beyond hpt new frontiers for the theory and practice of performance improvement session by: mariano...

Beyond HPT

Beyond HPTNew frontiers for the theory and

practice of performance improvement

Session by:

Mariano Bernárdez, PhD., CPT

Director of the Performance Improvement & Senior Scholars Institute, Technological Institute of Sonora, Mexico.

ISPI Board Director 2004-2006Performance Improvement Global Network Chapter, ISPI,

President

Sources & methodology Meta-analysis of current research & classic literature

in US, Europe, Asia and Americas Historical review of organizational practice from 1916

to present Economic and social 2003-2005 surveys from

The Economist WSJ/Heritage Foundation Business Week UNDP

Collaborative study involving CPTs in 16 countries Performance Improvement Global Network survey 2003-2005 PI Workshops & Conference discussions in

Europe, US and Latin America Inputs from 28 CEOs of client companies

Special thanks to

Miguel Bianchetti – CEO Refinor Glenn Tilton – CEO United Airlines Gonzalo Rodriguez Villanueva –

President ITSON Roger Kaufman C.K. Prahalad

Objectives

Revisit & expand PI roots Branch out, explore strategic

trends “Map” the new territory Draw lessons from practice

Why?

New realities, new frontiers Globalization Knowledge-Based economy BOP, emerging markets E-Performance

Crossroads Outgrow “process improvement” Global, multinational or international?

Expanding the roots Growing inside-out

From programmed instruction to process improvement

From training to performance Growing outside-in

Business perspective Outside-in disciplines:

Strategic planning Economics Marketing Business development

Economics, market, social realities Knowledge-based economics

Expanding the roots Inside-Out approach “NSPI” legacy Focus on “improvement” Internal focus

Source: Ripley & Dean (1997)

Performance improvement pathfinders

Expanding the roots

Branching out

Management dimension Business dimension From operations to tactics to strategy From educational, HR reformers to

business partners From “improving” existing organizations

to create new organizations Learning from the “practitioners”,

movers & shakers A little history of business & organization

Mapping the new territory

Knowledge-based economics The world is flat & spiky

Emerging markets, BOP realities Serving the poor, profitably Unlearning CW

E-Performance From e-training, to e-learning to e-

performance

Knowledge-based economics

The world is flat & spiky Serving & developing the 21st

century New Frontier: emerging markets

Performance new frontier:Knowledge-based economy

Population

Fuente: Florida, R. (2005) The World is Spiky. University of Maryland


Emisión de luz


Light emissions


Patents



Citaciones académicas


Papers



New realities: the digital divide

Knowledge Consumers

Knowledge producers



PI as a vehicle for crossing the digital divide

PI new frontier:Emerging markets, BOP realities

Bangalore: India From 900,000 to 6,000,000

inhabitants (1990-1999) From agriculture to 30%

India’s tech exports More than 1,000 tech

companies outshored Exporting online professional

and technological services Software code to Microsoft K-12 coaching to US Bioegineering to France

Key: Technological clusters & IIT using e-performance


PI new frontier:Emerging markets, BOP realities

China Second largest online population 400% yearly growth Digital Olympics 1,000,000 PhD. graduated x year Software development for US &

Europe Technology and business

incubation clusters Shangai – Jiading (143 companies) Shandong Quingdao Shandai Weifang

4,2 billion dollars in foreign technological investment in new IPOs

E-Performance

From e-learning to collaboration From knowledge management to

knowledge creation Virtual organizations Knowledge factories

ONLINE MIGRATION OF. ONLINE MIGRATION OF.

• JobsJobs• WorkplaceWorkplace• OrganizationOrganization• PerformancePerformance

PI New frontier: E-Performance


0

10

20

30

40

50

60

70

IM

e-Mail

Cellphones

% US workforce using IM, email y cell phones for work

Fuente: Wall Street Journal


1991 1999 20052005 20202020

1,4 % 5 % 20 %20 % 40 %40 %

OnlineOn site

Fuente: Business Week


Know-how and learning embedded in technological environment

From Information Technology to Collaboration Technology

Collaboration technology for BOP markets

PI New FrontierEmerging markets, BOP realities

12% equity markets for 2006

9 % annual GDP growth Largest inflow of

business investment Does your company

have a BOP strategy? Challenges

Microfinance New business

development Knowledge-intensive High-end, smart

technologies

PI New FrontierEmerging markets, BOP realities

World Economy Growth Forecast

2004 2025 2050

USA 28% 27% 26%

EU 34% 25% 18%

Japan 12% 7% 4%

China 4% 15% 28%

India 2% 5% 17%

Others

20% 21% 10%

PI New frontiers:Leading cases

Achieving business success by developing clients & market (Refinor case)

The new economy generator Performance centered university Incubation Acceleration

Refinor

Achieving business success by improving market and social conditions

9 years case study Two 3-year “conventional” PI One 3-year strategic PI

The company

Privatized in 1994 Gas production & distribution North of Argentina MERCOSUR Underdeveloped region Underdeveloped market “Island” in a sea of social

problems Management development

1994-1996

Refinor

Strategic Performance Indicators (SPI)

Year K hours of social work (*)

Market share

Local unemployment rate

Property loss

Riots & incidents

1994 8 4 25 8 20

1995 8.5 4.5 23 7.5 40

1996 9 4.8 21 7.3 50

1997 12 5 15 4 35

1998 14 6 12 2 15

1999 16 8 10 1 20

2000 4 4 25 6 50

2001 4.5 4.5 28 8 145

2002 6 4.6 32 7.8 60

n 82 45.4 191 51.6 435

Mean 9.1 5 21 6 48

Median 8.5 5 23 7 40

PI New frontier: Business, Social and Environmental bottom line

Investment

Bottom line• Macro• Mega

PI New frontier: Business, Social and Environmental bottom line

ITSON: strategic PI in Mexico

First PhD. in Performance Improvement

Kaufman, Rummler, Brethower, Carleton, Gerson, Bernardez, Guerra

From developing individuals to developing organizations

Three tracks Doctoral candidates Executives & supervisors Corporate sponsors

Business case Social bottom line Conventional bottom line

Three steps to develop new businesses:

Pre-Incubation Incubation Acceleration

PI New Frontier: Business incubation

Business-centered

Social impact


Three-tiered project teams:

Doctoral candidates

Executives Sponsors

2006: 13 new organizations

Job creation Graduates

employment Social &

regional impact

Reverse migration

PI Process: Get your company a PhD

New competencies From improving performance to creating new

business From operational to strategic planning & thinking Creating clients, markets Developing a true international strategy and

approaches Thinking outside of the traditional “process & micro” box Redefining performance for BOP, emerging markets Developing social strategies for business success: “triple

bottom line”, megaplanning Using online technology to produce and deliver e-

performance Integrating “external” disciplines and approaches:

economics, social sciences, business, culture

Q&A

[email protected]

New Performance metrics

DJSI outperforming “conventional” DJGI across industries

MNC adopting “green strategy” (GE, BP)

MNC adopting BOP strategy (Citibank, GE, Microsoft, Google, IBM)

A little history…of actual practice

Performance improvement pioneers:from practice to principles

Arsenal of Venice (1435) Pre-Manufacturing & assembly Charles Babbage (1792-1871) First computer, Economy of machinery & organizations Samuel Slater (1768-1835) English Manufacturing system Eli Withney, Simeon North (1795) American Manufacturing system (Springfield, Colt,

McCormick’s reaper) Daniel McCallum (1815-1878) US railroads: Functional organization Andrew Carnegie (1835-1919) Vertical integration, Bessemer converters Henri Fayol (1911) General Management principles, functional organization methods

& principles Frederick W. Taylor (1914), Carl Barth , H.L. Gantt (1916) ; Frank & Lilian Gilbreth

(1912) Process improvement, industrial psychology, task and process analysis Henry Ford (1913) Assembly line, serial production, mass market Alfred P. Sloan (1922) –first CEO- Divisional organization (GM) Kaoryu Ishikawa (1949), Joseph Juran (1951) & W. Edwards Deming (1952) , TQM in

Japanese industry Taiichi Ohno (1958) JIT, kanban, kaizen in Toyota Ray Kroc (1952) Franchising (McDonalds) Jack Welch (1981) Network organization, boundaryless organization HP & 3M: Matrix organization, self-directed work teams Tim Berners-Lee (1989) Internet, Mosaic Amazon, eBay, Google, Dell: virtual organizations

A little history…

Sources: Chandler, A.D. (1962) Chapters in the history of

the American Industrial enterprise. Cambridge, MA: MIT

Chandler, A.D. (1977) The visible hand: The managerial revolution in American business. Cambridge, MA: Belknup/Harvard

Chandler, A.D. (1990) Scale and scope: The dynamics of industrial capitalism. Cambridge, MA: Belknup/Harvard

Wren, D.A. (2005) The History of Management Thought. Hoboken, NJ: Wiley

PI New FrontierCompeting for the future

Quiz: who said this? “The right price is not what the traffic well bear. The

right wage is not the lowest sum a man will work for. The right price is the lowest price an article can steadily de sold for. The right wage is the highest wage the organization can steadily pay. That is where the ingenuity of the organization comes in. It has to create customers, and if it is making a commodity, then its own workers are among his best customers.

We have about two hundred thousand first-class

customers in our company –in the people we directly pay wages to. And we are creating more customers everyday in the workers of the companies we buy from. For every dollar we pay in wages, we pay two for materials and parts made on the outside. “

Quiz: who said this? “The right price is not what the traffic well bear. The

right wage is not the lowest sum a man will work for. The right price is the lowest price an article can steadily de sold for. The right wage is the highest wage the organization can steadily pay. That is where the ingenuity of the organization comes in. It has to create customers, and if it is making a commodity, then its own workers are among his best customers. We have abvout two hundred thousand first-class customers in our company –in the people we directly pay wages to. And we are creating more customers everyday in the workers of the companies we buy from. For every dollar we pay in wages, we pay two for materials and parts made on the outside. “

Heny Ford (1924) Today and tomorrow. New York, NY: Productivity Press, Page 140

Ford Internal performance improvement

Assembly line Serial production

External performance improvement Mass market Developing market purchasing power Vertical integration Horizontal integration Alliances

Systemic vision of business Supply <-> demand Relating external & internal performance

Creating a customer, market

Emerging markets, BOP realities

Competing for the future From Bottom line to Top line management Breaking with “old future”, extension of past success

Serving the poor, profitably Rewriting the rules of CW

New organizations Network Virtual

KSF Incubation Acceleration

E-Performance in BOP markets

Village Collection Centers (VCC)

Automatic weighing

Fat control Pricing Market price

for rural producers

10,675 interconnected villages

Control and information to producers

Eliminating middlemen

Purchasing & pricing power to the producers


Integrating learning, consulting & research

PI new frontier: Business acceleration

Leveraging companies growth

Access to global markets

Integration to knowledge-economy’s value chain

“Match-making”

Agenda

Revisiting & expanding the roots Branching out Mapping the new territory Lessons from practice

beyond hpt new frontiers for the theory and practice of performance improvement session by: mariano...

Documents

century new frontier

new organizationslearning

university of marylandpi

knowledgebased economyemisin

knowledgebased economypi

knowledgebased economyfuente

new territorydraw lessons

business partnersfrom