BPI Technique - Change History Diagnosis (CHD)

Description

Structured method for assessing the degree to which an organization is ready to change. The process draws on the perceptions of employees regarding how effectively the organization has managed change in the past, and generates practical insights into how the organization should manage change in the future. These insights are then integrated into a strategy for the involvement of employees during the BPI initiative, which will ensure that there is broad employee commitment both to the content of the change and the way it will be implemented.

When to Use

The Change History Diagnosis can be used in two main ways.

• To structure the development of a Readiness for Change Assessment

• Because the diagnosis is based on objectively accepted factors that contribute to the effective buy-in of employees, it assists the joint client/consultant team to think in a very practical way about how to manage change in the future. At the early stage of the BPI initiative, conduct a relatively focused assessment, using a small, carefully selected sample of employees who represent the key areas within the organization. Then, conduct further assessments, on a just-in-time basis, at each of the other key stages in the process.

• To facilitate project management

• At every stage of the BPI project there are decisions made concerning how employees will be involved in the next stage of the initiative. Use the Change History Diagnosis to highlight the importance of employee involvement in achieving lasting change in all aspects of the organization. Integrated with project management, it will provide each layer of sponsors and change agents with a valuable opportunity to hear from employees about what matters to them, and to demonstrate that the organization is genuinely interested in their views.

Approach

The use of a Change History Diagnosis needs to be carefully framed in the context of the overall BPI initiative. Supplement the diagnostic with other data-collection processes such as interviews, and an analysis of reports and surveys relating to change initiatives conducted within the organization over the previous two to five years. (Refer to Internal Organizational Overview and Readiness for Change Assessment.) Once this context is clearly established, there are typical steps for using a Change History Diagnosis.

1. Choose an appropriate Change History Diagnostic tool. Refer to the Tools section below for suggestions. Ensure that the client is comfortable about the choice of diagnostic. If they have used a diagnostic in the past that has worked well, it may be worthwhile using it again. It is best to check, however, if employees were comfortable with the process and whether the diagnostic has low credibility, because it was either poorly conducted in the past or there was no follow up.
2. Introduce the project team and the project sponsors to the diagnostic, explaining its conceptual underpinning and language, and how it will assist the overall change initiative.
3. Select a representative sample of employees for surveying purposes.
4. Conduct the survey using focus groups.
5. Develop a report on the findings.
6. Feedback the results to relevant sponsors.

Ensure that employees who participated in the focus groups are provided with a clearly written summary of the results of the diagnostic, and the opportunity to respond to any of the subsequent findings.

Guidelines

Problems/Solutions

• Some people are resistant to the diagnostic, and may dismiss it as an impractical questionnaire. This is often demonstrated by lengthy debate about its validity. These people can sometimes be hard to convince, and time spent trying to do so can be wasted. Thus, encourage participants to complete the diagnostic first, and then facilitate discussion about the issues that emerged from completing it afterwards. In most cases, people become supportive of the diagnostic. This is because it allows them to talk about issues such as management support, adequate resources, training and communication, which they may feel management has not handled well in the past.

Tactics/Helpful Hints

• Have the leadership team and the internal change agents complete the diagnosis first. In most cases, they identify many of the same issues as are later identified by employees. This often leads to useful discussion about their past disappointments with how change has been managed, and sensitizes them to the often deep-seated concerns that employees have about such a major change as BPI.

• Some organizations become very attracted to the diagnostics and want to conduct large-scale surveys using them. These can be costly, slow to generate results and logistically complex. In addition, such surveys lack the interactive qualities of the approach outlined above. If the organization is committed about going ahead with such an approach, ensure that there are mechanisms in place to manage communications, to manage the project within tight time and budget parameters, and to keep key opinion leaders on side.
• Make all responses confidential, if necessary, and establish a ground rule about confidentiality, whenever there is an expectation that people talk frankly about the findings of the diagnosis.

Resources/Timing

• It is imperative that people are appropriately trained and accredited, before they use any of the vendor-based tools. Contact the local national office of the vendor for details.

Tools

• A number of change history diagnostics are currently available from Consulting Companies and Software Suppliers.

• Implementation Problems Assessment also are available from various Consulting Companies and Software Suppliers.
• Develop a specific tool. This is done in conjunction with the organisation. This approach has the added advantage of ensuring buy-in to the outcome of the Change History Diagnosis, since the client has been intimately involved in the creation of the assessment method.

BPI Technique - Benchmarking BMK

Description

Benchmarking is the continuous process of making quantitative comparisons both internally and between companies on key performance areas/measures. This technique differs from the Best Practice Comparison deliverable, in that it provides information for quantitative versus qualitative performanc. This benchmarking information is used to identify problem areas by identifying measures, assessing the gaps compared to industry leaders and determining the impact to the client.

When to use

This technique is typically used at the beginning of the BPI project, while the prescriptive, best practice comparisons occur during the design. Benchmarking is used to establish goals (both for the organisation in general or for individual processes) and to serve as an aid in prioritising potential design opportunities. In later phases, benchmarking is a very important mechanism for the ongoing performance measurement of processes, after they have been implemented.

Approach

• Benchmarking can be conducted both internally and externally: internal comparisons can be across divisions, subsidiaries or over time, and external comparisons will be with best-in-industry peers and/or best-in-functional-area experts (e.g. companies do not have to be in the same industry to make meaningful comparisons. For example, a manufacturer can use a warehouse operation as a benchmark for their order- fulfilment process).

• The traditional approaches of surveys may be used to gather information, or an actual partnership with other companies to share information may be established. Benchmarking can also be found through other sources, including industry associations, third party benchmarking clearinghouses, internal databases or studies sold by consulting/research groups.
• In all cases, it is important to use balanced metrics, inputs, outputs and quality to tell the whole story (For example, if a process is faster at performing a function, it is also important to know if the quality is still appropriate. Otherwise, faster may not be better.

1. Identify areas to benchmark.
2. Identify comparative candidates.
1. Identify internal groups or external companies (competitive or functional areas).
2. Contact, screen and recruit partners.
3. Identify existing benchmarking within Implementation Consulting Organisation (see Reference).
4. Determine data-collection methods.
1. Develop surveys or form partnerships to target information and solicit input.
5. Conduct and analyse data.
6. Determine gap and impact analysis.
7. Summarise information, and draw conclusions.
1. Do this through workshops or other focus groups.
8. Project future performance levels based on comparisons.
9. Communicate benchmarking findings.

Guidelines

Problems/Solutions

• Be aware that getting buy-in to the results of the benchmarking is often difficult, especially when the information reflects poorly on the company. Ensure that this is considered in the presentation of the information, and anticipate the qualifiers that the client will make.

Tactics/Helpful Hints

• Be careful of “apples to oranges” comparisons. When conducting quantitative benchmarking, data needs to be qualified and if possible scrubbed to confirm comparability. Determine what is meaningful in the data, and recognise inherent differences such as regulations, unionisation, geographic market, etc. The data also should be normalised such as using a common denominator, adding in hidden costs and using estimates where necessary. Qualitative information may be needed to complete the picture.
• Since confidentiality of data is very important to all companies, abide by all the rules of confidentiality even to the point of not sharing particular findings with the client.
• Often results can be positive for the client. Consider this in the presentation of the results, so as to not limit the goals of the client. In “re-engineering” projects, it is the objective to break out of and far surpass current performance levels and not to just meet the best performance.

Reference

Knowledge Manager- Services- Organisation - Benchmarking

Tools

• Surveys
• Excel or other graphing tool (bar charts, scatter diagrams, etc.)

BPI Technique - Behavioral Model (BM)

Description

• A technique for clarifying the difference between the "As-Is" behaviors of employees and the "To-Be" behaviors that are necessary to ensure the effective performance of specific job roles. The Behavior Model provides a succinct summary of the gap between these two sets of behaviors and assists in the process of developing specific change strategies to ensure employees fully adopt their new roles.

When to Use

• The Behavioral Model is a key technique for the development of the Portrait of Desired Behaviors. It ensures that the outcome of this deliverable is very tangible and becomes a key input to the development of the Competency Needs Assessment and the Performance Support and Recognition deliverables.

Approach

1. Clarify the specific focus of the Behavioral Model. It may be a function, process, team role or individual job role.
2. Identify the current behaviors of employees. Be very specific, noting the specific conditions under which employees typically work, and the standards of their work.
3. Identify the expected behaviors of employees, noting any changes to the conditions under which they work, and the expected standards of performance.
4. Identify relevant measures or indicators of changed behavior.
5. Suggest strategies that will assist in the successful transition from one set of behaviors to another.
6. Document the results in tabular format to assist with the communication of the findings.

Guidelines

Problems/Solutions

• Since it is essential that employees accept the findings of the Behavioral Model, involve them in the development of the models.
• Realize that managers need to recognize that behavioral change is a considerable challenge, and to understand the thoughts and feelings that behavioral change can generate. This will enable them to realistically manage the transition to the new world of work. Therefore, work with managers on their own Behavioral Model first, and then focus on the Behavioral Models relating to their employees.

Tactics/Helpful Hints

• Ensure that there is a diversity of input to the development of the Behavioral Model, particularly with respect to the identification of current behaviors. Encourage openness and honesty, and accept that there may be quite different ways in which people currently behave.

BPI Technique - Balanced Business Scorecard (BBS)

Description

• The Balanced Business Scorecard is a framework, which links a company’s strategy with the appropriate measures that will help the company monitor and finally achieve that strategy. It represents a set of performance indicators that gives senior management a “snapshot” of the health of the business. The appropriate Balanced Business Scorecard includes financial measures that tell the results of actions already taken, as well as operational measures on customer satisfaction, internal processes and the organization’s innovation and improvement activities - all operational measures that are the drivers of future financial performance.
• With this balanced approach, the scorecard seeks to develop a full set of indicators (to motivate current actions and drive future performance), to balance measures (short term versus long term) and to link measures with objectives (to communicate importance and evaluate performance).

With the Balanced Business Scorecard performance is viewed from four different perspectives and subjected to a balanced assessment.

When to Use

• Traditional performance measurement is often approached in a rather passive way; it is regarded as a complex system which is difficult to fathom, let alone modify. The Scorecard on the other hand, is more closely linked with the cultural thinking of the organization. The power of the Scorecard lies in its focus, simplicity and vision. The experiences of companies that use the framework show that the Scorecard is most successful when it is used to drive substantial changes. In a turbulent environment, the Scorecard provides focus for actions. Where on-going projects in a company tend to peter out over time, or are pushed aside by other matters, the Scorecard can be used to maintain their momentum and sense of urgency.

• The Balanced Scorecard can be used to support the deliverables Critical Success Factors, Key Performance Indicators, To- Be Measurement Dashboard, Measurement System and Performance Feedback.

Approach

• An important condition for a successful implementation of the Scorecard is to begin with a clear vision, directly linked to Critical Success Factors and measurable ambition levels. It will then become the basis on which to develop measures at the high (business) level (3-5 measures) that will support the business strategy or vision (see Key Performance Indicators)
• Review/Establish (Confirmed) Business Vision and Critical Success Factors
• Summarize/Reflect (Confirmed) Business Vision and Critical Success Factors within the four Scorecard categories and develop preliminary set of measures
• The different perspectives in the Balanced Business Scorecard are:

• Financial Perspective
• The factors that create value for the stakeholders/owners of the company.In the end, long-term financial results are what matter to them. Cash flows - discounted for risk and time - determine the value of the organization for shareholders. Cash flows are more capable of reflecting the strategic objectives than profit or turnover. Other indicators in this perspective are growth in market share, profitability and profit per employee.
• Customer Perspective
• The performance of the company as it is judged by the customer. The true value of a product or service only becomes manifest in the eyes of the customer. It is therefore logical to measure the company's performance from the customer's point of view and to adopt a wider perspective. From the customer perspective, the important categories of indicators are price, quality, time and service. These can be measured in terms of "life cycle cost" (total operating costs including costs after purchase, such as installation, maintenance, training, facilities), error levels, timeliness of delivery, required time for the development and marketing of new products and a total score for customer satisfaction.

• Business Processes
• The performance level of the primary business processes. This perspective measures the performance of processes which have the largest impact on customer satisfaction. How can one structure the internal processes, procedures and management activities in such a way that the expectations of customers are met, or better yet, are surpassed? Turnaround time (the total time needed for the execution of the process from beginning to end, from customer to customer), quality and productivity are the most important categories in this perspective. The performance of suppliers and buyers forms part of the primary process as well.

• Organizational Learning
• The extent to which the company is able to continuously improve and innovate. The learning capacity of an organization is expressed by innovation, continuous improvement and intellectual assets. Exemplary indicators are the share of new products in the total sales, the level of improvement in development and speed of production or the level of reduction of waiting time, waste or defect level.  
• Balance identified measures
• Probably the most essential - and also most difficult - aspect of the Balanced Business Scorecard is the balance itself. A well-known phenomenon of performance reports is the abundance of figures. Managers themselves have to filter out the trends and essential issues in order to be able to plan certain actions. What they require is a  balanced overview of a limited number of key financial and operational measures which makes it possible to trace the cause and effect of performed actions. A well thought-out Scorecard is a reflection of the company's vision and the related measurable objectives.
• Review measures with the organization to create buy-in.
• Have senior managers take the output of the facilitated sessions back to their organizations for review.
• Set goals for each of the measures based upon the client’s (Confirmed) Business Vision and Critical Success Factors.
• Decompose the Business Balanced Scorecard into lower-level performance measures established at the process levels.
• Establish performance measurement system. (see Measurement System deliverable)

Guidelines

• Be aware that this approach to measures must be sold in the Envision phase to executive management to create a thorough and consistent approach around the Business Balanced Scorecard. This approach can be used up until the Design High-Level phase, when process measures need to be developed. However, rework may be required and assumptions/qualifiers may need to be incorporated.
• Do no attempt this technique without a clear business strategy. If there is no business strategy, or it has not been articulated clearly, then the scorecard must be preceded by a session to finalize or create the strategy.
• The process measurements have to be based on (primary) processes that cut through the entire organization. They should not be based on the narrow functional areas or departments, because this leads to fragmentation and sub-optimization in the lower levels of the organization.
• The risk in this technique is that the team goes overboard and creates more measures than the organization can manage. It is important to limit the number of measures that any one process, group or individual has responsibility for.
• With measures there is a tendency to immediately look for a familiar unit of measurement, such as values, numbers, times or percentages. However, the unit of measurement is not important. The applied standard and the relative importance of the measurement, are more meaningful. As long as the measure correctly reflects that which is considered important by top management, and as long as the measure indicates the company's performance in relation to its competitors, the objective or any other standard or random unit of measurement is relevant. The techniques that are used to arrive at units of measurement do not have to be special; an adequate dose of creativity and sometimes daring can make a considerable difference.

• Workshop agendas may include the following items.
• Balanced scorecard description and case
• Balanced scorecard brainstorming
• Balanced scorecard feedback
• Performance improvement objective-setting

Examples

• Below is an example of a Scorecard in which the strategic objectives are reflected. The company concerned operates in a strongly competitive market in terms of both price and technological progress. The lifetime of products is becoming increasingly shorter and the number of players entering the market is rising. In order to survive and flourish in that market, it is essential to innovate continuously and to market superior products rapidly. In that respect, the company must be capable of adequately anticipating movements in the market and taking advantage of these changes.
• This strategy is reflected by the set of performance indicators.
• The customer perspective focuses on the extent to which the company is able to offer customers new products and functionalities sooner. The reliability of announcements and deliveries plays an important role from the customer’s point of view.
• Translated into the internal processes, the applied measures are concentrated on the activities which are related to product development.
• Organizational learning is directed at innovation through the introduction of new products. Here, the importance of the multi-functional approach is stressed as well.
• In the financial perspective, attention is primarily paid to the expansion of market share.
• The interrelatedness of the measures clearly shows the strategic emphasis on innovation and marketing. From the Scorecards of the lower echelons in the organisation more detailed information can be obtained, if required (e.g. per product, region or period).

• The following example of the Balanced Business Scorecard comes from a high-tech company which excels in fast, continuous development of new products.

• This diagram below provides an example from the customer perspective of a company where timeliness is a key factor. The consequences of late delivery are represented by the discounts the company has to offer its customers. What is also shown is the level of performance in relation to the previous year and in relation to the defined objectives. Together with relevant measurements from the business process and organizational learning perspectives, a picture emerges indicating why improvements occurred and to what extent actions will be sufficiently effective to realize the increasingly demanding objectives.

Example of a possible reporting format, in this case of late deliveries

References

• The Balanced Scorecard - Measures that drive PerformanceÓ, by Robert S. Kaplan and David P. Norton, Harvard Business Review, January-February 1992
• The Balanced Business Scorecard - The link between vision and implementation, by Marc C. J. Smits, December 1993, Nolan, Norton & Co., Utrecht, The Netherlands