Business Modeling

30 06 2009

We spend a tremendous amount of resources on preparing financial models for the company.  Which is absolutely necessary, but we also need to model the operations as well.  For example, if we model the customer lifecycle we can begin to better understand each of the subprocesses within.

This leads to many different insights into the business:

  • Critical transition points within the process – target higher impact performance areas
  • Segment the customer by value – thus better alignment of product and services
  • Better communication of value to stakeholders
  • Enhanced sales negotiation

If we can build the formula around each of the key business processes, then we are providing more tools for the organization to use to focus resources and priorities.





Because you can…doesn’t mean you should

14 04 2009

We do a number of things in the name of business intelligence.  We say we have to have real time information.  We have to have hundreds of reports.  We have to be able to look at everything in every direction.

Business Intelligence software promises us this and make this seem like an achievable goal.  And yes it would be great to know everything about everything and get a perfect 360 degree view of the organization.

Yet it is not really achievable, actually not even close.  Instead ask what are the goals & objectives of the organization, and how does this support that end.  We are very quick to say “we can do that” but we need to temper that with “why should we do that?”  Think of the goal of a dashboard – to providereal-time information on a specific subject.  I have known many managers that constantly stare at the screen to see if anything moved.  

What we really need is to understand how to use the function of time and integrate that into a analytical management process.  What would you get more out of, a tactical dial that shows us one KPI, or a meeting at the end of the day to review a number of KPIs?





The Continuous Improvement Meeting – CIM

2 04 2009

Including on this blog, much has been written about meeting management: how to run a more effective meeting, improving meeting outcomes, etc. All concepts in which I am in complete support. I’ve found, however, that it is very difficult to implement wholesale change into an organization’s meeting culture. And there are several characteristic profiles of meeting culture within organizations.

Meetings typically occur for the purpose of communicating information, yet most meetings I’ve witnessed over my career consistently end with no action or accountability to do something. So, what I’m going to suggest here is not a change in your existing meeting culture. Continue to hold the meetings that your organization routinely conducts, for whatever the purpose. But, if your organization is serious about driving operational performance improvement, you need to add a meeting to your schedule. Yes, that’s right. I’m advocating yet another meeting. This meeting is specific in purpose. It never deviates its agenda. And it is a critical management tool for driving performance improvement.

The continuous improvement meeting or “CIM” has five objectives.

1. Review progress against KPIs
2. Identify barriers to performance
3. Share best practices
4. Develop action plans for next period
5. Recognize superior performance

The CIM is 45 minutes in length, maximum. It is conducted at every level of the organization. This is critical to insure all levels of the operation are aligning their efforts with the strategy. Typically, the meeting should occur weekly at the front line to monthly and/or quarterly at the executive level.

The keys to successful implementation of the CIM are:

  •  It is a separate, distinct meeting. Not part of another meeting agenda.
  •  45 minutes maximum
  •  It is held at the same time & day every period
  •  It must be group meeting

One of the biggest gaps in operational performance management is the area of management effectiveness. We tend to focus on effectiveness and efficience of front line contributors. But how exactly does management improve its effectiveness at managing? Try implementing the Continuous Improvement Meeting into your management process and see how much more focus you create around the metrics that are important to your organization’s strategy.





External & Market Indicators

25 02 2009

One item most organizations struggle with is leveraging external indicators. Early last year, the price of gas created a chain reaction. Most companies cost of goods sold increased to where they were forced to raise their prices as their margins eroded.  

Even if we do that, we typically do not have a systematic way to incorporate the learning into a business process. What we would need is the ability to understand the external indicators, know of potential sources for the information, and work these into ongoing environmental scans.  

What is the value of understanding how the consumer price index impacts your revenues? What happens if you were able to move before your customer in terms of supply chain interruption? In some cases, this could mean millions to your top or bottom line. There are a number of organizations that knew the market was struggling in 2008, but did nothing to prepare.  And a number of those names will never be the same (GM, AIG, Circuit City, etc).

When is the last time you did a formal environmental scan, discussed the results, and put new actions into place?