Business Process Management - Building The BPM Balanced Scorecard

Arlington, VA
Balanced Scorecard MastersBalanced Scorecard Masters
Building Your Scorecard: Working Towards
an Office of Strategy Managementan Office of Strategy Management
Steve Towers
© Steve Towers
All Rights Reserved
www.bpgroup.org
www.bennugroup.net www.stevetowers.com
All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights ReservedArlington, VA – www.stevetowers.com

Arlington, VA
Balanced Scorecard Masters
Building Your Scorecard: Working Towards an Office of Strategy Management
Striving for Balanced Scorecard Success
– we don’t always succeedwe don t always succeed
Embedding the scorecard as part of our
i ti l DNAorganizational DNA
Developing the Office of Strategic
Management – the keys to the future
All material © Terry Schurter & Steve Towers unless otherwise stated – All Rights Reserved

S f lSuccessful
Customer
OutcomesTowersAssociates www.bennugroup.net www.stevetowers.com
Outcomes

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 Towers
TowersAssociates www.bennugroup.net www.stevetowers.com

Arlington, VA
Striving for Balanced Scorecard
Success – we don’t always succeedSuccess we don t always succeed
i ti l DNAorganizational DNA
Developing the Office of Strategic
Management – the keys to the future

ObjectiveBenefits
SERVICESERVICE&COSTSERVICE&COST&REVENUE
11970-80
21980-95
31995-05
4post 2000
INSIDE-OUT OUTSIDE-IN
Scope of Transformation
Total Quality
Management
Business
Process
Improvement
Business Process
Reengineering
Six Sigma
Lean
Business
Process
Management
Advanced BPM &
Outside-In
Approaches
PERFORMANCE BENEFITS - PROCESS TRANSFORMATION EVOLUTION
© Towers Associates 2013 – Research 800+companies 2006-2013

BSC Needs to be “aligned” (driven by) the
Strategy Map
Objectives Measurement
Strategic Theme:
O ti Effi i
InitiativeTarget
gy p
Harvard K&N Southwest Airlines Example
j
• Market Value
• Seat Revenue
• Plane Lease
Operating Efficiency
g
• 30% CAGR
• 20% CAGR
• 5% CAGR
Profitability
Financial
More
Customers
Fewer Planes
• Profitability
• More
Customers
Plane Lease
Cost
• FAA On Time
Arrival Rating
• Customer
Ranking (Market
• Quality
management
• Customer
loyalty
5% CAGR
• #1
• #1
Customers
Lowest
Prices
Customer
Flight
Is on Time
• Fewer planes
• Flight is on -
time
• Lowest prices
Ranking (Market
Survey)
• On Ground Time
• On-Time
Departure
• Cycle time
optimization
program
loyalty
program
• 30 Minutes
• 90%
Internal
Fast Ground
Turnaround
• Fast ground
turnaround
• % Ground crew
trained
• % Ground crew
stockholders
• ESOP
• Ground crew
training
• yr. 1 70%
yr. 3 90%
yr. 5 100%
Learning
Ground Crew
Alignment
• Ground crew
alignment

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!”
Mi
Ry
ichaelO’Le
yanAir’sCE
Ryan Air – Europe’s largest
And most successful Airline
eary
EO
And most successful Airline.
“It’s not rocket science.
You need to be measuring
Wh ’ i hWhat’s important to the
customer. Then you make
sure everything you do is
achieving those measures.achieving those measures.
******* simple really.
That way customers keep coming back for more”.

We don’t focus on the Customer!
Our service centre hierarchy
What have we focussed on?
The service centre as a system
What we SHOULD pay attention to
Mgr
•Service
Level
•Abandon
Rate
•Costs
How many of these
measures does the
customer care about?
What happens when
Mgr
Focus: creation of value for customers
Measures: capability, predictability of
demand, response, failure
Role: Acts on the system
FLM
•# Call/Cases
•AHT
•Quality
pp
the actuals fall short of
targets?
Personal reviews
- Training & coaching
- Personal
Development plans
M l
FLM
Focus: creation of value for customers,
removal of failure and waste
Measures: achievement of purpose,
reducing variation in system performance
Role: Act on the system
Assoc
•AHT
•Ability to
follow
policies/pro
- More people
What about acting on
the system? How
much of demand is
failure? Assoc
Role: Act on the system
Focus: doing what the customer wants
M hi t f
Assoc policies/pro
cedures/scri
pts
What % of demand are
we meeting?
Assoc
Measures: achievement of purpose,
variation in performance
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;
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.

Successful BSc’s start with a Strategy
Map Mobil (US Marketing & Refining)Map Mobil (US Marketing & Refining)
Growth Theme
I lit f b
Productivity ThemeReturn on Capital
Improve quality of revenue by
understanding customer needs
and differentiating ourselves accordingly.
Maximize utilization of existing
assets and integrate the business
to reduce total delivered cost.
Financial
Perspective
p
Increased from 6% to 16%
Competitive Position
(profitability)
From last (1993)
to first (95, 96, 97, 98)
Volume Growth
Exceeds industry by 2-2.5% annually
Reduce Cash Expenses
Down by 20%
Improve Cash Flow
From -$500 M/Yr to +$700 M/Yr
Customer
Perspective Customer Satisfaction
Continuous improvement for 3
Internal
Perspective
p
consecutive years
Speedpass Active
Increasing at rate of
1M per year
Dealer Quality Perfect Orders
Continuous
improvement for 4
consecutive years
Product Innovation Customer Management
Continuous
improvement for 4
consecutive years consecutive years
Learning &
Growth
Quality Capacity Utilization Safety
Lost work incidents
down from 150 to 30
per year
Environmental
Number of incidents
reduced by 63%
Continuous
improvement for 4
consecutive years
Annual value of lost
yield reduced from
$175m to $50m
Operational Excellence Good Neighbor
consecutive years
Perspective Motivated & Prepared Workforce
Strategic Awareness
Annual employee survey shows awareness of
strategy increased from 20% to 80%
Source:Source:
The Balanced ScorecardThe Balanced Scorecard
D. Norton & R. KaplanD. Norton & R. Kaplan

STRATEGIC ALIGNMENT around SCO’s
The Process Performance Landscape
Provides the structureProvides the structure
and language to align
everything with the y g
Customer… then from
There create the BSC/SM

Can You Imagine How Different
Things Would Be?

Welcome to
An example of how to
Innovate throughInnovate through
Successful Customer
Outcomes
Outcomes

The FEDEX KINKO SCO... CHALLENGE 1
Su
How could we make business travelers’ lives
Simpler, Easier and more Successful?
uccess
1) I want to have a great presentation tomorrow.
Wh
sfulCu
2) I need to have packets to hand out
atist
ustom
3) I have to get the packets printed and bound.
4) They need to be nice.
the
merOu
) y
5) They need to be ready when I need them
utcom
6) I need to have them when I go to my meeting
e?

WHAT DID FEDEX KINKO’S DO?

Dashboard
Welcome Joe User Today is Saturday, February 23, 2008 © 2007 Bennu Group LLC & Associates
Summary (pre drill) Process Analytics
Dashboard Moments of Truth Breakpoints Rules
MOT Overview
Print | Help | Log Out
Page 1 | Page 2 | Page 3
(for representative purposes only)
Diagnostic No State
Moment of Truth 35,722
Breakpoints 181,220
Rules 117,900
Activity Name Assessment Trend COW (f) POF (f) Owner
Generate the Business
Promote
Conversion
Done
Done
To Do
23,000
45,112
89,778
33,400
64,023
93,000
23,000
45,112
89,778
Bill S.
Joey D.
Frank
Points Of Failure (f) 16.4M
Alerts
Alerts from last 2 weeks
GTB - Conversion
Completion
Grant the Business
Open Account
Upsell
Visit every day
To Do
To Do
Done
Done
To Do
BPs by Priority
12,110
34,000
23,000
45,112
89 778
45,112
89,778
42,110
50,000
90 004
12,110
34,000
23,000
45,112
89 778
Susie
Jill
Bob C.
Charles
JimboGTB Conversion
Frank
COW Improvement ratio
MOT Creation
Visit every day
Keep the Custom
Retention
Renewal
Growth
To Do
To Do
To Do
Done
To Domore...
89,778
12,110
34,000
10,500
66,998
90,004
12,007
55,009
12,889
82,002
89,778
12,110
34,000
10,500
66,998
Jimbo
Benny
Linda
Gigi
Rose
Program
MOT under management
Processes pending Asses 29
President’s Message
I’d like to take this opportunity to publicly thank the Hercules X team for the incredible job that
they’ve done. This is our most improved Successful Customer Outcome (SCO) period.
Rules Analysis
Least Improved -7%
Months target +23%
Most Improved 183% As a direct consequence of the improvements TRIPLE CROWN benefits this month exceeded
forecast in all categories including Cost Reduction, Service Improvement and Revenue Generation.
Compliance has also improved with Regulatory sign-off now complete.

The good news.. We are not alone!The good news.. We are not alone!
The BSCOL
Hall of fame

So how do we:So how do we:
1. Ensure the hard won benefits of initial BSC1. Ensure the hard won benefits of initial BSC
initiatives are secured
2. Create a framework to ensure ongoing2. Create a framework to ensure ongoing
success
3. Establish the strategic discipline and rigour3. Establish the strategic discipline and rigour
across the organization to encourage and
grow future success?
4. Consolidate the gains and become a triple
crown + company

STRATEGIC ALIGNMENT around SCO’s
Towers

5 Key attributes of the leader of
the OSM
• Strategist – owns the processStrategist owns the process
• Scorekeeper – creates, manages and grows
the structure for how things should be donethe structure for how things should be done
• Gatekeeper – sets the agenda
• Guide ‐ Content – focuses the senior team and
the companies attention on what we must do
• Guide ‐ Operations – provides the direction for
implementation and change management
p g g

Skill‐sets within the OSM(US Bank)
Project Managers to lead initiatives
I iti ti di t d d b t• Initiative coordinators and drum beaters
Certifed Process Professionals to align for SCO's
• process improvements and a process• process improvements, and a process
management/documentation team
Performance Analysts to count towards SCO'sPerformance Analysts to count towards SCO s
• Gather data, first level analysis, scorecard
updates
OD Expertise
• Plan, Review & Check
• Communication
• Training

Organizations achieving BSC success
Leaders use the BSC/SM to make their customers’ lives
Simpler, Easier and More Successful
They focus Outside‐in and reduce complexity by
applying focus to and fixing the Causes of Workapplying focus to and fixing the Causes of Work
They Align everything they do through measurement to y g y g y g
the Customer and eradicate the things that don’t
Th l t h l h t h lThey apply technology where technology
adds CUSTOMER value!

UPCOMING DATES
http://www.bpgroup.org/certification-by-city.html

Arlington, VA
Striving for Balanced Scorecard Success
focus on Successful Customer Outcomes
ion
organizational DNA
f d ’
clusi
Get everyone focused on SCO’s
thru the BSC & SM
Develop the Office of Strategic Management
Con
Develop the Office of Strategic Management
help on the journey to the Promised Land
In

Business Process Management - Building The BPM Balanced Scorecard

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