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PERFORMANCE DESIGN LAB Applying the Organization-as- System Concept Geary Rummler, Ph.D. Alan Ramias April 14, 2008
Transcript of Applying the Organization-as- System Concept › wp-content › uploads › ...PMO Journey Design...
PERFORMANCE DESIGN LAB
Applying the Organization-as-System Concept
Geary Rummler, Ph.D.Alan RamiasApril 14, 2008
The Performance Design Lab 2
Agenda
I. Background and HistoryII. Value Creation FrameworkIII. Participant Assessment IV. Answer your questions
The Performance Design Lab 3
1982-92 The Motorola Years
End-to-End Core ProcessesExec Involvement Focus: Meet Customer NeedsProcess and Biz Management the SameMethodologyImproving Performance (1990)Results?
The Performance Design Lab 4
Bill Wiggenhorn (MU) - 1990
“…use of the tools changed the way the company does business worldwide, helped us save more than $950-million in the last few years and played a leading role in Motorola’s winning the Malcolm Baldrige National Quality Award.”
The Performance Design Lab 5
Conclusions:
Business • Executives: “Finally, a tool we can use to
actually accomplish the strategic objectives”
Rummler & Ramias• “The general understanding that work gets
done – value gets added – through cross-functional processes is potentially the greatest business management breakthrough in the past 100 years”
The Performance Design Lab 6
1992-97 Re-engineering
Reengineering the Corporation (1993)Focus: Reduce Cost, DownsizeProcesses in Functional SilosDocumentation TechnologyInto the weeds- Everything a ProcessExecutives hard to find• Process Maturity/Governance
Results?
The Performance Design Lab 7
Conclusions:
Business• “We’ve done ‘process’ – what’s next?”
• “Re-engineering” made it to Dilbert cartoons
Rummler• “I think its time to retire”
The Performance Design Lab 8
1997 – 2000 Time Out!
1997 – (Rummler) “If I see another process….”
1999 – (Harmon) “You should see what you started..”
The Performance Design Lab 9
2001 – 2007 Rip VanWinkle Awakens to..
Overwhelming TechnologyBP(M?)Sub-Processes in Silos“Methodologies”• Weed-Wacking• CompetingPMO/PCO EffortsExecutives Still Hard to FindResults?
The Performance Design Lab 10
Conclusions:
Business• “Tell me again, why are we doing this
‘process’ stuff?”
Rummler & Ramias• As regards business results, it isn’t working.• But we still think “processes is potentially the
greatest business management breakthrough in the past 100 years”
The Performance Design Lab 11
Key Points:
1. Majority of “process” activity is in the weeds – a tenuous link to business results
2. We need to rethink what we are trying to accomplish with BPM
The Performance Design Lab 12
Organization as System Lens
The Performance Design Lab 13
A New Definition of Process…
Not only…“…a series of planned activities that convert a given input into a desired output”“Any repeatable set of activities”
The Performance Design Lab 14
A New Definition of Process…
PROCESS is a construct or artifice for organizing value-add work so it:• Can be Performed effectively and efficiently• Can be Managed effectively• Offers the potential for a Competitive
Advantage
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Value Creation
Hierarchy
The Performance Design Lab 16
The Performance Design Lab 17
Value Creation System Model
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The Performance Design Lab 19
The Performance Design Lab 20
The Performance Design Lab 21
Value Creation
Hierarchy
The Performance Design Lab 22
Two Dimensions of an Organization
The Performance Design Lab 23
CEO
SBU A Marketing Sales Printing & Assembly
Distribution
SBU B
ProductDesign
Process View #1
The Performance Design Lab 24
FinancialStakeholder(s)
$
“It”
Customers
FinanceSalesR&D Operations
Res
ourc
es
Management
Marketing
Process View #2
The Performance Design Lab 25
Participant Assessment
Where are you?
Where do you want to go?
Questions
The Performance Design Lab 26
Potential Pitfalls
Process IdentificationProcess ImprovementProcess ManagementEffort Management
The Performance Design Lab 27
Process Identification Pitfalls
Not starting with the systematic identification of key processes.Not starting at the business, value chain and Primary Processing System level.• Starting in the sub-optimization zone, with no
objective link to business and customer requirements
Not organizing the work using the criteria of • Effective performance and management of the work• The potential for a competitive edge
The Performance Design Lab 28
Process Identification Pitfalls (Continued)
Outside• Adopting a generic list of processes or
reference model.
Inside• Not working directly with senior management• Starting at too low a level in the organization• Starting in functional silos• Operating without a roadmap
The Performance Design Lab 29
Process Improvement Pitfalls
If processes not linked to the value chain and Primary Processing System levels, subsequent process improvement efforts will have these problems.
1. The criteria for selecting processes for improvement will not be tied to specific business needs.
2. The inability to link process improvement results to business results.
The Performance Design Lab 30
Process Improvement Pitfalls (Continued)
3. No “natural” maintenance of process improvements because no obvious connection to valued business results.
4. Process improvement efforts gravitate toward less relevant process improvement goals such as Maturity Model levels.
5. Competing performance/process improvement methodologies and orthodoxies.
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Process Improvement Pitfalls (Continued)
6. No clear responsibility for process improvement.
7. With no anchor to business requirements, process focus and efforts can quickly sink into the weeds.
The Performance Design Lab 32
Process Management Pitfalls
Failure to make the sale at the top of the house. Result is a staff driven, bottom-up effort.Processes defined from the bottom or middle-up. If processes are disconnected from the business, the subsequent process management system is going to be disconnected from the business management system.
The Performance Design Lab 33
Process Management Pitfalls (Continued)
Mistakenly equating “education/exposure” with “commitment”.• Awareness training ahead of application
opportunities.
The Performance Design Lab 34
Effort Management Pitfalls
Not selling the right benefitsNot selling to the right buyerNot getting a commitment from the business to lead the effortNot supporting line executives with the best staff possible (plus experienced external resources)
The Performance Design Lab 35
Effort Management Pitfalls (Continued)
Not having a master plan or journey map.Using a Maturity Model as a roadmap.
The Performance Design Lab 36
A Proposed Journey to the PCO
The VisionGuidelinesSummary ComparisonA MapImplications
The Performance Design Lab 37
The Vision
Process Infrastructure
Management System
The Performance Design Lab 38
VC Hierarchy and VC Architecture
Value Creation System
ResourcesAny Enterprise
Capital Market
Competition
BUSINESS ENVIRONMENT- Economy - Culture
TechnologyProviders
Suppliers
Labor Market
ResourcesProducts/Services
FinancialStakeholders
Customers
Markets
Enterprise/Business Model
Value Creation System/PrimaryProcessing Systems
Product/Servic
e Sold
Product/Service
Product/Service
Launched
Product/Service
Delivered
Opportunities Generated
Opportunities Qualified
Opportunity Developed and
Proposal Requested
Proposal Prepared and
Communicated
•
•
Order Taken and EnteredSale Closed
Order Captured and
Communicated
“It” Order Processed
“It” Shipped/ Delivered/ Installed
“It” Order Filled
“It” Order Closed
“It” Supported“It” Customer Serviced
“It” Ready For Delivery
P/S OrderProcessed
P/S Shipped/Delivered/Installed
P/S Order Filled
P/S Order Closed
P/S SupportedCustomer Serviced
P/SReady For Delivery
• Information Gathered• Needs Identified• Deciders and Users Identified• Constraints Determined• Credibility Established
Product/Service
Process/Sub-Process
Information Gathered• Relevant Data Sources Identified• Interviews Scheduled• Interviews Conducted• Conclusions Reached and Recorded
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
“It” Developed
and Launched
“It” Sunsetted
“It” Enhanced
P/S Developed & Launched
P/S Portfolio Managed
PrimaryProcessing Systems/Process
Demand for “It”
Developed
Customer Relationship Maintained
Order for “It”
Obtained
DemandDeveloped
Customer Relationship Maintained
Order Obtained
Management System
Programs &Applications
Investments
Sub-Process/Task/Sub-Task
- Natural Environment- Geo-Political - Regulatory/Legal
Returns
Enabling Processes
Order for Product/Service
Product/Service
Sold
Mtls/Equip
HumanRes.
$
Tech
Management SystemBusinesses
Opportunity Developed and Proposal Requested Sub-Process
Launched Sold Delivered
Order Obtained Process
Value Chain
LEVEL 1
LEVEL 2
LEVEL 3
LEVEL 4
LEVEL 5+
Value Creation Hierarchy
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Cross-Functional Value Creation Map
The Performance Design Lab 40
Cross-Functional Process Map
The Performance Design Lab 41
Business Process Architecture Framework
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Management System
Management Model
Management Information System
The Performance Design Lab 43
Management Model
Changes in Goals and/or Plans
Data on External Events
PERFORMANCE EXECUTED
Goals and Plans
Resources/ Structure/ Support
RESULTS
DataChange in Execution
PERFORMANCE MANAGEDPERFORMANCE PLANNED
Expectations Set Plans Set and Resources/
Support Requirements Determined
Performance/ Behavior Monitored
Plans Operational (Resources,
Structure and Support in Place)
Action Taken (Corrective, Preventive, Sustaining)
Deviations Analyzed, Cause Determined, and
Appropriate Action
Determined
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The work that must be managed
The corresponding work management system
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Journey Critical Success Factors
PMO Journey Vision/Mission• Clear Vision• Shared Vision/Mission• Commitment, not sponsorship
The Performance Design Lab 46
Critical Success Factors (Continued)
PMO Journey Design and Management• Journey Roles
Executive TeamDesign TeamGuide Team
• Journey PlanClear, detailed, multi-yearDeveloped by Design and Guide teams and approved by Executive team
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Critical Success Factors (Continued)
Process (Work) Structure• Work structure must efficiently and effectively
deliver value to customers. • Identification of processes follows the
Processing System Hierarchy• Final process structure captured in a
management friendly BPA map.
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Critical Success Factors (Continued)
Process Management• Journey is about enterprise/business
management, not process managementThere is Process Management as part of a comprehensive top-to-bottom enterprise/business management system
• Management System implemented in several phases, starting from the top of the Processing System Hierarchy and continuing to the bottom
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CEO
SBU A Marketing Sales Printing & Assembly
Distribution
SBU B
ProductDesign
Typical Approach
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FinancialStakeholder(s)
$
“It”
Customers
FinanceSalesR&D Operations
Res
ourc
es
Management
Marketing
The PDL Approach
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Summary Comparison
Typical Effort PDL Approach
Processes not linked to organization resultsProcesses functionally definedProcesses from generic listsProcess management system is not integrated with the business management system – a “bolt-on” governance system, operating in parallel.PMO effort done in a staff process excellence cocoon.
Processes in a Value Chain context, a Business Process Architecture context and linked to customersProcess as a way to organize cross-functional work for effectiveness and manageabilityA unique business process architecture, leading to competitive advantageNo process governance issues –The process management system is the organization management system.PMO effort done in concert with business management.
The Performance Design Lab 52
A Map
(Handout)
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Agenda
I. Why a Process Centric Organization (PCO)?
II. Characteristics of a PCOIII. Potential Pitfalls on the way to a PCOIV. A Proposed Journey to the PCOV. Getting Started
The Performance Design Lab 54
Getting Started
BarriersPlanNext Steps
