Which Performance Measures are Which?

February 6, 2014 by Leave a Comment

How can you get a handle on your performance measures and which measures are indicating what?

Organizational effectiveness hinges on ensuring you’re putting enough resources on the right business processes (the key work processes that your organization pursues that create value for your customer).  Additionally, how well you perform those processes forms the essence of how efficient your organization is at producing value to the customer.  But what are all the key support processes? And how much resource is required to run those critical support processes?  How do you even start to differentiate between your key support processes, and your key business processes? 

So as a senior leader you’re monitoring a lot of performance measures, but which measures are key? And which measures are predictors of major business trends or in process measures?  What should you be looking at to provide a check on major business performance and allow enough time to adjust resources to ensure sustained results?

Or, is there no process in place at all, and are decisions and the analysis that supports those decisions ad-hoc?  Is there a decision “science” to analyze problems and a systematic method to uncover root cause(s) to problems?  Do politics and intuition have a disproportionate impact on driving your decisions? Or do you use valid data to support your business decisions?

Having a sound method of determining your key business processes and key supporting processes is a good place to start in differentiating between the myriad of performance measure you’re monitoring.

As a rule of thumb, key support processes produce key work process inputs (business support requirements).  Key business support requirements are fundamental, essential, crucial, or indispensable process inputs needed for successfully producing a key work process output.  Your key performance measures are most closely associated with the voice of your customer and key value levers (key business processes).  You work backward from voice of your customer through your key performance measures.

Key-Supporting Process SIPOC

It is essential to identify those required/essential inputs to your key work processes.  These by definition are your key support process.   Now move to a more refined mapping process to capture your key support processes and the performance measures associated with them. 

KeySptDetermination

Your key performance indicators are now better defined along with those key “in process” indicators; namely your key support process measures which enable a more proactive approach to managing your business processes.  Your decisions to allocate the necessary resources can now be more deliberate and backed up by data versus intuition.

Filed Under: Baldrige Excellence Criteria, Strategic Planning

Taming the Innovation Management Monster; Moving Beyond the Suggestion Box.

January 30, 2014 by Leave a Comment

Innovation is really about three things: (1) building the right environment to spawn innovation; (2) identifying the most likely innovation that will succeed; and (3) knowing when to throw in the towel on an idea that didn’t work out.  Because let’s be honest, time and money are way too valuable in an austere environment.

So how do you ensure really good ideas are getting the proper attention when it comes to resources?  If you feel your best method of recouping any investment in innovative ideas is “hope,” then maybe you need a more deliberate, structured approach.

A pretty safe approach to innovation would be a structured approach that takes ideas through a deliberate process.  The process should identify the most likely innovations that will succeed; and in turn,  give you an accurate indication of when an idea should probably be jettisoned to the “good-idea fairy” for stewardship. 

That structured approach or “innovation protocol” should involve:

  • Your Mission, Vision, Values
  • How you obtain Voice of the Customer information
  • Strategic Planning Process
  • Business Review Process
  • Organizational Performance Measurement Process
  • Your Knowledge Management Processes
  • Your approach to Process Design and Improvement
  • Your approach to Budgeting
  • Your approach to developing Action Plans
  • And, a robust Change Management Process

For-Profit organizations must keep all this in mind while not sacrificing organizational agility; not-for-profit or Education institutions must be conscious of not allowing competitors to surpass you while you’re fettered in the decisions associated with implementing your innovative idea.  However, Innovation should be considered a business imperative first and foremost, and not something to do only if left-over resources become available.

Below is what might be considered an overly complicated process map regarding a protocol for innovation management; but, closer examination would reveal an integrated business approach to ensuring the most likely to survive innovation is given the appropriate amount of attention to ensure you’re successful taming the innovation management monster.

Innovation

Filed Under: Baldrige Excellence Criteria, Strategic Planning

How can the Baldrige Education Criteria for Performance Excellence improve your school?

November 20, 2013 by Leave a Comment

The Baldrige Education Criteria for Performance Excellence focuses on results in the key areas of student learning; processes; students and other customers (parents or colleges, and possibly community-workforce rolls); education institution workforce; leadership and governance; and budget, finance, and markets.

The Education Criteria is not prescriptive in nature but results oriented.  It will not prescribe the tools, processes, or structure you should use to ensure success.  The Education Criteria is more a systematic approach to organizational assessment.  The road-way to improved performance is aided by focusing on the measures associated with those key areas mentioned above. 

In the Education Criteria, the concept of excellence includes three components: (1) a well-conceived and well-executed assessment strategy; (2) year-to-year improvement in key measures and indicators of performance, especially student learning; and (3) demonstrated leadership in performance and performance improvement relative to comparable organizations and appropriate benchmarks.

The Education Criteria build alignment across your organization by making connections between and reinforcing measures derived from your organization’s processes and strategy.  These measures tie directly to student, other customer, and stakeholder value and to overall performance.  When these measures are used, activities are channeled in consistent directions with less need for detailed procedures, centralized decision-making, or overly complex process management.  Your communication plan is therefore wrapped around consistent performance requirements and lead to increased support to your education organization.

The Baldrige-based approach all starts with increased, frank and open communication with your customers and stakeholders.  A move toward a better understanding of your organization starts with completing the Organizational Profile.  Even if you never complete the entire comprehensive submission for examination, the effort given to completing the Organizational Profile will garner a better understanding and insight into your organizational performance and provide “self-help” in determining your next steps.

Filed Under: Baldrige Excellence Criteria, Strategic Planning

Process Improvement and the PISW

July 3, 2013 by Leave a Comment

The success or failure of Lean Six Sigma (LSS) projects is connected to many things. A critical aspect of a successful Lean Six Sigma program within an organization is how and when LSS projects are selected. The conduct of an effective Project Identification and Selection Workshop (PISW) goes a long way toward a successful LSS program. The first step in conducting a PISW involves identifying the value drivers in your organization. Identifying and understanding those value drivers are sometimes a misunderstood. Value drivers provide broad understanding of where to look for opportunities and must be connected to the organization’s strategy.ValueDirvers

Value drivers lead to opportunity areas. They provide a way to impact an area or focus of the organization. They come from financial analysis, voice of the customer, or process analysis. Value drivers are too broad to be addressed with a LSS project. Value drivers need to be translated into project ideas. Detailed definition and analysis is needed to get at real LSS project opportunities.

The first phase of the PISW is geared toward identification of the value drivers in the organization. A self-assessment is done from three different perspectives—the organization is looked at through three different lenses: Voice of the Customer (VOC), Voice of the Business (VOB), and Process as they flow from the strategic objectives (or goals) of the organization. Starting with the identification of the organization’s Strategic Value Chains, areas are identified where projects are strategically focused and will yield the biggest return on effort.

  •  What do our customers say?
  •  How can we improve from a business perspective?
  •  What is it that we do? What are our key business processes? And, which ones need improved?

The organization must understand how to serve its customers needs more effectively. What are customers telling you? How can you better understand what they are telling you? How can you ultimately better serve your customers? Identify your customer key requirements and identify gaps between requirements and performance. Accurate measures are required to get at performance. And finally, what processes require improvement to enhance customer satisfaction?

PerformanceGapUnderstand where the money lives; understand if you can get to it by looking at customer gaps, level of past attention, and internal benchmarks.

The PISW attendees must know going in what the organization’s critical processes are and which processes need improvement. The attendees must also be pretty familiar with opportunities for improvement within each of the processes. Process analysis steps should include: identify, classify, and evaluation of the processes. Determine which processes warrant the next level of analysis. And, attendees should have value stream maps for those processes to be examined in order to determine project opportunities.

There are several key success factors relating to the PISW. A strong management commitment is required to ensure projects are driven from strategy and value. All potential improvement projects must go through the Project Selection process. Projects tend to spawn more projects—the project selection process must be revisited frequently to ensure proper priority and to maintain a quality project pipeline. Projects must be properly scoped to maximize chances of success. Resist temptation to overload resources with projects—it will delay results. Don’t hesitate to kill projects “in-process” if they don’t continue to meet the criteria for prioritization.

Filed Under: Lean Six Sigma Deployment

Process Design for Transactional Process Management

April 15, 2013 by Leave a Comment

If you take a peek inside the world of systems engineering you’ll find some of the most remarkable charts and graphs ever conceived; pretty impressive stuff.  Spend enough time looking around and you’ll see plenty of acronyms; two may jump right out—DMADV and DFSS. Most practitioners familiar with them may argue they are not the same; that’s a debate for another day. 

  • DMADV—Define, Measure, Analyze, Design, and Verify is a methodology used to design a process where none existed previously.
  • DFSS—Design for Lean Six Sigma is a methodology more closely related to Six Sigma where the needs of the customer and business are driven into product design up front versus gaining process performance improvement post process design (DMAIC). 

The use of DMADV and DFSS in transactional process management (service operations) may prove difficult if your organization doesn’t employ a well seasoned Six Sigma practitioner with vast experience with process design.  For the purpose of this article “Service Operations” refers to activities that provide value to the customer along a value stream; wider service situations outside of the realm of manufacturing.  Transactional process design calls for an approach more suited for practitioners somewhat removed from systems engineering and the measurement of narrow tolerance levels associated with manufacturing. 

Take another look at DMADV and DFSS.  Go ahead.  What do you see?  The word “design” shows up in each approach without much description of what exactly to do to “design” a process. Let me introduce you to my 10 step process suited for transactional process design.

Step 1: (Conceptual) The design process starts by identifying the nature of the process to be designed using input from a Voice of the Customer process. Step 2: (Conceptual) Data and information associated with the nature of the process is collected and analyzed during this step using a well defined Knowledge Management Process. Step 3: (Conceptual) Measures associated with the process are developed in this step. Step 4: (Conceptual) Governing principles and specifications are applied to the process design in this step. Step 5: (Material) Environmental elements (tangible and abstract) are applied to the design in this step. Step 6: (Material) Tangible and abstract technology is applied to the design process in this step. Step 7: (Material) Required workforce skills and abilities are applied to the process in this step. Step 8: (Material) Human resources are matched to the required skills and abilities in this step. Step 9: (Sequence) A sequence of events or process steps are prescribed in this step. Step 10: Results from process test runs are evaluated in this step; based on results, modifications are made to the process.  Step 11: The design process is reviewed and evaluated in this step and cycles of improvement incorporated. 

 The process review protocol outlined below is used to systematically review any process.  Step 1: Objective of the process being reviewed is validated; if deemed invalid, the process objective is passed to the Process Design Process for consideration and redesign.  Step 2: The evaluated process result is considered. An interesting note here is the process result is only considered for success or failure; regardless, the process is still reviewed for continuous improvement.  Step 3: Each individual step in the process goes through steps 4-6. Failure to pass steps 4, 5 or 6, results in sending the process to the Process Design Process for modification or redesign. Step 4: Sequence change is considered. Step 5: Material change is considered. Step 6: Conceptual change is considered. Conceptual change is considered last due to being the most complex. Less risk is incurred when considering sequence or material change. Step 7:  If each step in the process is determined valid (passes steps 4-6, it is deemed a valid process. Step 8:The review protocol is reviewed using this same process for review.

This process design and review should not be confused with process efficiency and effectiveness matters.  For that one would use the DMAIC methodology to improve the process.  The process offered here is for initial design.

Filed Under: Uncategorized

Baldrige Approach

July 17, 2012 by Leave a Comment

The approach used for a Baldrige Performance Excellence submission can be as imaginative as the collection of people plotting the journey. Most approaches culminate around three basic approaches. One must consider the process of writing a submission as secondary to the benefits gained from such a journey.

In brief, some organizations organize their approach by assigning a leader for each category. Each category team is then comprised of process owners associated with each category. (Cat 1: Leadership, Cat 2: Strategic Planning, Cat 3: Customer Focus, Cat 4: Measurement, Analysis, & Knowledge Management, Cat 5: Workforce Focus, Cat 6: Operations Focus, Cat 7: Results) A team may also be assigned the Organizational Profile. Each team proceeds with assessing the organization using a myriad of assessment tools and then pursing the answers to the questions posed by the Baldrige Performance Criteria for their assigned category. Drafts representing the results for each category are painstakingly cross-referenced with the other categories to ensure linkage. The finished product is then reviewed and approved by the senior leaders of the organization.

Some organizations simply hire an expert and support the effort with one-on-one meetings with process owners. Over the course of time the assessment is concluded and the staff expert completes the draft while ensuring linkage between the categories. A draft submission is then submitted to senior leaders for final review and approval.

A third approach would have a core group of staff members draft the organizational profile and submit it to senior leaders for approval prior to commencing with the organizational assessment. Once the profile is approved by the senior leaders, the same core group of staff members collaborate with stakeholders to address the basic questions from each of the seven categories. Once the basic questions are answered, any clarifying process maps are completed, and the expected results, “think metrics” are targeted, the packet is proposed to senior leaders for approval. The metrics are then distributed to process owners for data mining and refinement. The whole packet of (1) the organizational profile, (2) answers to the basic questions from each category, and (3) any clarifying process maps are then distributed to the category teams similar to the ones mentioned in the first approach mentioned above. Follow on assessment is gained by addressing the overall and multiple level questions identified in the Baldrige Performance Excellence Criteria.

This third approach allows for an improved level of consistency in theme (linkage) while allowing for institutional learning over time by adding and replacing category team members when necessary to ensure a performance excellence culture is cultivated.

 

Filed Under: Baldrige Excellence Criteria Tagged With: , ,