managing business process improvement

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Managing Business Process Improvement

A.R. Alvarez

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The eBook is Now Available

ForwardBy

TJ Rodgers

https://www.amazon.com/Managing-Business-Process-Improvement-Destination-ebook/dp/B07521H3F9/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1505258757&sr=1-

1&keywords=managing+business+process+improvement

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PreambleObjective:

Provide a Management Process for Implementing Effective Business Process Improvement (BPI)

Included: Motivation Guiding Principles & Framework BPI Phase Gate Methodology

Excluded: Detailed Deliverables For Each BPI Phase Gate Detailed Review of Agile or Lean

Accompanying E-Book Now Available:https://www.amazon.com/Managing-Business-Process-Improvement-Destination-ebook/dp/B07521H3F9/ref=sr_1_1?s=digital-text&ie=UTF8&qid=1505258757&sr=1-

1&keywords=managing+business+process+improvement

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The BookManaging Business Process Improvement:

Navigate The Turbulence and Get to Your Destination Part I: Getting Alignment

Chapter 1: Challenging the Need For Business Processes

Chapter 2: The Importance of Business ProcessesPart II: Business Process Improvement Framework

Chapter 3: Supporting Company CultureChapter 4: Enabling Creativity and InnovationChapter 5: Providing a Foundation for GrowthChapter 6: Maximizing Speed and FlexibilityChapter 7: Capturing Organizational LearningChapter 8: Individual Accountability

Part III: Business Process Improvement MethodologyChapter 9: Plan (Managing the Funnel)

9.1: Strategic Fit9.2: Criticality9.3: Impact9.4: Time9.5: Setting BPI Work-In-Process Limits

Chapter 10: Do (Phase Gates)10.1: Phase Gate #1 - Project Scope10.2: Phase Gate “F” - Feasibility

10.3: Phase Gate #2 - Project Commit10.4: Phase Gate #3 - New Business Process

Prototype Design10.5: Phase Gates Alpha & Beta - Implementation

Stages10.6: Phase Gate #4 - Release10.7: Phase Gate #5: Rollout (Optional)

Chapter 11: Check (Monitor & Coach)Chapter 12: Act (Integration)

12.1 Phase Gate #6 – Business Process Post-Mortem (Optional)

Part IV: SummaryEndnotesReferencesBibliographyAppendix 1: BPI Quick StartAppendix 2: AgileAppendix 3: LeanAppendix 4: Theory of ConstraintsAbout the Author

Available as an eBook Now, Paperback Version in October

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From The Forward (1 of 3)“Managing Business Process Improvement” by Tony Alvarez is an important yet readable book, whoseapplication can immediately improve the performance of any small company or group within a largercorporation.

Today, Cypress Semiconductor is a $2.3 billion company that prides itself on being one of just 14 U.S.semiconductor companies that survived from the total of 59 U.S. semiconductor companies that were inbusiness at the time of Cypress’s founding in 1983. The cut-throat semiconductor industry features focusedstartups with brilliant people, massive foreign sovereign-funded competitors—and Moore’s Law, whichobsoletes the best-known semiconductor technology every three years. These conditions led to 76% mortality,47 deaths, among U.S. chip companies over the 1983-2017 period! Many of those 47 tombstones read, “RIP:Terminated by Moore’s Law,” a great example of Joseph Schumpeter’s theory of creative destruction inaction.

As Cypress’s founding CEO, I credit the extensive use of business processes for a good part of our longevity. Inparticular, I credit the author of this book, Tony Alvarez, as the Cypress leader who pushed our somewhatunstructured startup into becoming a corporate machine with longevity built into its DNA. His contributionwas to teach us how to create and use business processes to professionalize all areas of the company.

Intel is the world’s largest chip company—the company that created the processing hardware underlying PCsand Internet Servers—but it was ranked only No. 4 in the U.S. in 1983, behind Texas Instruments (now fourtimes smaller than Intel), Motorola (now acquired) and National Semiconductor (now acquired). It certainlyhas longevity in its DNA. Intel boasts an unprecedented string of semiconductor technical world records, eachof which required exceptional creative effort, yet it is also a strongly business-process-driven company,proving that business processes and creativity are not antithetical.

As a sitting CEO, I did not want “creative” financial statements. I wanted our financial statements to be rules-driven, zero-defect and 100% consistent quarter-to-quarter, down to the format, so that we could use our timeanalyzing our business, not deciphering reporting “creativity.”

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From The Forward (2 of 3)This meant that our finances had to be driven by formal business processes (written specifications withrevisions reflecting numerous process improvements). With business processes in place to automate ourfinancial report generation, our finance people had the time to use their creative skills on analyses aimed atimproving our future.

The same principle applies to manufacturing. Most people would not put up with a “creatively” assembledcar, like the British and American cars of the 1970s. The cars I buy must be cost-effective (for their class),have zero-defect initial quality and excellent long-term reliability. Those attributes can only be achievedconsistently by applying hundreds of business processes in what is now referred to as “lean manufacturing,”a process that Toyota refined to make it capable of producing one zero-defect car every minute on each of itsassembly lines—an accomplishment that literally bankrupted its U.S. competitors. The use of robust businessprocesses did not impair Toyota’s creativity. While it was setting manufacturing cost and quality records,Toyota also invented the world-changing hybrid electric vehicle years ahead of its competitors, this time byapplying business-process methods to its world-class R&D effort, which reduced its new product developmenttime by one year.

Today’s biggest chips are more complex than the Empire State Building, take longer to build (three years vs.13 months) and cost about four times as much ($2.3 billion vs. $650 million for the ESB in today’s dollars).They are miracles of creativity, yet they could not even be conceived, let alone created, without the use ofhundreds of business processes, some of them quite rigid. As one example, if even one of the billion-pluswires on a chip is subject to excess current (here, “excess current” is only 100 microamperes), the chip willfail over time as the overstressed wire separates like an old-fashioned fuse. This problem is fatal, and everychip company must follow a formal business process to check for and eliminate this problem on every newchip. The alternative is disaster. I was once forced to work on this problem, when it surprised us andprevented a critical new product from getting to market, costing millions. The taskforce solving the problemhad 10 members who worked on the problem for three months, costing millions more. A business processutilizing a specialized computer program can effectively prevent this problem today, but at least one of the 47tombstones described earlier reads, “RIP: terminated by metal overstress.”

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From The Forward (3 of 3)

The examples above were chosen to illustrate that the use of business processes will not turn a company intothe DMV, where poor management “solves” simple problems with mind-numbing bureaucracy. In fact,following the methods described in this book would cause the DMV to be completely restructured.

This book will show you how to create and use business processes to make mundane but necessary thingshappen on schedule with minimum cost and zero defects, so that your best people can creatively solve the bigproblems that can make a company rich and famous. It will also show you how to use business processes incomplex creative tasks to prevent the omissions and mistakes that can block a great idea from turning intoreality. The word “creative” should describe a very positive attribute of good companies, and you shoulddistance yourself from CEOs and managers who use the word to justify sloppy, haphazard practices. SteveJobs was very creative. He was also a tyrant when it came to perfect execution.

This is the best book I’ve read on how to define money-making business processes, simplify them, andimplement them quickly and effectively. It should be read by all startup CEOs who want to beat the odds andkeep their companies around for a decade and by all mid-level managers who are tired of the endless series of“surprises” produced by their groups.

T.J. Rodgers, Founding CEO, Cypress SemiconductorAugust 10, 2017

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“Managing Business Process Improvement” by Tony Alvarez is a superb synthesis of insights andmethodologies to maximize enterprise performance. I have observed and experienced first-hand the successof the principles espoused in this book. Tony is a rare breed of “lead from the front” executive who hasparlayed his substantial career of success and value creation into a potent guide relevant to any executivemanagement team striving for break-out performance in the highly competitive and rapid world oftechnology and industry we inhabit today.”

Dr. Michael Bartholomeusz, Chief Executive Officer TruTag Technologies

"Tony, the consummate business practitioner with a reputation for achieving results, has written amasterpiece that addresses a critical gap between the theory of BPI and its implementation, using aframework that intelligently integrates many valuable concepts to provide a powerful BPI implementationmethodology that can be used across all businesses."

Dr. Shaker Sadasivam, Formerly Chief Executive Officer SunEdison Semiconductor

“Having worked alongside Tony for several years, I can confirm his exemplary understanding of BusinessProcess Improvement is matched by his superb operational execution in practice. This book presents areadable & comprehensive summary of his methods and tools.”

Dr. David Burrows, Senior Director UK Design Center, ON Semiconductor

“The best technology will not result in a profitable company Without an installed effective Business Processthat is practiced and improved over time.”

Jack Saltich, Board Director

“Tony Alvarez has a unique innate ability to distill broad complex topics into practical concepts which can beembraced and readily put into practice. His book on Managing Business Process Improvement providesvaluable insight for organizations of all sizes.”

Stephen Lee, Engineering Operations Manager, Texas Instruments, Formally Vice-President Engineering, Advanced Analogic Technologies

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ARA Consulting Comments on the Book (2 of 3)“Tony Alvarez’s book on business process development, implementation, and management is the definitiveguide for practitioners written by a practitioner with deep knowledge in business processes utilized intechnology and product development, pricing optimization, supply chain management, corporate goalsetting, and strategy formulation. It is a must read!"

Ahmad Chatila, Formerly CEO,MEMC/SunEdison, Executive Vice-President Cypress Semiconductor

“Constantly improving through a disciplined process can be extremely rewarding for both individuals and thebusiness. A properly implemented Business Process Improvement program helps create a winning culture.”

Jeff Mendiola, Vice President External Operations, ON Semiconductor

“Tony’s work is grounded in a lifetime of direct experience, self-coaching, and rigorous study. Everything hesays or writes reflects curiosity, radical candor, and openness to best practices in every aspect of life. Don’tpass up a chance to study with him.”

Dennis Matthies, Founder and Master Coach, Vervago

"I worked closely with Tony for two years at Aptina and saw firsthand the effectiveness of the approachdocumented in the book. Now when I see execution problems, I immediately look to techniques here as agreat path forward. "

Dr. Sandor Barna, VP Hardware Engineering at GoPro

"Tony takes a very practical and unique approach to "right sizing" business process. He attacks a businessissue by developing a process by being very analytical. He then adjusts the process as driven by differentmetrics thru actually running and monitoring the process. It is my estimation that he is one of the best intechnology world to blend both the analytical and practical aspects necessary to achieve an efficient andfavorable business result."

Ralph Schmitt, Chief Executive Officer, OCZ Storage Solutions a subsidiary of Toshiba

“Tony Alvarez lays out a detailed, practical, step-by-step plan for any executive managing or consideringimplementing business processes.”

Jim Nulty, Senior Vice President, Cypress Semiconductor

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ARA Consulting Comments on the Book (3 of 3)“It’s fascinating that what initially appears to be a process for technology and engineering-centric programsactually works for ALL business processes. In particular, the phase-gate reviews, with defined deliverablesand sign offs at each gate, prevent miss-guided or miss-executed projects from continuing and moreimportantly, facilitate changing course to the desired outcome. I learned this approach from Tony decadesback and I continue to apply them in my business engagements.”

Emmanuel Hernandez, Board Member On Semiconductor, and SunEdison (Chairman), Formerly CFO SunPower and Cypress Semiconductor

"The best business processes connect leadership's vision, and direction, with execution and feedback. It's theonly way to drive alignment, and scale the culture of any organization"

Behrooz Abdi, Chief Executive Officer InvenSense, Formally Senior Vice-President Qualcomm

"Culture is crucial to an organization’s success. “Managing Business Process Improvement" is a most valuabletool to aid in creating an organization with a culture of achievement. The reader benefits from Tony Alvarez’many years of being a student, developer and practitioner of effective business practices which have enabledhim to be one of the industry’s most competent executive leaders."

Dr. Louis C. Parrillo, Formerly CTO Motorola Semiconductor Sector, EVP, Head of R&D Spansion Inc., CTO

“Tony Alvarez’s book is a triumph of honesty. In exploring the different strategies and approaches to BPI, hedoes not offer the classic dogmatic solution, the inflexible ‘fits it all’ stereotype. Instead he lays out optionsand methods carefully selected for every specific phase of growth and maturity of the company’s life fromstart up to multinational. Alvarez’s work is the vade mecum for BPI.”

Donato Montanari, Executive Business Consultant (Italy)

“I had a chance to work with Tony at Advanced Analogic Technologies. During our time together, we focusedon improving the Business Process across all levels of activities, and significantly increased the productivityof our company. What I learned from those years is applicable today in my current position. This booksummarizes all the training and guidance on managing company business with clear explanations and in avery readable format.”

Quoi Huynh, Vice President of Operations and Engineering, ViVaLnk Inc

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From The PrefaceEveryone involved with running a business, functional group, or project looks for ways to do things better. Thisusually means doing things faster, with better quality, or at lower cost. At its core, doing things better is the essenceof Business Process Improvement (BPI).

My interest in business processes began in earnest during my tenure at Cypress Semiconductor. Cypress’s founder,TJ Rodgers, strived to optimize every aspect of the company. Consequently, even from its startup days, Cypressworked hard to hone business process that it deemed critical to its core operations. During my 18 years at Cypress, Iwas initially responsible for new process technologies and eventually went on to assume responsibility for Cypress’sMemory Products Division. Having started with Cypress when its annualized revenue was approximately $60 millionand working there until its revenue exceeded $1 billion, I was able to work on a wide variety of business processes atdifferent stages of the company’s maturity. These business processes involved almost all aspects of the company:new technology and product development, quality, operations, product pricing, strategy, human resources, and M&A.

Subsequent to my tenure at Cypress, I held C-Level or Board positions at a number of different companies. Thisafforded me opportunities to work on business process improvements in a broad range of situations with companiesthat had different cultures and faced disparate challenges. Some of these companies had no history of employingexplicit business processes. Some had strong business processes in one or two areas, but not in others. Myapproach to business process improvement evolved as I learned what worked and what didn’t in those variedsituations. A common thread was focusing to make the process effective, while keeping it as simple as possible.

The roots of this book can be traced to a white paper I wrote in 2002 while working on a process to improve Cypress’sorder management system. As I developed insights from my experience, as well as from other people’s work, I wouldperiodically update the white paper. As I surveyed the available literature on business process improvement, I realizedthat, even though a great deal of very good information was readily available, a gap still existed between the theory ofbusiness process improvement and its implementation. In particular, I bring the perspective of someone who had tolive with the business processes that were put in place, as opposed to consulting on the processes and then leaving.I concluded that a short book providing a practical step-by-step management methodology on how to put the theoryof business process improvement into practice would be worthwhile. The e-book you are reading is the result.

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Getting Alignment

What Are We Trying to Do?

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Control ?

Efficiency ?

Productivity?

Speed ?

Mistake Proof ?

?????


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Andy Grove’s High Output Management (1983), Makes Analogy to Management as a Production (Manufacturing) Process

Hammer & Champy’s "Reengineering Work: Don't Automate, Obliterate" (1990) Led to Resurgence of Interest in How to Optimize Business Processes

Netflix CEO Reed Hastings’ (2009) “Freedom & Responsibility” Culture: Avoid Business Processes as Much as Possible

Hall and Johnson’s “When Should a Process Be Art, Not Science” (2009) Argues That Some Things Are More ‘Art’ Than ‘Mechanics’ and Shouldn’t Be Routinized

Differing Perspectives

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As Companies Grow:1) Complexity Increases2) Percent of High Performance Employees Drops (Talent Density)3) Processes Put in Place to Bridge Gap in Order to Forestall Chaos & Avoid Errors

Unintended Consequence is Stifling of Organization That Slows it Down, Makes it Less Flexible, and Drives High Performers Out

Makes ‘Process Driven’ Company Vulnerable to Market Shifts

Recommendation: Avoid Business Processes as Much as Possible1) Increase Talent Density (of Top Performances) Faster Than Increase in

Business Complexity2) Minimize Complexity That Accompanies Growth by Doing Many ‘Small’

Products vs. Few ‘Large’ Ones, Eliminating Complexity as It Springs Up, and Valuing Simplicity.

Advocates ‘Rapid Recovery’ vs. ‘Error Avoidance’ Model

Netflix’s Hastings

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Appealing Model For a Start-upor Small Company

No Argument With Main Points

Its Worked Well For Netflix

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But, …

Is That The Optimal Model?

How Broadly Can That Model Work as a Company Scales Up ?

orFor a “Large” Company ?

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Business Processes Matter

Similar People, Natural Resources, Customs, and a Shared History,But Governed With Different Business Processes,

Produced Strikingly Different Results

East-WestGermany

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Adopt a Framework That Delivers Scalable, Adaptable, and Efficient

Business Processes . . .

. . . At The Appropriate Time in An Organization’s Maturity

Avoid Tyranny of The “Or”

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BPI – It’s a Continuum

One Size Does Not Fit All,But ... How Do You Determine The “Right” Size

Loose

High

Bureaucratic

Absent Paralyzed

“Startup Light”

Chaos Stifling

Tight

Activity:Risk, Criticality, Creativity, …

Low

Business Processes Shape The Environment In Which People Work

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Let’s Step Back to The Earlier Question:


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Support & Re-Enforce Company Culture

Enable Creativity & Innovation

Provide Foundation for Growth(By Enhancing Organizational Capabilities)

Maximize Speed & Flexibility(as Organization Grows)

Capture (Organizational) Learning

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A Lighthouse Not A Cage

The Art in BPI is Doing it in a Way That Shines a Path That Helps People and Teams Find Their Way Quickly and

Efficiently to Their Destination as Opposed to Imposing Hurdles or Walls That Exhausts The Participate

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Business Process ImprovementFramework

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1) Link to Company Values, Customers, and Stakeholders

2) Enable Flexibility and Dynamic Range

3) Match Process to Problem Complexity & Criticality – Seek Simplicity

4) Look For Ways to Refine The Process, Reduce Non-Valued Added Work, and Reduce It’s Complexity – Think LEAN

5) Minimize the Number of People Required to Carry Out The Process

6) Minimize the Time to “Release”. An Implementation That Delivers 80% of Its Value Sooner is Better Than 100% Later

7) Clarify Decision Authority / Process to Drive Speed (RAPID)

8) Involve The People That Live The Process in Its Design & Implementation –Motivation Counts

9) Employ System Thinking; Business Processes are Not Standalone They are Inter-Connected

10) Utilize Business Processes to Capture Organizational Learning and Support Continuous Improvement

Guiding Principles

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Enabling Creativity & Innovation Taken to an Extreme BPs Create a Cumbersome,

Bureaucratic Environment

There Has to Be Sufficient Flexibility in BPs to Allow Improvisation that Fosters Innovation and Agility

An Effective BP Fosters Innovation by Allowing Users to Focus on What Needs to Be Done and Not The BP

An Effective BP Fosters Agility by Allowing Users to Adapt it to the Situation Being Addressed

Hastings: “Good” Processes Help Talented People Get More Done and “Bad” Processes Try to Prevent Recoverable Mistakes

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What Determines a Company’s Foundation? Strong Financials – Balance Sheet, Cash Flow, …

Resilient Culture

Leadership Team Bandwidth

Global Geographic Footprint

Scalable / Efficient Business Processes

What Else?

How Critical are BPs To a Solid Foundation?

What Role Do BPs Play in: Integrating an Acquisition?

Maintain Agility and Speed as Company Grows?

Enabling a Company’s Growth?

Foundation for Growth

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Company Foundational Requirements Evolve Over Time

Consequently a Company May Find That its Existing BPare No Longer Adequate

BP Rigor Required For Now Larger Company Un-Necessary &Overly Cumbersome When Company Was Smaller. Therefore aSophisticated BP Was Not Required, Explicitly Defined

Existing BP Not Designed With Scalability in Mind or CompanyGrew Beyond Scaling Limits For Which Process Was Designed

Competitive Environment or Market May Have ChangedNecessitating a Better Business Process to Remain Competitive

….

Companies Need to Have Management Practice to Evolve Business Processes; By Design as Required

Foundation for Growth

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“Slow as They Grow”?

Ecology Clarity of Vision & Strategy Alignment Around Strategy & How to Achieve It (Goals) Culture (Risk Adverse vs. Risk Taking, Collaborative, …) Leadership (Style)

Structural Complexity Inter-Relatedness Organizational Structure (Functional/Siloed vs. X-Functional) Regulatory

Process Systems That Guide People’s Work Decision Making

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Four Common Ways That BPs Become Overly Bureaucratic & Slow Organizations

1) When Every Detail, Contingency, Decision, etc. is Attempted to be Prescribed

2) When Over Time The Business Process Keeps Being ‘Improved’ to Prevent The Re-occurrence of a Problem and It Then Collapses Under its Own Weight as it Becomes a Patchwork of Trivia Rather Than a Holistic Guiding Process

3) When The Same Business Process is Imposed in All Situations; i.e. They Are Rigid & Lack Flexibility or Adaptability

4) When The Process Becomes More Important Than The Result

If Resistance to Follow a BP is High . . .. . . Stop & Figure Out Why . . .

Make Sure That BP Adds Value, Provides Flexibility &Is Appropriately Sized For Task

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Decision Making Hierarchy and Process Becomes Ambiguous

Who Has to Agree?Who Can Pocket Veto?

Who Has Ultimate Decision Power?

Explicit Design of Decision Making Process is Critical to Keeping Organization Fast and Agile

Missing in Most BPI Efforts

Design Business Process to Explicitly Facilitate Getting to The Right Decision Quickly

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RAPID Decision MakingRecommend: Responsible for Making Proposal, Gathering Input, Providing Data & Analysis to Make

Sensible Decision in Timely Fashion; Consult With Others to Get Broad Input, Build Buy-in

Agree: People In This Role Have Veto Power; There Should be Few if Any of These Veto Triggers Debate With Recommenders; Escalate to Person with “D” if Takes Too Long to

Resolve

Perform: Once Decision is Made, People Responsible to Execute / Implement

Input: People That are Consulted on Decision Typically Involved With Implementation

Decide: Formal & Final Decision Maker Ultimate Accountability for Decision & Authority to Resolve Impasses & Commit to Action

RAPID: “Who Has The D: How Clear Decision Roles Enhance Organizational Performance”,P. Rogers, M. Blenko, Harvard Business Review, January 2006.

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“… The Rate at Which Individuals and Organizations Learn May Become The Only Sustainable Competitive Advantage, Especially in

Knowledge-Intensive Industries.”

(Ray Stata, Chairman Analog Devices)

Peter Senge, a Pioneer in OL, Cites 5 Required Disciplines Systems Thinking Personal Mastery Mental Models Building Shared Vision Team Learning

Difficulty of Translating These Concepts Into The Realities of How a Company Operates Day-to-Day Has Limited Broad Adoption

Properly Implemented BPI Directly Supports All 5 Disciplines

Capture Learning

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Accountability Having a Good BP For a Particular Activity is Not a

Substitute For Individual Ownership, Competence and Execution

Organization Must Maintain a ‘Just Do It’ Attitude and Not Use a Weakness or Deficiency in a Business Process as an Excuse

In a Healthy Company Culture, Individual and Group Accountability are in The Forefront With Sound BPs Playing a Supporting Role

When Something Goes ‘Wrong’ Both Individual / Team Execution and Role of The BP Needs to Be Reviewed

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Business Process ImprovementMethodology

How to Do What We’re Trying to Do

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Process For A Process

Act(Integration)

Do(Phase Gates)

Check(Monitor & Coach)

Plan(Manage Funnel)

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What Business Flows

(Or Value Streams)

Run The Company?

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Roadmap to Launch

Concept to Customer

Launch to Product Release

Product Release to Dollars

Demand Review

Sales & Operations Planning

Supply Review

FinancialIntegration

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Generating BP Candidate List Business Process Are Not Standalone

Start By Thinking About Processes at a High Level – Inter-Connected System; i.e. End-To-End

Map System So It’s Clear Which Are Main Company Drivers (Value Creation / Competitive Advantage) and How They Link New Products: Concept To Customer Project Development & Financing Sales & Ops Planning (S&OP): Quote To Cash Financial: Cash Cycle, Close Cycle, Etc. M&A Etc.

Then Breakdown Major Branches/Business Processes Into Sub-Processes – Where are The Weak Links?

Tie New BP To Existing / Well Working BP And / Or System When Possible

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Impact

Criticality

TimeResource

Queue

Launch

PrioritizeCandidate

List

What Else Is Going on in Organization?

StrategicFit

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Competitors:Capabilities & Offerings

Your:Capabilities, Offerings

& Vision

Customer:Problems, Needs,

& Aspirations

D.J. Collis, M.G. Rukstad (HBR April 2008) “Can You Say What Your Strategy Is?”

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Strategy Process

Creating and Executing Breakthrough Strategy, William Pietersen

Strategy: The Sum of a Company’s Choices About Where it Competes, How it Creates Superior Value For its Customers, And

How it Will Generate Superior Profits For Itself

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Filter: Criticality vs. QualityThe Business Processes That Are The Most Critical To Your Business and

Have The Highest ROI Should Be The Ones Worked On - Obviously.

But How to Figure Out?Peter Keen Provides a Useful Framework

Process Salience

Pro

cess

Qu

alit

y / E

ffe

ctiv

en

ess

Lo

wH

igh

IdentityBackground

Quad IInitiate ASAP

Quad IIContinuous

Improvement

Quad VROI

Driven

Quad VIBacklog

Priority

Quad IIIROI

Driven

Quad IVContinuous

Improvement

Mandated

Quad VIIROI

Driven

Quad VIIIBacklog

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Filter: Impact vs. Investment

Investment(Dollars, People, . . .)

Impact

Low High

High

Low

Is It Worth The Effort? How Fast?

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Act(Integration)

Do(Phase Gates)


Plan(Manage Funnel)

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Business Process Improvement

It’s a Project

Manage it Like a Project

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Requires Formal: Justification Commitment Launch Finish

We Know How to Manage Projects: Start With The End in Mind Define Success Criteria / Vital Signs Develop a Roadmap Breakdown Success Criteria into Gates Track The Path Develop Leading Indicators for Critical Steps Assign Project Leader & Team

What Do We Get?

Phase Gate Process

BPI Implementation

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PDCA Project Management*

* Reference: PDCA Project Management Cookbook, AR Alvarez, February 2016

Plan(Set Goals, Resources & High Level

Schedule Socialize & Get Buy-In)

Do(Detailed Schedule, Daily /Weekly Checks & Pull-in)

Check(Mgt & Milestone Reviews)

Act(Adjust Resources, Goals, &

Schedule)

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BPI Phase Gates1 Optional Gates: Feasibility & Project Commit Can Be Combined, as Can Alpha & Beta Trials2 Project Sub-Leads to be Decided at PR2 if Main Project is Sub-Divided Into Multiple Threads

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Degree of Uncertainty

Degree ofComplexity

Low High

High

Low

Look For Ways to Deconstruct Project To Reduce Complexity & Minimize Interactions,

Focus on Bringing Clarity Quickly to Items/Paths With High Uncertainty

Straightforward ProjectThat Lends Itself to Basic

Prj Mgt Techniques, Minimizing Prj Mgt

Overhead to Maximum Efficiency

Look For Ways to Deconstruct Project To Reduce Complexity & Minimize Interactions,

Focus on Detailed Planning Will Have High ROI

Project Steps are Straightforward;

Focus on Bringing Clarity Quickly to Items/Paths With High Uncertainty

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ARA Consulting BPI Project Tracks

Single Track BPI Project

PG1 PG2 PG3 PG-Beta PG4

PG1 PG2

PG3 PG4

PG3 PG4

PG3 PG4PG-Beta

Multi-Track BPI Project

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ARA Consulting

Unlike Conventional Project Management

BPI Project Management

Almost Always Involves Overcoming Resistance to Change

BPI & Resistance to Change

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ARA Consulting

BPI & Change Mgt Go Hand-in-Hand

https://www.prosci.com/change-management/thought-leadership-library/change-management-project-management-value-proposition?utm_source=tutorial-integrating-cm-pm-mod5&utm_medium=redirect&utm_campaign=cm

CurrentState

TransitionState

FutureState

Change Management

Project Management Delivery of BPI

Adoption of BPI

Both Project and Change Management Required to Insure Success Implementation of a New Business Process

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ARA Consulting

BPI ROI

FutureState

PerformanceMinus

CurrentState

PerformanceEquals

BPI ProjectBenefits

Lower Costs — Higher Costs = Costs Saved

Higher Revenues — Lower Revenues =Revenue

Generated

Fewer Errors — More Errors = Errors Reduced

Lower Risk Exposure

—Higher Risk Exposure

= Risks Mitigated

In Compliance — Out of Compliance = Mandates Met

Ref: After PROSCI - http://www.change-management.com/tutorial-roi-of-cm-mod4.htm

Simplistically . . .

ROI = (BPI Project Benefits – BPI Project Costs) / BPI Project Costs

… But There are Also Opportunity Costs

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ARA ConsultingBuilding in Dynamic Range

For A Business Process to Be Effective It Must Have The Flexibility to Span a Broad Range of Situations

ARA (June’17)- © 2017 - 57

ARA Consulting Building in Dynamic Range

A Conditional Process Matrix Determines, Based on The Situation, Which Sub-Sets of The Business

Process Need to Be Performed

Level 1 Level 2 Level 3

Step 1

Step 2

Step 3

Step 4

Step 5

Step 6

Step 7

Step 8

Step 9

Step 10

1

2

3

1

6

5

3

2

4

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ARA Consulting

Building in Dynamic Range Identify Range of Situational Complexity Business

Process is Likely to Encounter and Therefore Needs to Cover

Define Business Process to Cover Highest Level of Complexity (Maximum Set)

Define Business Process to Cover Lowest Level of Complexity (Minimum Set)

Define a Conditional Matrix That Determines Which Portions of the Process Need to Be Implemented Depending on The Situation

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ARA Consulting


Act(Integration)

Do(Phase Gates)

Check(Periodic Monitor & Coach)

Plan(Manage Funnel)

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ARA Consulting

Project Review Hierarchy

After: http://blog.agilegamedevelopment.com/2014/04/agile-long-term-planning.html

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ARA Consulting Executive Sponsor Review How Often: Once or Twice Per Month (Rate of Change Driven)

How Long Should it Take: 15 - 20 Minutes (30’ Max)

Who Attends: Exec Sponsor(s), Contributing Mgrs, Project Lead, Cross-Functional Team (As Required)

Who Runs It: Project Lead (Template in Appendix 2)

What Needs to Be Communicated? Make Sure Executive Sponsor Grasps Status of Key Deliverables: Schedule,

Performance Targets, Quality, etc. as Well as Areas of Uncertainty Barriers to Meeting Commitments That Need Executive Sponsor Attention Highlight Risk Items, White Spaces, Resource Gaps, Skill Set Holes, etc.

What to Do: Focus on Deliverables Highlight Key Decisions That Need to Be Made Highlight Any Escalation Required – Get Help (Do it Earlier Rather Than Later) Propose Recovery and/or Contingency Plans as Required

Summarize, Issue Minutes and Update Action Items

ARA (June’17)- © 2017 - 62

ARA ConsultingProject Change ManagementBe Prepared, Changes are Normal

Dependent on Many Factors (Some Good, Some Bad, Some Under Team’s Control, Some Not): Project Length (The Longer The Project, The More Likely That Scope Creeps) Market Place Environment & Dynamics Capability of People Defining BPI Project BPI Project Development Process Methodology

Different Ways to Address “Say No” and Queue For Next BPI Cycle . . . Or “Say Yes” and Incorporate into

Current BPI Cycle Fixed BPI Project “Freeze” Points Beyond Which Certain Changes Not Allowed Incorporate Changes Into Process Through Explicit Iteration Planning (ala Agile) ROI Hurdle: Evaluate Return vs. Investment (Time, Resources, Cost) Required

for Change

Manage Through Mgt Bi-Monthly Review Meeting Requester Presents Justification, BPI Team Presents Schedule/Resource Impact Option to Hold Ad Hoc Meeting if Required

ARA (June’17)- © 2017 - 64

ARA Consulting Integration Not “Done” Until Insure That BP is Part of How Company Really

Operates at Later (6 Months) Point in Time

Once BPI Demonstrated to “Work” (Meets PR 4 Targets), Still Necessary to Insure Organization Doesn’t Backtrack

Done Properly During Implementation Stage, Full Integration Should Be Straightforward and Monitoring Task Light

Identify New Owner For Maintenance/Continuous Improvement

Continuous Improvement Will Be Required: New BPI Efforts Are Typically ‘Released’ at Level 3 or 4 Macro Environment Changes Competitive Environment Changes

Plans For Full Deployment (if Piloted in One Group), Maintenance, and Improvement Part of This Last Stage

Capture “Lessons Learned”

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ARA Consulting A Lighthouse Not a Cage

The Art in BPI is Doing it in a Way That Shines a Path That Helps People and Teams Find Their Way Quickly and

Efficiently to Their Destination as Opposed to Imposing Hurdles or Walls That Exhausts The Participate

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ARA Consulting

BPI – It’s a Continuum

One Size Does Not Fit All,You Need to Determine The “Right” Size

Loose

High

Bureaucratic

Absent Paralyzed

“Startup Light”

Chaos Stifling

Tight

Activity:Risk, Criticality, Creativity, …

Low

ARA (June’17)- © 2017 - 68

ARA ConsultingManaging Business Process Improvement:

Navigate The Turbulenceand

Get to Your Destination

Available at Amazon:https://www.amazon.com/Managing-Business-Process-Improvement-Destination-ebook/dp/B07521H3F9/ref=sr_1_1?s=digital-

text&ie=UTF8&qid=1505258757&sr=1-1&keywords=managing+business+process+improvement