operational transformation framework

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OPERATIONAL TRANSFORMATION HYPOTHESIS, FRAMEWORK, CASE STUDIES,

AND MATURITY MODEL

2.4.2015


WELCOME AND GETTING STARTED

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INTRODUCTIONS TODAY’S SPEAKERS

Shannon Adkins VP, Client Engagement & Strategy [email protected]

Sylvia Stephenson VP, Client Engagement & Strategy [email protected]

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DISCUSSION TOPICS

Case Studies

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4

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3

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The Case for Change

Maturity Model

Operational Transformation Framework

Maturity Assessment Exercise

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LANGUAGE MATTERS CLARITY WITH TERMINOLOGY IS CRITICAL TO UNDERSTANDING

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Adoption Innovation Process Excellence

Operational Transformation

Portfolio Management

✓ Organizational Effectiveness


THE CASE FOR CHANGE


CHANGE IS ALL AROUND US WE ALL HAVE EXPERIENCE WITH CHANGE; IT IS THE ONLY CONSTANT

CASE FOR CHANGE

Internal Drivers External Drivers

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•  Growth •  Merger and

Acquisition •  New Leadership •  Talent Gap •  Cost Pressure •  New Technology

•  Competition •  Industry Shift •  Regulation •  New Technology


INITIATIVE DISCONNECT + CHANGE FATIGUE PEOPLE OFTEN EXPERIENCE COMPETING, DIVERGENT, DUPLICATIVE EFFORTS

CASE FOR CHANGE

Internal Drivers External Drivers

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Can lead to: •  Process

improvement initiatives

•  LEAN or Six Sigma projects

Can lead to:

•  Innovation programs

•  Design thinking initiatives

•  Novel approaches

WHO IS THINKING ABOUT THE PEOPLE?


TAKE AN INTEGRATED APPROACH WITH PEOPLE AT THE CENTER OF FOCUS

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•  Process Excellence •  Adoption •  Innovation •  Portfolio Management •  Organizational

Effectiveness


OPERATIONAL TRANSFORMATION FRAMEWORK


OPERATIONAL TRANSFORMATION FRAMEWORK INTEGRATED, INTERDISCIPLINARY APPROACH TO LASTING CHANGE

ADOPTION INNOVATION

PROCESS EXCELLENCE

OPERATIONAL TRANSFORMATION Inputs

Outcomes

How can we be more efficient with our process?

How do we generate novel approaches to solve future demands?

Why should I change? Who, what, when, where and how?

Do we have clear leadership, vision and a plan to get there?

How do we realize return on investment and sustain change over time?

How will we align, prioritize and manage risk?

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MATURITY MODEL


Expe

cted

Ret

urn

on

Inve

stm

ent (

ROI)

PROCESS

ADOPTION

INNOVATION

0 1 2 3 4 - WORLD-CLASS

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PORTFOLIO MANAGEMENT

ORGANIZATIONAL EFFECTIVENESS

Level of Maturity


CASE STUDIES


Good Superior Optimal World Class

PROCESS EXCELLENCE

ADOPTION

INNOVATION

Change Management and Communications for an Integration

CASE STUDY ADOPTION APPROACH

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PROCESS EXCELLENCE

ADOPTION

INNOVATION

Current State Clinical Study Management Process Mapping

CASE STUDY PROCESS EXCELLENCE APPROACH

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PROCESS EXCELLENCE

ADOPTION

INNOVATION

NEW PRODUCT DEVELOPMENT

Continuous Improvement for Coca-Cola Co.

EXTERNAL CASE STUDY

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PROCESS EXCELLENCE

ADOPTION

INNOVATION

Integrated Approach for an Independent Physician Association (IPA)

EXTERNAL CASE STUDY COST OF HEALTH CARE DELIVERY

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1 2 3 4

MATURITY ASSESSMENT EXERCISE


MATURITY IMPROVEMENTS

PROCESS EXCELLENCE

Create process clarity, known steps, roles, owners and KPI metrics

End-to-end process mapped with handoffs, metrics used to improve performance

Alignment of enterprise-wide process with governance; process linked to IT

Process integrated with adoption, innovation, customer, supplier process

ADOPTION

Establish touchpoints, give a reason to change and clear vision of future

Deliver routinely on support and leverage resistance as opportunity

Create full-circle, end-to-end consistency, recognize change champions

Integrate process, change and innovation efforts in holistic approach

INNOVATION

Cross-functional ideation and application to business needs

Development of regular innovation process, pilots funded through testing

Operationalize innovation competencies and create positive impact

Develop enterprise-wide leadership innovation and design thinking capability


Standardize process within a select project management methodology and build program-level tools

Integrate into enterprise process, optimize resourcing and decisions with portfolio analytics and learning

Focus on continuous improvement and integrated enterprise schedules, resources and risks

Transparent decision-making based on accurate, proactive data and consistently measured over time


Leaders define and share foundational story (vision, mission, values, origins and focus)

Organization designs alignment to strategy with skill-enabled workforce, tools and processes

Process and systems exhibit philosophy, with diverse talent, learning and growth strategies integrated

Focus on leadership development, employee engagement, feedback loops, solid rewards, growth opportunities

WHAT TO FOCUS ON TO GET TO THE NEXT LEVEL

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LEVEL ONE: GOOD

LEVEL TWO: SUPERIOR

LEVEL FOUR: WORLD-CLASS

LEVEL THREE: OPTIMAL


OPERATIONAL TRANSFORMATION MATURITY MATRIX WORKSHEET

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LEVEL 1: GOOD

OPERATIONAL TRANSFORMATION MATURITY MATRIX

Basic elements of strategic planning, HR, onboarding and talent in place

New hire onboarding program in placeIncidental training for mentoring and ap-prenticeship exist that are SME-based and manually trackedTalent management workstream exists within human resourcesCompany vision, mission and values are readily accessible to all employeesHR enables and drives the change leadership capability for the organizationHR functions as an effective cultural steward of the organizationHR invests in and develops its own HR talent pool to ensure best practices and latest learning is in placeLeadership offsite takes place annually



LEVEL 2: SUPERIOR LEVEL 3: OPTIMAL LEVEL 4: WORLD CLASS

Emerging program management

Common definitions of project types and core characteristics are establishedMethodology being developedCo-ordination of overlapping projectsProcess for updating project list/databaseBasic processes used on some projectsSkeleton methodology in placeBasic project data is collected consistentlyPerformance is stabilizedSome standard processesInitial portfolio controlsProject and project data tracked in single system/databaseExperimentation with project management methodology(ies)

Standardizing program management

All processes standardized and repeatableA project management methodology is chosen/developed, approved and used Project participants are informed about project management standardsResource forecasting occurs sporadicallyStrategic projects recognizedProjects can be prioritizedProjects can be scored in the prioritization phaseProject, program and portfolio reports can be generatedInitial integration across portfolioAwareness of status Risks managed across a program Program level status and reporting

Initiating enterprise portfolio management

Project management processes integrated with corporate processesMost projects managed in portfolioResource allocation occurs across multiple business unitsTransparent decision making based on resource information and priorities Knowledge base createdBusiness intelligence and reporting provide leadership with accurate portfolio, program, and project dataMulti-level data enables visibility of bottom-up and top-down analysisProjects support the strategic planProject benefits are trackedPortfolios of projects or programs initiated easily to meet strategic business objectivesLessons learned a routine processPerformance improvement experimentation

Optimized enterprise portfolio management

Focus on continuous improvementPM is a Center of ExcellenceKnowledge base expandedProject management system fully integrated with other core systems Enterprise level schedulingChecks and balances ensure utilization ratesRegular analysis and renewal of the existing PM methodologyLessons learned are easily shared and accessed across the enterpriseResources optimized enterprise-wideResource requirements accurately forecastedProject prioritization aligned to objectives / funded at enterprise levelPortfolio strategy influenced by the vision and long-range goalsKey metrics integrated to measure delivery by program/project team

HR functioning effectively as strategic business partner, supporting growth

Learning and development program exists for all levels of employeesLMS in place with program-focused instructionCompany vision, mission and values are understood by all employeesAbility to create business cases and governance structures for LOBsWorkforce planning and forecasting capabilities across the enterpriseEffort to create an environment of innovation and collaborationHRBPs are consultative partners to the LOBs (not only HR administration)Operational measures to assess HR functions and strategic people measures to support LOB decisionsOrganizational design optimized to support vision and strategic objectivesFive-year strategy is in place for the organization

HR / OD consistency and reuse enterprise-wide and desired employer

Benefits and compensation are very competitive within the industryHigh potential employees recognized and proactively developedSuccession planning expected with process and implementation rigorEffective diversity strategy in placeSkip-level meetings are part of the normal check-in processCompany vision, mission and values are supported by all employeesA healthy culture of feedback existsKnowledge sharing portals, recruiting tools, management dashboards usedStrategic outsourcing capabilities exist to optimize organizational efficiencies and economies of scaleLearning and development is integrated with talent strategy and process and technology focusedExhibits high degree of change ability

Evolves industry best practice, supporting strategic growth of the business and ‘great place to work’

Employees engaged, valued and actively contributing in a ‘fit’ roleRecruiting top talent is organic because the culture draws themLeadership development program prepares leaders to adapt to volatile, uncertain, complex and ambiguous world with positive influence, science of change and emotional intelligence, diversity and generational leadershipExecutive leaders are visible, available and function as a cohesive, aligned and publicly engaged leadership teamEmployees actively ‘live’ the vision, mission and values in daily behavior and decision-makingCulture of learning agility established with a systemic focus

www.futurestate.com | 877.614.0222

Transparent decision-making

based on accurate,

proactive data and consistently measured over

time

Focus on continuous

improvement and integrated

enterprise schedules,

resources and risks

Integrate into enterprise process, optimize

resourcing and decisions with portfolio analytics and

learning

Standardize process within a select project management methodology

and build program-level

tools

Focus on leadership

development, employee

engagement, feedback

loops, solid rewards, growth

opportunities

Process and systems exhibit

philosophy, with diverse

talent, learning and growth strategies integrated

Organization designs

alignment to strategy with skill-enabled

workforce, tools and processes

Leaders define and share

foundational story (vision,

mission, values, origins and

focus)

© 2015 Future State | CONFIDENTIAL AND PROPRIETARY. Copying, distributing, re-creating or any other non-authorized use of the content in these slides without express written consent is strictly prohibited. page 2

NOTES

LEVEL 1: GOOD

OPERATIONAL TRANSFORMATION MATURITY MATRIXTo create lasting change for an operational transformation, take an interdisciplinary approach including process excellence, adoption and innovation. Use this worksheet to identify your project or organization’s current level of maturity in each of the three areas.

Entry-level experimentation and applicationswith low consistency

Stakeholders often functionally, regionally orhierarchically groupedNo or little visible sponsorshipMost groups using communications to informstakeholdersLargely tactic driven, trying various vehiclesChange management applied to some projects with a few successesScattered, standardized training opportunitiesGeneric support or help desk / help linesBasic level of design for humans / user interfaceChange integration into project management

PROCESSEXCELLENCE

ADOPTION

INNOVATION

Creation of innovation standards and centersof excellence

Ideation, iteration, design process developed and formalized (repeatable)End-to-end touchpoints for innovation knownDedicated group or leadership team for innovation establishedApplication of innovation principles or design thinking to multiple projects in various business units across the organizationReward mechanisms and recognition more meaningful and automaticInnovation metrics measured, tracked and shared / reported

LEVEL 2: SUPERIOR LEVEL 3: OPTIMAL LEVEL 4: WORLD CLASS

Process designed functionally, performsconsistently with good performance

Leaders recognize need to improveSmall group appreciates power of processPerformers can name process they implementProcess documentation is in place and primarily functional, and it identifies the interconnections between the functionsMetrics are used to track performance, identify root causes and drive improvement

Process designed for end-to-end, delivering consistent superior performance

Leaders understand process can improve performanceProcess owners accountable for individual processesProcess governance establishedProcess documentation is end-to-endProcess metrics are compared to industry benchmarksPerformers understand end-to-end processes and key metricsAccess to process excellence, change management and communications expertsEnterprise-wide process model established

Process integrated with other enterprise processes and strategy, delivering optimal performance

Leaders have future state vision for enter-prise-wide processProcess owners share accountability for enterprise performanceAccess to large-scale operationaltransformation expertsEnterprise process model documented and linked to technology and data architecturePerformers understand business drivers and how individual performance impacts enterpriseProcess documentation shows interfaces andexpectations of connected processes

Process that transcends the boundaries of the enterprise, extending to suppliers and customers

Leaders automatically operate from a process mindsetPeople with skills in process and change management across enterpriseDocumented structure, learning opportunities for process and changeEnterprise process model connects to strategy and customer and supplier processPerformers know industry trends and how performance impacts industryProcess design and documentation digitally available and connected to performance, management and impact analysis

Expanded application of a basic approach with regular, routine consistency

Stakeholders grouped by shared concernswith a stakeholder analysisOCMs apply learnings to new change initiativesTwo-way feedback loopsRegular approach used for communicationsand change managementSome projects design end-to-end change strategy, change agentsGlobal change teamIncreased visibility and established ‘voice’Improved support tools that focus on user needsBeginning project management integrationAwareness of best practices

Establishment of standards to guide a unified approach for repeated success

Most projects apply consistent approach with set of standards for end-to-end processInfrastructure in place to support routine change, communication and learning activitySome differentiation based on need/risk levelStakeholders engaged, sentiment measured, tracked, responsiveChange networks or competency teams growLeadership coachedSponsor embodies change leadership roleConnection to business process excellence and aligned with HR process

Demonstrated competency and sharing of knowledge to grow organizational capacity

Change preparedness is second natureEngaged stakeholders are collaborative partners for changeExpansion of change expertise and change network among all levels of the organizationIncreased experience, certifications, best practice applications, industry participation grows organizational capacity for changeCenters of Excellence established with contributions from the field, continuous improvementInnovative behavior targets identified

Full innovation capability throughout enterpriseHuman-focused design thinking second natureOpen, collaborative ideation opportunitiesImmersive, tactile ideation lab or centerInnovation approach integrated withinvarious departments Interdisciplinary teamCross-functional leadership team acts as innovation championsConnection routinely made from innovation effort to goal contribution and outcomeOrganization yields multiple benefits andgrows innovation capacityOngoing KPIs and improvement

Growth of design thinking, establishment of innovation structure and process

Ideation is linked to strategic business needsOne or a few new ideas are testedsuccessfullyDesign always occurs with direct user input and full feedback loopsStructured improvement processes with formal methods appliedInnovation program with budget, clear goalscontribution and rewardsConsistent approach to innovation emerges

Experimentation with innovation projects/programsSome initial innovation efforts yield a new product, process or ideaSome ad hoc or isolated improvementsdeliver better cycle time, cost, agility,precision, value, performance, satisfactionIdeation or innovations untracked, recordedor measuredIt can be challenging to come up with a few viable possibilities from ideationDesign attempts user focus but can occur without direct user inputMany pilots - ideas form but never getdeveloped or launched

www.futurestate.com | 877.614.0222

Process integrated

withadoption,

innovation, customer, supplier process

Alignment of enterprise-wide

process with governance, process is linked to IT

End-to-end process

mapped with handoffs,

metrics used to improve

performance

Createprocess

clarity known steps, roles, owners and KPI metrics

Integrate process,

change and innovation efforts in holistic

approach

Create full-circle, end-to-end

consistency, recognize change

champions

Deliverroutinely on support and

leverage resistance as opportunity

Establish touchpoints, give a reason

to changeand clearvision offuture

Develop enterprise-wide

leadership innovationand design

thinkingcapability

Operationalize innovation

competencies and create

positive impact

Development of regular innovation process,

pilotsfundedthroughtesting

Cross-functional ideation and applicationto business

needs

© 2015 Future State | CONFIDENTIAL AND PROPRIETARY. Copying, distributing, re-creating or any other non-authorized use of the content in these slides without express written consent is strictly prohibited. page 1


Please Contact:

THANK YOU QUESTIONS TO ASK, INPUT OR IDEAS TO SHARE?

Shannon Adkins VP, Client Engagement & Strategy [email protected] Phone: 925.956.4203 Cell: 415.385.5430

Sylvia Stephenson VP, Client Engagement & Strategy [email protected] Phone: 925.956.4234 Cell: 408.209.3320

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