatabase mgmtNetwork mgmt
Financial Capital
Mission, Vision, BHAGs, Core Ideology
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FinancialPerspective"To sustainour mission,
on what mustwe focus?"
CustomerPerspective“To achieveour vision,how shouldwe appear
to ourcustomers?”
ProcessPerspective“To satisfy
ourcustomers
whichprocessesmust weexcel?”
ResourcePerspective"How will wesustain ourability tochange &improve?"
Organization Capital
skills
training
knowledge
teamwork
Human Capital
key positions & skills
education & training
knowledge mgt
Supply ChainProcesses
processes that produceand deliver products and
services
CustomerManagement
Processes
processes that supportand enhance customer
value
Product DevelopmentProcesses
processes that createnew products and
services
Customer ValueProposition
price quality Time selection functionality service partnership brand
Product/Service Attributes Relationships Image
Sloan Vision & MissionProductivity Strategy Revenue Growth Strategies
Improve CostStructure
Increase AssetUtilization
EnhanceCustomer Value
Expand RevenueOpportunities
+ +
Information Capital
systems
databases
networks
collaboration
key positions/skillseducation/trainKnowledge mgtteamschange management
capital asset mgmtrisk mgmtfiduciary controlsbudget controlsfinancial planning
Process mgmtSystems mgmtKnowledge mgmtDatabase mgmtNetwork mgmt
Financial Capital
Mission, Vision, BHAGs, Core Ideology
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So…What do we have so far?1. Market Needs2. Competitive Analysis3. OTWS (aka SWOT)4. Mission5. Vision6. Strategic Imperatives (BHAGs)7. Core Values8. Financial Value proposition9. Customer Value Proposition
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CoreValues
1.0
Vision
3.0
Mission(Purpose)
2.0
MarketNeeds
4.0
SWOT
6.0
CompetitiveAnalysis
5.0
CustomerValue
Proposition& Discipline
7.0
Develop Strategic WIGs& Key Initiatives
8.0
Communication,Review,
Feedback
10.0
2013 Sloan Strategic Planning ProcessCore
IdeologyDiscoveryValuePlan
Strategic Goals Realization
EmployeePerformanceManagement
Process
17.0-N
BudgetProcess
17.0
FinancialValue
Proposition
18.0
StrategicImperatives
21.0
Reconcilation
What can wediscover aboutthe market, the
competition, andourselves?
What is our visionof today and of thefuture? What do
we value?
What must weachieve over the
next 5 years?
To achieve ourvision, what mustwe deliver to ourcustomers andstakeholders?
What is wildly important thisyear? How shall we achieveour financial and customer
goals?
How does the strategicplan reconcile with thebudget? How can we
communicate the strategicplan? How can we alignthe WIGs and initiatives
to employee action?
Part 5
35Note: This is an example of a strategic planning process
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Focus on the Wildly Important
2-3
2-3
4-10
1-2
11-20
0
In addition to the whirlwind . . .
“The Law of Diminishing Return”
Source: FranklinCovey 4DX 36
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37
A WIG is a goal that makes all the
difference. Failure to achieve this goal renders any other
achievements secondary as it
relates to the long term well-being of the organization.
Source: Rick Spencer (Franklin Covey)
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38
Besides the whirlwind, what are you absolutely going
to do?
and…What are you
absolutely going to stop doing?
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39
Compelling Vision“What”
Strategy Execution“Operating System”
Wildly Important Goals(War & Battles)The Day Job
• What does our organization look like in 5 years?
• How big?
• What are we famous for?
• Why does anyone care about what we do?
• How do our people feel about being part of our organization?
Strategic Imperatives“What”
Daily Operations“Whirlwind”
• How should we behave while executing on our goals.
Values
Source: FranklinCovey 4DX
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40
Daily Operations“Whirlwind”
Strategy Execution“Operating System”
Continuous Improvement
Strategic War Plan
TransformationalChange
Source: FranklinCovey 4DX
Whirlwind To-Do List:1. This is important2. So it is 3. So is this, but…4. So is this but…5. This is important6. So is this7. So is this…8. Not as important as…
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41
WARGrow Profits from X to Y
by 12/31/2013
BATTLE BGrow gross margin from X
to Y by 12/31/2013
BATTLE ALower COGS from X to Y
by 12/31/2013
OTC Proc. Team WIGIncrease productivity
from X to Y by 12/31/2013
STP Mat. Team WIGReduce material costs
from X to Y by 12/31/2013
OTC Proc. Team WIGGrow throughput from X
to Y by 12/31/2013
Machining WIGReduce scrap from X to Y by 12/31/2013
Mfg Eng WIGReduce setup from X to Y by 12/31/2013
Inspired by : FranklinCovey 4DX
OTC = Order-to-Cash ProcessSTP = Source-to-Pay Process
TransformationalChange
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OrderTo
CashProcess
Demand GenerationProcess
New ProductDevelopment
Process
SloanStrategy
andGoals
CustomerSupportProcess
Wheels of Competitive Strategy
1980 Source: Michael E. Porter (Competitive Strategy)2007 Source: T. Coleman
GoalsStrategy
Objectives
Finance
Mfg Mktg
Sales
Service
HREngineering
Other
1980 2007
Functions Functions
Functions Functions
42
X
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Sample Old Functions Vs Processes
Information Technology (IT)FinanceHuman Resources (HR)
Marketing Sales Mat Mgt Mfg QA Research Des EngTech Support
Demand Generation
New Product Development
Order Acquisition
Cust Support
Order-to-Cash
Strategic Planning
Source-to-Pay
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New Functions Vs Processes
Information Technology & Process Mgt Financial Capital MgtHuman Resource Mgt (HR)
Business Development Supply Chain & Ops Product Development
Demand Generation
Product Development & Lifecycle Mgt (Domain Divided)
Order Acquisition
Cust Support
Order-to-Cash
Strategic Planning
Procure-to-Pay
44
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APQC Process Classification Framework
45Source: APQC
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DGPDemand
GenerationProcess
OAPOrder
AcquisitionProcess
STPSource-to-Pay
Process
OTCOrder-to-Cash
Process
CSPCustomerSupportProcess
SPPStrategic Planning Process
EPM/OCMEmployee
Perf. Mgt. &Org. Chg.
Mgt Process
BPMBusiness Process
Mgt Process
QAPQuality
AssuranceProcess
S&OPSales & Oper
PlanningProcess
MDMMaster
DataMgt Process
ECMEngineering
ChangeMgt Process
PCMShop Process
ChangeMgt Process
NPDNew ProductDevelopment
Process
AOPAnnual
Oper PlanProcess
HCMHuman Capital
Processes
MasterGovernance
Process
GovernanceProcesses
CoreProcesses
EnablingProcesses
(many more)
Sloan Enterprise Process Model
46
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FinancialPerspective"To sustainour mission,
on what mustwe focus?"
CustomerPerspective“To achieveour vision,how shouldwe appear
to ourcustomers?”
ProcessPerspective“To satisfy
ourcustomers
whichprocessesmust weexcel?”
ResourcePerspective"How will wesustain ourability tochange &improve?"
Organization Capital
skills
training
knowledge
teamwork
Human Capital
key positions & skills
education & training
knowledge mgt
Supply ChainProcesses
processes that produceand deliver products and
services
CustomerManagement
Processes
processes that supportand enhance customer
value
Product DevelopmentProcesses
processes that createnew products and
services
Customer ValueProposition
price quality Time selection functionality service partnership brand
Product/Service Attributes Relationships Image
Sloan Vision & MissionProductivity Strategy Revenue Growth Strategies
Improve CostStructure
Increase AssetUtilization
EnhanceCustomer Value
Expand RevenueOpportunities
+ +
Information Capital
systems
databases
networks
collaboration
key positions/skillseducation/trainKnowledge mgtteamschange management
capital asset mgmtrisk mgmtfiduciary controlsbudget controlsfinancial planning
Process mgmtSystems mgmtKnowledge mgmtDatabase mgmtNetwork mgmt
Financial Capital
Mission, Vision, BHAGs, Core Ideology
47
Where do strategic goals Flow to? PROCESSES!
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StrategicTheme
Financial
Customer
Process
Resource
Increase Asset Utilization
Enhance Cust Value
Expand Rev Opportunities
Improve Cost Structure
Productivity Strategy Revenue GrowthSloan Vision and Mission
Customer Solutions Theme (EPO= J. Aykroyd)
Improve S&M portion of
SG&A
TimeService Partnership Brand
Improve or eliminate VAC
ImproveDSO
ImproveSales Revenue
Improve Receivables
Marketingcost Improve
Restructure S&M
TermsAnalysis
S&MInventory
Improvement ReengineerCustomerSupportProcess(CSP)
Improve NPDI Idea Mgt
Sub Processes
Order Acquision
Process Has Clean Orders
Implem CRM Sales LeadMgt System
Mkt Needs Custom
Solutions
-N
Explore non-traditionalways to
increase brand awareness &
perception
Assign and train SCM
and Financeanalyst
ImplementSAP CIC (IC)
Develop call Centers
Implement IP Telephony
(VoIP)
Launch BPR Team for OAP
ReengineerOrder
AcquisitionProcess(OAP)
Implement Mkt Needs &
Competitive Analysis
ProcessesReengineer Customer
CommunicationProcess(CCP)
-N
Assign BPR Team for CCP
Product Portfolio
Analysis &Rationalization
Build IT's BI Support
To SCM Theme
MarketingInitiative
To NPDI Process
482008 Sloan Strategic Planning Cycle
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49
Sloan Business Process Mgt.(Process Lifecycle Mgt.)
Performand Improve the Process
MeasurePerformance
andUnderstand
Needs
DoesProcess
MeetStrategicGoals?
Yes
Set Targets;Understand Nature
of Perf Gap;Develop
Intervention Plan
NoDecide
Approach to
Change
EngageImprovement
Program
Re-DesignProcess
LEVEL 0DIAGRAMVERSION
StrategicPlanningProcess
Version: April 7, 2008
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LEVEL 1DIAGRAM
Sloan Business Process Redesign Process
Stage 1Mobilization
1.0
Stage 2Diagnosis
2.0
Stage 3Design
3.0
Stage 4Development
4.0
Stage 5Implementation
5.0
Stage 6Post Implement
6.0
FromBPM
Process
Mobilization DeliverablesTeam EducationScope and Boundary StatementVision StatementMission StatementGoal ListProblem StatementStakeholder ListCommunication PlanProposed project planReview with EPO/CPO
DiagnosisDeliverablesAs-Is mapBenchmark SummaryIndustry TrendsGap AnalysisBarrier listCritical Success FactorsImprovement PrioritiesMomentum for changeUpdated project planReview with EPO/CPO
DesignDeliverablesList of Brainstorm ResultsTo-Be DesignBusiness CaseUpdated project plan To-Be Design Preview with EPO CPO
DevelopmentDeliverablesJob DescriptionsOrg changesProcess PrototypePolicy StatementProceduresTest ResultsTraining ScriptsUpdated project plan Development Preview with EPO & CPO
ImplementationDeliverablesProduction System InstalledProcess Education DeliveredSystem Training PerformedInitial Process Performance AssessmentReview with EPO/CPO
Post-ImplementationDeliverablesProcess MeasurementsLessons LearnedAction PlansPost Implementation Preview with EPO & CPO
Gate 1 Gate 2 Gate 3 Gate 4 Gate 5
Gate 6
ToBPM
Process
Version: April 7, 2008 50
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Strategic Levers of Transformation
• Integrated with Sloan’s Strategic Plan• Process Redesign as well as Improvement• Policies, Rules, Procedures• Computing & Technology• Organization Structure• Change Management• Roles & Job Changes• Paradigm Shifts• Communications• Knowledge• Facilities 51
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Sample Methodology for Problem Solving and Improvement
DefineProblem
MeasureProblem
AnalyzeProblem Improve Control
LEVEL 1DIAGRAMVERSION
FromPLMP
Process
D M A I CNote: There are many types of CI methods. DMAICIs only one of the many methods in the toolkit thatshould be used depending on the objective and toolNeeded for change.
52
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Sample Enterprise “Toolkit”
CM: ADKAR
IT PMOBSC/Hoshin
BPR
53Need a recipe???
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BPM is a managementdiscipline that treats
Processes as assets that directly drive enterprise performance through (1)
operational excellence, (2) business agility, and (3) strategic differentiation.
54
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FinancialPerspective"To sustainour mission,
on what mustwe focus?"
CustomerPerspective“To achieveour vision,how shouldwe appear
to ourcustomers?”
ProcessPerspective“To satisfy
ourcustomers
whichprocessesmust weexcel?”
ResourcePerspective"How will wesustain ourability tochange &improve?"
Organization Capital
skills
training
knowledge
teamwork
Human Capital
key positions & skills
education & training
knowledge mgt
Supply ChainProcesses
processes that produceand deliver products and
services
CustomerManagement
Processes
processes that supportand enhance customer
value
Product DevelopmentProcesses
processes that createnew products and
services
Customer ValueProposition
price quality Time selection functionality service partnership brand
Product/Service Attributes Relationships Image
Sloan Vision & MissionProductivity Strategy Revenue Growth Strategies
Improve CostStructure
Increase AssetUtilization
EnhanceCustomer Value
Expand RevenueOpportunities
+ +
Information Capital
systems
databases
networks
collaboration
key positions/skillseducation/trainKnowledge mgtteamschange management
capital asset mgmtrisk mgmtfiduciary controlsbudget controlsfinancial planning
Process mgmtSystems mgmtKnowledge mgmtDatabase mgmtNetwork mgmt
Financial Capital
Mission, Vision, BHAGs, Core Ideology
55
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“The hardest part of succeeding in the age of Process is not technical in nature; it revolves around people and organizational change.”
Source: Michael Hammer56
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Source: Prosci
CM Tools Vs. Phases of Change
58
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A word about HR…• Benefits, onboarding, functional OD, and related HR
work is important but may do little to help the organization with transformation
• An HR organization can gain high credibility by linking HCM to both functions & process work
• HR is usually knowledgeable about what’s possible regarding human capability
• Often HR and IT are the only functions that see operationally across the entire enterprise
• The true value of HR is proportional to how they enable human beings and process teams to support the value proposition
59
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FinancialPerspective"To sustainour mission,
on what mustwe focus?"
CustomerPerspective“To achieveour vision,how shouldwe appear
to ourcustomers?”
ProcessPerspective“To satisfy
ourcustomers
whichprocessesmust weexcel?”
ResourcePerspective"How will wesustain ourability tochange &improve?"
Organization Capital
skills
training
knowledge
teamwork
Human Capital
key positions & skills
education & training
knowledge mgt
Supply ChainProcesses
processes that produceand deliver products and
services
CustomerManagement
Processes
processes that supportand enhance customer
value
Product DevelopmentProcesses
processes that createnew products and
services
Customer ValueProposition
price quality Time selection functionality service partnership brand
Product/Service Attributes Relationships Image
Sloan Vision & MissionProductivity Strategy Revenue Growth Strategies
Improve CostStructure
Increase AssetUtilization
EnhanceCustomer Value
Expand RevenueOpportunities
+ +
Information Capital
systems
databases
networks
collaboration
key positions/skillseducation/trainKnowledge mgtteamschange management
capital asset mgmtrisk mgmtfiduciary controlsbudget controlsfinancial planning
Process mgmtSystems mgmtKnowledge mgmtDatabase mgmtNetwork mgmt
Financial Capital
Mission, Vision, BHAGs, Core Ideology
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Labor is the single biggest operating expense in most businesses
61U.S. Bureau of Labor Statistics – 2000 to 2010
IT Contribution
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A word about IT…• There is a strong correlation between companies
that view IT as a strategic enabler and those that outperform their competition financially
• An IT organization can gain high credibility by substituting “technology” with “Process” as THE major discussion point
• IT is usually knowledgeable about what’s possible
• Often IT is the only function that sees operationally across the entire enterprise (add HR to the mix)
• The true value of IT is proportional to how integrated company systems are to core processes
• Core processes must support of the value proposition and strategic differentiation
• IT must consider becoming “BT”62
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CoreValues
1.0
Vision
3.0
Mission(Purpose)
2.0
MarketNeeds
4.0
SWOT
6.0
CompetitiveAnalysis
5.0
CustomerValue
Proposition& Discipline
7.0
Develop Strategic WIGs& Key Initiatives
8.0
Communication,Review,
Feedback
10.0
2013 Sloan Strategic Planning ProcessCore
IdeologyDiscoveryValuePlan
Strategic Goals Realization
EmployeePerformanceManagement
Process
17.0-N
BudgetProcess
17.0
FinancialValue
Proposition
18.0
StrategicImperatives
21.0
Reconcilation
What can wediscover aboutthe market, the
competition, andourselves?
What is our visionof today and of thefuture? What do
we value?
What must weachieve over the
next 5 years?
To achieve ourvision, what mustwe deliver to ourcustomers andstakeholders?
What is wildly important thisyear? How shall we achieveour financial and customer
goals?
How does the strategicplan reconcile with thebudget? How can we
communicate the strategicplan? How can we alignthe WIGs and initiatives
to employee action?
63Note 1 : This is an example of a strategic planning process Note 2: WIG = Wildly Important Goal
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Conclusion• Companies must take an end-to-end,
holistic view of their strategy• Corporate Strategy is a governance process• Corporate Strategy is not the same as
Business or Marketing Strategy• The strategy framework must tie core
ideology to the value prop, core processes, Human Capital Management, Information Capital Management, and Corporate Culture
• Improvement ≠ Transformation64
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Any questions?