getting from understanding to execution: making implicit processes actionable and measurable

Welcome Angelo Baratta

PresidentPerformance innovation

Getting From Understanding to Execution

2 April 21-23, 2008

Renaissance Washington, DC

What is the constraint?

At any given point in time• There is at least one constraint• Which limits a system's performance• Relative to its goal

Finding that constraint and dealing with it should be a key management activity.

3 April 21-23, 2008

Renaissance Washington, DC

OrgChart view Command & Control

• Single component – people• Personal vantage point.• Doesn’t provide a full picture.

• Who is responsible?

• Who did this or didn’t do this?

• Who gets blame/credit?

• Who should we replace ….?

Business Unit

Vantage Pointre

spo

nsib

ility

4 April 21-23, 2008

Renaissance Washington, DC

Business Unit

Process Vantage Point Customer View

1. Do we understand the need that we are trying to fulfill?

2. How well is the process fulfilling the needs?

3. How effectively is the need being fulfilled? How much waste is in the process?

4. What element should we change in order to do better?

Multiple integrated components

resp

ons

ibili

ty

accountability

Process B

Process A

Process C

CustomerNeed

NeedFulfillment

5 April 21-23, 2008

Renaissance Washington, DC

Performance Management

To

ols &

Tech

niq

ues (L

ean, R

oo

t-Cau

se …)

1 2

34

Process Model Blueprint

Process A

people (capability )

technology (capability )

method outputinput

MM

EM

Process Performance Measurement

VALUE

- Customer- Employee- Supplier- Shareholder

CAPABILITY

THROUGHPUTPERFORMANCE

ATTRIBUTES

- Integrity (Quality)- Capability- Demand-Capacity- Availability- Responsiveness- ...

PROCESS-RISKCAPABILITY

Process Change Management

6 S

igm

aB

PM

met

h.

Process Performance Management

Gap

Process Performance Management

6 April 21-23, 2008

Renaissance Washington, DC

Process

outputinput Transform

Full ProcessFramework

method

MM

EM

people(capability)

technology(capability)

A process is a mechanism of interdependent components for fulfilling a customer need:1. That produces a defined output2. From some consumed input3. Using a sequence of operations – the transform method4. Executed by an operator - people and/or technology5. Based on a mental model and emotional mindset.6. Exhibiting measurable performance

THROUGHPUT + PERFORMANCE-RISK

7 April 21-23, 2008

Renaissance Washington, DC

549

59184

504

576

753X531

X

S1

S2

S3

S4

753

Anatomy of a process

We sell the product of 3 by 3 numbers

Result

orde

rs

Lead(1)

Last(4)

(2) (3)2 factors

Productof 3#

Theory

Behaviour

Product Process

Technology Capability1. Paper for recording2. Pen/pencil to write

People Capability1. Multiply times tables 0 – 92. Add column with max 3 rows

- Defectives- Effort/Cost- Time2deliver- $Revenue

DASHBOARD

MethodOperations required to get the product

inputoutput

8 April 21-23, 2008

Renaissance Washington, DC

Task Method via example

1. Multiply 3 & 5 to get 15

PP

1. Since 15 > 9 carry 1

PP

2. Multiply 3 & 5 to get 15

PP

2. Since 15 > 9 carry 1

PP

3. Multiply 3 & 3 to get 9

PP

4. Multiply 2 & 3 to get 6

PP

5. Add columns:

805PP

23X 35 5

1 23X 35 115

11 23X 35 115 9-

11 23X 35 115 69-

23X 35 115 69- 805

1111

Alternative ways to define the method:

1. Task level flow

2. Example

3. Procedure

4. …

9 April 21-23, 2008

Renaissance Washington, DC

Outcome

manages

Output

accountable

Task

responsible

m

n

3 Tier Model for Accountability

What we do.

We execute tasks to produce an output. Tasks relate to functions and jobs.

What’s left when we’re done.

We produce an output in order to achieve an outcome. Outputs relate a culmination of tasks & the flow of value.

What we got out of it.

We achieve an outcome to fulfill a vision. Outcomes relate to system goals.

10 April 21-23, 2008

Renaissance Washington, DC

Output Model

Ones Product

S1

Tens Product

S2

Delivered Answer

S4

3x3 Product

3x3

Ord

er

Hundreds Product

S3

Effort

Hundreds

DPMO

IS Tar

Effort

Answer

DPMO

IS Tar

DPMR

Throughput

Contrib$

240k

Revenue$

Demand

4000

360k

60k

240k

4

120k

360k

IS Targ

549

59184

504

576

753X531

X

S1

S2

S3

S4

753

11 April 21-23, 2008

Renaissance Washington, DC

Separate value effort from drag effort– 3 Streams

failure

control

value

pure waste

dragburden Value

throughputwaste

12 April 21-23, 2008

Renaissance Washington, DC

3 Tiers + 3 Streams = big picture

Outcome

manages

Output

accountable

Task

responsible

m

n

Outcome

manages

Output

accountable

Task

responsible

m

n

Outcome

manages

Output

accountable

Task

responsible

m

n

Value Stream Control Stream Failure Stream

ActualRE/FM

PredictedRE/FM

Ideal –Zero Risk

13 April 21-23, 2008

Renaissance Washington, DC

Add controls

Ones

ProductS1

Tens

ProductS2

Answer

S4

Hundreds Product

S3

Delivered Answer

=

Scheduled

OrderS0

Compare all cells

Rework

wrong cells

Rework wrong cells

not =Quality Productmanages

VerifiedAnswer

Optimized Resources

manages

CorrectedFailuremanages

CorrectedAnswer

3x3 Value S

tream

Failure

Stream

Control S

tream

3x3

Ord

er

Sum products

operator

DPMR

Throughput

Contrib

240k

Revenue

Demand

4k

360k

60k

240k

1k

120k

360k

IS Targ

14 April 21-23, 2008

Renaissance Washington, DC

Add failure

Ones

ProductS1

Tens

ProductS2

Answer

S4

Hundreds Product

S3

Delivered Answer

=

Scheduled

OrderS0

Compare all cells

Rework

wrong cells

Rework wrong cells

not =Quality Productmanages

VerifiedAnswer

Optimized Resources

manages

CorrectedFailuremanages

CorrectedAnswer

3x3 Value S

tream

Failure

Stream

Control S

tream

3x3

Ord

er

Sum products

operator

DPMR

Throughput

Contrib

240k

Revenue

Demand

4k

360k

60k

240k

1k

120k

360k

IS Targ

15 April 21-23, 2008

Renaissance Washington, DC

Business Unit

Org Chart focused view Task objective bias

Operationalize Strategy

Strategy

ExternalStimulus

Business Objective

Individual PerformanceMonitoring/Assessment

Functional/Individual objectives

16 April 21-23, 2008

Renaissance Washington, DC

Business Unit

Process Performance Framework

Process A

CustomerNeed

Process Performance ManagementFramework

VALUE

- Customer - Shareholder

CAPABILITY

PERFORMANCE DASHBOARD

Process A

people (capability)

technology (capability)

method outputinput

MM

EM

change

change

actual Processtargets

Operationalize Strategy

Strategy

Business Objective

Feedback

Individual PerformanceMonitoring/Assessment

P

Process B

people (capability)

technology (capability)

method outputinput

MM

EM

Gap

ChangeProcess

Process Performance Management

D

C

A

17 April 21-23, 2008

Renaissance Washington, DC

Thank You!Angelo BarattaPresidentPerformance Innovation

Contact Information:905-270-7591ABaratta@PerformanceInnovation.com