ENHANCING BUSINESS OUTCOMES THROUGH THE TARGETED IMPLEMENTATION OF PROCESS ENGINEERING IMPROVEMENT METHODOLOGIES IN HIGH VALUE AREAS OF THE VALUE

Transcription

1 ENHANCING BUSINESS OUTCOMES THROUGH THE TARGETED IMPLEMENTATION OF PROCESS ENGINEERING IMPROVEMENT METHODOLOGIES IN HIGH VALUE AREAS OF THE VALUE CHAIN

2 THREE STEPS TO STRATEGY EXECUTION SUCCESS

3 Who are we Matthew McCrea Chris Drungell Founder, Avanza CS 15+ years global experience leading organizations through change addressing issues of business strategy, transformation, and operations management. Principal, Avanza CS Former USAF Pilot MBB that has led major projects at USAA, Blue Cross Blue Shield, HCA, and Tenet Hospitals.

4 The promise: THREE steps to strategy execution success ALIGN ASSESS EXECUTE UNDERSTAND WHY IDENTIFY WHAT DECIDE HOW Clear Direction Shared Understanding Collaborative Culture Industry Leadership Organizational Agility Linked to Strategy Focus on Value Shared Ownership Performance Driven Rapid Assessment Strategic Flexibility Accountable Team Engaged Stakeholders Faster Time to Value Enhanced Results

5 There is a lot of ground to cover We ll be moving pretty fast We ll be focused (well, to the extent possible) But, we may not get through it all And we want it to be interactive

6 What is the hardest part about implementing improvements in your company today?

7 Companies are constantly looking to get better GROW IMPROVE INNOVATE Penetrate existing markets or to develop new markets and grow revenues and (hopefully) profits. Improve the effectiveness (output) and efficiency (cost of output) of their business functions. Create incremental or disruptive change within industries that leads to competitive advantage. The problem: Results do not always meet expectations

8 Executional Excellence was the number one challenge facing corporate leaders in Asia, Europe, and the United States two-thirds to three-quarters of large organizations struggle to implement their strategies.

9 Only 26 percent of companies were able to both improve performance and sustain improvements over time. The success rate for these efforts turns out to be less than 60 percent.

10 We believe that there are THREE main failure points: THE WHY GAP THE WHAT GAP THE HOW GAP

11 ALSO what about YOUR goals? Be recognized as a trusted advisor by the business Be able to identify impactful improvement opportunities Generate solution options that deliver value Successful companies need effective leaders

12 Why this is important for you Successful Companies Connect goals and objectives to the vision, mission, and business strategy Have clear strategic measures of success Identify targeted areas for improvement that have the most value and/or the most pain Are selective in the projects that they choose Generate multiple options to solve the organizational challenges identified Outperform peers in measures of performance Unsuccessful Companies Select initiatives based on strong personalities or the latest business or IT trends Have limited understanding of the impact or the focus is on short-term results Spread improvement efforts (and $) equally or based on power and political influence Have a never ending list of things to improve Have solutions looking for problems Tend to underperform peers over time

13 The process targets high impact areas of the business ALIGN ASSESS EXECUTE Clarify goals and objectives and ensure alignment. Identify high business value and diagnose performance gaps. Select solutions and deliver value to customers. UNDERSTAND WHY IDENTIFY WHAT DECIDE HOW...and creates connection between strategy and execution

14 Case Study: Fortune 200 Financial Services Company Scenario A diversified financial services firm wants to ensure it remains a leader in its respective markets and wants to identify targeted opportunities to improve performance and deliver operational excellence across its diverse business units. Scope Challenge There was limited visibility into enterprise opportunities for business improvement. Also, decision-making and coordination of the selection and execution of projects was immature. Approach Avanza developed a standard approach to business improvement initiative prioritization, implemented a best practice framework dubbed Process Excellence in a Box and led and supported the execution of business improvement projects across the company. Results Avanza was able to generate business improvement benefits of five million dollars which represented more than 1200% return on investment, in approximately four months.

15 Where does this apply in your business today? Which one of the three steps do you need most right now?

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17 (Approximately) half the C-suite cannot connect the dots between strategic priorities and the share plummets to 16% for frontline supervisors and team leaders

18 Why would we want to ALIGN? Successful Companies Create connection to the purpose, vision, and strategic intent of the company Provide constancy and clarity of purpose from the top of the organization down Clarify the participation and collaboration of stakeholders involved to ensure success Identify clear strategic success measures Always seem to be leaders in their markets Are agile and implement change effectively Unsuccessful Companies Few managers understand the strategy beyond its simplest goals Purpose or strategy is not defined in terms of specific goals and outcomes Always seems to be behind the competition and/or the market Exhibit a lack of trust between leaders that creates a highly political environment Make implementing change slow and hard

19 Five principles for the ALIGN stage 1. Understand the purpose 2. Determine business value 3. Identify (and collaborate with) stakeholders 4. Express goals in a common language 5. Select clear success measures Which of these principles is most valuable to you, and why?

20 How to complete the ALIGN stage 1. Collect and review purpose, vision, and mission 2. Identify primary business strategy 3. Develop proposed goals/objectives 4. Review/refine goals with stakeholders 5. Select success measures

21 ALIGN Example 1: Business Strategy and Guiding Principles We compete on price. Value Proposition We have and will continue to develop our service capabilities to meet market levels. Our Blue brand and its inherent capabilities are sufficient differentiation. Our size provides stability and strength for our communities. Business Focus We need to maximize our operational efficiency and clinical best practices. We will maintain competitive advantage in health care costs in WNY and become a leading competitor in NENY. Our core business is Blue, fully insured and Administrative Services Only (ASO).

22 ALIGN Example 1: Common language and definitions Network Value The ability to provide a network that balances a variety of network configurations and cost of care and demonstrates value to purchasers of health care coverage. Customer Service The ability to provide transactional customer service resulting in customer preference and loyalty for the organization. provides clarity across leadership and project teams

23 ALIGN Example 1: Where should our projects focus? Opportunity: Network Value and Price in Western New York the biggest opportunity relates to the potential to improve and increase network value through enhanced network configurations, and appropriate management of the cost of care. This should lead to the ability to offer lower prices. Threat: Customer Service if the market moves to an individual consumer purchaser model sooner than expected, competitor s emphasis in this area may lead to them gaining a market share in the short term. This can be mitigated by ensuring that HealthNow continues to invest to remain at par with the majority of its competitors in customer service. Improvement efforts should be aligned to identified opportunities, business strategy and guiding principles

24 ALIGN Example 2: Stakeholder alignment HR Insights Survey HR has a clear set of priorities HR aligns to business strategy HR understand my business HR processes are effective and efficient HR has the necessary tools & technology HR Responses Business Responses is critical to project success.

25 ALIGN Example 3: Clear organizational success measures SUCCESS MEASURES Member satisfaction score Member effort score Ideation to production cycle time Inventories: experiences, touch points, etc. Customer adoption of design approach make alignment of improvement efforts easier

26 Where is alignment a challenge in your company?

27 How is this different from how you ve been doing it?

28 Hopefully, you have learned how to ALIGN

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30 Targeted performance improvement drives operational efficiency and profit growth by identifying the critical few problems (needed to achieve) your desired results.

31 Why would we want to ASSESS? Successful Companies Understand WHAT they do to execute their strategy and deliver value to customers Have clear business focus on what differentiates them from their competitors Look for opportunities to create leverage Collaborate cross functionally in completion of performance assessments Incorporate quantitative and qualitative data in identifying key causes of performance gaps Unsuccessful Companies Focus on HOW they execute and miss opportunities to reconfigure or add more value Try to be world class at everything and do not differentiate high value activities Create a culture of protectionism where it s every person for themselves Are focused on the assessments of individual managers/leaders

32 Five principles for the ASSESS stage 1. When building model, focus on WHAT and not HOW 2. Differentiate based on business value 3. Encourage broad participation in rating/assessment 4. Keep it simple precision is the enemy of progress 5. Follow through on results trust the process What impact could this make for you?

33 How to complete the ASSESS stage 1. Build/refine model 2. Assign business value 3. Assess performance (and identify performance gaps) 4. Prioritize and rank performance gaps 5. Identify root cause

34 ASSESS Example 1: Business Value Human Resources

35 ASSESS Example 2: Performance Human Resources

36 ASSESS Example 3: Heat Map Sales Function

37 Which part of this stage appealed most to you?

38 Hopefully, you have learned how to ASSESS

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40 The ability of an organization to achieve its goals and objectives in the most effective manner is what separates successful companies from the rest.

41 Five principles for the EXECUTE stage 1. Generate multiple options for each performance gap 2. Have a way to assess/prioritize options 3. Check for connection back to vision/strategy 4. Choose the right tool for the job (be LEAN ) 5. Be agile, communicate often How could this give you a competitive advantage over others?

42 How to complete the EXECUTE stage 1. Generate solution options 2. Score and rank solution options 3. Develop recommendation 4. Select (approve) recommendation 5. Implement project (you know actually EXECUTE)

43 Case Study: Blue Health Plan Scenario A Blue Cross Blue Shield branded health plan is trying to determine a path to grow and improve its business following the implementation of the Patient Protection and Affordable Care Act (ACA) in 2012 and the expected changes to the industry. Scope Challenge In terms of growth, the client was restricted geographically due to Blue Cross Blue Shield Association rules. In addition, the ACA prohibited certain profitable underwriting approaches. Approach Avanza developed a growth strategy based on leveraging the company s TPA platform to grow nationally, and then focused operational improvement on cost reduction/avoidance. Avanza oversaw the selection of vendors and technology solutions and was responsible for specific aspects of the execution roadmap. Results The client was able to reorganize organizational functions to increase efficiency and an analysis of current projects delivered $250MM in cost avoidance from scheduled projects.

44 Where can you see yourself using this first to great effect?

45 Hopefully, you have learned how to EXECUTE

46 SUMMARY

47 Key Points - ALIGN 1. Have a clear direction 2. Define what constitutes value 3. Express goals in a common language 4. Collaborate stakeholders 5. Select clear success measures

48 Key Points - ASSESS 1. Identify the (relative) value of business activities 2. Use metrics where available, and listen to people 3. Get multiple perspectives 4. Look for common issues 5. Follow the process and trust the results!

49 Key Points - EXECUTE 1. There s always more than one solution 2. Prioritize solutions to deliver maximum benefit 3. Ensure connection to the vision/purpose 4. Chunk work for rapid delivery (where possible) 5. Monitor results and pivot as needed

50 Any questions?