7 Phases of Continuous Process Improvement. 8 Performance ...

Here are the performance management principles was developed by the U.S. Army:

Principle 1: Performance driven:?This principle deals with the key organizational drivers behind the change. All business process changes must be based on customer needs and business performance measurement. All business activities and processes that support them should be done for a reason. Measurement techniques such as balanced scorecards indicate whether we are acting consistently with organizational goals, which should be based on customer needs and traceable to key performance indicators (KPIs). This principle in no way says what the right measurement indicators should be. Every industry is different, and every organization has its own strategy for identifying which goals are achievable. Nonetheless, it is vital that each organization chooses wisely; the old adage ?You get what you measure? is universal to all organizations.

Principle 2: Customer focused:?This principle deals with the following questions: Why would your customer care about the change? Will the improvement initiative solve or improve an identified customer issue? Who are these customers?

Let?s answer the last question first: a customer is any individual, organization, or institution that has a vested interest in or can influence the organization?s performance in some way.

To analyze the gap between our current processes and what the customer?s needs are in the future, we should consider two key factors. First, we should have a strong grasp of our customer?s needs. Second, we should understand the state of our current relationships and a have view of what we want these relationships to be in the future. Gaps between these two states will drive our needs for change. The future state view will provide a set of evaluation criteria for change from the current reality, which then will be translated into balanced scorecard KPIs.

Principle 3: Traceable to the customer requirements and key business criteria:?This principle speaks to the ability to trace change to a customer requirement; if you cannot trace an improvement to a specific customer requirement, then the viability of the improvement initiative needs to be questioned.

The challenge is to build a traceable and actionable link to customer requirements and balance that with institutional and operational objectives. Conflicting business and political drivers can devastate a sound decision-making process. When those drivers are also misaligned with the organization?s mission and culture, we cannot expect successful results. Change initiatives that waste millions and even billions of dollars can be found in almost all organizations and institutions of any size and complexity. Typically, the root cause is poor decision making, or poor interpretation of the organization?s needs and customer expectations.

Principle 4: Segmented along business process lines to synchronize change:?This principle deals with the importance of cross-functional integration and collaboration to ensure a sustainable change initiative. As more and more governmental agencies and commercial institutions move toward Web-enabled services, integration of products and services across an enterprise becomes more and more critical. Management structures with overly rigid organizational structures and boundaries that are too slow to respond will eventually become obsolete and nonresponsive to customer demands. Customer demand for Web-enabled services and seamless institutional response forces closer collaboration and integration between various organizational disciplines from front-end customer support functions to organizational enablers such as information technology and human resources departments. By segmenting the transformational initiatives along business process lines, we have a clear framework for organizing and prioritizing change and for measuring the impact of our efforts in terms that the business executives can understand.

Principle 5: Integrated with organizational change management:?Change management initiatives are often used simply as ways of creating a document or developing the communication strategy for implementing a technology system. Clearly, this is a very limited view of change management. Instead, we must see change management as a vehicle for a more encompassing transformation. We must recognize that during initiatives such as implementing an ERP system we are not just impacting technology, data, or processes, we are also striving to identify champions and transform people into enthusiastic supporters and participants who will enable transformation initiatives. This is one reason we should encourage the analysis of existing organizational processes and capabilities. In addition to traditional change management tools, such as communication strategies, we must support changes with appropriate assignment of roles and responsibilities, organizational structures, empowerment, and most importantly, accountability.

During transition, the staff must feel that an appropriate level of trustworthy communication is happening. The main take-away is that staff affected by change should feel a sense of contribution as a result of their participation and should be positioned as the beneficiaries of the new process.

Principle 6: Conducted with a well-managed and time-boxed approach:?This concept is not new and traditionally refers to program management. The program management discipline might appear on the surface to be simply managing program time and resources. If it is not aligned with the organization?s culture and not integrated with change management components and not accepted by all levels of the organization, it will be a struggle to meet all program objectives and agreed upon stakeholder expectations. Managing complex transformational programs such as ERP implementation might be the toughest thing ever done. By sticking to a proven project management approach and methodology, program risk will be reduced and program goals and stakeholder expectations will be better managed.

Principle 7: Understood as a continuous process:?A major distinguishing feature between continuous improvement process (CPI) and the wave of business process reengineering (BPR) efforts that proliferated in the early and mid-1990s is the approach to continuity of effort. BPR emphasized radical change of business processes and everything that touched them in the ?big bang? approach. But it did little to uphold the notion of supporting the ongoing management of the implemented change or ongoing implementation of change. It assumed the solution would have stability in an unstable market with changing priorities. Perhaps for these reasons, as well as issues with people?s natural tendency to resist change, most BPR programs failed to deliver their expected results.

We must recognize that in any given time, our stakeholders will have a set of requirements that are in flux and can be influenced by regulatory and market demands. If we accept the fact that change is an embedded part of business transformation, we should also recognize that building iterative processes in the overall business transformation is critical to the success of a CPI initiative.

The U.S. Army also defines seven phases of continuous process improvement.?Table 4.1?lists the eight CPI phases and discusses their benefits and effect on the transformation program. Details for each phase and its associated tools and templates are provided under the CPI framework.

From a business perspective, performance management provides a mechanism to set targets (KPIs) for the different departments and function areas. An effective performance measurement system starts from the mission and vision of the organization and designs the KPIs for each unit or process from this overall corporate goal. In order to dynamically respond to a change, the goal and the KPI representing the performance toward the goal achievement have to be changed or modified. To continuously revise the business process and the low operational goals so that they are aligned with the new corporate goal is a serious undertaking for the senior-and mid-level management.

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Table 4.1:?CPI Phases and Their Benefits to a Successful Transformation Program?

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CPI Phases	Benefits	Effect on the Transformation Program
Define business drivers	Identifies business drivers and reason(s) for change early in the program	Identifies program champions and develops the foundation for organizational buy-in
Architect and align strategies	Aligns transformation program goals with the organization?s business strategy	Ensures early alignment of the CPI initiative with the existing organizational strategy and capabilities
Develop vision	Identifies the key business drivers, organizational goals, and performance measures	Reduces the risk of initiating transformation programs without clearly defined performance measures
Current state understanding	Provides a clear map of the existing processes and identifies potential areas for improvement	Identifies root causes and reasons behind process bottlenecks early and the key features of future state processes
Future state design	Defines the renewed processes and identifies required organizational assets needed to enable continuous improvement	Confirms the business case and develops the foundation for developing the implementation road map
Roadmap development	Defines in detail the future state implementation road map, such as critical milestones and early wins	Reduces program management risks and identifies required steps to accomplish key milestones
Execution	Delivers the early and ongoing benefits of the transformation program	Delivers business objectives and secures organizational buy-in

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