Applying The Three Levels of Performance

How Would You Grade These Performance Improvement Programs ?

To optimize performance, companies need to improve all Three Levels of Performance:

     1. The Organizational Level (where strategy is established)
     2. The Process Level  (where workflows are streamlined)
     3. The Job/Performer Level  (where individuals do the work)

Typical improvement campaigns (i.e. customer focus, process redesign, TQM, cost reduction, cycle-time reduction, Lean, Six-Sigma) focus on only one level. As a result, these efforts do not optimize overall results. In fact, they can do more harm than good if the “fixes” in one area create unintended, negative side effects elsewhere.

Breakthroughs occur when leaders address all Three Levels of Performance and manage the whole system, not just tinker with a few of its parts.

With that in mind, how would you grade the following four performance improvement programs? (The names of the actual companies have been changed) ...

1. Determine the Critical Business Issue

You shouldn’t pursue Process Improvement because it’s conceptually logical or a noble objective; you should do it to solve a high-impact problem. The driving force of a Process Improvement project is a Critical Business Issue (CBI) that may be centered on revenue, quality improvement, cost reduction, and/or cycle time reduction. (Since most of these variables are in the mix, you need to agree on which one or two are the primary motivations for the project.)

Once you reach consensus on the CBI, the individual championing the effort should lead the Process Improvement project definition, which results in:

  • Project GOALS, including not only metrics around the CBI, but other measures of project success (e.g., role clarity, systems installation, culture transformation)
  • Process SCOPE (start and stop points)
  • Project CONSTRAINTS, which are the guardrails within which the new process must function. For example, your headcount and safety policies may be givens. Or, perhaps the process must use the enterprise computer system that you just spent $4 million to install.

How Does Strategy Relate to Process Redesign?

Introduction

There are a wide variety of models for strategy formulation, strategy execution, and process redesign. How do all three areas link together? 

The Evolution of Process Redesign

When the Rummler-Brache Group began first focusing on process improvement, our thrust was on the development and deployment of tools for analyzing and designing cross-functional processes such as order fulfillment, product development, pricing, and budgeting. It didn’t take us long to discover that our interventions in this area were less likely to be effective and almost certainly to be inefficient if they weren’t preceded by some strong up-front planning. We concluded that any process design/redesign should begin with ... 

 

The Questions that Need to be Answered

Introduction

Before performance at any level can be managed, the expectations for that performance need to be clearly established and communicated. This need is particularly strong at the Organization Level. If we have not clearly defined the business we are in, we certainly cannot effectively design and manage the Organization Level of Performance or establish goals, structure, and management practices at the Process and Job/Performer Levels. Without the guiding hand of a clear strategy, we cannot be sure that we are allocating our resources appropriately, managing our critical business processes, and rewarding the right job performance.

To slightly alter the old Chinese proverb, “If we don’t know where we are going, any processes and jobs will get us there.” We will not add to the vast number of models, theories, and methodologies for strategic planning. Our objective is to identify those questions that need to be answered if an organization’s strategy is going to effectively guide the Three Levels of Performance ... 

Seven deadly sins

Overcoming the Seven Deadly Sins of Process Improvement

Introduction

As with other performance improvement efforts (TQM, self-directed teams, Six Sigma, Lean, Just-In-Time inventory, etc.), most organizations can point to the results of their efforts: cost savings, quality improvements, and cycle time reductions. However, there has been more sizzle than steak, more activity than results. In our experience, most failures to realize the potential return on an investment in process improvement arise from committing one or more of the seven deadly sins.

Sin 1: Process improvement is not tied to strategic issues. One company in the food business was proud of its seventy cross-functional process improvement teams. When asked about results, executives mumble vague homilies about “culture change” and “empowerment.” Noble pursuits, no doubt, but what’s the increase in shareholder value? Almost every one of an engineering conglomerate’s dozens of business units has documented its processes. When asked how they’ve used these “maps,” they admit that they haven’t. Too many process improvement teams are convened to address self-selected “backyard” issues that are not  ...