Transcript Performance Maturity

Performance Management
Maturity Methodology
Mitchell Weisberg – Lumen, Inc.
Recommendation:
IF YOU ARE PLANNING TO COME TO THIS
SESSION:
Take our Performance Management Maturity Assessment before
attending this session for greater value from the session.
You can take the assessment survey at:
www.Lumeninc.com/Maturity
We will email you your results prior to the session so you can compare
your results with others in the session.
Objectives
> Provide deeper understanding of how performance metrics
will drive higher performance in your company
> Understand why knowing maturity is key is achieving success
in any performance management implementation
> Learn how to adapt approach to your organization’s
performance maturity to accelerate implementation and
achieve faster results
> Learn from the execution of performance metrics at Amgen
> Develop next steps to apply learnings in your organization
Agenda
> Welcome & Introduction
> Lumen, Inc. Overview
> Current Situation
> Amgen Case Study: CPM Maturity Applied
> Performance Management Maturity Model
> Lessons Learned
> Discussion
Lumen, Inc. is a specialty management consulting firm of
senior, experienced professionals who collaborate with
clients to rapidly transform them into high performance
businesses.
Align business performance
with the business strategy
Reengineer processes for
greater productivity
Establish and execute
performance management
throughout the organization
Manage change more
effectively for rapid
achievement of competitive
advantage
Rethink customer and
employee relationships for
greater profitability,
satisfaction and retention
Technology Agnostic: Relationships with
Vendors Across the CPM Landscape
> Our deep familiarity with all
the key vendors in the CPM
space is a strength
> Counsel is objective,
choosing the right product for
the client based on needs and
best-in-class solutions
> Vendors provide training to
our consultants on a regular
basis, so our service to
clients is always current
Agenda
> Welcome & Introduction
> Lumen, Inc. Overview
> Current Situation
> Amgen Case Study: CPM Maturity Applied
> Performance Management Maturity Model
> Lessons Learned
> Discussion
Businesses Continue to Face the Same Challenge of
Faster Growth and Higher Performance
Organizational Performance
Issues
> Over abundance of data and
information
> Management demands for
better information for decision
making
> Increased market expectations
> Greater internal complexity
> More dynamic markets require
higher business agility
Benefits of CPM
> Measure performance outcomes with
leading metrics enabling managers to
anticipate and respond to change with
decisions or actions
> Consistently and systematically monitor
progress towards goals and targets to
enabling proactive addressing of issues
> Enable execution of the company’s
strategy through line of sight objectives,
processes and practices
> Increased ability to manage internal
performance to market demands
17 July 2015
9
Today’s Economy Superimposes a Greater Challenge:
Decrease Costs While Maintaining Capability for Growth
More dynamic markets requiring higher business agility…
> Improving operational efficiencies
• Without reducing production capability
> Reducing human capital
• Without losing valued employees
> Reducing sales and service expenses
• Without customer attrition
> Maintaining financial results
• Without missing forecasts and market expectations
… and greater visibility
17 July 2015
10
CPM Delivers Capability for Better Business
Performance
> Corporate Performance Management: system of
metrics, processes and supporting IT that
enables users to define, monitor, manage and
optimize process outcomes while creating
alignment with strategic objectives across
multiple organization levels
Strategy Map
Strategic Theme:
Strategic
Theme:
Operations
Operating Excellence
Efficiency
Profits and
RONA
Financial
Grow
Revenues
> Successful CPM requires:
Customer
Fewer planes
Attract &
Retain More
Customers
On-time
Service
Lowest
prices
Standard methodology and consistent
metrics
•
Culture supporting fact-based decisions
•
Technology to deliver accurate metrics and
analysis
• Incorporates tool and methodologies: Balanced scorecard,
performance metrics, strategy map, Lean, SixSigma, value
tree, process improvement or redesign, change
management
turnaround
Fast ground
turnaround
Ground crew
alignment
Targets
Initiatives
• 12% growth
• Ranked #1
• Ranked #1
•Customer
20% CAGR
5% CAGR
loyalty
program
Quality
management
•
• On Ground Time • 30 Minutes • Cycle time
• On-Time
• 90%
optimization
Departure
•
Learning
Measures
30% CAGR
• More Customers • # Customers
• Flight is on -time • FAA On Time
Arrival Rating
• Lowest prices
• Market Survey
• Fast ground
Internal
•
Objectives
•
• Profitability
• Grow Revenues •
• Fewer planes •
Ground crew
alignment
•
% Ground crew
trained
•
% Ground crew
stockholders
• yr. 1
70%
yr. 3 90%
yr. 5 100%
• Ground crew
training
• ESOP
CPM Closes the Gap Between Strategy and
effective Execution
Strategy
Execution
Manage the Business
Performance and Management
Conduct the Business
Achieving the Value of CPM
Tangible Benefits
> Significant resource savings
> Simplified reporting
environment
> Reduced budget and
reporting cycle times
> Lowered cost of compliance
> Reduced spreadsheet
proliferation
Intangible Benefits
> Movement to a flexible, rolling
forecast and budget cycle.
> Significant improvements in
forecasting accuracy
> Improved decision-making
capability
> Increased accountability through
better visibility
> Information to manage the
business more effectively
>Why isn’t Performance Management (CPM)
delivering the expected value for everyone
who is implementing it
15
Agenda
> Welcome & Introduction
> Lumen, Inc. Overview
> Current Situation
> Amgen Case Study: CPM Maturity Applied
> Performance Management Maturity Model
> Lessons Learned
> Discussion
Amgen: A Biotechnology Pioneer
> Founded in 1980, Amgen was one of
the first biotechnology companies to
successfully discover, develop and
make protein-based medicines
> Today, Amgen is leading the industry
in its next wave of innovation by:
• Developing therapies in multiple
modalities
• Driving cutting-edge research and
development
• Continuing to advance the science
of biotechnological manufacturing
Amgen’s Mission…
…to serve patients
Inflammation
Nephrology
Oncology
Amgen's Business at a Glance
2007
Revenue
$14.8 B
R&D Investment
$3.1 B
Locations
Cambridge, MA
Norway
Toronto, ON
Luxembourg
West Greenwich, RI
The Netherlands
Washington, DC
Belgium
Ireland
Burnaby, BC
Bothell, WA
Seattle, WA
Longmont, CO
Boulder, CO
Fremont, CA
South San Francisco, CA
Thousand Oaks, CA
Mexico City, Mexico
England
France
Switzerland
Denmark
Finland
Sweden
Estonia
Latvia
Lithuania
Russia
Czech Republic
Poland
Slovakia
Hungary
India
United Arab Emirates
Greece
Slovenia
Austria
Germany
Japan
Hong Kong
Italy
Louisville, KY
Juncos, Puerto Rico
Spain
Portugal
Australia
New Zealand
Amgen’s Products
For additional information about Amgen products, including
important safety information, please visit www.amgen.com
What Was the Problem?
> Over a dozen Dashboards with
different metrics and design
> Large number of non-Standard metrics
> Significant manual effort to deliver
dashboards
> Challenges to do factual comparisons
between multiple organizational unit
performance
Solution: Service Partnership of Business & IS
to Deliver Metrics Using Standard Methodology
> Amgen’s approach
> CASE STUDY DISCUSSION
Approach : 3 Step Process
> Created Custom Performance Management
Methodology
> CASE STUDY DISCUSSION AND
ANSWERS
Performance Management Methodology
> Framework to consistently implement metrics
> Repeatable and flexible process from project inception to
delivery
> Drives top-down and bottom-up approaches
> Playbook contains instructions, templates, and roles &
responsibilities
Performance Management Methodology
Process Steps
1.0 Establish Metrics
2.0 Develop Metrics
3.0 Manage Performance
1.1
Initiate
1.2
Evaluate Metric
Maturity
1.3
Develop Strategic
Metrics
1.4
Align Operational
Metrics to Strategy
1.5
Establish
Targets
1.6
Finalize Metrics
& Scorecard
2.1
Gather Metric
Components
2.2
Develop Detailed
Design
2.3
Construct Metrics
& Scorecard
3.1
Deliver Metrics &
Scorecard
3.2
Continuous
Improvement
Technical Solution Maintains Standard Metrics
Enabling Cross-business Unit Comparisons
IBM Cognos Metrics Studio
> Amgen standard IT scorecarding application
> Powerful tool to track and analyze scorecard & metrics performance
Scorecard Hierarchy
> Supports a performance management culture
Metric Performance
> Indicates the current status of the business
The Scorecard Enables Root Cause Analysis of
Problems
Metrics Studio contains rich features …
>Quickly identify and focus on problem areas
>View performance trends over time
>View metric relationships & impact diagrams
>Drill-down reports & analysis for details or context
Metrics Definitions are Held in a Central Repository
Metrics Catalog
>Web-based tool integrated
with IBM Cognos Report
Studio
>Supports the performance
management methodology




Methodology
Technology
Prototype
Pilot…
But was it complete?
Did it deliver expected results?
Why not? ?
What Was the Problem “2”?
• CASE STUDY DISCUSSION AND
ANSWERS
• (Hint: Performance Management
Maturity)
Agenda
> Welcome & Introduction
> Lumen, Inc. Overview
> Current Situation
> Amgen Case Study: CPM Maturity Applied
> Performance Management Maturity Model
> Lessons Learned
> Discussion
Performance Management Maturity Model:
Charting the Course
> Developed with input from across industries and
thought leaders
> Represents a formula for long-term success that is
a function of three fundamental capabilities
> Outlines a path forward as companies work toward
closer alignment of business strategy and
execution
Three Dimensions of the
Performance Maturity Model
> Organization and Culture
• The practices and integration of metrics into the
organization’s behaviors; includes the breadth and depth
of metrics in managing performance
> Processes
• The practices and structures for producing, distributing,
managing and using performance metrics; includes the
quality of the metrics
> Technology and Data
• The technology support and data quality that underlies the
metrics, scorecards and dashboards
The Model is Based on Three Dimensions
Organization
& Culture
Performance Maturity Model
Processes
Technology
& Data
Lumen Performance Management Maturity Model
Organization
& Culture
Processes
Technology
& Data
Lumen Performance Management Maturity Model
Organization
& Culture
Processes
Org Structure:
Enterprise + Bus
Partners
Sponsorship:
Board to Worker
Seamless Management &
Process Views
Sponsorship: Mgt
Strategy & Value Based
Compensation Link to
Team/Board
Planning & BPM
Enterprise
Performance
Compensation vs.
Cultural Focus: Strategy
Perf: Exec & Middle
& Value Chain Driven
Org Structure:
Strategy Driven Org
Mgmt
Anticipatory
Enterprise & Cross
Global, Standardized w/ Focus on
Alerts
Standard Procedures
Functional
Scorecard Supporting Leading Indicators
at All Org Levels
all Levels
Business Processes Techniques
Analysis through
Balanced Scorecard w/
Include Formal reviews, Best
Embedded
Leading Indicators
Practice Learnings, Collaboration &
Analytics & AI
Org Structure:
Rewards
Process Integration:
Regional / Functional
Lead/Lag Balance
Global Enterprise level
Compensation vs. Perf:
Real-time for
Sponsorship:
Executive Level Only
Operations Level
Balanced &
CFO/CEO
Leading Measures
System Supported
Org Focus: Region / Function Cycle Time::
with Supporting
Analysis: OnTactical & Strategic Mix w/ some
Continuous –
Reports
Demand & Solution Immediate
Process Metrics
On Demand
Corporate & BU Redundancy:
Based
Cycle Time
Department/Regiona
Redundancy:
Scorecard
l
Fully Integrated
Balanced
Measures
Certified Data
Data Sourced from
w/ Some “Leading” Process Integration:
Quality
Organization
Functional/Segment
Internal & External
Common KPIs
Standard KPI s
Silos
Technology
& Definitions
and Reports
Tactical /
Seamless Functionality
Non-Existant /
Availability: Anytime /
Independen Cycle Time:
Reactive
w/
Drilldown
and
Lagging
Anyplace
t Systems
•
Monthly
for
Mgt
Culture
Across
No Compensation/
Indicators
Integrated Technology
Global Technology
Reg Reviews • Wkly for
Performance Linkage
(ERP, DW, Planning,
Consistency at All
&
Reward
Operational
Poor Data Quality
Local Mgr/Director
BPM)
Org Levels
Fully Automated
Internal Data Source:
Internal Data Source
Sponsorship
Data Source
Technology Environment
Standard w/ Supporting
Process & Org
Data Manually Compiled
Integration –
Detail
Data
Quality:
Integrated,
Scorecard Local / Independent Data Stores
Data Quality: Stdardized
“Plug & Play”
Consistent and
Sources & Definitions
Local Metrics and Definitions
Measured
Technology
& Data
SO Where Was Amgen:
CASE STUDY DISCUSSION
Amgen:
Metric Maturity Survey Results (Example)*
People Process & Technology
Overall metrics maturity
• CASE STUDY DISCUSSION AND
DATA
• (Hint: Performance Management
Maturity)
*NOTE: Numbers disguised, but demonstrating trend
Map Yourself Against the Model
Organization
& Culture
Performance Maturity Model
Processes
x
814
21
x
x
x24
26
17x4 20 25
x 16
x 18
31
10
13 1912 22
28 6
15
32
9
x 5 x29
x8x
x
x x
32 6
21 17
4x 1614
x
28
1022
9
13 3120
x
19
24
xx15 12 25
29
18 26
xx
7 7
22x 19
x
x
12
28
15
7 18
24 29
x
x5
4 32
x31 10
26
20 x x x
9 13
21x
614
5
25
x x8
16 17
x
x
Technology
& Data
Process Dimension Appears Least Mature
Performance Management Maturity
3.00
Overall
2.00
0.50
Technol
1.00
Process
1.50
Organiz
Maturity Stage
2.50
1
2
3
0.00
Organiz - Process - Tech - Overall
4
Process Dimension Appears Least Mature
PerformanceFinance
Mgmt Maturity - Finance
Overall
1
2
3
1.5
1.0
0.5
Tech
Tech
0.5
Process
1.5
2.0
Process
Maturity Stage
2.0
Organiz
1
2
3
0.0
0.0
4
Organiz - Process - Tech - Overall
Organiz - Process - Tech - Overall
PerformanceOperations
Operations
Overall
2.5
1.0
0.5
Tech
1.5
Proc
2.0
Organiz
Maturity Stage
Maturity Stage
2.5
1.0
Overall
2.5
Organiz
3.0
Performance Mgmt
IT Maturity - IT
1
2
3
0.0
Organiz - Process - Tech - Overall
4
4
Agenda
> Welcome & Introduction
> Lumen, Inc. Overview
> Current Situation
> Amgen Case Study: CPM Maturity Applied
> Performance Management Maturity Model
> Lessons Learned
> Discussion
Observations
> Performance Management Maturity is quite low
> Maturity levels may vary by department
> You must balance multiple dimensions of maturity
challenges
> The Organization/Culture and Process dimensions
(Methodology for dashboard/scorecard, metrics)
are the least mature areas
> CPM delivers significant benefits, and, in today’s
economy is a critical management methodology to
implement.
Observation:
You can accelerate value delivery by addressing
maturity issues:
> Use the Performance Maturity Model to benchmark your
dashboard initiatives and goals
> Adapt methodology to address different maturity of
organizational units
> Expand your approach to address the dimensions of
performance maturity
• Cultural, Process and Technology
Take our Performance Management Maturity Assessment at
www.Lumeninc.com/maturity
Use the Results to Put your Project Back on the Fast Track
Throw Away “The Box”
> Use the Performance Maturity Model to initially to establish your
CPM initiatives and goals
• Adapt methodology to address different maturity of organizational
units
> Expand methodology to fit dimensions of performance maturity
• Cultural
• Process
• Technology
> Target the value for your maturity level “don’t shoot for the
moon”
• Value delivered is relative to the maturity of the organization
> Use the Performance Maturity Model to ensure that your CPM
initiatives have the right balance of people, processes and
analytic applications
Garter, 2008
Key Takeaways
> Customizing the Performance Management
approach to the company’s Maturity is a key
element to achieving efficient, successful
implementation…
and ultimate USE of a CPM methodology
> Start now with an assessment of
Performance Maturity!
Thank you!
Contact Information:
Mitchell Weisberg
• [email protected]
• +1 781-894-9202 (office)
• +1 781-249-3750 (mobile)
Take our Performance Management Maturity Assessment now:
www.Lumeninc.com/Maturity
We will email your results.