Driving Business Value Through Strategic Process Management Sloan Global Holdings Tom Coleman Chief Information & Process Officer [email protected].

1

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

2

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

3

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

4

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”

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

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?

6

• 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

“Strategy is not about ways to get better…

strategy formulation is about finding ways to

get…

different”Source: Michael Porter

8

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

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

10

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

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

12

Sample Market Needs Analysis Fragment

Value Attributes Vs. Products(Survey Sample)

13

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

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

15

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)

16

17

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

19

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

20

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)

21

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

22

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

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

Financial Value Proposition

24

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

25

Lock customer in to highswitching costs

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

26

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

27

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

28

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

29

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

30

Source: Michael E. Porter

Low CostNiche Market

31

32

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

33

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

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

34

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

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

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)

38

Besides the whirlwind, what are you absolutely going

to do?

and…What are you

absolutely going to stop doing?

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

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…

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

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

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

43

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

APQC Process Classification Framework

45Source: APQC

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

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!

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

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

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

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

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

Sample Enterprise “Toolkit”

CM: ADKAR

IT PMOBSC/Hoshin

BPR

53Need a recipe???

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

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

“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

57

Source: Prosci

CM Tools Vs. Phases of Change

58

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

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

60

Labor is the single biggest operating expense in most businesses

61U.S. Bureau of Labor Statistics – 2000 to 2010

IT Contribution

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

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

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

Any questions?