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Introduction
Introduction to
Serious Performance
Consulting
Workshop
Version 2.1
http://www.performancedesignlab.com
Design Center: Tucson, Arizona
Admin Center: P.O. Box 215,
Belmont MI 49306-0215
(616)-784-1163 (F)
(616)-881-2488
Serious Performance Consulting Workshop
Introduction
TABLE OF CONTENTS
Introduction
Workshop Map ........................................................................................................................5
Objectives ...............................................................................................................................4
• You are in a function or role with responsibility for assisting a client organization
unit be more effective in producing their product or service.
• You are interested in learning strategies and techniques for improving organization
effectiveness.
WORKSHOP OBJECTIVES
WORKSHOP MAP
3 Job Level
Process
4 Level
Performance
Design
Organization
5 Level
Total
1 2 6 System
Framework
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
ACKNOWLEDGMENTS
The concepts and techniques presented in this workshop have been evolving since 1956
and have involved the input of many people, who I would like to acknowledge. My thanks
to the following for:
ACKNOWLEDGMENTS (Continued)
Dr. Rummler has published a variety of books ranging from labor relations to the
development of instructional systems and his articles have appeared in numerous
professional and management journals and handbooks. In 1988, he co-authored Training
and Development: A Guide for Professionals, with George S. Odiorne. In 1990, he co-
authored Improving Performance - How to Manage the White Space on the Organization
Chart with Alan P. Brache. And in 2004 he published Serious Performance Consulting -
According to Rummler.
Geary received his MBA and Ph.D. from the University of Michigan and has served as
• The president of the International Society for Performance Improvement (ISPI);
• A member of the Board of Directors of the American Society of Training and
Development (ASTD)
• A member of the Editorial Board of Training Magazine.
ALAN RAMIAS
Alan Ramias is a Partner of the Performance Design Lab (PDL). He has had twenty-five
years of experience in performance improvement and organization effectiveness.
Alan was employed by Motorola for ten years as an internal consultant on organizational
performance. As a member of the team that founded Motorola University, he was the first
person to introduce Geary Rummler’s pioneering concepts in process improvement and
management to business units within Motorola. Alan advocated and led several of the first
groundbreaking projects in process improvement that evolved to the invention of six sigma
and Motorola’s winning of the first Malcolm Baldrige Award in 1988. Alan was also
involved in major restructuring projects at Motorola, and in job design work, compensation
planning, workplace literacy, and educational program development.
After joining The Rummler-Brache Group in 1991, Alan led major successful performance
improvement engagements within Fortune 500 companies. His experience spanned
several industries and the full spectrum of corporate functions and processes, such as
strategic planning, manufacturing, product development, financial management, and
supply chain. Major clients included Shell, Hewlett-Packard, 3M, Citibank, Motorola,
Steelcase, Citgo, Hermann Miller, Louisiana-Pacific, and Bank One. After leading many
high-profile projects, he became a partner and Managing Director of Consulting Services
at RBG. He led development of much of RBG’s products and services, and was
responsible for selecting, training and mentoring RBG’s consultant teams.
Upon leaving RBG, Alan founded his own consulting company, where he continued to
practice in the field of performance consulting. He was also involved in several
organizational restructuring initiatives in the U.S. and in Asia.
3 Job Level
Process
4 Level
• Basic Premise
Performance
• Assumptions
• Design
Physician Analogy Organization
• PC Key Points 5 Level
Total
1 2 6 System
Framework
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tool Kit Manage
Performance
Analysis
8 Cases
9 Reference
BASIC PREMISE
?
B A
Results
Resource E
C
EXERCISE
You have just received the following phone message from the Sales VP of AJAX:
“It has been brought to my attention that some of our Sales Reps continue to submit
incomplete sales orders to Production. Is it possible for you to develop a one-day
refresher training session for the Sales Reps addressing this issue? Maybe something we
can deliver during our quarterly sales meetings – the next one is in six weeks. Please let
me know what you think.”
Please list the factors that determine whether you follow Path “D” or Path “E”, when you
receive a request such as the above:
1.
2.
3.
4.
5.
4. Performance Consultants
• Are “Solution Neutral” during analysis *
• Apply a robust, systematic performance analysis methodology
I believe you/we only add value if we improve individual performance and organization
results. But even the best training can’t overcome a bad performance environment.
Therefore to add value, the trainer must be able to determine:
• What performance/results gaps can be successfully addressed by your good
training.
• What is required in the job environment to support your good training.
We see great similarities between the diagnostic work of a physician and that of a
Performance Consultant.
SITUATION Patient feels pain. Patient enters Client feels pain. Client calls with
clinic and asks for help. request for “help” (“ Growing customer
complaints”).
OBJECTIVE Relieve the pain and cause of the Relieve the pain and cause of
health issue. performance issue and obtain
measurable improved results.
ANALYST’S Knowledge of human anatomy which Knowledge of the Anatomy of
FRAMEWORK provides understanding of how Performance, which provides
components that make up the understanding of the factors that
human body/system interact and the determine good individual
consequences of a failure in any one performance and organization results.
of those components. Every
physician knows the factors that
determine good health, the
consequences of a failure in any of
those factors, and what must be
done to correct a failed factor and
return the patient to good health.
They also know that symptoms in
one area may result from problems
in another-this requires taking a
“systems view” of the problem.
DIAGNOSTIC Basic tests include Three Levels of an Organization and
TESTS • X-Ray related Templates
• Blood tests • Job Results Template
• CAT Scan • Process Results Template
• Magnetic Resonance Imagining • Organization Results Template
(MRI)
DIAGNOSTIC 1. Elicit description of symptoms Results Improvement Process:
PROCESS 2. Interview and examine Patient I. Desired Results Determined and
and conduct tests as required Project Defined
3. Review test data and make II. Barriers Determined and
diagnosis Changes Specified
4. Prescribe treatment/procedure or III. Changes Designed, Developed
refer to a Specialist and Implemented
IV. Results Evaluated and
Maintained or Improved
PRESCRIPTION Corrective and preventive action Corrective and preventive action
prescribed to close the gap in prescribed to close the gap in Results
physical well-being
TREATMENT/ Treatment/procedure delivered or Changes designed, developed and
PROCEDURE patient referred to Specialist if implemented, utilizing special
appropriate resources as required.
Organization Unit
B A
Resource
E
? Results
C
I II III IV
What and Where Why the Gap in How are we Did we Close the
is the Gap in Results & What Closing the Gap Gap in Results?
Results? is Required to in Results?
Close it?
3 Job Level
Process
• Anatomy of Performance (AOP)
4 Level
• Two Views of an Organization
Performance
• AOP Mapping
• Results Chain Design
Organization
• Example 5 Level
• PC Key Points
Total
1 2 6 System
Framework
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
“It has been brought to my attention that some of our Sales Reps
continue to submit incomplete sales orders to Production. Is it
possible for you to develop a one-day refresher training session for
the Sales Reps addressing this issue? Maybe something we can
deliver during our quarterly sales meetings – the next one is in six
weeks. Please let me know what you think.”
Organization Unit
?
B A
R e s u lt s
R e s o u rc e E
C
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
services
Research
Laboratories technology
customer orders
requirements &
feedback
COMPETITION products
Customer
Emphasis
Emphasis
• How work gets done
• Reporting Relationship
• How Value gets added
• Resource Management
• Value-add Management
MAPPING AN ORGANIZATION
market needs
design
OPERATIONS
prints Commercial
Engineering Manufacturing aircraft
Airlines
prints
Material orders materials
Materials
Vendors materials
AJAX, Inc, designs, produces and markets training materials. Specifically, AJAX sells a
series of five-day training courses related to productivity. The training is delivered by an
employee of the customer organization who is trained to conduct the course by AJAX. A
typical sale consists of an order to train several customer instructors and the purchase of
several hundred sets of training materials, or “units”.
CEO
Vice President
Vice President Vice President Vice President Vice President
Research and
Marketing Sales Production Administration
Development
HR
Regions (4)
Regions (4)
Finance
IT
Regions
Districts (4)
(6 per Region)
Regions
Sales Reps(4)
(8 per District)
TASK 1
Using the background information you have just read and the “Function Summaries” that
follow on page 26, develop a Relationship Map for AJAX on the wall chart provided by the
instructor. (Note: The format for the Relationship Map also appears on page 26.)
HINTS:
• Your map should reflect the “is” state (how AJAX presently operates)
• Label all input/output arrows.
• As soon as you have read the Function Summaries, develop the map working as a
total team. You will not have time to complete the map if you work individually
and then try to combine results into a group product.
TASK 2
On your flip chart, list three “disconnects” that negatively impact the development
and introduction of a new product at AJAX. (Note: A “disconnect” is any deficiency
that negatively impacts the effectiveness or deficiency of the process.)
A.
1.
2.
3.
TASK 4
In the table below, indicate with an “X” which AJAX functions (according to your flow in
Task 2) are involved in each of the three value adding activities listed.
2. Business Generation
FUNCTION SUMMARIES
MARKETING
Develops and distributes promotional material to the marketplace. Generates new product
ideas and specifications for Research and Development.
SALES
Receives product support from R&D and leads from the market. They respond to leads
from the market by submitting proposals to prospective customers. They receive orders
from the customer and prepare sales orders, which they forward to Finance.
PRODUCTION
Prints and ships training materials to customers in response to customer orders.
Customer orders are received in Production from Finance. It also receives paper for the
printing from outside vendors.
FINANCE
Receives customer orders from Sales and forwards them to Production. Also invoices the
customer and receives the cash in return. Obtains capital for AJAX as required.
MARKETING
R&D
SALES MARKET
Prospect
Customer
FINANCE
PRODUCTION
product
idea MARKETING product promotion
customer order
Customer
capital FINANCE invoice
payment
content &
layout
production
order
SUPPLIER materials
TASK
Using the blank relationship template on page 31 and the Relationship Map Guide below,
1. Identify your Function.
2. Identify a typical client organization.
3. Identify any significant functional relationships within the client organization.
4. Identify major outputs of the client organization and their functional recipients.
5. Identify any functional entities between the client organization and the external
customer.
6. Identify the larger organization entity in which you and your client operate.
7. Identify the ultimate external customer of the outputs of your client.
8. Identify the ultimate outputs received by the external client.
9. Identify other internal organization units that provide significant inputs to your client
organization.
10. Identify a few of those significant inputs provided by the organization units
identified in (9).
11. Identify the significant input your function makes to your client organization.
Organization Unit 6
2
Client Organization
10 Input 5 5 7
Output
Product/ External
4 Service Customer
1 3
Your
Your Function Input 8
11
Input 10
1 8
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
CJI
services
Research CPI
Laboratories technology
customer orders
requirements &
feedback
COMPETITION products
RESULTS CHAIN
“Loss of Market
CRITICAL Share”
BUSINESS
ISSUE Desired Results:
• Market Share of
60%+
Current Results:
• Market Share of 48%
(and dropping)
“Excessive time to
CRITICAL install new service”
PROCESS
ISSUE Desired Results:
(for Installation • All new service
Process) installed within 48
hours.
Current Results:
• 72% of new service
installed within 48
hours.
“Inaccurate,
CRITICAL incomplete customer
JOB data”
ISSUE
(for Business Desired Results:
Office Rep) • Zero Incomplete Data
Forms
• 100% Accurate
Orders
Current Results:
• Between 1 – 10%
Incomplete Order
Forms
• 83% Accurate Orders
PM2
INDIVIDUAL
1. The project will have greater impact on organization results as you move up the
Results Chain.
3. If the apparent CJI can’t be linked to a CPI, then that suggests there may not be
much value in pursuing the project and the performance consultant should back
away if at all possible.
Service
"Help! We need help with our productivity".
Organization
EXAMPLE
NuPlant
“Need Human
Relations Training for
Production Supervisors”
HRM
PC
Results
PS
V.P. Human V.P. Stamping V.P. Stamping V.P. Stamping V.P. Stamping
Resources Operations Procurement Mfg. Eng. Industrial Eng.
Plant Manager
New Town
Human Resources Production Plant Eng. Tool & Die Quality Control Materials Control Mfg. Engineering Industrial Eng.
Manager Manager Manager Manager Manager Manager. Manager Manager.
Production
Superintendent
General
Supervisor
Production
Supervisor
1
Serious Performance Consulting, Geary A. Rummler, ©2005
FIGURE 3-8. MAJOR COMPONENTS OF THE NUPLANT PRODUCTION SYSTEM – THE “IS” AOP2
NuPlant
Manager
I
Production
Manager
Production
Superintendent
General
Supervisor
C
Human
Resources
B Production
Production Supervisor
Scheduling
A
Parts to Ship
Steel
Parts To Scrap
The Production/Press Line
Die Repair
F
Quality Control
G
Material Handling
H
Materials Management
2
Serious Performance Consulting, Geary A. Rummler, ©2005
Parts Division
Management
Management
Stamping Division
Management
Other Plants
NuPlant
Management
Production
Assembly Division
Management
Support
Functions
Assembly
Automobiles
Stamped Plants
Parts
Steel
3
Serious Performance Consulting, Geary A. Rummler, ©2005
CBI
Plant Productivity
(Bottom of the
Division)
A Study of the
Effectiveness of
Production Supervision
CPI
?
CJI
Supervisors
Training Needs
allegedly behaving
Analysis of Production
inappropriately
Supervisor Position
toward hourly
workers
LOCATION OF FINDINGS
NuPlant
Manager FINDINGS
The Production Management System (A1) Production supervisors have little control over
the factors critical to plant productivity .
B3 (A2) Production supervisors receive little
Production
Scrap Measured Each Shift
Manager performance feedback on a daily basis .
(A3) The productivity of New Plant will not be
Labor Cost/Part Measured Hourly significantly affected by training production
supervisors.
Production (B1) The production system currently measures and
Superintendent emphasizes an inappropriate performance
variable - direct labor cost.
(B2) There is no data storage that can function as a
B9 “memory” for the production system .
General (B3) There is little or no feedback to production
Supervisor
B10 supervision the consequences to the system of
Human
Resources its poor performance.
A1 A2 A3 (B4) The New Plant scheduling system does not have
the data necessary to realistically and effectively
Production
Production schedule production.
Supervisor
Scheduling (B5) The New Plant Production Scheduling work
environmnet is a contributor to lack of
B2 B4 B5 scheduling effectiveness.
B6 B7 B11
(B6) The first hour line “start -up” is ineffective and
B12 costly.
Steel Parts to Ship (B7) Lines frequently run when it is more cost -
B1 effective to shut them down .
(B8) The indirect budgeting system is flawed and
The Production /Press Line
Parts To Scrap
tends to be counter-productive in times of
stress.
(B9) The organization of responsibilities of the three
Maintenance Die Set lower levels of production management is
B8 inadequate for coping with the current
production problems.
(B10) Knowledge deficiiencies in production
supervision and management.
Die Repair
(B11) The introduction of new production workers into
the production crews during the first hour line
start-up every day is extremly inefficient and
Quality Control
counter-productive.
(B12) Old Plant has an “early -quit” policy that
provides a significant incentive to production
workers for high productivity and yield . There is
no such system at New Plant .
Material Handling
B8
Materials Management
LOCATION OF RECOMMENDATIONS
NuPlant
Manager
RECOMMENDATIONS
1. Measure performance by material yield and
Production
net productivity.
Manager
2. Install a data system which will provide a
production system “memory” function.
3. Provide feedback to all production
supervision.
4. Change production supervision
Production responsibilities.
Superintendent 5. Change the scheduling system.
6. Alter the basis for determining certain
indirect labor budgets.
7. Change current start up procedures.
2
3 8. Provide decision guides for supervisors
General 4 and general supervisors on shutting down
8 lines.
Supervisor
Human 3 9. Train production supervision in new
Resources responsibilities.
9 10. Train production supervisors and general
supervisors in selected topics.
2 7 Production 10
Production Supervisor
5
Scheduling 1
Parts to Ship
Parts To Scrap
Steel
Die Repair
Quality Control
Material Handling
Materials Management
CPI(s): Gaps in Results (B1) The production system currently measures and 1. Measure performance by material yield and net
“Is” “Should” emphasizes an inappropriate performance variable – productivity.
Production direct labor cost. 2. Install a data system which will provide a production
Process/ (B2) There is no data storage that can function as a system “memory” function.
Plant “memory” for the production system. 3. Change production supervision responsibilities.
Performance (B3) There is little to no feedback to production 4. Alter the basis for determining certain indirect labor
supervision on the consequences to the system of its budgets.
Scrap “X” “Y” poor performance. 5. Change current line start-up procedures.
(B4) The NuPlant scheduling system does not have the
Labor cost “X” “Y” data necessary to realistically and effectively schedule
production.
On-time “X” “Y”
delivery Etc.
CJI(s): Gaps in Results (A1) Production supervisors have little control over the 1. Provide feedback to all production supervision.
“Is” “Should” factors critical to plant productivity. 2. Provide decision guides for supervisors and general
(A2) Production Supervisors receive little performance supervisors on shutting down lines.
Production feedback on a daily basis. 3. Train production supervisors in new responsibilities.
Supervisors (A3) The productivity of NuPlant will not be significantly
affected by training production supervisors.
Total
1 2 6 System
Framework
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
CJI
services
Research CPI
Laboratories technology
customer orders
requirements &
feedback
COMPETITION products
Your Role:
You are a member of the Performance Support Group (PSG) of the JAX
Corporation, a very diversified conglomerate. The PSG provides training and
performance improvement support to JAX’s many subsidiaries.
“It has been brought to my attention that some of our Sales Reps continue to
submit incomplete sales orders to Production. Is it possible for you to develop a
one-day refresher training session for the Sales Reps addressing this issue?
Maybe something we can deliver during our quarterly sales meetings – the next
one is in six weeks. Please let me know what you think.”
CEO
Vice President
Vice President Vice President Vice President Vice President
Research and
Marketing Sales Production Administration
Development
HR
Regions (4)
Regions (4)
Finance
IT
Regions
Districts (4)
(6 per Region)
Regions
Sales Reps(4)
(8 per District)
BUSINESS ENVIRONMENT
RM
Technology
DM
CUSTOMER MARKET
Cash SR sales
order ???
?
Human CJI Customer
Resources
Administrat ion Incomplete
(Finance, HR & I T)
Order Forms
COMPETITION
CPI:
PROCESS
CJI:
JOB
INDIVIDUAL
Cornerstone of Performance
INPUT OUTPUT
CONSEQUENCES
PERFORMER
FEEDBACK
• Clear or sufficiently
recognizable indications • Sufficient positive
of the need to perform consequences
• Frequent and relevant (incentives) to
• Minimal interference perform
feedback as to how well
from incompatible or
(or how poorly) the job • Few, if any, negative
extraneous demands
is being performed consequences
• Necessary resources (disincentives) to
(budget, personnel, perform
equipment) to perform
The Human Performance System is a conceptual model first articulated by Geary Rummler in
1964, while at the University of Michigan. It is an amalgam of B. F. Skinner’s work in reinforcement
theory and basic industrial engineering practices. The development of the model was heavily
influenced by Dale M. Brethower and George L. Geis, colleagues at the University of Michigan. The
HPS can be distinguished from other models because it conceptually and graphically recognizes
the underlying principle that the variables impacting human behavior/performance are part of a
system.
INPUT OUTPUT
CONSEQUENCES
PERFORMER
FEEDBACK
INPUT OUTPUT
CONSEQUENCES
PERFORMER
FEEDBACK
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
services
Research
Laboratories technology
customer orders
requirements &
feedback
COMPETITION products
Establish Interview
Objectives and Time
Parameters
Ask Questions
Collect Examples
Diagram Answers
Where Possible
Re-State Points to
Interview Planning Verify
Skills Ask for Other Data
Listening Skills Sources
Probing/ Reinforce Interviewee
Questioning Skills for Talking
Reinforcement Summarize What You Information Gathered
Skills Learned Needs Identified
Summarization State How Interviewee Decision Makers & Qualified Leads
Skills was Helpful Users Identified Appointments
Knowledge of Repeat How Data Will Constraints Opportunities
Interview Be Used Determined Proposal Request
Guidelines Thank Interviewee Credibility Established Proposal Customer Orders/Sales Profits
OTHER HPS
COMPONENTS
• Job Models
4
Improving Performance, How to Manage the White space on the Organization Chart, Geary A. Rummler, Alan P. Brache, Jossy Bass, 1995
5
Improving Performance, How to Manage the White space on the Organization Chart, Geary A.
Rummler, Alan P. Brache, Jossy Bass, 1995
ALL CONTENTS Copyright 2005 61
Performance Design Lab – v2.1
Serious Performance Consulting Workshop
Performance Design – Job Level
DRILL-DOWN #2 – CONSEQUENCES
INPUT OUTPUT
CONSEQUENCES
PERFORMER
FEEDBACK
A CONSEQUENCE….
BALANCE OF CONSEQUENCES
OUTPUT CONSEQUENCES
(DESIRED) +–
INPUT
OUTPUT CONSEQUENCES
(UNDESIRED) +–
DRILL-DOWN #3 – FEEDBACK
INPUT OUTPUT
CONSEQUENCES
PERFORMER
FEEDBACK
FEEDBACK
C
Display and Storage
1. Can the information be
easily interpreted by the
performer?
2. Is the goal displayed?
3. Can improvement or
deterioration of Performance
over time be determined?
A
Measurement
1. Are all relevant
requirements
Delivery being measured?
B
1. Does the performer 2. Are only relevant
receive the information requirements
on time? being measured?
2. Does the performer 3. Is the unit of
receive the information measurement
frequently? meaningful to the
3. Is the information performer?
specific?
4. Is the information free
of "noise"?
A. Measurement
• $ Sales or # of sales calls made?
• $ Sales and percent of proposals accepted
• $ Sales and Sales/Order
B. Delivery
• Sales Reps receive their sales results every quarter:
1. Timely
2. Frequent
• Sales Reps receive the percent profitability of sales only for the
total of all sales
PERFORMANCE INDICATOR M1 M2 M3
Total $ Orders Plan
Actual
Gap
Cum Gap
Total # Orders Actual
$ per Order Actual
Total Orders/ Total Actual
Proposals Submitted
Cum Actual
Total $ Proposals Plan
Outstanding
Actual
Total # Proposals Actual
Outstanding
Total $ Proposals Plan
Submitted
Actual
Total # Proposals Actual
Submitted
$/ Proposal Submitted Actual
INPUT OUTPUT
CONSEQUENCES
PERFORMER
FEEDBACK
INPUT OUTPUT
CONSEQUENCES
PERFORMER
FEEDBACK
IMMEDIATE DELAYED
+ +
– –
DESIRED
OUTPUT CONSEQUENCES TO THE CONSEQUENCES
(What should the PERFORMER(S) TO
performers do?) (What happens to the performers when THE ORGANIZATION
they take the desired action?)
IMMEDIATE DELAYED
INPUT/SIGNAL PERFORMER(S)
(WHAT INDICATES THAT
ACTION IS REQUIRED?) + +
– –
UNDESIRED OUTPUT
(What do the CONSEQUENCES TO THE CONSEQUENCES
performers do?) PERFORMER(S) TO
(What happens to the performers when THE ORGANIZATION
they take the undesired action?)
FEEDBACK: What feedback do the performers receive?
INPUT/RESOURCES
(What resources are What Information? What Source? How Often?
available
to assist the performers?)
PAD 3-014
IMMEDIATE DELAYED
_ _ More $
Collect + +
$30 –
Poor CS
C
M
– Loss of Mkt
u Share
DESIRED
OUTPUT CONSEQUENCES TO THE CONSEQUENCES
PERFORMER(S) TO
Airline
(What should the
3 performers do?) (What happens to the performers when
they take the desired action?)
THE ORGANIZATION
Bags Ticket
Agent IMMEDIATE DELAYED
INPUT/SIGNAL PERFORMER(S)
(WHAT INDICATES THAT ☺ Cust ☺ Mgr Better CS
ACTION IS REQUIRED?)
Do not + Less work +
Collect
– _ _ – Less $
Situation:
Initial Request (Phone message from AJAX Sales VP):
“It has been brought to my attention that some of our Sales Reps continue to submit
incomplete sales orders to Production. Is it possible for you to develop a one-day
refresher training session for the Sales Reps addressing this issue? Maybe something
we can deliver during our quarterly sales meetings – the next one is in six weeks. Please
let me know what you think.”
TASK 1:
A. Review the project documentation on the following page (AJAX AOP Map and Project
Scope)
TASK 2:
During a follow-up phone conversation with an assistant to the Sales VP, a member of your
team received an “OK” to spend two weeks gathering more information about this issue
before committing to a particular plan of action. (“We think we can help you, but we need a
little more information.”)
Who do you want to talk to and what questions do you want to ask?
BUSINESS ENVIRONMENT
RM
Technology
DM
CUSTOMER MARKET
Cash
SR sales
order ???
?
Human CJI Customer
Resources
Administration Incomplete
( Finance, HR & IT)
Order Forms
COMPETITION
CPI:
PROCESS
CJI:
JOB Incomplete Sales Order
Forms
INDIVIDUAL
TASK 3:
Read the results of the interviews, summarized in Figure 1 on page 75.
TASK 4:
Update the Scope and Impact Document on page 73.
TASK 5:
Complete the HPS Template on page 76.
Sales VP
• Has been with AJAX just short of two years. Came from the outside.
• Is concerned about this issue primarily because of pressure from the
Production VP.
• The “problem” (if there is one) really doesn’t impact sales or the sales
organization because the order forms are subsequently processed in a
timely manner.
Sample of Sales Reps [Five high performing (top quartile of sales producers)
who were known to frequently submit incomplete order forms.]
• The sales order form was submitted to Sales Administration and then
sent to Production. A sale became “real” for commission purposes as
soon as it was received by Sales Administration.
• Although not hard to complete, Sales Reps found completing all sections
of the form to be time consuming and “a pain”, while on the road. They
believed they could produce healthier sales numbers if they didn’t have
so much paperwork.
• The Reps also thought it a major inconvenience to cart around the order
code manual. They couldn’t keep up with the frequent code changes and
often the information was out of date.
• Infrequently, the Sales VP sent a memo to the four region Sales
Managers urging them to make sure that their Sales Reps understood the
importance of completing the order forms. The order forms usually were
more complete for one or two weeks following one of these memos
IMMEDIATE DELAYED
+ +
– –
DESIRED
OUTPUT CONSEQUENCES TO THE CONSEQUENCES
(What should the PERFORMER(S) TO
performers do?) (What happens to the performers when THE ORGANIZATION
they take the desired action?)
IMMEDIATE DELAYED
INPUT/SIGNAL PERFORMER(S)
(WHAT INDICATES THAT
ACTION IS REQUIRED?) + +
– –
UNDESIRED OUTPUT
(What do the CONSEQUENCES TO THE CONSEQUENCES
performers do?) PERFORMER(S) TO
(What happens to the performers when THE ORGANIZATION
they take the undesired action?)
PAD 3-014
Consequences:
• Positive consequences for undesired behavior/output. (Less time, work. Receive
commission regardless.)
• Inadvertent negative consequences for the desired behavior/output (more time,
work)
• Result: “Mixed signals” as to what is appropriate Sales Rep behavior.
Feedback:
• No specific feedback on undesired behavior/output – just a general “somebody out
there is screwing-up” message.
Resources:
• Because of the current code manual set-up, difficult to complete the job as
desired.
Conclusion:
• The current Human Performance System does not support the desired Sales Rep
behavior/performance.
C+
–
C+
–
C+
–
1421 PAR CB 64
For example, if we are concerned with field sales reps turning in accurate and timely sales
orders, it will be necessary for the performance expectations, measures, consequences
and feedback to be consistent for the sales reps and their superiors - the District Sales
Managers, the Regional Sales Managers and the National Vice President of sales. If we
are to expect consistent, sustainable performance on the part of the field sales rep, it will
be necessary that the HPS’s of all managers in the hierarchy are aligned. In contrast, if we
say we want accurate and timely sales orders from sales reps, but the District Sales
Managers are held accountable (feedback and consequences) only for the number of
orders, the organization is not going to get the desired performance from the Sales Reps
on a consistent basis.
C +- C +- C +-
C +- C +- C +-
C +- C +- C +-
Are the Human Performance Systems aligned horizontally across functions that must
work together to perform/support a critical cross-functional process?
If, for example, an organization is concerned with developing and introducing new
products but they do not have the expectations, measures, consequences and feedback
aligned for the VPs of Marketing, Research and Development, Sales and Production, they
will never get the desired output from their New Product Development and Introduction
process. If
• The HPS of the Marketing VP emphasizes staff “budget”
• The HPS of the R&D VP emphasizes “time to market”
• The HPS of the Sales VP drives “total revenue” without regard to product mix
• The HPS of the Production VP focuses on “unit cost”,
then you can almost guarantee a new product that is late to market, over budget and does
not meet customer requirements nor its revenues goals after launch.
KEY POINTS:
1. Every Performer exists as part of a Human Performance System
2. There are a finite number of variables (six) to be concerned about regarding
human behavior/performance.
3. Behavior is influenced by its consequences – people continue to exhibit behavior
that leads to positive consequences and will avoid exhibiting behavior that leads to
negative consequences. However, what operates as a negative and positive
consequence is determined by the perception of each individual.
4. Since this is a “system”, it is necessary for all components to be operating at a
minimal level in order to have sustained performance.
5. If there is a human performance problem, then the question is: Where has the
Human Performance System broken down?
6. Poor human performance tends to be the result of a breakdown of more than one
component of the HPS. Therefore it is necessary to check the “health” of all HPS
components before making any changes.
7. It is the responsibility of management to assure that the Human Performance
Systems are properly aligned.
APPLICATIONS:
1. Hypothesizing and diagnosing the cause(s) of poor human performance
2. Designing productive work environments
MANAGEMENT MODEL
Plans
PERFORMANCE
Goals EXECUTED Results
C +-
PERFORMERS AND
Function Function
Performance Performance
Planned Managed
JPP JPM
VP Sales
JPP JPM
JPP JPM
JPP JPM
Sales Rep
POSITION JOB PERFORMANCE PLANNED JOB PERFORMANCE EXECUTED JOB PERFORMANCE MANAGED
Vice Participates in: • Reviews new product ideas and • Organization performance
President, • Development of organization provides input regarding sales monitored (Market Share,
Sales strategy potential and issues Revenue, Profit, Competition,
(Role as • Development of Process Goals Economic Indicators)
member of for all processes • Deviations from Org goals
Executive • Development of Budget • Provides ideas and analysis of analyzed and corrective actions
Team) potential new markets identified
• Participates in adjustment of
strategy and goals
(Role as • Function goals for Marketing • Provides sales forecasts as input • Business Generation Process
Process and Sales developed in support to manufacturing capacity performance monitored (Sales
Owner of of the Business Generation planning Revenue and Volume by product,
Business Process goals Sales close ratio, # of qualified
Generation leads, Marketing plan to actual)
Process) • Evaluates product sales • Deviations from process
strategies, sales tools, sales performance objectives and
techniques, and sales best corrective actions identified
practices. • Process improvements initiated
and sponsored
• “White Space” issues resolved
(Role as • Function goals (related to any • Determines sales training rqmts • Sales performance and Regional
Functional processes in which Sales and evaluates sales training performance monitored (Sales
Head of participates) obtained and effectiveness Rev by region, Sales close ratio
Sales) agreed to by region, Sales Budget plan to
• Regional objectives developed actual by region)
and communicated • Deviations from Sales and
• Sales Forecasts developed Region objectives analyzed and
• Regional Managers available corrective actions identified
and prepped (hiring, • Regional Manager Performance
development plans in place, Appraisals conducted
succession plans, coaching)
• Sales Support material
available - Provides feedback
and specifications for marketing
materials required to meet
sales goals
• Budget available
THE PERFORMANCE PLANNED AND MANAGEMENT SYSTEM AND THE ORGANIZATIONAL HIERARCHY
Organization
Function (or sub
and process Function plans
process) goals,
strategy and operational
plans, and Performance Performance Corrective
goals relevant to (systems and
Functional budgets monitored analyzed action taken
Manager function resources in
developed and
articulated and place)
communicated
communicated . . .
Organization,
process, and
function Job goals, plans
strategy and and budgets Job plans Performance Performance Corrective MARKET
First Line goals relevant to developed and operational monitored analyzed action taken
Supervisor job articulated communicated
and
. . .
communicated
Customers
Variables
Job PP 9 Job PM
5 1
6
7
4 C+-
Feedback 8
1
3 Results
Job 2
Requirements
J2
Job/Position:
CONCLUSION
VARIABLES REQUIREMENTS ACTION/COMMENT
Yes No ?
Outputs 1. Job and Performer Outputs and Requirements are:
a. Linked to Process, Organization and Customer Requirements
b. Clear and Communicated (Performer has performed as required
in the past.)
Job Design 2. Job is designed to meet Job and Performer Output requirements.
(Tasks are sequenced to optimize desired job outputs, minimize task
interference and performer fatigue, and maximize job satisfaction.)
Inputs 3. Inputs/Triggers:
a. Meet input standards
b. Are recognizable by the performer
Performer K/S 6. Performer has necessary Knowledge and Skill to meet Job and
Performer Output requirements.
J3
JOB ANALYSIS QUESTION GUIDE
VARIABLES REQUIREMENTS QUESTIONS
When possible, it is preferable to observe the job being performed, or if feasible, to perform parts of the job
yourself. In addition, ask exemplary and non-exemplary performers the following:
Outputs 1. Job and Performer Outputs and Requirements are: • How do you know what to do?
a. Linked to Process, Organization and customer • How do you know what is acceptable performance? Are there written standards anywhere?
requirements • Are the expectations consistent? If not, when not?
b. b.Clear • Are the expectations realistic? Do they make sense?
c. c. Communicated • How can you tell when you are doing the job correctly or incorrectly?
• Why is it important to perform the job as expected? What are the negative consequences of the
job not being performed as required?
Job Design 2. Job is designed to meet Job and Performer output As you observe or perform the job, ask yourself:
requirements • Could the job sequence be better designed?
• Are there competing tasks?
• Can the job environment be better designed to enhance performance of the job?
Inputs 3. Inputs/Triggers: • How do you know when you are to perform the various tasks expected of you?
a. Meet input standards • Is it reasonably clear when you are to perform the various tasks expected of you?
b. Are recognizable by the performer • Do the things you are to work on or respond to, vary a great deal?
Resources 4 Necessary Resources are available • Do you have everything you need to do this job accurately and in a timely manner?
• (Based on observation) Wouldn’t it be easier to do this job if you had……?
Performer 5. Performer has necessary capacity As you observe the job being performed, does the job seem to have particular physical, mental, or
Capacity emotional requirements? Does this seem to explain any of the differences between exemplar and non-
exemplar performance?
Performer K/S 6. Performer has necessary Knowledge and Skill The best way to answer this question is to observe the difference in performance of exemplar and non-
exemplar performers and ask each why they are doing certain tasks they way they are. Also ask
performers, “What are the critical things to know in order to do this job well? How did you learn them?” Ask
supervisors, “What do you see as the critical difference between exemplar and non-exemplar performers?”
Consequences 7. The Balance of Consequences supports the As you observe or perform the job, ask the incumbent:
desired Performer output • What happens to you/me when you/I do this task correctly? Incorrectly?
• What is the impact on the organization of you/me doing this task correctly? Incorrectly?
Feedback 8. There is adequate Feedback on outputs to the • How do you know when you are doing this job correctly? Incorrectly?
Performer • Are you able to understand what you need to change/do differently in order to perform correctly
the next time?
• Is the information you receive, timely enough? Specific enough? Frequent enough?
• How do you learn about the impact of doing this job correctly? Incorrectly?
Management 9A. Job Performance Planned Component: (The answers to the above questions should make it possible for you to reach the necessary conclusions
System a. In Place regarding this variable.)
b. Linked and Aligned
c. Being Executed
9B. Job Performance Managed Component (The answers to the above questions should make it possible for you to reach the necessary conclusions
a. In Place regarding this variable.)
b. Linked and Aligned
c. Being Executed
SHLD
IS
SHLD
IS
SHLD
More data:
Data from interviews with a sampling of District and Region Sales Managers-
• Sales managers are really only concerned with the number of sales made by the
Sales Reps, not the completeness of the order forms.
• Sales volume has become the unspoken priority since the new Sales VP took over
about two years ago.
TASK 6:
Given all the data you now have regarding the Sales Rep Critical Job Issue, complete the
“Conclusions” column of the Job Analysis Worksheet on the following page.
TASK 7:
Complete the “Action” column of the Job Analysis Worksheet and summarize your
recommendations on the flip chart for the design of a “performance system” that will close the
gap in Job results.
TASK 8:
Given a decision that the Sales Reps are to submit accurate sales order forms 100% of the
time, without benefit of an electronic order entry system:
A. Review the partially completed “Is/Should Job Level Worksheet” on page 92.
B. For each performer in the hierarchy, check the cell in the “SHLD” row which offers
the most leverage in supporting the desired output of the Sales Rep. (For example,
for the District Sales Manager, the desired or should output needs to be changed, as
do the consequences. What other change will be critical to supporting the desired
Sales Rep output?)
CONCLUSION
VARIABLES REQUIREMENTS ACTION/COMMENT
Yes No ?
Outputs 1. Job and Performer Outputs and Requirements are:
a. Linked to Process, Organization and Customer Requirements
b. Clear and Communicated (Performer has performed as required
in the past.)
Job Design 2. Job is designed to meet Job and Performer Output requirements.
(Tasks are sequenced to optimize desired job outputs, minimize task
interference and performer fatigue, and maximize job satisfaction.)
Inputs 3. Inputs/Triggers:
a. Meet input standards
b. Are recognizable by the performer
Performer K/S 6. Performer has necessary Knowledge and Skill to meet Job and
Performer Output requirements.
J4
IS/SHOULD JOB LEVEL WORKSHEET
SHLD
IS
REGION /
DISTRICT
SALES
MANAGER SHLD
IS There are no The trigger (??) Need to Sales order No problem No problem Feedback is SRs get their There is no plan
SALES REP 10% standards (sale made) is get more form is painful with capacity with K/S – not specific commissions in place for
incomplete regarding what easy to information – to complete; – the SRs the SRs can and not no matter ensuring
order form constitutes a identify don’t know the order can do the do the job timely (a what; there complete sales
good/complete much about code manual job when when they memo here are no order forms and
sales order form the job changes they need to need to and there) negative no one is
design constantly consequences monitoring
and is hard to for not whether sales
carry around completing orders are
their order complete and
forms – there providing
is actually a corrective action
disincentive to
complete them
SHLD Create and Remains the (??) Remove N/A N/A Provide SRs get Monitor
100% communicate the same issues with specific, commissions completeness
complete standards the order detailed, only when of sales order
order forms regarding a code manual timely order are forms and
good/complete feedback complete; provide
sales order form. don’t allow appropriate
Simplify the others to feedback /
order form if complete the consequences
possible. forms for them to performers
A. Competing Environments
Feedback
+
C-
Home
Home Output
Input Job
Output
+
Job Input
C-
Feedback
B. Competing Responses
+
C +-
C +-
C +-
C-
C. HPS Chain
Successful C+
Present
C-
Proposal
Prospect asks Unsuccessful
for Proposal
X
Prepared Presents Proposal
C-
D. Culture Change
+
X C-
+
Y C-
E. Member of a Team
+
C-
+
C-
COMPETING RESPONSES
If we have impressed on our new employees that our record-keeping system is important,
they are likely, initially, to make out their records – to the extent that they can find the time.
Will they continue to be conscientious in all of their record-keeping? That depends.
Consider the experience of the sales person described below.
In general, she completes all her reports on time and accurately, but the
following exceptions occur:
1. Her Report 903A is two days late, but she doesn’t get any flack about it.
2. She makes an error on the Business Management Statement, and it is sent
back to her for correction, rework, and resubmission.
3. She loses her New Business Call Forms, so she sends in the rest of her
reports without them. Nobody comments on the omission.
4. She requests another set of New Business Forms. She gets them five (5)
weeks later.
5. She faithfully turns in her agenda each Monday for the first three (3) weeks. No
one calls her while she is on rounds. Her agenda is preempted by two sales
meetings scheduled after her agenda was submitted.
6. Her Sales Manager calls to ask her where her special tear slips are for the
particular model that has a special campaign on this month.
7. She spends her own money for expenses, and doesn’t get reimbursed until the
expense report is submitted.
Rate the importance of each item as you think the salesperson would rate it after six
weeks on the job:
(Low or High)
Report 903A
Business Management Statement
New Business Call Forms
Weekly Agenda
Tear Slips for Special Campaigns
Expense Report
As she is given more and more responsibility and becomes more strapped for time, which
items is she not likely to complete, if she judges some have to go?
(List the numbers)
“To an anthropologist, culture is a ‘shared system of beliefs, values, and traditions that
shape a person’s behavior and perception of the world’”. (University of Arizona Natural
History Museum)
Behavior X C-
Situation A
Behavior Y C+
That is, if given Situation A, Behavior X is always punished and Behavior Y is nearly
always rewarded, the performer will do Y. That is the prevailing expectations-
consequence relationship in this particular work environment.
If we want this same performer to begin doing X instead of Y given Situation A, we must:
1. Communicate the change in desired behavior (from Y to X, given A)
2. Modify the consequence pattern;
a. Minimally, not punish for new behavior X
b. Minimally, not reward for old behavior Y
c. Ideally, reward for new behavior X
3. Make other changes in the performer’s HPS as required to support the new
behavior (e.g., different tools, more resources, different skills and specific
feedback on performance).
This second, behavioral view is totally consistent with the first view/definition, but is one
that speaks to how a culture is formed (i.e., “expectation-consequence” relationships that
form “reinforced behavior patterns”). If we understand the elements that form a culture,
then we have an understanding of what is required to change a culture.
C. Organization
Results
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
CJI
services
Research CPI
Laboratories technology
customer orders
requirements &
feedback
COMPETITION products
CJI(s): Gaps in Results • Sales commission available upon submission of order A. Investigate implementation of an electronic order entry
“Is” “Should” form, regardless of accuracy of submission. system. If that is not feasible,
Sales Rep • Incomplete sales order forms are subsequently B. Investigate having the sales reps initiate the order form,
Job completed by order entry personnel in Production after with the bulk of the form completed by someone in
contacting the sales rep and/or customer. Production. If that is not feasible,
Incomplete 8-10% of Zero order • Number of incomplete order forms not tracked and C. Make the following set of changes:
Sales Order forms forms therefore no feedback to individual sales reps. 1. Simplify and restructure the form.
Forms incomplete incomplete • The Code Manual used by sales reps to complete 2. Redesign the Code Manual
order forms is unwieldy in size, not user-friendly and 3. Change the commission system so that sales
frequently out of date. commissions are not available until a complete
• The incidence of incomplete order forms increases sales form has been processed.
near the end of each quarter. 4. Provide monthly feedback to sales reps and all
levels of management on the
accuracy/completeness performance of all
sales reps.
5. Hold District and Region Sales Managers
accountable for the accuracy/completeness
performance of all sales reps.
Jobs (by themselves) do not add value – just cost. Job outputs need to be linked to a
primary process that delivers value to a customer.
SPECIAL POINTS
1. Some jobs can be confused with a process – e.g., the Sales Rep Job
• On the surface, the sales process and the sales rep job look the same – just a
series of tasks.
• Also, it looks like what is done is unique to the individual performer – “I am the
process!”
• But actually, the sales process looks more like this:
Sales Rep
Sales Process
Completed
Leads Lead Opportunity Proposal Order
Sales Order
Qualified Identified Made Taken Form
2. Supervisor/Management jobs
• When focusing on supervisory or management jobs, you must establish:
o How they impact and provide value to the process to which they
contribute.
o What it is exactly that must be managed.
District Manager
Sales Rep
Sales Process
Lead Completed
Lead Opportunity Proposal Order
Generation Leads Sales Order
Qualified Identified Made Taken
Process Form
Total
6 Framework
1 2 System
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
CJI
services
Research CPI
Laboratories technology
customer orders
requirements &
feedback
COMPETITION products
ANY BUSINESS
“I am
receiving a
2 return on my
investment”
Shareholders
Value Chain
2 “I got It”
Customers
1 “I want It”
ANY BUSINESS
Human
Resources Value Creation System
Product / Service
Market
“It” Available “It” Sold
Raw Materials /
Supplies
Support
Customer
Processes
Technology “It”
“It” Delivered
“It” Ordered
1. Need Exists
“It” Available Market “It”
“It” Order
“It” Order “It” Order Shipped / “It” Order 6. “It” Received
Processed Filled Distributed/ Closed
Tools/Materials Available Installed
7. “It” Used or Consumed
Resources Available
Technology Available
Facilities Available “It” 8. “It” Evaluated &
“It” Customer Serviced
Supported Conclusion reached to
Cash Available
Drop or Expand /Repeat
and/or Refer
I Want “It”
Any Business
Investments
Resources
Management System
Lab
Labor
System
Customers
Available Sold Delivered Product/
Suppliers Service
©
Research Support/Enabling Processes
Products/
Resources Competition Services
Product /
Product Product/
Product Product
Product /
Internal Value Chain Servic
/
Service Servic
/
Service Servic
/
Service Product/
e
Availabl Sole e
Delivere Service
Available Sold Delivered
e d d
“It”
“It” Order “It”
“It”Order
Order Shipped/ “It” Order
Processe Fille Close
Processed Filled Delivered/ Closed
d d d
Installed
Macro Process
“It”
“It” Customer Serviced Supported
Nee
•
dOpportunity
Proposa
Opportunitie
Opportunities Opportunitie
Opportunities Capabilitie Proposal • Order
Order
Captured
• Developed and Prepared
l
Prepared and
s
Generated Qualifie
s
Qualified Communicate
s
Proposal Sale Closed Taken
and
and
Presente
and
d Proposa d Communicated • Communicated
Entered
• Requested d
Requeste
l
d
• Information Gathered
• Needs Identified
Task/Sub-Task • Deciders and Users Identified
• Constraints Determined
• Credibility Established
Information Gathered
• Relevant Data Sources Identified
Input
• Interviews Scheduled
• Interviews Conducted
• Conclusions Reached and Recorded Output
Work Station
AJAX
Management
RESOURCES
$ Jax
Marketing R&D Sales Finance Production
“It” Available
(New Product Development & Introduction)
MARKET
“It” Sold
(Business Generation)
Customers
“It” Delivered “It”
(Order Fulfillment)
15
MARKETPLACE/ 4 13
5 7 Invoice
CUSTOMER Promotional Promotion Buy?
No Order Received &
Received &
Materials Inquiry Instructors Trained
Received Paid
1 3
New Product Promotional Yes
Ideas & Product Materials
MARKETING Specifications Specs Developed &
Developed Distributed Lead
Proposal
Ideas 2
Product
RESEARCH & New Product Support
DEVELOPMENT Developed
Payment
Training
• Training Order
Proposal Made Invoice
Completed
FIELD
10
TECH Order Instructors
SUPPORT Trained
FINANCE 9 14 16
Notification of
Order Shipment
Customer Payment
Processed Invoiced Received
Paper
Supplies
PERSONNEL
12
SUPPLIERS Paper Shipped
by Paper
Vendor
MARKETPLACE/ 15
4 13
CUSTOMER 5 7 Invoice
Promotional Promotion No Order Received &
Inquiry Buy? Received &
Materials Received Instructors Trained
Paid
1 3
New Product Promotional Yes
Ideas 2
RESEARCH & New Product
DEVELOPMENT Developed
Payment
Training
10
TECH
Instructors
SUPPORT Trained
9 14 16
ADMINISTRATION
Notification of
FINANCE Order Shipment Customer Payment
Processed Paper
Invoiced Received
Supplies
PERSONNEL
12
Paper Shipped
SUPPLIERS by Paper
Vendor
Order Order
Sales
Reps
Completed Submitted
2 3
Sales
Admin
Sales
Order Logged
4
Order
Entry
Invoicing
OK?
Yes Checked No to Sales Rep Entered Invoiced
12
11 14 15 27
Yes
Yes
Production
Control
16 17 19 21
& Shipping Production
Production Materials
Special?
Scheduled Printed No
24
20 22
Yes
Assembly
Order Assembled
Materials 25 Order
PreAssembled Shipped
23 Specials Picked & 28
Assembled 26
Process
Capability
Resources
When looking at the internal organization system (i.e., Value Chain) we are
concerned about two things, as illustrated in the Matrix below:
1. Are the three Primary Processes aligned horizontally across the Value
Chain? (Are the Process Goals aligned with the Organization Goal and
with the other Processes? Do all Processes have the capability to meet
their and the organization’s goals?)
Process
Capability
Resources
WHAT IS A PROCESS?
(1)
Improving Performance: How to Manage the White Space on the Organization Chart – Rummler
and Brache (1995)
Customer
Sales
Credit and
Invoicing
Production
Control
Order •
•
Taken •
Order
• •
Entered • •
• • •
•
•
Order
Processed
•
A. Order Recieved •
Order Assembled •
and Shipped •
B. Order Assembled •
•
Job Model
Job: Assembler
Variables
Process
Results
3 1
2
Requirements
There are likely to be substantial costs in making the following changes to address the CJI
of “Incomplete Sales Order Forms”:
• Clarifying expectations of all relevant performers
• Modifying the Sales Order Form
• Developing an alternative to the code manual
• Modifying consequences so Sales Reps will not be automatically paid for not
meeting standards.
• Feedback to all relevant performers regarding actual performance against
standards.
TASK 1:
A. Do you think the argument for change needs to be strengthened by looking for a
Critical Process Issue?
More Data:
In addition to performing the Sales Process, the Sales Reps are also part of the Customer
Order Process. A principle output of the Sales Rep job – the completed Sales Order Form
– is also a critical input to the Customer Order Process, the process that ultimately
delivers the product (and value) to the customer.
Further, it has recently come to light that customers are increasingly unhappy about the
time it takes to receive their orders from AJAX. Apparently it takes 20 days on average to
receive orders from AJAX compared to an average of five days from some competitors.
TASK 2:
Update the AJAX AOP below, indicating the location of the process you have identified
and Critical Process Issue.
BUSINESS ENVIRONMENT
RM
Technology
DM
CUSTOMER MARKET
Cash SR
sales
order
?
Human CJI Customer
Resources
Administration Incomplete
( Finance, HR & IT) Order Forms
COMPETITION
TASK 3:
CPI:
PROCESS
INDIVIDUAL
We have successfully moved the scope of this project up the Results Chain to a CPI, as
shown below.
INDIVIDUAL
A small cross-functional task force developed the cross-functional process map of the
Customer Order Process (“It Delivered”) shown on page 125.
A. Review the cross-functional “is” map of the Customer Order Process. Note where
the Sales Rep participates in this process.
C. Identify four to five disconnects in the “is” Customer Order Process that impact the
delivery cycle time and/or order accuracy. (Note: a “disconnect” is any deficiency
in the process that negatively impacts the effectiveness or efficiency of the
process.) List and number each disconnect on the Flip Chart. Then put the
number of each disconnect on the process map, indicating where it occurs in the
process.
D. Summarize your conclusions and actions regarding the Customer Order Process
on the Process Analysis Worksheet on page 128.
re
m
o Order Clarified Materials Invoice
Credit Problem Received Received
t
s Proposal Accepted w/ Customer
u Solved 29 30
1 9
C 13
s s
e s p
al e e Order Order Credit Problem
S a lR Completed Submitted Solved
S
2 3 13
s
p n
O i
m Order Logged
d d
e lA 4
i
F
r y
e
dtr Order Order Clarified Order
r O n E
Order Logged
Checked
OK?
No w/ Customer Corrected
5 7
6 8 10
e
c
n
a
n & n g
iF Credit Order Referred Order Order
t ici OK?
d i Yes Checked No to Sales Rep Entered Invoiced
e o 12
11 14 15 27
rC v
n
I Yes
n Yes
o l
t iro
c
ut n Order Inventory Print Order Order
n d o Available?
o oC Logged Checked No Placed Scheduled
r P 18
ti 16 17 19 21
c
u n
d o
o i
rP t
c
u Production Materials
Special?
d Scheduled Printed No
o 24
r P 20 22
Yes
y g
l n
b Order Assembled
m p i
p Materials 25 Order
e i
h PreAssembled Shipped
s
s S 23 Specials Picked& 28
A & Assembled 26
MEMORANDUM
Historically, we have told customers we would ship their materials within 20 days
of receipt of the order. We have not done that consistently for several years now.
These are some of the issues:
2. Finance takes another 2-8 days to process an order (including credit checks,
etc.) and forward it to Production.
3. Best case, Production now has less than 13 days to process and ship the
order. In the past, this might have been feasible, but now we have these
factors to deal with:
A. We are printing more and more orders (about 60%) as they come in
rather than filling from inventory because of pressures on inventory cost.
(The inventory we have is frequently not what is being ordered because
of the field’s inability to forecast product mix accurately. The total unit
forecast is reasonably accurate; the forecast by product is terrible.) It
takes us just one day to print an order. However, our print job backlog is
such that it takes us 8-10 days to get an order through the print shop.
Production Control takes an additional day to get the order entered into
the production/assembly process.
B. The Sales organization increasingly wants mixes in the orders (e.g., ten
of P100 and ten of P101, which is below our standard order size of 20
units). In some cases, the field wants parts of P100 and P104 combined.
The result of all these exceptions is special assembly of orders. This
increases our order assembly time from one day for standard orders to
3-5 days for these specials.
The Sales organization would have us ship these orders by air, but we
continue to ship by surface delivery because of our budget. We ship the
same day we get the order from Assembly. The shipping time is usually
4-5 days.
MEMORANDUM
The time to process an order varies considerably, depending on how well the
Sales Reps do their jobs.
Our people log an order and check it for accuracy and completeness. If there are
no problems, the order moves to “Credit”. All “OK” orders are handed over to
Credit at the end of each day. However, if an order is not “OK”, we have to
contact the Sales Rep or customer for clarification. This can easily take another
one to three days. I would estimate that 20 percent of the orders these days are
incomplete or inaccurate and require our seeking clarification. It seems to be
getting worse. Those Sales Reps need training. Also, a sale becomes “real” for
commission purposes as soon as it is received by Sales Administration.
The next thing our people do is a credit check on each customer, new or old. This
activity is a nuisance, so we accumulate the orders and do the checks on the last
two days of the week (the clerks are doing other financial transactions the first of
each week). We clear each order through Credit in a day. If there is a problem,
we send the order back to the Sales Rep for discussion with the customer.
Order handling time also is affected by the Sales organization. Usually, the Sales
Reps turn in all their orders on Friday. After Sales Administration processes them,
we usually get big batches of orders from all the Regions on the following
Wednesday or Thursday.
“Is" Process
X
X
X
X
X
Disconnects
CPI/Project Assumptions/
Goals Constraints
Yes Fix No
Disconnects
OK?
Fix Radical
Disconnects Redesign
Evaluate Process
Against:
• “Should” Design
Specs
• Disconnect List
Process
1.1 Objectives and Scope Definition
Information
4.1 Implementation
Process
Process Improvement
Management Request or
Opportunity
1.2 Project Organization
Change
Assessment and
Management
3.2 Change
Planning
Project
Management
Approach A:
The goal is to improve the Customer Order Process so that the average cycle time from
receipt of a sales order by AJAX Sales to receipt of materials by the customer is a
maximum of five days.
1. Modify the “Is” process map (using “stickies” or a colored marker) to depict the
improved process.
2. Annotate your improved process map with the improved cycle times you expect.
3. List your expected expenditures and total cost.
You have an “out of pocket” budget of $100,000 to achieve your improvement goal.
Approach B:
You have an “out of Pocket” budget of $1,000,000. The goal is to redesign the Customer
Order Process and reduce the average cycle time by as much as you can, given your
budget.
6
P5
PROCESS DISCONNECTS* AND “ROOT-CAUSE” GUIDE
The failure of a process to perform as required may result from one or more of the
potential “disconnects” in column one, below. The location of the likely cause of that
disconnect, and its subsequent correction, is indicated in columns two through four.
PROCESS PERFORMANCE
PROCESS MANAGEMENT SYSTEM
POTENTIAL DISCONNECTS
DESIGN PERFORMANCE PERFORMANCE
PLANNED MANAGED
ORGANIZATION LEVEL
1. Organization Goals X X
2. Organization Business Model X
3. Organization Strategy X X
4. Process Goals and Requirements X X
5. Organization Priorities X X
6. Value Chain Alignment X X
7. Operating Policies X X
8. Functional measures, goals and rewards X X
9. Reporting Relationships/Organization Structure X
10. Business Values and Practices X X
11. Resource Availability and Allocation (Capital, X X
Human Resources, Material/Equipment,
Technology, Facilities)
12. Accountability for results X X
PROCESS LEVEL
13. Process Strategy X X
14. Process Priorities X X
15. Process Flow, including X X
a. Batch versus continuous flow X X
b. Serial process flow versus parallel X X
c. Unnecessary (non-value added) steps X X
d. Redundant (non-value added) steps X X
e. Bottleneck operation X X
16. Missing, sub-standard input from another X X X
process
17. Unclear or conflicting spec. of process output X X
18. Underlying Business Models X X
19. Decision Rules X X
20. Lack of information on process step performance X X X
21. Resource availability and allocation for process X X X
steps
22. Not clear who is responsible to Perform, Manage X X X
or Support a process step
23. Accountability for results X X
JOB/PERFORMER LEVEL
24. Performance Expectation not clear X X
25. Job Design not supportive X X
26. Job Support (resources, tools) not adequate X X X
27. Consequences not supportive X X X
28. Feedback on performance not adequate X X X
29. Performer not adequately trained X X X
30. Performer does not have basic capacity to X
produce required outputs.
*Disconnect: Any deficiency in the process that negatively impacts the effectiveness and
efficiency of the process
ALL CONTENTS Copyright © 2005 132
Performance Design Lab – v2.1
Serious Performance Consulting Workshop
Performance Design – Process Level
A. Referring to your analysis of the “Is” Customer Order Process, in what ways is the
job of the Sales Rep not aligned with the process?
1.
2.
3.
B. What changes are required to properly align the sales rep job with the “should”
customer order process (Approach A).
Below is a schematic of the Anatomy of Performance related to the “It Delivered” process
(Customer Order Process) for AJAX.
Management System
“It” Available
(New Product Development & Introduction)
Resources
“It” Sold
(Business Generation) Customers
RELEVANT COMPONENTS
POSSIBLE MANAGEMENT ACTIONS
OF HPS
Performance Expectations
Feedback
Consequences
MEMORANDUM
Given what you have learned about the AJAX organization, how would you go about
changing its “culture” to be more sensitive to customer expectations?
• AJAX EXAMPLE
• MEASURES CHAIN TOOL
• MEASURES CHAIN – AJAX EXAMPLE
“Should” • Accurate and timely order • Accurate and timely invoice • Timely order scheduling
Process submission preparation • Timely and accurate production of • Cycle Time = 6 days
Goals • Accurate and timely order entry • Accurate and timely credit orders • Avg. Cost/Unit = $48
• Order processing cost checks for new accounts • Timely shipment of orders • Order Accuracy =
• Invoice processing cost • Unit production and shipping costs 99.5%
ORGANIZATION
M1 M1
Internal External
MARKET
New Product
Dev elopment M2 M2 M2
Process
M3 M3
New Products
MEASURES CHAIN
End-of-Sub-Process Measures End-of-Process Measures Related
(M2) (M/I) (M/E) Enterprise
Measure
Company Customer
Quality Quality
Variable
M1 Measure
Variable Variable
M2 Measure M1 Measure
Time Time
$ $
Sub-
process
$ $
Handling Units printed Assembly # units ship Revenue
cost/unit Print cost/unit cost/unit # orders ship Cost
Inventory Ship cost/unit Cost per unit Profit
Other Critical Dimensions Other
C. Organization
Results
BUSINESS ENVIRONMENT
Government Economy Culture
CPI(s): Gaps in Results • Internal cycle time and accuracy of order goals have never 1. Redesign the process (per the attached cross-functional
“Is” “Should” been linked to customer expectations and made explicit. “should” process map) .to meet customer expectations,
Customer • The current process is incapable of consistently meeting including an order to delivery cycle time of six days and 100%
Order customer order cycle time expectations for a number of accurate shipments.
Process reasons, including: 2. Address all process disconnects identified in the “is” analysis
- Sales reps frequently hold orders and submit them 3. Implement the following recommendations to support the
Drop in Order cycle Order cycle at the end of the week. “should” process:
customer time of 20 time of 6 - Sales reps submit incomplete order forms, resulting a. Electronic order entry from sales rep laptop
satisfaction days days in additional processing time and errors. b. New customer credit check done automatically as part
- Orders from new and existing customers both of order entry by sales rep
85% 100% undergo credit checks. c. Orders go simultaneously to sales administration,
accurate accurate - Credit checks batched and done once a week. production, finance and shipping.
shipments shipments - Multiple order log-ins d. Lot size of one.
- Inventory cost pressures have resulted in a de e. Minimum order size of 10 units.
facto policy of “produce to order”. f. One demand printing of orders
- Etc.. g. Etc..
PM9
Macro Implementation Plan
AJAX CUSTOMER ORDER PROCESS (excerpt)
Recommendation Dimension Period
Bundle 1 st
Quarter 2nd Quarter 3rd Quarter 4th Quarter
Month 1 Month 2 Month 3
Activity • Standard • Reps begin Web • Proposals
A - Accurate and Timely Proposals to submit development On-line
Orders: Developed proposals • Sales Order
• Laptops Commission Software in
3 - Sales Reps submit
issued change in use via web
proposals to all new
customers. • Reps submit effect
orders daily
7 - Sales orders capture via fax
software will require
orders to be complete Cost $100,000 $80,000 $40,000
before submission. Impact • • Payroll • • • Payroll • Payroll
reduction reduction reduction
8 - Sales orders are
$25,000 $50,000 $50,000
submitted daily or at
time of order • Increase in • Cycle time
order reduction of
10 - Commission on the accuracy & 7 days
sales is not paid completenes
until the order has s
shipped
24 - Standard
proposals will be
available on-line for
sales reps
(Corollary to #1: Teams starting out to “map” processes rather than to improve
processes. No process mapping efforts should be started unless it is clear that the
objective is to improve performance in support of the strategy or a CBI. Such efforts
typically end in countless hours of meetings and flowcharting, no tangible results, and
frustrated and disillusioned “team” members.)
2. Not having a clear charter, objectives, measures, and sponsorship (i.e., process
owner)
In effect, not having the results of a robust project definition (see Phase 1.1 and 1.2).
For an overall, coordinated effort, it is crucial that teams have a common approach to
BPI. If they adopt the PDL PD&M methodology, they will be using a time-tested
methodology, which PDL is willing to teach them. The methodology also is robust
enough and flexible enough to accommodate modifications by various teams, so they
won’t feel like they are in a methodology “straight jacket”.
8. Failure to drive the redesign down to the Performer Level, redesigning key jobs
and their performance support systems.
Total
1 2 6 System
Framework
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
CJI
services
Research CPI
Laboratories technology
customer orders
requirements &
feedback
COMPETITION products
CAPITAL MARKET
ANY BUSINESS
RESOURCES Analysts
Earning
Dividends Market Activity
Capital Share-
(Actual vs.
Buy or Sell and Share Price
holders
Forecast)
Potential
Human Investors Buy
Resources
Raw
Materials
PRODUCT/SERVICE MARKET
Technology
“It”
Customer
Ordered “It”
COMPETITION
Variables
1
1 2
7
Organization Performance Planned Organization Performance Managed
1
Support 3 1
Processes Available
5
Sold
5
Delivered
Requirements
1. Super-System Monitored and Action Taken
2. Organization Direction aligned with Super-System
a. Mission/Vision
b. Strategy
c. Business Model
d. Goals
3. Value Chain Outputs and Requirements
a. Linked to Organization/Customer Requirements
b Clear
4. Processes Optimized to achieve desired Value Chain results
a. Goals Aligned
b. Adequate Capacity
c. Adequate Capability
5. Process Results, as described in “B”
6A. Value Chain Performance Planned Component
a. In Place
b. Linked and Aligned
c. Being Executed
6B. Value Chain Performance Managed Component
a. In Place
b. Linked and Aligned
c. Being Executed
7A. Organization Performance Planned Component
a. In place
b. Linked and Aligned
c. Being Executed
7B. Organization Performance Managed Component
a. In Place
b. Linked and Aligned
c. Being Executed
O2 Organization Unit:
S t ock pric e u p
JAX 50% thi s year JAX
capi ta l
(C apital M arket)
M ana gers ,
L abor Mar ket S t ock ers,
MARKET
Checkers , etc.
F ood,
Food , Cl othing , C ustome rs:
Cl ot hin g,
etc. Su ppli ers E lectroni cs, e tc. H ead s of
la rge
F ood, Cl othi ng, househol ds-
E lec troni cs, et c. 80 % repeat
Com puter
custome rs
Techn olog y: Sy st em s
Walm art, C ostco, Safeway , Kroger , Best Buy, C i rcui t C ity, Food, Clot hin g,
Wa lgr eens, 7- Eleve n, Re stau rants, D epartmen t Stor es E l ect ron ics , et c.
B. Read the background information on AJAX on page 158 with the objective of
further annotating the AJAX Super-System map.
D. What are three apparent external threats (i.e., in the Super-System) to the
continuing success of AJAX.
1.
2.
3.
E. What appears to be the greatest potential external opportunity (i.e., in the Super-
System) for AJAX?
G. Complete the “Conclusion” column for questions one and two on the Organization
Analysis Worksheet.
INDIVIDUAL
I. Complete the “Conclusion” column for questions one and two on the Organization
Analysis Worksheet on page 159.
BUSINESS ENVIRONMENT
RESOURCES AJAX
Capital Shareholders
Market (JAX)
Suppliers Industry
Training Materials
for 5 Courses growth = 6-8%
& Instructor per year for
Training
last 5 years
Research
Laboratories
COMPETITION
products
AJAX BACKGROUND
AJAX designs, produces and markets training materials related to productivity. There are
currently five different courses, targeting different audiences, including executives,
managers and supervisors. The training is delivered by an employee of the customer
organization, who is trained by AJAX to conduct the course. A typical sale by AJAX
consists of an order to train several customer instructors and the purchase of several
hundred sets of training materials, to be used by the trained instructors. AJAX will
typically have a three to ten year relationship with a customer, as they complete the
training of appropriate audiences.
AJAX, Inc., was founded 15 years ago and was a pioneer in the teaching of productivity
principles and practices. It has long been the dominant supplier of training materials in
this area. The “productivity and quality training” industry has been growing an average
of 6-8% a year for the past five years. AJAX was acquired by JAX Corporation (a
highly diversified conglomerate) five years ago. AJAX has always been profitable and
has enjoyed almost complete operating independence within JAX.
Revenues for the last year were $40,000,000 and after-tax profits have dropped below
15% for the first time. Revenues have been level for the past three years. Sales to
new customers continue to grow at about 8% a year. Sales to existing customers have
decreased over the past two years.
AJAX has some new competition from “imitators” who are selling similar (but technically
inferior) products at lower prices. Many customers and potential customers seem
unable or unwilling to note the difference in quality of the new competitors. The result
has been a steady decline in market share (from 60% to 48%) for the past three years.
In addition, there are several new, small competitors in the market who have video
and internet based productivity training products. Currently, no competitors are
emphasizing on-the-job results of their training, long a strong point of AJAX.
There is Federal legislation pending regarding providing significant incentives for the
training of employees by U.S. corporations. The North American Society for Training
predicts this legislation could result in a 5% – 10% boost in expenditures for training.
JAX senior management recently turned down a request by AJAX for additional capital.
JAX management said they wanted to see a plan for getting AJAX after-tax profits
back to 15% before they would decide on additional funding.
AJAX has lost several key sales reps to competition and is having trouble finding
comparable “new hires”.
AJAX consumes a lot of paper for its products. As a result, they are concerned about
recent labor unrest in the paper industry that could lead to a strike and a shortage of
supplies, and most certainly will lead to increased cost of raw materials.
TASK 1:
Assess the level of alignment between the primary processes making up the AJAX
Value Chain (shown below) by reading the two memos that follow and answering the
questions below.
A
C
“It”
Delivered
(Production)
A. List one or more ways that “It” Sold (and the customer) and “It” Delivered are out
of alignment (E.g., “Sales promises short lead times that Production can’t meet”.)
B. List one or more ways that “It” Available and “It” Sold are out of alignment.
C. List one or more ways that “It” Available and “It” Delivered are out of alignment.
TASK 2:
How could possible misalignment of the AJAX Value Chain impact the CBI on this
project?
TASK 3:
Complete the “Conclusion” column for questions 3 - 5 on the Organization Analysis
Worksheet on page 159.
MEMORANDUM
As we discussed in our meeting last week, these are our major cost concerns:
1. Cost of product. This has been rising steadily, over time, but hardly
faster than the cost of paper and shipping. (In fact, our labor cost as a
percent of total cost has declined over the past five years through
increased automation and work design.)
2. Cost of handling the product. Our problem is that the field sales
organization does not respect our lead requirements for order time (we
need 30 days, they give us 5-10 days in many cases). Also, they
increasingly want mixes in the orders (e.g., ten of P100 and ten of
P101, which is below our standard order size of 20 units). In some
cases, the field wants parts of P100 and P104 combined. The result of
all these expectations is special handling. The result of the short lead
time also is special handling plus rush shipping by air rather than truck
or rail. This alone is becoming increasingly expensive.
3. Cost of inventory. As you know, our inventory costs are high because
of all the product that was forecast in past years but has not sold. (Our
total unit forecasts are accurate, but the product mix estimates are way
off.) However, we have still managed to reduce our inventory costs
considerably this year by keeping new inventory as low as possible
and trying to print orders as they come in. Of course, this has
extended our ship time from ten days to three or four weeks in many
cases.
MEMORANDUM
I am as concerned as any one about the slow start we are experiencing with
P104. In that regard, there are three issues that I feel should be addressed in
the next staff meeting:
2. The technical support people have received very little training in how to
support this new product, which is considerably different than our
traditional core courses (P100 – P102). This is a result of our training
budget being cut drastically just prior to product launch. (Which seems
to happen every time we launch a new product.)
Despite these problems, I want to point out again that Research and
Development did meet its objective to have the product designed and ready for
production in six months.
Management System
1
Management
“It” Available 4
2 (New Product Development & Introduction)
Resources
“It” Sold
2 (Business Generation) 4 Customers
“It”
“It” Delivered
2 (Order Fulfillment)
d
Organization
Function (or sub
and process Function plans
process) goals,
strategy and operational
plans, and Performance Performance Corrective
goals relevant to (systems and
Functional budgets monitored analyzed action taken
Manager function resources in
developed and
articulated and place)
communicated
communicated . . .
Organization, f f f
process, and
function Job goals, plans
strategy and and budgets Job plans Performance Performance Corrective MARKET
First Line goals relevant to developed and operational monitored analyzed action taken
Supervisor job articulated communicated
and
. . .
communicated
Customers
PERFORMANCE PLANNED
Expectations Set • Goals and Strategy not clearly
articulated and/or communicated
• Strategy not aligned with super-system
Plans Set and Resources/ • Plans and Budgets not adequate to
Support Requirements Determined accomplish stated goals and implement
strategy
Plans Operational • Adequate funds not released to
implement Plans
PERFORMANCE MANAGED
Performance Monitored • Appropriate Performance Data not
available
• Roles for who is to monitor what, when,
not clear
Deviations Analyzed and • Who responsible to analyze what, when,
Cause Determined not clear
Action Taken • What Action to be taken when not clear
• Who takes what Action, when, not clear
d. Goals are not set for Processes before they are set for Functions, leading to sub-
optimization of the critical processes that deliver value.
f. It is not clear “who” does “what”, “when”, regarding monitoring performance data,
diagnosing deviation in performance and taking necessary action, at any level.
Beyond failures in the components of the Management System, there is always the real
problem of the actual content that flows across the components being flawed. (e.g., the
appropriateness of goals, the adequacy of plans and the accuracy and timeliness of
performance data.)
ANNUAL
1
JAX
2 3 8 9 10 11
Super
System
Review and Scan
AJAX Update 3 Performance
EXECUTIVE Year Goals, Goals, Plans
Review
TEAM Parameters & and Budgets
Annual
Assumptions Goals Set Finalized
Scan
Strategy
Performance,
Updated
Goals, Strategy
VC Priorities Process
& Priorities
Set Goals
Reviewed
Negotiated
Preliminary
4 5 7 Process
Process Goals
Budget
& Parameters
Negotiated
Communicated
(All Primary Process
PROCESS Processes Performance Steps 3
MANAGEMENT Reviewed through 8
TEAM Annual Goals Conducted
Set for Support
Planning Processes
Completed
Process Goals Functional
& Plan Goals Goals, Plans,
Reviewed Negotiated Budgets,
Function 6 Functional Communicated
Requirements Budget
Communicated Negotiated
Functional
FUNCTIONAL Goals Set
EXECUTIVES Plans Set
AND Budget
MANAGERS Developed
INDIVIDUALS
12 15 20 24 28 29 32
Super
AJAX Performance
System Key Company, Key Process
EXECUTIVE Review Changes
Scan Process & Indicators Monitored
TEAM Communicated Trends Noted Trends Noted
Performance Function (ex. Sales (X Sold)
Review Questions Asked Questions Asked
Process Indicators and Product Shipped
Changes Monitored (X Delivered)
Required Review
Changes in Performance
Goals & Reviewed
Resources Answers
Made as 21 25 Reviewed
13 Required 16 Request
Cross- Reviewed &
Process Acted-on
Super Optimization Action Taken
PROCESS System Issues
MANAGEMENT Scan Resolved Process Key Process
Trends Noted
TEAM Process Changes Made Indicators
Questions Asked
Performance as Required Monitored
Review
Issues?
14 17 22 26 30 33
Deviations
Managed
FUNCTIONAL Key Function Questions Deviations
Issues Functional Key Function/
EXECUTIVES Job Indicators Asked Analyzed
Reviewed and Changes Made Job Indicators
AND Monitored Action Taken Action Taken
Resolved as Required Monitored
MANAGERS Assistance
Requested
18 23 27 31 34
Deviations
Job Changes Key Job Managed Key Job Deviations
INDIVIDUALS
Made as Indicators Action Taken Indicators Analyzed
Required Monitored Assistance Monitored Action Taken
Requested
C. Organization Results
1 2
Organization
Performance Planned
Pe
1
Va
Support
Processes
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
CJI
services
Process
Research CPI
3
technology
Laboratories
customer orders
requirements &
feedback
4
COMPETITION products
Job
A. Job Results Performan
Planned
6
4
Etc..
Continued . . .
14. In the final analysis, an organization is a giant Value Creating System or machine.
In order to be effective the components of the machine/system must be aligned:
• Organization with the Super-System
• Value Chain with the Organization
• Processes with the Value Chain
• Jobs with Processes
15. Management must do the aligning of the Value Creating system.
16. A major source of poor organization performance is the misalignment and sub-
optimization of the Value Chain (“It” Available, “It” Sold, “It” Delivered) – a direct
result of the failure to manage this level of the organization.
3 Job Level
• Explaining the Difference in
Performance
Process • Designing Poor Performance
4 Level
• AOP and Olympic Medals
• Modelling Business Units
Performance • Mapping the AOP
Design • PC Key Points
Organization
5 Level
Total
6 Framework
1 2 System
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
BUSINESS ENVIRONMENT
Government Economy Culture
Suppliers material/
equipment
products/ Customers
services
Research
Laboratories technology
customer orders
requirements &
feedback
COMPETITION products
a. Goals Aligned
b. Adequate Capacity
c. Adequate Capability
5. Process Results, as described in “B”
6A. Value Chain Performance Planned Component
a. In Place
b. Linked and Aligned
c. Being Executed
6B. Value Chain Performance Managed Component
a. In Place
b. Linked and Aligned
c. Being Executed
7A. Organization Performance Planned Component
a. In place
b. Linked and Aligned
c. Being Executed
7B. Organization Performance Managed Component
a. In Place
b. Linked and Aligned
c. Being Executed
1. Process Outputs and Requirements are
a. Linked to Organization and Customer Requirements
b. Clear
c. Communicated
2. Process is designed to meet Output requirements
Process
*Units might be plants, stores, sales districts, departments, call centers, supervisors, sales reps or
customer service reps
4. Provide negative or inconsistent consequences for doing what the employee thought
they were supposed to do.
9. Make it impossible for employees to get clear direction or decisions from their bosses
(because of all of the above).
11. Do not fully prepare employees to be competent at their job, thereby setting them up
for abuse from con-workers, bosses, and customers.
12. When employees ask for direction and assistance, tell them that it is their
responsibility to solve the problem or to “work it out”. (You might even mention that
they are empowered to do so.)
Application of the
Anatomy of Performance Framework to
Building a World-Class
Olympic Swim Team*
*Excerpted from
“From ‘Scratch’ to ‘Qualified
Olympic athletes in Athens 2004’:
The Olympic Road to Performance
Improvement”
Michiel Bloem and Arnoud Vermei
Source: Performance Improvement: page 7, Volume 44, Number 6, July, 2005, International
Society for Performance Improvement
From Improving Performance – How to Manage the White Space on the Organization Chart by Geary Rummler and Alan P. Brache, 1990.
Variability indicates
opportunity for performance
improvement
APPLIED TO….
MANUFACTURING PLANTS
• Ford
• Frito-Lay
• Motorola
• Warner-Lambert
RETAIL OUTLETS
• Calico Corners
• Eckerd Drugs
• Farmer Jack’s
• Federated
• Gino’s
• Montgomery Ward
• Pizza Hut
• Sherwin-Williams
PROPERTIES
• Holiday Inn
• Marriott
DISTRICTS
• Capital Holding Corporation
• Public Finance
COMPANY
• North Carolina Trust Company
• Hylsa Steel (Grupo Alfa – Mexico)
• AG Consulting
1. The Super-System
2. Variables
3. Assumptions
4. A Market Model
5. Variables
6. Assumptions
7. Strategy (or how we plan to achieve a sustainable competitive advantage).
8. Product/Services to be offered.
9. Organization of the Value Creation System to achieve competitive advantage
(including decisions about organizing by LOB’s, etc.)
10. Much more
11. Physical layout
12. Economic Model
13. Revenue (by product/service, customer, etc.)
14. Cost (by…..)
15. Profiles of Key Roles
16. Outputs and accountabilities
17. Measures
18. Roles/responsibilities for key interfaces
19. Critical HPS components
20. Competencies (?)
21. Profiles of Key Processes
22. Process Outputs
23. Process Steps
24. Process measures
25. Role/responsibility matrices
26. Key process step definition
27. Management Systems
28. Process steps
29. Measures
30. Roles/responsibilities (Management Calendar)
31. Performance Tracking System
32. Staffing Models
33. By Role and Situation
34. Performance Logic Map(s)
35. Leadership/Management Models
36. Relationship to external functions of the organization
* Each dimension modeled represents a set of variables that impact performance of the
organization unit. Not all dimensions will be appropriate for any given type of business
ALL CONTENTS Copyright 2005 188
Performance Design Lab – v2.1
Serious Performance Consulting Workshop
Performance Design – Total System
Failing Sub-par Moderate Good Better Best Failing Sub-par Moderate Good Better Best
Start
1 2 3 4 5
KEY RELATIONSHIPS
Districts (93)
DM Role
Admin
Hospital/
Account
Sales CS Manager Role Referring
Team Physician
Role Hospital
Admin
Implanting
Physciam
Sales Process
Super-System Map
(O5)
BUSINESS ENVIRONMENT
Management Calendar
Government Economy Culture
(O9)
Function Relationship
Map
RESOURCES ANY BUSINESS
(O6)
earnings
Capital shareholder
Market capital Management System value
Shareholders Process versus
Function Map
(P6)
Labor Market human MARKET
resources Cross-Functional
Value Chain Map
(O7)
Suppliers material/
equipment
products/ Customers Cross-Functional
services Process Map
Research
technology (P5)
Laboratories
Role/Responsibility
customer orders
requirements & Matrix
feedback (J8)
COMPETITION products
Job Model
(J6)
Human Performance
System Template
(J5)
14. In the final analysis, an organization is a giant Value Creating System or machine.
In order to be effective the components of the machine/system must be aligned:
• Organization with the Super-System
• Value Chain with the Organization
• Processes with the Value Chain
• Jobs with Processes
15. Management must do the aligning of the Value Creating system.
16. A major source of poor organization performance is the misalignment and sub-
optimization of the Value Chain (“It” Available, “It” Sold, “It” Delivered) – a direct
result of the failure to manage this level of the organization.
17. Variability in performance is the performance consultant’s friend. It indicates an
opportunity for performance improvement.
3 Job Level
Process
4 Level • Results Improvement Process
Performance • Tools
Design
Organization
5 Level
Total
6 Framework
1 2 System
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
I
II III IV
DESIRED
Request for BARRIERS CHANGES RESULTS
RESULTS
"Help" or an DETERMINED DESIGNED, EVALUATED &
DETERMINED
Opportunity & CHANGES DEVELOPED & MAINTAINED
& PROJECT
SPECIFIED IMPLEMENTED OR IMPROVED
DEFINED
Why the Gap
How are we
What and in Results & Did we Close
Closing the
Where is the What is the Gap in
Gap in
Gap in Results Required to Results
Results?
Close it?
I II III IV
Request for Desired Results Barriers Changes Designed Results Evaluated &
“Help” or an
Determined & Determined & Developed & Maintained or
Opportunity Project Defined Changes Specified Implemented Improved
I Ii III IV
PROCESS
DESIRED RESULTS DETERMINED BARRIERS DETERMINED AND CHANGES DESIGNED, DEVELOPED, RESULTS EVALUATED AND
PHASES
AND PROJECT DEFINED CHANGES SPECIFIED AND IMPLEMENTED MAINTAINED OR IMPROVED
Objective • Determine if there is a significant • Determine what variables in the • Design, develop and implement the • Determine if the Results Gap has
Results Gap to be closed Anatomy of Performance must be interventions necessary to close been closed and if not what must
• Determine the Point of Entry (CJI, addressed to close the Results Gap the Results Gap and assure be done to do so
CPI, CBI) • Specify the changes required in the continuous improvement
• Determine the feasibility of closing Anatomy of Performance variables
the Results Gap to close the Results Gap
• Prepare a Project Plan and
Proposal for closing the Results
Gap
Outputs • Project Definition Document • Job, Process and or Organization Implemented Changes Continuously Improved Performance
• Project Plan Analysis Worksheets
• Proposal • Macro Design and Implementation
Plan
Major 1. What and where is the Gap in Why the Gap in Results and what is How are we closing the Gap in Did we close the Gap in Results?
Questions Results? required to close if ? Results?
to Answer 2. Is the Gap significant?
3. Is it feasible to close the Gap?
I II III IV
CBI
“What’s
Scope and
happening or not Project Design CPI
Hypothesis
happening ...?
CJI
Out
RIP PHASE I
Replace with 11x17
Requestor “ - - - -“ “ - - - -“ “ - - - -“
3
“Can I go Look?”
1 Go to Phase III
5
Request for X content
2
O analysis P/O Clarification 8 10 11
4 9
“What’s happening P Constraints
or not happening Data Gathering & Project Plan &
Hypo I ? Hypo II ?
Analysis Strategy Proposal
that suggests ‘X’?” J/P 7 Results Gap/Chain
Bail Bail
Go To 6
Phase III
• Problem Pentagon (PM1) • AOP Variables & • Data Sweep Model (PM4) • Project Definition
Tools • Project Definition Requirements (PM3) • Data Sweep Template Document (PM2)
Document (PM2) (PM5)
OUTPUT OF PHASE II
PM9
MACRO DESIGN AND IMPLEMENTATION PLAN TEMPLATE
PERIOD
RECOMMENDATION DIMENSION First Quarter Second Quarter Third Quarter Fourth Quarter
Month One Month Two Month Three
A. ///////// Activity
Cost
Impact
B. ///////// Activity
Cost
Impact
Impact
D. ////////// Activity
Cost
Impact
E. ////////// Activity
Cost
Impact
1422-69-5.2.61
CPI
CJI
I
II III IV
DESIRED
Request for BARRIERS CHANGES RESULTS
RESULTS
"Help" or an DETERMINED DESIGNED, EVALUATED &
DETERMINED
Opportunity & CHANGES DEVELOPED & MAINTAINED
& PROJECT
SPECIFIED IMPLEMENTED OR IMPROVED
DEFINED
Why the Gap
How are we
What and in Results & Did we Close
Closing the
Where is the What is the Gap in
Gap in
Gap in Results Required to Results
Results?
Close it?
Requestor “ - - - -“ “ - - - -“ “ - - - -“
3
“Can I go Look?”
1 Go to Phase III
5
Request for X content
2
O analysis P/O Clarification 8 10 11
4 9
“What’s happening P Constraints
or not happening Data Gathering & Project Plan &
Hypo I ? Hypo II ?
Analysis Strategy Proposal
that suggests ‘X’?” J/P 7 Results Gap/Chain
Bail Bail
Go To 6
Phase III
• Problem Pentagon (PM1) • AOP Variables & • Data Sweep Model (PM4) • Project Definition
Tools
• Project Definition Requirements (PM3) • Data Sweep Template Document (PM2)
Document (PM2) (PM5)
WH E
W HO
N
WORTH
Unacceptable Response
Acceptable Response
Morale is low.
Reports are rarely submitted on time.
What do you mean by rarely? 2 out of 10; Give me an example of what someone
5 out of 10? Can you give me a specific does that indicates to you that morale
number or range? is low.
How will you know when the problem is solved? (What will be different?)
WHERE
How general a problem is it?
Probe with:
WORTH Is it Important?
PM2
CPI:
PROCESS
CJI:
JOB
INDIVIDUAL
B. Project Benefits
- Other, because:
A. Stakeholder Profile
Stakeholder Relationship to this How this Project may How they may impact
(group or project impact them (+/-) Project (+/-)
individual)
Project Phases Factors that represent a threat to the Action that will be taken to
success of this phase of the project minimize these risks
2. What assumptions have been made regarding the scope and effectiveness of this
project?
MILESTONE DATE
1. Project Introduction and Start-up
Data Sweep #1
Data Sweep #2
Data Sweep #3
Data Sweep #4
3. Interim Review
PM4
VARIABLES REQUIREMENTS
1. Super-System Monitored and Action Taken
1 2. Organization Direction aligned with Super-System
a. Mission/Vision
b. Strategy
1 2 c. Business Model
Organization 7 Organization d. Goals
Performance Planned Performance Managed 3. Value Chain Outputs and Requirements
1 a. Linked to Organization/Customer Requirements
b. Clear
4. Processes Optimized to achieve desired Value Chain results
6 a. Goals Aligned
Organization
performer
5 1 4. Necessary resources are available
6
7 5. Performer has necessary Capacity
4 C+- 6. Performer has necessary Knowledge and Skill
7. The Balance of Consequences supports the desired Performer output
8. There is adequate Feedback on outputs to the Performer
9A. Job Performance Planned Component:
Feedback 8 a. In Place
b. Linked and Aligned
1 c. Being Executed
3 9B. Job Performance Managed Component:
a. In Place
Job 2 b. Linked and Aligned
c. Being Executed
Changes Specified
Data Sweep One Data Analyzed (First
DATA SWEEP ONE Data Gathered
Planned Approximation)
Changes Specified
Data Sweep Two Client Update and
DATA SWEEP TWO Data Gathered Data Analyzed (Second
Planned Discussion
Approximation)
1. Summary of Recommendations
2. 1.Feasibility
SummaryReview
of Recommendations
2.a.Feasibility
ReadinessReview
a. Readiness
b. Current Initiatives
3. ROI b. Analysis
Current Initiatives
& Prioritization
3. ROI Analysis
4. Recommendations & Prioritization
organized &
4.Macro
Recommendations
Implementationorganized
Plan &
Macro
developedImplementation Plan
developed
5. Recommendation Prototypes
5.developed
Recommendation Prototypes
as appropriate
developed as appropriate
I
II III IV
DESIRED
Request for BARRIERS CHANGES RESULTS
RESULTS
"Help" or an DETERMINED DESIGNED, EVALUATED &
DETERMINED
Opportunity & CHANGES DEVELOPED & MAINTAINED
& PROJECT
SPECIFIED IMPLEMENTED OR IMPROVED
DEFINED
Why the Gap
How are we
What and in Results & Did we Close
Closing the
Where is the What is the Gap in
Gap in
Gap in Results Required to Results
Results?
Close it?
INTERVIEW GUIDELINES
INTRODUCTION – Describe:
✔ Who you are
✔ Purpose of project
✔ Purpose of interview
✔ How data will be used; confidentiality
✔ Time expectations
✔ How you want to proceed
✔ Note taking
DATA GATHERING:
✔ General to specific
✔ Don't interrupt
✔ Ask for examples, copies
✔ Give examples of what you want
✔ Flow chart or diagram information
✔ Re-state points to verify
✔ Ask for other data sources
✔ Reinforce interviewee for talking
END:
✔ Summarize what you learned
✔ State how interviewee was helpful
✔ Repeat how data will be used
✔ Get OK for future contact with interviewee or staff
Guide (P4)
• Cross-Functional Process Map Template
(P5)
• Results/Measures Chain Template (P7)
• Analysis Summary – Process Level (P9)
Variables
Job PP 9 Job PM
5 1
6
7
4 C+-
Feedback 8
1
3 Results
Job 2
Requirements
SHLD
IS
SHLD
IS
SHLD
IS
SHLD
IMMEDIATE DELAYED
+ +
– –
DESIRED
OUTPUT CONSEQUENCES TO THE CONSEQUENCES
(What should the PERFORMER(S) TO
performers do?) (What happens to the performers when THE ORGANIZATION
they take the desired action?)
IMMEDIATE DELAYED
INPUT/SIGNAL PERFORMER(S)
(WHAT INDICATES THAT
ACTION IS REQUIRED?) + +
– –
UNDESIRED OUTPUT
(What do the CONSEQUENCES TO THE CONSEQUENCES
performers do?) PERFORMER(S) TO
(What happens to the performers when THE ORGANIZATION
they take the undesired action?)
FEEDBACK: What feedback do the performers receive?
INPUT/RESOURCES
(What resources are What Information? What Source? How Often?
available
to assist the performers?)
PAD 3-014
J6
THE JOB MODEL TEMPLATE
ACCOMPLISHMENTS CRITICAL
SUB ACCOMPLISHMENTS DIMENSIONS MEASURES STANDARDS
CLAIMS QUALIFIED
• Loss Notice received • % of cases of Recovery potential • 75% of caes of Recovery Potential
identified
• Claim type identified Accuracy • % of coverage issues identified later
• Additional or corrected coverage
• Coverage determined • % of Loss Notices entered in correct
issues identified in less than 5% of
claim category.
– recovery potential identified cases
– legal trends identified & considered • All Loss Notices entered. Loss Notice
• Missing/Inaccurate information identified entries reported by claim category
Timeliness • Average Loss Notice processing/ • 15 min. per Loss Notice
• Claims progress tracked confirmation time
Accuracy • % of adequate justification of method • All method mix variances greater than
CLAIMS ASSIGNED mix variances greater than 5% 5% adequately justified
• Economic assignment determined
• Average size of outside assigned • Outside assigned claims $1000 or
– $ exposure estimated claims more
– Settlement variance potential estimated • % of cases coinspected/reinspected • 10% of cases
coinspected/reinspected
– Method option availability determined
C +-
Customer
Sales
Credit and
Invoicing
Production
Control
Order •
•
Taken •
Order
• •
Entered • •
• • •
•
•
Order
Processed
•
A. Order Recieved •
Order Assembled •
and Shipped •
B. Order Assembled •
•
Job Model
Job: Assembler
FINDINGS RECOMMENDATIONS
Variables
Process
Results
3 1
2
Requirements
Job Results 10. 5. Job Results as described in “A” for Job ………
order
7
Order Order No Order clarified Order
ORDER ENTRY OK with customer
logged checked corrected
5 6 ? 8 10
FINANCE
Yes
order
12 Order
Credit No Order Customer
CREDIT AND OK referred to
INVOICING checked Sales Rep entered invoiced
11 ? 14 15 27
Yes
Yes
18 Order
PRODUCTION Order Inventory Avail- No Print order scheduled
CONTROL logged checked able placed for Assembly
notice of shipment
16 17 ? 19 21
order filed
PRODUCTION
24
Production Materials Yes
PRODUCTION Special
scheduled printed
20 22 ?
No
Materials
pre- Order Order
assembled assembled shipped
23 25 28
ASSEMBLY
AND SHIPPING
Specials
picked and
assembled
26
88-607
AJAX
Management
RESOURCES
$ Jax
Marketing R&D Sales Finance Production
“It” Available
( New Product Development
& Introduction)
MARKET
“It” Sold
( Business Generation
)
Customers
“It” Delivered “It”
( Order Fulfillment
)
MEASURES CHAIN
End-of-Sub-Process Measures End-of-Process Measures Related
(M2) (M/I) (M/E) Enterprise
Measure
Company Customer
Quality Quality
Variable
M1 Measure
Variable Variable
M2 Measure M1 Measure
Time Time
$ $
Sub-
process
“Is" Process
X
X
X
X
X
Disconnects
CPI/Project Assumptions/
Goals Constraints
Yes Fix No
Disconnects
OK?
Fix Radical
Disconnects Redesign
Evaluate Process
Against:
• “Should” Design
Specs
• Disconnect List
FINDINGS RECOMMENDATIONS
POINT OF DATA SWEEP I DATA SWEEP II DATA SWEEP III DATA SWEEP IV “SHOULD” SPECIFICATIONS
ENTRY
• Relevant AOP • Business Unit and Value • Processes analyzed • Critical Jobs • “Should” design
confirmed/identified Chain(s) analyzed • Management systems analyzed specifications developed
• Relevant Super-System, • Critical processes and analyzed for
Business Unit, Value management systems - Value Chain
Chain(s) understood confirmed/identified for - Process(es)
CBI • Critical Value Chains, analysis - Process
Processes, and Management
Management Systems Systems
identified for analysis (J1) Job Results Template - Critical Jobs
(J2) Job Analysis Worksheet
• Results Gap and impact
(J3) Job Analysis Question
confirmed
Guide
• Evaluation criteria confirmed
(J4) Is/Should Job Level
• Relevant AOP • Process(es) analyzed • Value Chain issues Worksheet • “Should” design
confirmed/identified
(PM2) Project Definition Document • Process Management analyzed (J5) Human Performance System specifications developed
(PM5) Data• Sweep
Value Chain or Process
Template Systems analyzed • Additional Process(es) Template for
(PM7) Interviewunderstood
Guidelines • Additional Process(es) analyzed (J7) Job Performance Planned - Value Chain
• ResultsMap
(O5) Super-System GapTemplate
and impact requiring analysis • Relevant Jobs analyzed and Managed Template - Process(es)
(O6) Functionalconfirmed
Relationship Map identified - Process
CPI •
Template Results Chain Scope tested • Value Chain issues Management
(O1) Organization Results Template
• Process performance and requiring analysis Systems and Management
(O3) Organization Planning
design constraints identified (P1) Process Results Template Template- Critical Jobs
understood (P2) Process Analysis Worksheet (O4) Value Chain Planning and Management
• Related Processes identified (P3) Process Performance Planned and Template
for possible analysis Managed Template (O9) Management Calendar Template
• Evaluation criteria confirmed (P4) Process “Disconnect” and “Root- (P1) Process Results Template
• Relevant(O1)
AOPOrganization Results
• Template
Relevant Jobs analyzed cause”
• Guide
Additional Jobs analyzed (P3) Process
• Performance
“Should” Job Planned and Managed
(O2) Organization Results
confirmed/identified • (P5) Cross-Functional
Additional Jobs requiring • Process
Process(es) Map
analyzed Templatespecifications developed
• Process context Worksheet
of Job analysis identified Template (P7) Results Chain Template Worksheet Template
understood(O3) Organization Planning
• and
Process(es) (P6) Process versus Function Map
requiring (P8) Process Design Strategy Guide
• Results Gap and Management
Impact Templateanalysis identified Template (J4) Is/Should Job Level Worksheet
confirmed (O4) Value Chain Planning and (P7) Results Chain Template Worksheet (J5) Human Performance System Template
CJI • Job performance Management
and designTemplate Template (J6) Job Model Template
(O7)
constraints Cross-functional Value Chain
understood (J7) Job Performance Planned and Managed
Map Template Template
• Related Jobs identified for
(O8) Value Chain Analysis (J8) Role/Responsibility Matrix Template
possible analysis
Worksheet (PM9) Macro Design & Implementation Plan Template
• Results Chain Scope tested
(O9) Management Calendar (J9) Analysis Summary – Job Level
• Evaluation criteria confirmed
Template (P9) Analysis Summary – Process Level
(O10) Analysis Summary – Organization Level
1 2
7
Organization Performance Planned Organization Performance Managed
1
Support 3 1
Processes Available
5
Sold
5
Delivered
Variables
Requirements
1. Super-System Monitored and Action Taken
2. Organization Direction aligned with Super-System
a. Mission/Vision
b. Strategy
c. Business Model
d. Goals
3. Value Chain Outputs and Requirements
a. Linked to Organization/Customer Requirements
b Clear
4. Processes Optimized to achieve desired Value Chain results
a. Goals Aligned
b. Adequate Capacity
c. Adequate Capability
5. Process Results, as described in “B”
6A. Value Chain Performance Planned Component
a. In Place
b. Linked and Aligned
c. Being Executed
6B. Value Chain Performance Managed Component
a. In Place
b. Linked and Aligned
c. Being Executed
7A. Organization Performance Planned Component
a. In place
b. Linked and Aligned
Being Executed
7B. Organization Performance Managed Component
a. In Place
b. Linked and Aligned
c. Being Executed
SUPER-SYSTEM MAP
BUSINESS ENVIRONMENT
Government Economy Culture
RESOURCES AJAX
earnings
Capital shareholder Shareholders
Market capital Management value
Suppliers material/
equipment
products/
services
Research
Laboratories technology
COMPETITION products
CORPORATE
SEMICONDUCTOR DIVISION
order
report
Product Marketing
Operations
order Market
report
order
Sales
order Customer
order acknowledgement
Manufacturing
financial data
invoice Finance
Manuf acturing
QA Engineering Facilities
Vendors/ payment
Suppliers Accounts instructions
support
Pay able inspection specs
mfg.
pl an
payment materials
Accounts Materials Production
invoice Receiv able product
product
materials
invoice
payment
MARKETPLACE/ 15
4 13
5 7 Invoice
CUSTOMER Promotional Promotion Buy?
No Order Received &
Received &
Materials Inquiry Instructors Trained
Received Paid
1 3
New Product Promotional Yes
Ideas & Product Materials
MARKETING Specifications Specs Developed &
Developed Distributed Lead
Proposal
Ideas 2
Product
RESEARCH & New Product Support
DEVELOPMENT Developed
Payment
Training
10
TECH Instructors
SUPPORT Trained
FINANCE 9 14 16
Notification of
Order Shipment
Customer Payment
Processed Invoiced Received
Paper
Supplies
PERSONNEL
12
SUPPLIERS Paper Shipped
by Paper
Vendor
MARKETPLACE/ 15
4 13
CUSTOMER 5 7 Invoice
Promotional Promotion No Order Received &
Inquiry Buy? Received &
Materials Received Instructors Trained
Paid
1 3
New Product Promotional Yes
Ideas 2
RESEARCH & New Product
DEVELOPMENT Developed
Payment
Training
10
TECH
Instructors
SUPPORT Trained
9 14 16
ADMINISTRATION
Notification of
FINANCE Order Shipment Customer Payment
Processed Paper
Invoiced Received
Supplies
PERSONNEL
12
Paper Shipped
SUPPLIERS by Paper
Vendor
ANNUAL
1
JAX
2 3 8 9 10 11
Super
System
Review and Scan
AJAX Update 3 Performance
EXECUTIVE Year Goals, Goals, Plans
Review
TEAM Parameters & and Budgets
Annual
Assumptions Goals Set Finalized
Scan
Strategy
Performance,
Updated
Goals, Strategy
VC Priorities Process
& Priorities
Set Goals
Reviewed
Negotiated
Preliminary
4 5 7 Process
Process Goals
Budget
& Parameters
Negotiated
Communicated
(All Primary Process
PROCESS Processes Performance Steps 3
MANAGEMENT Reviewed through 8
TEAM Annual Goals Conducted
Set for Support
Planning Processes
Completed
Process Goals Functional
& Plan Goals Goals, Plans,
Reviewed Negotiated Budgets,
Function 6 Functional Communicated
Requirements Budget
Communicated Negotiated
Functional
FUNCTIONAL Goals Set
EXECUTIVES Plans Set
AND Budget
MANAGERS Developed
INDIVIDUALS
O9
AJAX MANAGEMENT CALENDAR (QUARTERLY – DAILY)
12 15 20 24 28 29 32
Super
AJAX Performance
System Key Company, Key Process
EXECUTIVE Review Changes
Scan Process & Indicators Monitored
TEAM Communicated Trends Noted Trends Noted
Performance Function (ex. Sales (X Sold)
Review Questions Asked Questions Asked
Process Indicators and Product Shipped
Changes Monitored (X Delivered)
Required Review
Changes in Performance
Goals & Reviewed
Resources Answers
Made as 21 25 Reviewed
13 Required 16 Request
Cross- Reviewed &
Process Acted-on
Super Optimization Action Taken
PROCESS System Issues
MANAGEMENT Scan Resolved Process Key Process
Trends Noted
TEAM Process Changes Made Indicators
Questions Asked
Performance as Required Monitored
Review
Issues?
14 17 22 26 30 33
Deviations
Managed
FUNCTIONAL Key Function Questions Deviations
Issues Functional Key Function/
EXECUTIVES Job Indicators Asked Analyzed
Reviewed and Changes Made Job Indicators
AND Monitored Action Taken Action Taken
Resolved as Required Monitored
MANAGERS Assistance
Requested
18 23 27 31 34
Deviations
Job Changes Key Job Managed Key Job Deviations
INDIVIDUALS
Made as Indicators Action Taken Indicators Analyzed
Required Monitored Assistance Monitored Action Taken
Requested
O10
ANALYSIS SUMMARY – ORGANIZATION LEVEL
FINDINGS RECOMMENDATIONS
O11
ANALYSIS SUMMARY (PHASE II)
OPPORTUNITIES FINDINGS (Barriers to Desired Results) RECOMMENDATIONS (Actions to Remove Barriers)
CBI(s): Gaps in Results
“Is” “Should”
Organization
I
II III IV
DESIRED
Request for BARRIERS CHANGES RESULTS
RESULTS
"Help" or an DETERMINED DESIGNED, EVALUATED &
DETERMINED
Opportunity & CHANGES DEVELOPED & MAINTAINED
& PROJECT
SPECIFIED IMPLEMENTED OR IMPROVED
DEFINED
Why the Gap
How are we
What and in Results & Did we Close
Closing the
Where is the What is the Gap in
Gap in
Gap in Results Required to Results
Results?
Close it?
PERIOD
RECOMMENDATION DIMENSION First Quarter Second Quarter Third Quarter Fourth Quarter
Month One Month Two Month Three
A. ///////// Activity
Cost
Impact
B. ///////// Activity
Cost
Impact
C. ////////// Activity
Cost
Impact
D. ////////// Activity
Cost
Impact
E. ////////// Activity
Cost
Impact
1422-69-5.2.61
Total
1 2 6 System
Framework
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
Situation:
During a meting to discuss why it was taking so long for AJAX to get new products to
market, several Project Managers commented on the apparent “low morale” of those
employees engaged in product development and introduction. The Vice President of
Research and Development was alarmed at the specter of “low morale” and hired a
consultant to look into the matter. The consultant specialized in understanding the
“human side” of performance
Request:
After several weeks of interviews of individuals and managers, the consultant presented
the results of their “situation analysis”. Among the findings were the following.
6. "Employees report that they do a lot of 'non-value added' work (correcting the
work of others)."
Task:
Using the format provided on the following two pages, record your hypothesis as to the
Anatomy of Performance explanation of each of the observations. (A hypothesis has
already been developed for Observation 1, as an example/model/
2. "Decision
making is
terrible. They
'delegate-up.'"
3. "There is no
'continuous
improvement'
mindset."
6. "Employees
report that
they do a lot
of 'non-value
added' work
(correcting the
work of
others)."
Situation:
The Bell Telephone System company serving the New York metropolitan area
was approaching a major “melt down” in service due to phenomenal growth in
demand and aging equipment. Although the long-term issue of capacity was
being addressed, there was an immediate, short-term, crisis in the area of “repair
service”. More and more customers were experiencing “trouble” with their phone
service and calling in requests for service. As this demand for service escalated,
the response time expanded from a day to several days, to nearly a week. And
many times when a repair person appeared at the customer’s premises, the
customer was not there, requiring a further delay and another visit by the repair
person. In such a case, the customer, already upset at the delay in getting
service, would be infuriated by the additional delay. Needless to say, the next
phone call between the customer and the Repair Service Clerk who took the call
was likely to be very unpleasant. In fact a large percentage of the calls taken by a
RSC could be quite abusive. In an increasing number of cases, the RSCs were
“breaking” under the strain of this barrage of insults and “returning fire”, as it
were. This behavior (and in particular, some of the language) on the part of the
RSCs was alarming management and attracting some attention from the FCC.
What to do?
Request/Symptom:
Relevant AOP
REPAIR SYSTEM
System Repair
Trouble
Ticket System Check
Customer RSC
Repair on
Dispatch
Premise
Project Design:
A. Proposal:
The consultant undertook a “Repair Clerk Training Needs Analysis”.
B. Process:
1. Analyzed the Repair System
2. Analyzed the Repair Clerk Job
1. Recommendations regarding the Repair System and redesigning the Repair Clerk
job. (e.g., “Putting the RSC in charge of the call interaction”)
2. Recommendations for training Repair Clerks
3. Recommendations for managing the Repair Clerk job.
Results:
1. Dramatic improvement in Trouble Ticket accuracy, “call backs” and time to restore
service
2. Multi-million dollar savings in Repair costs due to changes in the process
Situation:
• Like the leaders of the many Human Resource organizations which face the specter of
being outsourced, the Vice President of Human Resources of XJAX is under pressure to
reduce administrative costs and add more “professional value”. Two of her responses to
this pressure were aimed at the Human Resource Generalist staff and included:
o Reducing their administrative support by 50%, requiring every two HRG’s to
share an administrative resource.
o Urging the HRG’s to add more value by acting more as “performance
consultants” to their clients, not just the expediter of the many HR transactions
emanating from the field organizations.
• However, nine months after announcing the change in the priorities of the HRG’s, the VP
HR is disappointed and frustrated with the progress of the HRG’s toward acting as
performance consultants to their clients.
Request:
In an effort to try and get this effort back on track, the AJAX Vice President of Human
Resources has requested assistance from the OD staff in organizing an off-site team building
session for her HR Generalist staff of 10.
Task One:
Using the Job Analysis Worksheet, what would you hypothesize are the reasons for the HR
Generalists not providing “performance consulting” services?
Task Two:
Using the Job Analysis Worksheet and the IS-Should Worksheet as guides, describe what
action you recommend to increase the performance consulting activity of the HRG’s from the
“is” of Zero to a “should” of 15 – 20% over the next 18 – 24 months.
A – Gap in Results
Current behavior/performance:
HRG’s provide whatever solutions their clients ask for, including a lot of
transactional HR tasks.
Desired behavior/performance:
HRG’s will probe requests of clients, evaluate the worth of the requests and the
appropriateness of the requested intervention, propose alternative solutions and
either carryout or manage the design, development and implementation of the
alternative solutions.
Expectations:
There are two issues here regarding expectations; the client’s Expectations of
the HRG and the clarity of the new HRG expectations.
First, the client’s expectations: I would hypothesize that clients expect the HRG’s
to do just exactly what they are doing now – “When I say jump, you say ‘how
high?’”. What is being done or will be done to change client expectations of the
HRG’s?
Second, what exactly are the HRG’s now supposed to do differently? Is there a
Job Model for the old HRG job that can be compared to a Job Model for the new
HRG job? Something that is explicit about what has changed? Something that
says I’m no longer expected or required to do “X”, since “Y” is now being added
to the job?
Resources:
Will the necessary resources (time and tools) be available to help the HRG’s with
their new set of job responsibilities?
Consequences:
Unless something extraordinary is done to realign the expectations of the HRG
clients, there are bound to be some significant immediate negative
consequences to the HRG for going into “performance consulting” mode. The
client will expect/demand that their requests be responded to ASAP. And even if
the HRG persists through this first level of immediate negative consequences for
“pushing back” and questioning, they will eventually run into the delayed negative
consequences of having to design, develop and implement interventions for
which they are not adequately trained and experienced. In addition, developing
such an unfamiliar intervention will consume vast amounts of the HRG’s most
scarce resource – time. Given this array of predictable consequences, it is hard
to imagine any but the most zealous performance consultant wannabe’s not
quickly dropping back into their familiar and comfortable behavior patterns.
and putting in place some positive consequences for the HRG’s for emitting the
new behaviors.
Feedback:
What will be in place to track and inform the HRG’s, the HR organization and the
client managers on the benefits of the new HRG job requirements?
Knowledge/Skill:
No doubt, the new HRG job requirements do require additional HRG
knowledge/skill. But would you spend a lot of time and money on this before the
other components of the HRG HPS are addressed, per the above? And as
alluded to above, the new HRG performance consulting job requirements are
pretty sophisticated, requiring more than learning some new models and doing a
couple of role plays. A sound instructional design would most likely include
behavioral modeling and coaching.
C – Conclusion/Solution:
In light of the above, if we were serious about HRG’s being effective performance consultants
(in addition to their other job requirements) we might design a pilot in one division, where the
clients are supportive of the new HRG role. The new job could be defined and expectations
made clear to all parties. (Maybe client managers learn some of the basic analysis models, so
they can do a better job articulating their needs.) HRG’s would be provided with some modeling
by exemplary performers and coached as they move up a very challenging learning curve –
getting better at both identifying root-causes and selling clients on doing the “right thing”. Based
on the pilot, the approach would be modified as necessary (tools refined and training
developed) and rolled out through the organization.
As part of doing the knowledge/skill analysis for the above, Human Resources would have to
contribute to the completion of a matrix such as this:
Situation:
In each case, two vice presidents of the firm were continually at odds with one another.
Their behavior was disruptive to effective senior leadership meetings and their
respective organizations were increasingly engaging in “silo” behavior that was
detrimental to customers and the total organization. In all cases, the “boss” of the VPs
had engaged their subordinate VPs in “team building” exercises, but to no apparent
avail. In one case, the “boss” had engaged a consultant who monitored meetings and
provided the VPs one-on-one feedback on their meeting behavior, off-line. In this case
the meeting behavior changed (i.e., they “played nice” in front of the boss), but the
“back-stabbing” behavior and distrust throughout their respective organizations remained
the same.
Request/Symptom:
(Note: Our hypothesis about “play nice” situations is influenced by two underlying beliefs
we have about “culture” and “trust”. A brief description of these beliefs can be found at
the end of this case study.)
Before a “play nice” issue can be constructively addressed, a CBI and Gap in Results must be
established. In the case of two warring vice presidents, a CBI involving the Value Chain and
impacting the customer and/or the total organization performance is essential. Examples include
“time to get new products to market” and “time, cost and quality of order fulfillment”.
Relevant AOP
ANY BUSINESS
Project Design:
A. Proposal:
The proposal could be to conduct “team building”, redesign a critical
cross-functional work process, align and optimize the Value Chain or
redesign the goal setting and performance measurement system. But the
goal is the same in all cases – get the Value Chain producing the desired
results and have each organizational component contributing as required.
B. Process:
Regardless of the “cover” in the proposal, all the issues listed in the
above hypothesis must be addressed.
N/A
Results:
In all situations where the above approach was undertaken, the desired Value Chain
results were achieved within a year. In some cases there subsequently was a change in
one of the two vice president positions.
Situation:
Big Retailer is a 300-store retail chain. Historically decisions on what merchandise to
purchase and in what volumes, has been the responsibilities of each of the 30 plus
department managers in each store. However, in order to remain competitive, Big
Retailer is moving toward a centralized purchasing or “replenishment” system, where
decisions as to what styles and volumes of merchandise will be made by product
managers at regional Central Merchandising Units (CMU). Key to this system is the
accurate entry of merchandise data into the electronic cash register by sales clerks at
the time of the sale. (This situation was before the advent of the bar code and scanning
technology and all information had to be read by the sales clerk off the merchandise
label and keyed into the register.)
This new system had been pilot tested in four departments in 15 stores and was about
three months away from a full “roll-out” across the entire system. There was only one
problem – in order for the new system to be effective, the accuracy of the input data via
the cash registers and sales clerks (the “retrieval rate”) had to be at 98.5% and the
average during the pilot period was 66%. This discrepancy put the implementation of this
critical initiative in jeopardy.
Request:
The Vice President of Automation of Big Retailer is demanding that corporate training
immediately launch a massive training program for all sales clerks regarding the proper
entry of merchandise data into the system.
Where do we begin?
Project Overview
I II III IV
Desired Results Determined Barrier Determined and Changes Designed, Results Evaluated and
and Project Defined Changes Specified Developed and Implemented Maintained or Improved
Region Management
Stores
Store Manager
Order
Merchandise Manager
Department Manager
Vendors
Vendors
Vendors
Vendors
Shipping and
Vendors Merchandise
Receiving
Sales Clerk
Merchandise
Cash Register
Display
Customer
“SHOULD” State
Replenishment Information
Merchandiser
Data Data
Base
Region Management
Order
Stores
Store Manager
Merchandise Manager
Department Manager
Vendors
Vendors
Vendors
Vendors
Shipping and
Vendors Merchandise
Receiving
Sales Clerk
Merchandise
Cash Register
Display
Customer
“Solving inventory problems for the entire chain calls for a six-year, $300-million program
that will link each store’s electronic cash registers into one of four national computer
centers servicing a group of stores. There, one person will be responsible for ordering
merchandise in a number of high-volume departments for perhaps 30 to 50 stores. This
is a departure from the Sears’ approach, where individual store managers must approve
each order.
• Discuss findings.
Data Data
Base
Region Management
Order
Stores
C
Store Manager
Merchandise Manager
Department Manager
Vendors
Vendors
Vendors
Vendors
Shipping and A
Vendors Merchandise
Receiving
Sales Clerk
Merchandise
Cash Register
Display
Customer
WHERE WHAT
• 7 Digit code
• Takes time
A
• Code not always marked or accurate
Sales Clerk
• Code not always legible
• Learned the “9999999” work-around
Per the “Should” state diagram on page four (4), what are your preliminary thoughts on
what needs to be done at each level to improve the retrieval rate and the chances of a
successful implementation of the Automated Merchandising System?
Region
Management
Store Manager
Department
Manager
Sales Clerk
• Which of the above rolls do you consider the most critical to the successful
implementation of the Automated Merchandising System?
CPI:
PROCESS Automated
Merchandising
System
• Inventory
levels
• Merchandizing
turns
• Out-of-Stock
conditions
• Sales
• Customer
Service
CJI:
JOB Retrieval Rate 66% 98.5%
INDIVIDUAL
• Discuss findings
Key:
(1) Solutions that the Training Department, given permission, can design relatively independently and
present to the field for use.
(2) Once the decision has been made to follow the recommendations, the Training Department can
provide valuable resources to the Field/Buying Office by working closely with them to design and
implement the solution
(3) Recommendations that require significant organization changes beyond the domain of the Training
Department.
Key:
(1) Solutions that the Training Department, given permission, can design relatively independently and
present to the field for use.
(2) Once the decision has been made to follow the recommendations, the Training Department can
provide valuable resources to the Field/Buying Office by working closely with them to design and
implement the solution
(3) Recommendations that require significant organization changes beyond the domain of the Training
Department.
SUMMARY OF RECOMMENDATIONS
IMPROVING THE AUTOMATED MERCHANDISING SYSTEM
Key:
(1) Solutions that the Training Department, given permission, can design relatively independently and
present to the field for use.
(2) Once the decision has been made to follow the recommendations, the Training Department can
provide valuable resources to the Field/Buying Office by working closely with them to design and
implement the solution
(3) Recommendations that require significant organization changes beyond the domain of the Training
Department.
OBSERVATIONS RECOMMENDATIONS
Some Department Managers A. Provide the Department Managers
do not know what the “new with performance-oriented job
descriptions based on
2
job” of Department Managers
entails.. accomplishments.
B. Provide training for Department
Managers in areas that affect their 2
use of the system.
Some Store Managers and A. Design and implement a “Change
Implementation System”.
2
Department Managers do not
understand how to use the B. Provide job aids for using reports. 1
new system and are therefore
C. Provide a central telephone
unable to support the
number for getting quick answers to 2
Department Manager in using
questions about the system.
the system.
D. Provide a list of “Questions and
Answers” about the system and 1
ways to solve common problems.
There are insufficient A. Define areas of control and
consequences to the store for responsibility, particularly for 3
using the system correctly. merchandising decisions.
B. Provide store management with a
list of people to talk to in order to get 2
things done regarding the system.
C. Reduce the number of ways of
going outside the system to get 3
things done.
D. Provide and “interim adjustment”
3
period.
Some Department Managers A. Structure the communication
do not know what information between the Replenishment
the Replenishment Merchandiser and the Department 2
Merchandiser needs. Manager. Use forms and checklists.
Store Clerk
A. 1
2A
Assortment
suggested by 3A 4A
1A
buyer Department Merchandise
Basic System Store
Reviewed by Manager writes Manager
Budget
Metro order review orders
Merchandise
Mngr.
Input from
Department
Manager
2B
4B
Assortment
3B Department
Replenishment 1B determined by
Computer Manager spots
System Store Budget replenishment
writes orders problems /
Merchandiser /
changes
Buyer
A. 1
2. “I know how to impact the system.” 2. “I don’t know how the system
works.”
5. Likes the mechanized system and 5. Thinks the system is hurting them.
sees how it saves time and Blames the system for problems.
expedites merchandise receipt.
ACCOMPLISHMENT/SUB-ACCOMPLISHMENTS
LABOR CONTROLLED
• Labor Assignments Made
• Performance Evaluations Made
• Career Plans (Employee) Made
• Development Plans Made
• Personnel Relations Maintained
MERCHANDISE PROMOTED
• Items Selected for Local Advertising
• Merchandise Ordered
CUSTOMER HANDLED
• Sales Tactics Determined
• Complaints Handled
90
Actual Performance
80
70
60
50
40
30
20
10
0
Jan Feb March April May June
Provide feedback to sales people on the retrieval rate and on their errors. One means of
providing feedback is to post a graph of the department’s retrieval rate in the department.
A prototype feedback graph is shown above.
Direct Labor DL
Controllable Budget* CB
Markdowns MD
Controllable Budget CB
Controllables C
Controllable Budget CB
Net Earnings NE
Controllable Budget CB
Sales Turn
Inventory
# of times checked TC
C. Labor controlled
Controllables
a. Labor assignments made
A1, A4, A7, B1-3 b. Performance evaluations made
Controllable Budget
C1, D1, E c. Career plans (employees)
made
d. Personnel relations maintained
E. Merchandise promoted
Markdowns
A3, A4, A7, D1, B1, a. Merchandise ordered
F1 b. Items for local advertising
Controllable Budget
selected
F. Customers handled
$ Sales Reported
a. Sales tactics determined
B1
b. Complaints handled
$ Sales Made
Department Replenishment
Manager Merchandiser
Checks variables that Checks department sales
1 influence sales, such as 1 data reports an analysis,
weather, holidays, fashion incorporating informaton
trends, according the the: from Department Manger
the the:
Replenishment
Merchandiser Call
Reminder
Replenishment
4 Merchandiser decides what
corrective action is
necessary, provides
feedback to Department
Manger on action take, and
record this on the:
Merchandiser
Feedback Recorder
Checked By
D.M. R.M.
Daily
Volume of certain item
Weather
Availability of merchandise
Day of the week
Weekly
Promotions scheduled
Special events
Storage space availability
Mark-up and mark-down schedule
Merchandise on-order
Merchandise on-hand
Delivery schedules
Check-outs
Basic fill-ins needed
Sales potentials
Monthly
Season
Holidays
Special events
Competition
Budgets and plans
Seasonal
Climate
Weather
Fashion trends
Annual
Change in department size from last year
Budgets and plans
Economics: national and local
Demographic information about customers
As needed / Infrequent
New competition
Department / store management changes
Change in store or department size
ALL CONTENTS Copyright 2005 301
Performance Design Lab – v2.1
Serious Performance Consulting Workshop
Performance Analysis – Cases
Keep this reminder handy all week to make notes as you think of them. Show date call
completed and then file this sheet for future reference. If you cannot complete your call
in the time allotted, ask your Merchandiser to call you again.
Sales Potentials
(Identify requests for merchandise you couldn’t sell due to out-of-stock or not carried by
your department. Identify checkouts.)
Prototype
C. 4
Department Manager
Use the Replenishment Merchandiser Call Reminder form as a place to jot down ideas
as you think of them. (i.e., record your ideas and problems so that you have them all in
one place and ready when you talk to the Replenishment Merchandiser).
Set up a regular time for your phone call, and try to be in your department at the time of
the call.
The Merchandiser does not have available sales by style for your store. You must be the
one to identify check-outs (new items that sell better than average) and slow movers for
the Merchandiser.
Ask your Merchandiser to call back if you run out of time and your call is not yet
completed.
Don’t hesitate to call the ____________________ if there are problems that the
Replenishment Merchandiser can’t handle; that is, get help right away.
Keep your Reminder Forms in a folder. Each should be dated, and dated when action is
competed. This will be a reference for you to make sure that action is taken and record
of any problems you are having so you may discuss them with your Merchandise
Manger / Store Manager.
C. 5 Prototype
Replenishment Merchandiser
Ask the manager to refer to the Replenishment Merchandiser Call Reminder form.
Encourage him to use the form and reinforce them for having ideas, problems, and data
collected you call.
Set up a regular time for your phone call, and encourage the manager to be in his
department at the time by asking: “Are you in your department?”
Do not discourage him by “punishing” them for telling you about problems. Accept
complaints and thank them for telling you. Discuss the problem with them so that you are
certain they understand. If you can’t answer a question immediately, jot yourself a note
to remind yourself to call back. Use your Merchandiser Feedback Recorder form.
If the Department Manager runs out of time and the call is not completed, determine a
time when you can call back.
Keep Variables Check Schedule handy. Refer to the schedule to determine what specific
information you should request.
Refer to the department’s retrieval rate. Compliment improvement.
90
80
70
60
50
40
30
Average National Retrieval Rate
20 Average Retrieval Rate Within Replenishment Merchandiser Area
10
0
Jan Feb March April May June
Prototype Individual Store Retrieval Rate
D. 2 To be maintained by Replenishment Merchandiser
O rde r
• Provide training for Department Managers transferring
Stores
into store after initial introduction
Store Manager
Merchandise
Cash Register
Display
Customer
Total
1 2 6 System
Framework
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
The Three Levels of the Organization System (Organization, Process, and Function/Job)
suggest three likely “entry points” into an organization when trying to improve
performance (as illustrated by the three issues at AJAX). Chances are you are going to
be called upon to respond to issues that start with one of those three entry points.
Following are some conclusions we have made regarding these potential “starting
points”.
AJAX example: The Vice President of Field Operations contacts us because the VP of
Production is complaining about Sales Reps not completing sales order forms properly.
He/she want us to “look into the matter” and make some recommendations. Our first
order of business is to determine the significance of this “problem”. We need to establish
a link between the apparent CJI and a CPI or CBI. We do the following:
1. Gather data on the type, frequency and location of errors to learn if this is a
widespread problem. (i.e. Many or a few orders, in every District or
concentrated in a few, by many Sales Reps, or just a few.)
2. Confirm our hypothesis that the Sales Rep is the starting point of the
Customer Order Process. Then develop a quick, high-level cross-functional
map showing the trail of a sales order and all the areas it touches until the
customer receives their order.
3. Establish the fact that there is a serious Critical Process Issue (CPI) regarding
customer dissatisfaction, which is possibly linked to a CBI of loss of market
share.
4. Suggest to the VPs of Field Operations and Production that the real
opportunity to make a difference is to address the CPI of customer
dissatisfaction. Point out that fixing the “incomplete order form” issue will not
significantly impact the “customer dissatisfaction” issue, but addressing the
“customer dissatisfaction” (i.e. Customer Order Process) issue will either fix or
eliminate the “incomplete order form” issue.
In addition to the potential for “making a difference”, a reason for our pursuing
“significance” is to assure implementation of our recommendations. If we stay at the Job
Level (Sales Reps and sales order forms) we are engaged in an inter-functional debate
between two Vice Presidents, with little incentive for the VP of Field Operations to
actually implement what we might recommend. However, if we can move the “problem” to
the Process Level, with a CPI (and possible CBI of “market share”), we will have the
attention of the AJAX President (and perhaps of JAX executives) and thereby will have
greatly increased the probability of successfully implementing painful, but necessary,
changes.
The Process Level is always a good place to start. This Level will quickly lead you to
something of value or significance you can measure (a CPI that can be linked to a CBI). It
will also ultimately lead you to the Job Level (process execution issues), Organization
Level (Strategy, policy, Value Chain alignment and/or organization structure issues that
impact process performance) and Management (maintaining alignment at, and between,
all Levels). The Process Level also provides quick insight into an organization’s strategy,
management, business values and practices, leadership and chances of survival.
B. A business is a Processing System. The The quickest and most reliable way to
business organization transforms customer understand an organization is to identify
needs into valued products or services via the primary processes that create, sell
a Value Chain of core processes. and deliver its products or services.
Knowledge of these basic processes
provides a blueprint for how the
organization delivers value to the
customer. Virtually all performance
improvement ultimately is about
increasing value to customers.
C. Jobs/roles and functions exist to The link between job and process is
support processes. Functions and jobs critical and very often a major issue
represent non-value added cost until they impacting organization results. Reality is
are linked to processes that deliver value that jobs and departments are highly
to customers. visible compared to processes, which
tend to be invisible in most
organizations. That leads to jobs
evolving in ways that don’t efficiently or
effectively support the processes that
are supposed to be delivering value to
customers. In effect, jobs take on a life
of their own.
OVERVIEW
Business Environment
E.
Competition --------------------
C.
3. All Results Improvement projects must be pushed to (1) – something to do with earnings to
shareholders, or (2) – something to do with the sales of the Product or Service offered. (2)
can be pushed to (1) if necessary.
4. There is a definable network or hierarchy of factors that impact (1) and (2).
5. There is always variability in how these factors are performed. It is this variability that causes
the Results Gaps in (1) and (2).
6. It is the job of the Performance Improver to identify and remove the cause of this variability
in the factors that impact (1) or (2)
THE PROCESS
A. Determine the Critical Business Issue (CBI) in (1) or (2). Establish the GAP between current Results
and desired Results.
B. Determine the SIGNIFICANCE of the Gap in Results.
1. Is it worth attempting to close the Gap? (ROI)?
2. Will the necessary changes be implemented?
3. What priority will this effort receive?
4. What are our expectations in closing the Gap and how will we evaluate the success of the
effort?
C. Where is the LOCATION of the Gap(s)?
1. Identify the network of factors that impact the Gap. (Tool – Performance Logic Map)
2. Locate “when” and/or “where” there are Gaps in performance of the factors. (Techniques –
“Exemplar Analysis” and “PIP Analysis”)
a. “When” – Time
• Season
• Annually/Quarterly/Monthly/Weekly/Daily/Hourly
• Shift
b. “When” – “Trigger” (Type of input)
• Customer
• Product or Service
c. “Where” –
• Customer/market
• Supplier
• Product/Service
• Location
• Country/Region/District
• Branch/Store/Plant
• Shift
• Manager
• Individual Performer
• Organization System
• Value Chain
• Process
• Process Step
D. What is the CAUSE of the Gap?
1. External?
2. Internal?
a. What Process?
b. What Process Step?
c. Performance Planned?
d. Performance Managed?
e. What Performers?
f. What HPS component?
E. What are the RESULTS of closing the Gap? To what degree have we impacted the Critical Business
Issue?
Background:
Six months ago, AJAX introduced a new product through their sales organization, which looks
like this:
President
VP Sales
Region I Region II
Exercise:
The variability in To whom would you look
If during the six months that the new product
performance is at what for an explanation of the
was introduced…
level in the organization? poor performance?
1. Only one Sales Rep in the company had
failed to meet the minimum sales
expectations for the product.
2. Four of the six Sales Reps in District 3 are
the only Sales Reps in the company who
had failed to meet the minimum sales
expectations
3. 20 Sales Reps had failed to meet the
minimum sales expectations for the
product. 18 of those Sales Reps were in
Region I
4. 36 of 48 Sales Reps in the company had
failed to meet the minimum sales
expectation for the product.
5. Five of the six Sales Reps in District 6 are
the only Sales Reps in the company
meeting their sales targets for the product.
6. Sales are 40% less than projected across
all Districts, the cost of producing the
product is 30% over plan and Sales Reps
complain the new product competes with
existing AJAX products.
3 3
1
1
2 2
6. Establish what measurable performance distinguishes the “good” performers from the “not-so-good”
performers.
7. Observe a range of performers, from “good” to “not-so-good”.
8. Based on the performance data and observations, develop an “exemplary model” (Accomplishment
Model) for the job and job hierarchy. (Develop an exemplary model of the underlying process, if
necessary.)
9. Validate the Exemplary Model with management and “good” performers.
10. Establish the sub-accomplishments, tasks, and behavior (if appropriate) to support the
Accomplishments.
11. Build a Performance Table identifying the support required for Exemplary performance
12. Develop the support specified in the Performance Table.
TERRITORY B
TERRITORY C
AREA 2
AREA 3
AREA 4
AREA 5
AREA 6
DISTRICT B
DISTRICT C
DISTRICT D
DISTRICT E
DISTRICT F
REGION II
REGION III
13. STAKES
(AS IN “WHAT’S AT STAKE”)
• Revenues?
• Expenses
•?
PIPS
a)
0 100
b)
0 50 100
c)
0 50 100
I Average MUF’s
1. Packaging Machine Operator $12.00
2. Product A Cooks 5.00
3. Product B Cooks 6.00
II Frequency of MUF’s per day for typical performers
Performance Class Packaging Product A Product B
Cooks Cooks
Machine
Operators
High Performers 10 10 10
Standard Performers 40 25 30
Low Performers 60 30 40
IDENTIFYING PIPS
The PIP is determined by examining the spread in performance between two sets of performers
– the best or master performers, and average performers. A large spread indicates a large
potential for improved performance, or a large PIP.
For example, if the best clerk in the department consistently turned out 60 claims per day and
the average clerk in the department turned out 30 claims per day and if all the clerks were
operating under the exact same circumstances, then we can justifiably compare their
performance as follows:
60
= 2
30
In this case the PIP is 2, or in other words, the best clerk is performing 2 times as well, or 100%
better than the average clerk.
Another example might be the case where the best clerk in the department averages a 10%
error rate, while the average for the department is 13%. Once again we would examine the
relationship between their rates to determine how significant the difference between them is, or
How big is the PIP?
13%
= 1.30
10%
The PIP, therefore, is 1.30. Another way of stating this relationship is that the difference
between performers is 30%.
As a general rule, when you are calculating PIP’s for those measures involving value we form
the equation as follows:
Master Performer 60
= PIP or =2
Average Performer 30
The result of either of these equations is that the spread in performance can be expressed in a
number greater than one.
EXERCISE 1 –
IDENTIFYING PIPS
Attachment A, on the next page, contains performance data on three branches. Based on a
comparison of the Operation Indicators for the three branches in the region, we have identified a
significant PIP in the area of customer complaints/total claims processed: Branch #14 (the
master performer) at 11.0% compared to the average of the branches – 16.5%
The resulting PIP in the area of customer complaints/total claims processed between the
average branch and the best branch in the region, Branch #14, is 1.50, or 50%. Since we
generally consider PIP’s larger than 10% to be significant, this PIP is certainly significant
enough to warrant further consideration.
Review the other Operation Indicators on page 13 and simply check off those performance
areas in which significant PIP’s exist between the best branch and the other branches in the
region:
a. Customer complaints/total claims processed ________
b. Adjustments/total claims processed ________
c. Processing cost/claim ________
d. Processing cost/adjustment ________
e. Processing cost/customer complaint ________
PERFORMANCE LOGIC
I – PREMISE
Mailing Lists
Capacity
Message
Price
Promotions
Registrations Awareness Presentations Frequency
Publications
Content Timing
Dates
Schedule
Revenue Location
Product
Available
Profit Workshop Instructors
Delivered Available
Facilities
Cost Available
Fee
II – PRINCIPLES
1. Some of these variables are outside the direct control of the organization (they are
influenced by factors in the Super System), and therefore not controllable by the
organization. However, if the organization has identified these variables and
understands their impact, it is frequently possible for the organization to observe,
anticipate, influence, and quickly react to them
2. The key is identifying and understanding these variables and their relationship to one
another.
3. We call these variables and their relationship a Performance Logic. We identify these
variables and display them in a chart called a Performance Logic Map.
4. The Performance Logic Map shows the hierarchy of variables from the ultimate
Enterprise variable of PROFIT to the last identifiable variable. This chain or hierarchy of
variables makes it possible to distinguish between "lagging" variables such as profit and
"drivers" such as "quality" and "price". Then it is possible to link these variables from the
Enterprise or "lagging" level to the "drivers", which exist in processes (that impact or
influence those variables).
PERFORMANCE LOGIC
Product (Product
Available Development)
Market (Market
Available Development)
Leads (Market
Sales Made
Generated Development)
Proposals
(Sales)
Made
REVENUES Price Sales
Closed (Sales)
Order (Order
Shipped Fulfillment)
Orders
Invoiced (Billing)
PROFITS
(Before Payments Payment (Accounts
Taxes) Received Received Receivable)
Collections (Collections/
Made Accounts Rec.)
Research and
Development
Marketing
EXPENSES Sales
Manufacturing
Administration
Overhead
II – PRINCIPLES, (Con'd)
5. There is usually a basic underlying "logic" for each industry, such as the petroleum or
grocery industry. The logic for that industry remains the same. "Points of Optimization"
vary depending on an individual organization's strategy. The "leverage points" for a given
organization in a given industry vary
• depending on the strategy of that organization
• depending on the strengths and weaknesses of a given organization, compared to
competitive moves and leverage points (e.g., a cost of raw material advantage or
distribution advantage, or a technical innovation advantage).
• over time, because of changes in the Super-System (markets, suppliers,
environment.)
But the INDUSTRY LOGIC remains the same for all players.
6. There are Organization, Process, and Job Level Performance Logic's. The Organization
Performance Logic shows the relationship between the organization's ultimate outputs,
including earnings, and operations (specifically processes). This logic remains
unarticulated in most businesses and is the reason why the relationship between various
financial meters and operational knobs remains a mystery.
8. No Strategy, no Performance Logic Map. You can identify the variables, but you cannot
develop the logical relationships between the variables without clear decisions about the
goals and what variables are to be optimized.
Performance Logic Map (PLMp): A tool to display the logic, the variables and their relationship.
The PLMp is used to validate the logic, identify "lagging" and "driving" variables, determine
"leverage points", and identify key measures. In the context of Peter Senge's work on "learning
organizations" (Reference 1990 HBR article), the PLMp is a powerful tool for:
• gaining insight into the nature of complexity in organizations
• seeing where "high leverage" lies
• understanding "current reality" and restructuring the view of reality
• developing shared visions
• articulating and communicating "mental models"
• aligning "espoused theory" with "theory in use"
• designing "scenario analysis" exercises
Point(s) of Optimization: the set(s) of variables that are optimized/should be optimized (e.g., by
region, by market, by product lines, etc.).
Leverage Points: Those variables in the Performance Logic which will have the greatest impact
on the performance of the organization and should therefore be measured, monitored, and
managed. They can be:
• variables that have the biggest impact on performance goals (in the experience/estimation
of the organization)
• variables that are a source of current pain and errors
• variables for many compensating sub-processes or "work-arounds"
• crunch points, bottlenecks
• "weak" variables-variables that currently have no infrastructure or support that we must
have in order to achieve the strategy/performance goals. Example: current supplier base
not big enough to support growth goals
• variables whose performance or condition is unpredictable or out of control
B. Mergers
C. Business Analysis
E. Strategy Formulation
G. Planning
H. Goal Setting
I. Measurement System
• Assumption. The Training Department or other "helping" staff organization has developed a
Master Organization Level PLM for the business or businesses and has developed Process
Level PLMs for most of the business. Further, the potential leverage points and the levers
currently being manipulated are known to the "help" department.
• Given the existence of these PLM's, these are four possible applications:
• Relationship of PLM to PIPS and Stakes: the PLM, via Leverage Points, will lead to "high
stakes" areas. Then you look for variability in performance for those high-stakes leverage
points and determine the Performance Improvement Potential
Job Level
1. An individual performer
3. A work team
5. A manager of others
6. A manager of managers
Process Level
8. A process that is performing
poorly
Organization Level
PP PM
PP PM
3 Job Level
Process • Model
4 Level • Plan and Design
Performance
Design
Organization
5 Level
Total
6 Framework
1 2 System
10
Performance Anatomy of
Performance Plan &
Consulting Performance
Department Design
Assumptions Framework
Process &
7 Tools Manage
Performance
Analysis
8 Cases
9 Reference
The Institution
1
1
1
2 2
“Help” Requested
“Help” Provided
3 3
Per the diagram above, the internal performance consultant has a multi-level client
management challenge:
Training
Human Resources
Selection, Compensation, Benefits, Appraisal
Information Systems
Quality
Engineering
Organization Development
INTERNAL
CONSULTING
DEPARTMENTS PERFORMANCE ORGANIZATION
DEPARTMENT
Training
Performance Analyst
and Architect
Human Resources
• Analyze
• Design Performance
Information Systems System
• Assemble Multi-Discipline
Systems Development
Team
Quality
• Oversee/Manage System
Development and
Implementation
Engineering
Organization
Development
“Is” “Should”
---------->
To Support To Support
Training Organization Performance Organization
You need to rebuild each of the cells in the Performance Matrix to support your new
organization.
Developing a Plan
This transition is going to be a complex and difficult task and will take you at least 3-5
years to accomplish. You are going to need persistence, patience, and a plan. To help
you with this transition task, we suggest the planning format shown in Figure 1 on page
348. The column at the far right represents requirements that our experience tells us you
will need to have in place in order to have an effective Performance Department. (This is
not an exhaustive list of requirements. You may wish to add to this list to reflect your
special circumstances. We will discuss these components below.) The column at the far
left provides space for you to describe the current status of each of the requirements
listed at the far right. The columns in between denote the periods of time you have to
move from the “is” state (far left) to the “should” state (far right). The number of columns
shown here are illustrative. I recommend that the first four columns in this section
represent the first four quarters of the first year of the transition. Then I would
recommend a column for each six months of the next two years (four more columns).
This covers the first three years. If you think it is going to take you longer to accomplish
your PD development goals, add columns accordingly.
* Some of these thoughts originally appeared in Moving form Training to Performance, edited by Dana
Gaines Robinson and James Robinson, and published by ASTD.
Some of the benefits we have found for developing such a plan include:
• Forcing you to think through in some detail, and on a time-line, just what is
involved in achieving your goal of a PD.
• Providing you with a mechanism for setting goals for key results to be
accomplished. Lack of goals significantly reduces the likelihood of success.
• Providing you with a roadmap, because we guarantee you are going to get
temporarily lost on such a long, complicated journey.
• Providing you a “progress plotter”, so you can see that you are making progress.
You are going to suffer set-backs and become frustrated and discouraged.
Referring to this plan will help you see that not all is lost and that you are making
important strides toward your goal.
• Assisting you to manage set-backs and modify your plan to work around
temporary road-blocks.
• Assist you in communicating to others that you know where you are going-and
what you need from them to make it happen.
There are four major requirements for successfully deploying a PD and the top-to-bottom
sequence of the requirements shown in Figure 1 on page 348 reflects their relative order
of implementation.
• Leadership. You can’t go anywhere without leadership. If you don’t have it, don’t
even attempt this journey.
• Performance Infrastructure (basically those components in the Performance
Matrix). You need to make these decisions and build this capability before you
can deliver results.
• Credibility. This work begins as soon as you have capability. You need to show
results and build support ASAP.
• Formal Charter. This comes last. To a large degree, you “earn it”, through the
results you deliver. We have seen instances where this item was put at the top of
the list, as the first thing to be accomplished. The result was a disaster of
definition of “performance” and turf wars. Attempting to start the transition by first
securing a formal charter is a sure way to doom this effort from the outset.
• Sponsor
B. INFRASTRUCTURE
• Goals & Strategy
• Processes
• Policies
• Structure
• Funding
• Management System
• External Reporting
Relationship
C. CREDIBILITY
D. FORMAL CHARTER
Leadership. Two sources of leadership are required for the successful implementation
of a Performance Department:
Leadership within the PD. There has to be a leader within the PC movement to get
this effort off the ground and keep it moving. The requirements include:
• a Vision of what needs to be accomplished and why
• ability to get others (within and without PD) to believe in this vision and to
follow them in its implementation.
• an understanding of PC-what it is, what it requires, how you do it.
• energy. It will take a lot.
Leadership within the host organization. There are several possible levels.
• ideally, the CEO or COO of the host organization realizes the contribution
a PD can make and personally sponsors the implementation of such an
institution. This happens, but not enough. Still, your goal should be to try
to get such sponsorship.
• The next level of leadership/sponsorship is at the business unit or
function level. Shoot for General Managers, vice presidents, and
department heads.
We are assuming that the reader of this book is going to perform the internal (to PD)
leadership role. For the external leadership,
• identify who are the current leaders and sponsors and determine what
you need to do to enhance or maintain their support.
• identify who you want to be leaders and sponsors and determine what
you need to do to gain their support. (See discussion of Credibility.)
Performance Infrastructure. These are basically the components that make up the
Performance Matrix. They can be summarized for purposes of a plan, as follows:
Credibility. There are two goals here-gain acceptance for what you are trying to do and
create “demand” for your services. This needs to be planned for and managed, it
won’t just happen. Identify individuals or organizations that have influence in the host
organization and target them for certain projects and results in various blocks of time
in your plan. Think of initiating a “demonstration” project in some influential part of
the host organization each quarter.
Formal Charter. Such a thing might not even be necessary. The primary reason to put it
on the plan is to stress the point that unless you have extraordinary circumstances,
you should not attempt to get such a thing at the outset of your journey to a PD. As
we said earlier, this is something that you earn, that will be bestowed on your PD
simply to confirm the “should” state. This is not to say that you don’t want to garner
sponsorship and informal support from the outset. You need that. But don’t try for the
big formal announcement that you are now the “grand-pu-ba” of the newly formed
Performance Fiefdom. If that happens, you will spend more time fighting turf wars
than implementing Performance Consulting.
REFERENCES