Improving Performance ebook

Table of Contents

COVER

TITLE

COPYRIGHT

LIST OF FIGURES AND TABLES

Figures

Tables

FOREWORD

PREFACE

Purpose of the Book

Overview of the Chapters

How Is This Third Edition Different?

THE AUTHORS

PART ONE: A FRAMEWORK FOR IMPROVING PERFORMANCE

CHAPTER ONE: VIEWING ORGANIZATIONS AS SYSTEMS

The Traditional (Vertical) View of an Organization

The Systems (Horizontal) View of an Organization

The Organization as an Adaptive System

The Reality of Adaptation

CHAPTER TWO: THREE LEVELS OF PERFORMANCE: ORGANIZATION, PROCESS, AND JOB/PERFORMER

I: The Organization Level

II: The Process Level

III: The Job/Performer Level

The Nine Performance Variables

Organization Level

Process Level

Job/Performer Level

A Holistic View of Performance

Using the Three Levels Framework

PART TWO: EXPLORING THE THREE LEVELS OF PERFORMANCE

CHAPTER THREE: THE ORGANIZATION LEVEL OF PERFORMANCE

Exploring the Organization Level

Understanding and Managing the Organization Level

The Performance Variables at the Organization Level

Summary

CHAPTER FOUR: THE PROCESS LEVEL OF PERFORMANCE

What Is a Process?

Understanding and Managing the Organization Level

Why Look at Processes?

The Performance Variables at the Process Level

Summary

CHAPTER FIVE: THE JOB/PERFORMER LEVEL OF PERFORMANCE

What Is the Job/Performer Level?

Taking Action at the Job/Performer Level

The Performance Variables at the Job/Performer Level

Summary

PART THREE: APPLYING THE THREE LEVELS OF PERFORMANCE

CHAPTER SIX: LINKING PERFORMANCE TO STRATEGY

What Is Strategy?

Why Do Strategies Fail?

The Three Levels of Strategy Implementation

Linking Performance to Strategy: An Example

Summary

CHAPTER SEVEN: MOVING FROM ANNUAL PROGRAMS TO SUSTAINED PERFORMANCE IMPROVEMENT

Four Examples of Flawed Performance Improvement Efforts

Organizationwide Performance Improvement

Two Case Studies

Summary

CHAPTER EIGHT: DIAGNOSING AND IMPROVING PERFORMANCE: A CASE STUDY

The Three Levels Approach to Performance Diagnosis and Improvement

A Situation Requiring Diagnosis

Project Definition and Plan

Organization Improvement

Process Improvement

Job Improvement

Implementation

Summary

CHAPTER NINE: PROJECT DEFINITION: THE TEN ESSENTIAL STEPS

Phase 1: Project Definition

CHAPTER TEN: PROCESS ANALYSIS AND DESIGN: THE TEN ESSENTIAL STEPS

Phase 2: Process Analysis and Design

CHAPTER ELEVEN: OVERCOMING THE SEVEN DEADLY SINS OF PROCESS IMPROVEMENT

CHAPTER TWELVE: MEASURING PERFORMANCE AND DESIGNING A PERFORMANCE MANAGEMENT SYSTEM

Why Measure?

Requirements for Effective Management of the Organization System

Building a Measurement System

Performance Logic

Summary

CHAPTER THIRTEEN: MANAGING PROCESSES AND ORGANIZATIONS AS SYSTEMS

Process Management

Institutionalizing Process Management

Managing the Vertical and Horizontal Organizations

The Role of Top Management

Process Improvement and Management and the Three Levels of Performance

Managing an Organization as a System

Evaluating the System

The Systems Management Processes

The Systems Management Culture

Summary

CHAPTER FOURTEEN: DESIGNING AN ORGANIZATION STRUCTURE THAT WORKS

Designing an Organization Structure

Designing an Organization Structure That Works

Summary

CHAPTER FIFTEEN: CREATING A PERFORMANCE-BASED HUMAN RESOURCE DEVELOPMENT FUNCTION

Two Views of Performance Improvement

Determining Training and Development Needs

Designing Training

Evaluating Training

Designing and Managing the HRD Function

Summary

CHAPTER SIXTEEN: DEVELOPING AN ACTION PLAN FOR PERFORMANCE IMPROVEMENT

Step 1: Organization Level

Step 2: Process Level

Step 3: Job/Performer Level

Summary

INDEX

INSTRUCTOR’S GUIDE

End User License Agreement

List of Illustrations

CHAPTER ONE: VIEWING ORGANIZATIONS AS SYSTEMS

FIGURE 1.1. TRADITIONAL (VERTICAL) VIEW OF AN ORGANIZATION

FIGURE 1.2. THE “SILO” PHENOMENON

FIGURE 1.3. SYSTEMS (HORIZONTAL) VIEW OF AN ORGANIZATION

FIGURE 1.4. AN ORGANIZATION AS AN ADAPTIVE SYSTEM

FIGURE 1.5. THE SUPER-SYSTEM OF COMPUTEC, INC.

CHAPTER TWO: THREE LEVELS OF PERFORMANCE: ORGANIZATION, PROCESS, AND JOB/PERFORMER

FIGURE 2.1. THE ORGANIZATION LEVEL OF PERFORMANCE

FIGURE 2.2. THE PROCESS LEVEL OF PERFORMANCE

FIGURE 2.3. THE JOB/PERFORMER LEVEL OF PERFORMANCE

CHAPTER THREE: THE ORGANIZATION LEVEL OF PERFORMANCE

FIGURE 3.1. LAYERS OF ORGANIZATION SYSTEMS IN AN AUTOMOBILE COMPANY

FIGURE 3.2. COMPUTEC, INC., ORGANIZATION CHART

FIGURE 3.3. RELATIONSHIP MAP FOR COMPUTEC, INC.

CHAPTER FOUR: THE PROCESS LEVEL OF PERFORMANCE

FIGURE 4.1. COMPUTEC ORDER FILLING: AN “IS” PROCESS MAP

FIGURE 4.2. COMPUTEC ORDER FILLING: A “SHOULD” PROCESS MAP

FIGURE 4.3. SELECTED PROCESS SUBGOALS FOR COMPUTEC’S ORDER-FILLING PROCESS

CHAPTER FIVE: THE JOB/PERFORMER LEVEL OF PERFORMANCE

FIGURE 5.1. THE HUMAN PERFORMANCE SYSTEM

FIGURE 5.2. HIERARCHY OF PERFORMANCE GOAL SETTING

FIGURE 5.3. FACTORS AFFECTING THE HUMAN PERFORMANCE SYSTEM

CHAPTER SIX: LINKING PERFORMANCE TO STRATEGY

FIGURE 6.1. THE IMPACT OF STRATEGY ON THE COMPONENTS OF AN ORGANIZATION SYSTEM

CHAPTER SEVEN: MOVING FROM ANNUAL PROGRAMS TO SUSTAINED PERFORMANCE IMPROVEMENT

FIGURE 7.1. TOP MANAGEMENT’S ROLE IN A PERFORMANCE IMPROVEMENT EFFORT

CHAPTER EIGHT: DIAGNOSING AND IMPROVING PERFORMANCE: A CASE STUDY

FIGURE 8.1. THE THREE LEVELS PERFORMANCE IMPROVEMENT PROCESS

FIGURE 8.2. PCI RELATIONSHIP MAP

FIGURE 8.3. PCI CLAIM-HANDLING PROCESS

CHAPTER NINE: PROJECT DEFINITION: THE TEN ESSENTIAL STEPS

FIGURE 9.1. PHASE 1 STEPS

FIGURE 9.2. DETERMINANTS OF FULL, PARTIAL, OR NO FACILITATION

FIGURE 9.3. SAMPLE PROCESS

FIGURE 9.4. COMPONENTS OF A STANDARD PRM

FIGURE 9.5. SAMPLE CHART

FIGURE 9.6. SAMPLE CHART WITH PROCESS BOX

FIGURE 9.7. SAMPLE CHART WITH “UPSTREAM” AND “DOWNSTREAM” PROCESSES

FIGURE 9.8. SAMPLE CHART WITH INPUT AND OUTPUT ARROWS

FIGURE 9.9. PRM EXAMPLE 1

FIGURE 9.10. PRM EXAMPLE 2

FIGURE 9.11. SAMPLE GENERAL FRM TEMPLATE

FIGURE 9.12. SAMPLE SPECIFIC FRM TEMPLATE

FIGURE 9.13. FRM EXAMPLE 1

FIGURE 9.14. FRM EXAMPLE 2 (GENERAL FRM)

FIGURE 9.15. FRM EXAMPLE 3 (SPECIFIC FRM)

CHAPTER TEN: PROCESS ANALYSIS AND DESIGN: THE TEN ESSENTIAL STEPS

FIGURE 10.1. THE TEN CORE STEPS OF PHASE 2

FIGURE 10.2. CROSS-FUNCTIONAL PROCESS MAP TEMPLATE

FIGURE 10.3. CROSS-FUNCTIONAL PROCESS MAP LABELED

FIGURE 10.4. CROSS-FUNCTIONAL PROCESS MAP WITH SUBPROCESSES

FIGURE 10.5. CROSS-FUNCTIONAL PROCESS MAP: STEPS

FIGURE 10.6. CROSS-FUNCTIONAL PROCESS MAP: OUTPUT

FIGURE 10.7. CROSS-FUNCTIONAL PROCESS MAP: OUTPUT, CONT.

FIGURE 10.8. MAPPING CONVENTIONS

FIGURE 10.9. EXAMPLE: “SHOULD” DESIGN SPECIFICATIONS

FIGURE 10.10. REMOTE JOB ENTRY

FIGURE 10.11. CENTRALIZED FRONT END

FIGURE 10.12. VENDOR OPTION

FIGURE 10.13. SAMPLE MACRO PROCESS BLOCKS

FIGURE 10.14. MACRO PROCESS BLOCKS WITH OUTPUTS, OUTPUT REQUIREMENTS, AND ASSUMPTIONS

FIGURE 10.15. LINEAR PROCESS MAP WITH OUTPUTS, REQUIREMENTS, AND ASSUMPTIONS

FIGURE 10.16. HIGH-LEVEL VIEW, CROSS-FUNCTIONAL PROCESS MAP OF MAJOR PROCESS STEPS

FIGURE 10.17. EXAMPLE: MEASURES CHAIN

FIGURE 10.18. SAMPLE STEPS FOR COMPLETING THE CROSS-FUNCTIONAL ROLE/RESPONSIBILITY MATRIX

FIGURE 10.19. A MODEL FOR TROUBLESHOOTING OR DESIGNING AN EFFECTIVE HUMAN PERFORMANCE SYSTEM

FIGURE 10.20. EXAMPLE: READINESS AND DISRUPTION MATRIX

FIGURE 10.21. EXAMPLE: READINESS AND DISRUPTION MATRIX HIGHLIGHTING CLUSTERS

FIGURE 10.22. EXAMPLE: COMPLETED IMPLEMENTATION STRATEGY MATRIX

CHAPTER TWELVE: MEASURING PERFORMANCE AND DESIGNING A PERFORMANCE MANAGEMENT SYSTEM

FIGURE 12.1. MEASURING THE THREE LEVELS OF PERFORMANCE WITHIN THE ORGANIZATION SYSTEM

FIGURE 12.2. COMPUTEC PRODUCT DEVELOPMENT AND INTRODUCTION: “SHOULD” PROCESS MAP AND SAMPLE GOALS

FIGURE 12.3. OUTPUT MEASURES

FIGURE 12.4. COMPUTEC PRODUCT DEVELOPMENT AND INTRODUCTION: “SHOULD” PROCESS MAP AND SAMPLE FUNCTIONAL GOALS

FIGURE 12.5. A THREE LEVELS PERFORMANCE MEASUREMENT/MANAGEMENT SYSTEM

FIGURE 12.6. PERFORMANCE MANAGEMENT SYSTEM

FIGURE 12.7. COMPONENTS OF AN ORGANIZATION PERFORMANCE MANAGEMENT SYSTEM

CHAPTER THIRTEEN: MANAGING PROCESSES AND ORGANIZATIONS AS SYSTEMS

FIGURE 13.1. THE RUMMLER-BRACHE PROCESS IMPROVEMENT AND MANAGEMENT METHODOLOGY

FIGURE 13.2. MANAGING THE ORGANIZATION AS A SYSTEM

CHAPTER FOURTEEN: DESIGNING AN ORGANIZATION STRUCTURE THAT WORKS

FIGURE 14.1. ACE COPIERS, INC., ORIGINAL ORGANIZATION CHART

FIGURE 14.2. ACE COPIERS, INC., “IS” RELATIONSHIP MAP AND DISCONNECTS

FIGURE 14.3. ACE COPIERS PRODUCT DEVELOPMENT: PARTIAL “SHOULD” PROCESS MAP

FIGURE 14.4. NEW ACE COPIERS ORGANIZATION CHART

FIGURE 14.5. ACE COPIERS “SHOULD” RELATIONSHIP MAP

CHAPTER FIFTEEN: CREATING A PERFORMANCE-BASED HUMAN RESOURCE DEVELOPMENT FUNCTION

FIGURE 15.1. THE “VACUUM” VIEW OF PERFORMANCE

FIGURE 15.2. TWO APPROACHES TO TRAINING-NEEDS ANALYSIS

FIGURE 15.3. FOUR TYPES OF EVALUATION

FIGURE 15.4. MODEL OF A PERFORMANCE-FOCUSED TRAINING FUNCTION

List of Tables

CHAPTER TWO: THREE LEVELS OF PERFORMANCE: ORGANIZATION, PROCESS, AND JOB/PERFORMER

TABLE 2.1. THE NINE PERFORMANCE VARIABLES

TABLE 2.2. THE NINE PERFORMANCE VARIABLES WITH QUESTIONS

CHAPTER FOUR: THE PROCESS LEVEL OF PERFORMANCE

TABLE 4.1. EXAMPLES OF BUSINESS PROCESSES

TABLE 4.2. SELECTED FUNCTIONAL GOALS BASED ON COMPUTEC ORDER-FILLING PROCESS GOALS

CHAPTER FIVE: THE JOB/PERFORMER LEVEL OF PERFORMANCE

TABLE 5.1. ROLE/RESPONSIBILITY MATRIX FOR FINANCE FUNCTION AND CUSTOMER ORDER PROCESS

CHAPTER SIX: LINKING PERFORMANCE TO STRATEGY

TABLE 6.1. STRATEGY’S POSITION IN THE NINE PERFORMANCE VARIABLES

CHAPTER EIGHT: DIAGNOSING AND IMPROVING PERFORMANCE: A CASE STUDY

TABLE 8.1. PCI ORGANIZATION ANALYSIS AND IMPROVEMENT WORKSHEET

TABLE 8.2. PCI PROCESS ANALYSIS AND IMPROVEMENT WORKSHEET

TABLE 8.3. PCI CLAIMS SUPERVISOR JOB MODEL

TABLE 8.4. PCI JOB ANALYSIS WORKSHEET

TABLE 8.5. PCI PERFORMANCE SYSTEM DESIGN WORKSHEET

CHAPTER NINE: PROJECT DEFINITION: THE TEN ESSENTIAL STEPS

TABLE 9.1. SIGNIFICANCE OF RELATED PROCESSES

TABLE 9.2. PROJECT GOALS EXAMPLE 1

TABLE 9.3. PROJECT GOALS EXAMPLE 2

TABLE 9.4. EXAMPLE OF A PARTIAL PROCESS INVENTORY

TABLE 9.5. EXAMPLE: PROJECT PLAN

CHAPTER TEN: PROCESS ANALYSIS AND DESIGN: THE TEN ESSENTIAL STEPS

TABLE 10.1. EXAMPLE: ORDER FULFILLMENT PROCESS DISCONNECT LIST

TABLE 10.2. OUTPUT SPECIFICATIONS

TABLE 10.3. INPUT SPECIFICATIONS

TABLE 10.4. PROCESS SPECIFICATIONS

TABLE 10.5. “COULD BE” PRIORITIZATION WORKSHEET

TABLE 10.6. EXAMPLE: “COULD BE” PRIORITIZATION WORKSHEET

TABLE 10.7. EXAMPLE: CROSS-FUNCTIONAL ROLE/RESPONSIBILITY MATRIX

TABLE 10.8. EXAMPLE: HUMAN PERFORMANCE SYSTEM CHECKLIST

TABLE 10.9. RECOMMENDATION ANALYSIS WORKSHEET

TABLE 10.10. EXPECTED RESULTS

TABLE 10.11. EXPECTED COSTS

TABLE 10.12. RISKS

TABLE 10.13. IMPLEMENTATION STRATEGY ANALYSIS WORKSHEET

TABLE 10.14. IMPLEMENTATION STRATEGY MATRIX

CHAPTER TWELVE: MEASURING PERFORMANCE AND DESIGNING A PERFORMANCE MANAGEMENT SYSTEM

TABLE 12.1. EXAMPLES OF “SOUND MEASURES”

TABLE 12.2. COMPUTEC PRODUCT DEVELOPMENT AND INTRODUCTION: PERFORMANCE TRACKER

TABLE 12.3. ROLE/RESPONSIBILITY MATRIX FOR THE COMPUTEC PRODUCT DEVELOPMENT AND INTRODUCTION PROCESS

TABLE 12.5. ROLE/RESPONSIBILITY MATRIX FOR THE COMPUTEC MARKETING FUNCTION: NEW PRODUCT DEVELOPMENT AND INTRODUCTION

TABLE 12.6. PORTION OF A JOB MODEL FOR THE COMPUTEC MARKET RESEARCH ANALYST

CHAPTER THIRTEEN: MANAGING PROCESSES AND ORGANIZATIONS AS SYSTEMS

TABLE 13.1. COMPARISON OF THE TRADITIONAL (VERTICAL) AND SYSTEMS (HORIZONTAL) CULTURES

TABLE 13.2. SYSTEMS MANAGEMENT QUESTIONS

CHAPTER FOURTEEN: DESIGNING AN ORGANIZATION STRUCTURE THAT WORKS

TABLE 14.1. ACE COPIERS PRODUCT DEVELOPMENT ROLE/RESPONSIBILITY MATRIX

CHAPTER FIFTEEN: CREATING A PERFORMANCE-BASED HUMAN RESOURCE DEVELOPMENT FUNCTION

TABLE 15.1. TRAINING’S ROLE IN THE NINE PERFORMANCE VARIABLES

Guide

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Table of Contents

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IMPROVING PERFORMANCE

How to Manage the White Space on the Organization Chart

THIRD EDITION

Copyright © 2013 by John Wiley & Sons, Inc. All rights reserved.

Jacket design by Jeff Puda.

Published by Jossey-Bass

A Wiley Imprint

One Montgomery Street, Suite 1200, San Francisco, CA 94104-4594—www.josseybass.com

No part of this publication may be reproduced, stored in a retrieval system, or transmitted in any form or by any means, electronic, mechanical, photocopying, recording, scanning, or otherwise, except as permitted under Section 107 or 108 of the 1976 United States Copyright Act, without either the prior written permission of the publisher, or authorization through payment of the appropriate per-copy fee to the Copyright Clearance Center, Inc., 222 Rosewood Drive, Danvers, MA 01923, 978-750-8400, fax 978-646-8600, or on the Web at www.copyright.com. Requests to the publisher for permission should be addressed to the Permissions Department, John Wiley & Sons, Inc., 111 River Street, Hoboken, NJ 07030, 201-748-6011, fax 201-748-6008, or online at www.wiley.com/go/permissions.

Limit of Liability/Disclaimer of Warranty: While the publisher and author have used their best efforts in preparing this book, they make no representations or warranties with respect to the accuracy or completeness of the contents of this book and specifically disclaim any implied warranties of merchantability or fitness for a particular purpose. No warranty may be created or extended by sales representatives or written sales materials. The advice and strategies contained herein may not be suitable for your situation. You should consult with a professional where appropriate. Neither the publisher nor author shall be liable for any loss of profit or any other commercial damages, including but not limited to special, incidental, consequential, or other damages. Readers should be aware that Internet Web sites offered as citations and/or sources for further information may have changed or disappeared between the time this was written and when it is read.

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Library of Congress Cataloging-in-Publication Data

Rummler, Geary A.

 Improving performance : how to manage the white space on the organization chart / Geary A. Rummler, Alan P. Brache. — Updated ed., 3rd ed.

p. cm.

 Includes index.

 ISBN 978-1-118-14370-4 (cloth); ISBN 978-1-118-22559-2 (ebk.); ISBN 978-1-118-23902-5 (ebk.); ISBN 978-1-118-26367-9 (ebk.)

 1. Industrial productivity. 2. Performance. 3. Organizational effectiveness. I. Brache, Alan P., 1950– II. Title.

 HD56.R86 2013

 658.4'02—dc23

2012030713

LIST OF FIGURES AND TABLES

Figures

1.1. Traditional (Vertical) View of an Organization

1.2. The “Silo” Phenomenon

1.3. Systems (Horizontal) View of an Organization

1.4. An Organization as an Adaptive System

1.5. The Super-System of Computec, Inc.

2.1. The Organization Level of Performance

2.2. The Process Level of Performance

2.3. The Job/Performer Level of Performance

3.1. Layers of Organization Systems in an Automobile Company

3.2. Computec, Inc., Organization Chart

3.3. Relationship Map for Computec, Inc.

4.1. Computec Order Filling: An “IS” Process Map

4.2. Computec Order Filling: A “SHOULD” Process Map

4.3. Selected Process Subgoals for Computec’s Order-Filling Process

5.1. The Human Performance System

5.2. Hierarchy of Performance Goal Setting

5.3. Factors Affecting the Human Performance System

6.1. The Impact of Strategy on the Components of an Organization System

7.1. Top Management’s Role in a Performance Improvement Effort

8.1. The Three Levels Performance Improvement Process

8.2. PCI Relationship Map

8.3. PCI Claim-Handling Process

9.1. Phase 1 Steps

9.2. Determinants of Full, Partial, or No Facilitation

9.3. Sample Process

9.4. Components of a Standard PRM

9.5. Sample Chart

9.6. Sample Chart with Process Box

9.7. Sample Chart with “Upstream” and “Downstream” Processes

9.8. Sample Chart with Input and Output Arrows

9.9. PRM Example 1

9.10. PRM Example 2

9.11. Sample General FRM Template

9.12. Sample Specific FRM Template

9.13. FRM Example 1

9.14. FRM Example 2 (General FRM)

9.15. FRM Example 3 (Specific FRM)

10.1. The Ten Core Steps of Phase 2

10.2. Cross-Functional Process Map Template

10.3. Cross-Functional Process Map Labeled

10.4. Cross-Functional Process Map with Subprocesses

10.5. Cross-Functional Process Map: Steps

10.6. Cross-Functional Process Map: Output

10.7. Cross-Functional Process Map: Output, cont.

10.8. Mapping Conventions

10.9. Example: “SHOULD” Design Specifications

10.10. Remote Job Entry

10.11. Centralized Front End

10.12. Vendor Option

10.13. Sample Macro Process Blocks

10.14. Macro Process Blocks with Outputs, Output Requirements, and Assumptions

10.15. Linear Process Map with Outputs, Requirements, and Assumptions

10.16. High-Level View, Cross-Functional Process Map of Major Process Steps

10.17. Example: Measures Chain

10.18. Sample Steps for Completing the Cross-Functional Role/Responsibility Matrix

10.19. A Model for Troubleshooting or Designing an Effective Human Performance System

10.20. Example: Readiness and Disruption Matrix

10.21. Example: Readiness and Disruption Matrix Highlighting Clusters

10.22. Example: Completed Implementation Strategy Matrix

12.1. Measuring the Three Levels of Performance Within the Organization System

12.2. Computec Product Development and Introduction: “SHOULD” Process Map and Sample Goals

12.3. Output Measures

12.4. Computec Product Development and Introduction: “SHOULD” Process Map and Sample Functional Goals

12.5. A Three Levels Performance Measurement/Management System

12.6. Performance Management System

12.7. Components of an Organization Performance Management System

13.1. The Rummler-Brache Process Improvement and Management Methodology

13.2. Managing the Organization as a System

14.1. Ace Copiers, Inc., Original Organization Chart

14.2. Ace Copiers, Inc., “IS” Relationship Map and Disconnects

14.3. Ace Copiers Product Development: Partial “SHOULD” Process Map

14.4. New Ace Copiers Organization Chart

14.5. Ace Copiers “SHOULD” Relationship Map

15.1. The “Vacuum” View of Performance

15.2. Two Approaches to Training-Needs Analysis

15.3. Four Types of Evaluation

15.4. Model of a Performance-Focused Training Function

Tables

2.1. The Nine Performance Variables

2.2. The Nine Performance Variables with Questions

4.1. Examples of Business Processes

4.2. Selected Functional Goals Based on Computec Order-Filling Process Goals

5.1. Role/Responsibility Matrix for Finance Function and Customer Order Process

6.1. Strategy’s Position in the Nine Performance Variables

8.1. PCI Organization Analysis and Improvement Worksheet

8.2. PCI Process Analysis and Improvement Worksheet

8.3. PCI Claims Supervisor Job Model

8.4. PCI Job Analysis Worksheet

8.5. PCI Performance System Design Worksheet

9.1. Significance of Related Processes

9.2. Project Goals Example 1

9.3. Project Goals Example 2

9.4. Example of a Partial Process Inventory

9.5. Example: Project Plan

10.1. Example: Order Fulfillment Process Disconnect List

10.2. Output Specifications

10.3. Input Specifications

10.4. Process Specifications

10.5. “COULD BE” Prioritization Worksheet

10.6. Example: “COULD BE” Prioritization Worksheet

10.7. Example: Cross-Functional Role/Responsibility Matrix

10.8. Example: Human Performance System Checklist

10.9. Recommendation Analysis Worksheet

10.10. Expected Results

10.11. Expected Costs

10.12. Risks

10.13. Implementation Strategy Analysis Worksheet

10.14. Implementation Strategy Matrix

12.1. Examples of “Sound Measures”

12.2. Computec Product Development and Introduction: Performance Tracker

12.3. Role/Responsibility Matrix for the Computec Product Development and Introduction Process

12.4. Portion of the Computec Marketing Function Model

12.5. Role/Responsibility Matrix for the Computec Marketing Function: New Product Development and Introduction

12.6. Portion of a Job Model for the Computec Market Research Analyst

13.1. Comparison of the Traditional (Vertical) and Systems (Horizontal) Cultures

13.2. Systems Management Questions

14.1. Ace Copiers Product Development Role/Responsibility Matrix

15.1. Training’s Role in the Nine Performance Variables

FOREWORD

Improving Performance: How to Manage the White Space on the Organization Chart was the first book written on the mechanics of process improvement, the nuts and bolts of how you actually do it.

The methodology in the book was so embraced by readers that Rummler and Brache became the godfathers of process improvement. They helped spawn a cottage industry of business process management analysts, software vendors, consultants, authors, and conferences.

Today, there are dizzying numbers of process improvement methodologies and technologies competing with one another. But in the light of day, practically all of them owe their origin to their predecessor, the Rummler-Brache methodology.

The Rummler-Brache approach to process improvement is the gold standard. It’s a systematic, disciplined framework that does more than just isolate process performance. The methodology addresses all three levels of performance: organization, process, and job performer. And it’s all linked to support the strategy and goals of the organization.

Over the years, I’ve been amazed by the cult-like devotion to the methodology that many of its practitioners have demonstrated. Initially, I thought they were all a little too enthusiastic, sort of like Trekkies at a Star Trek convention. However, since I’ve seen Rummler-Brache principles applied, I get it. The passion out there for the methodology is really a passion for what it delivers: hard results.

The authors provide a clear blueprint on how to achieve sustainable, tangible improvements. This third edition of the book reveals the latest enhancements to that blueprint: tools to create project deliverables for an accelerated project.

The book is a classic and worth revisiting, especially in the current competitive climate, when organizations must make the right systemic changes in tighter time frames.

Joe AbergerPresident, PRITCHETT, LP

PREFACE

Managers face an awesome challenge in this competitive and constantly changing environment, and this is not a passing phenomenon. As customer demands, global competition, and regulatory scrutiny have increased, it has become clear that the current instability in our marketplaces is not going away. Change is and will continue to be the only constant.

The call to arms, chronicled in numerous books and articles, is widely understood by American businesspeople. Our concern is not managers’ failure to understand the problem; it is their failure to do anything substantive to address it. We wrote this book because we have a framework and a set of tools that can substantively address the problem. There are plenty of books on management and organization behavior. However, we find that most of them fail to present tools (leaving the reader saying, “I’m a believer, but what do I do tomorrow?”) or they provide tools that deal with only one aspect of a multidimensional need. In our review of management literature, training courses, and consultant services, we have encountered some very valuable theories, hints, and tools. However, we have not come across a single methodology for the improvement of organization performance that is conceptually sound, practical, experience-based, and comprehensive. We immodestly believe that our approach, based on Three Levels of Performance, meets these criteria and, by doing so, provides a blueprint for managing change.

Our second reason for writing this book is our desire to capture our fifty years of combined experience in improving organization performance. We both started in the field of training (before it became human resource development). Like many other people in our position, we were quick to realize that training is only one variable that affects human performance. Early in our careers, we began learning about the environmental and managerial variables that influence performance. We then turned our attention to the impact of organization strategy on performance and developed a technology for documenting, improving, and managing the business processes that bridge the gap between organization strategy and the individual.

With the evolution of Process Management, and more recently, of “managing organizations as systems,” we believe we have a comprehensive approach that addresses the major variables in the system that influence the quality, quantity, and cost of performance. Through the application of Process Management, we have learned that managers (particularly at senior levels) should concentrate as much or more on the flow of products, paper, and information between departments as on the activities within departments. Process Management provides a methodology for managing this white space between the boxes on the organization chart.

Purpose of the Book

The purpose of this book is to explain the underpinnings of our Three Levels framework and to demonstrate the tools through which the framework is applied and by which the white space can be managed. We have written it for performance improvement specialists (who may be professionals in human resource development, industrial engineering, quality, or systems analysis) and for line and staff managers who want to examine a process that can bring about significant performance improvement. We expect that performance improvement specialists will most often constitute the first wave of readers in an organization and that they will recommend all or part of the book to the managers who are their customers. In addition, business and organization behavior professors may find that our approach presents a different perspective.

American management has a tendency to manage by executive summary. A director gets a one-page summary of an issue, a vice president gets a paragraph, and the president gets a three-item list. At a recent conference on improving American manufacturing’s ability to compete in the global market, one conferee criticized a session by saying, “If an idea can’t be summarized in one page, it doesn’t have any merit.” We do not see how U.S. companies will ever beat their global competitors with that view of executive information and analysis.

We are opposed to the “get it to one page” school of management. Managers who are successful over the long haul understand their businesses in detail. As a result, the Three Levels approach has a fair amount of rigor. It is practical, involving a series of straightforward questions and steps. The process has been validated, through application to companies and agencies of all kinds, in all parts of the world. It can even be fun, because teams improve the quality of work life as well as improving productivity and the quality of products and services. But often it is not simple because the challenge is not simple. Any manager or performance improvement specialist who is looking for a quick-fix formula or for the latest program to keep employees stimulated is liable to be disappointed by this book.

Overview of the Chapters

Chapter One contrasts the traditional functional view of the organization (as represented by the organization chart) with the more descriptive and useful systems view. We describe the system components that must be managed to establish an organization that is competitive, adaptive (reactively and proactively), and focused on continuous performance improvement.

The second chapter introduces the Three Levels of Performance and presents the Nine Performance Variables that determine the effectiveness and efficiency of an organization. At each of the Three Levels—the Organization Level, the Process Level, and the Job/Performer Level—this chapter describes the three Performance Needs—Goals, Design, and Management—and shows how they can be used by executives, managers, and analysts.

One of the Three Levels of Performance is explored in each of the next three chapters. Chapter Three provides a set of questions for diagnosing the effectiveness of the Goals, Design, and Management at the Organization Level. It illustrates the use of these questions in a sample company and presents the Relationship Map as a tool for understanding and improving performance at this level.

Chapter Four gives the reader tools for understanding and improving the Goals, Design, and Management of the cross-functional processes through which an organization provides products and services to customers. This chapter continues the examination of the company introduced in Chapter Three and presents the Process Map as a methodology for meeting the needs at this Level of Performance.

Chapter Five uses the sample organization from Chapter Three to explore the role of people in improving organization and process performance. It presents the Human Performance System as a tool for understanding and meeting the Performance Needs (Goals, Design, and Management) of individuals and work teams.

The remaining chapters discuss the application of the systems view of the organization and the Three Levels framework to a variety of performance improvement opportunities faced by most North American corporations today. Chapter Six examines the role of the systems view in ensuring that top management has answered all eleven questions that must be addressed to establish a clear, viable strategy. It goes on to show how the Nine Performance Variables can help in implementing that strategy.

Through four examples, Chapter Seven shows how quality, productivity, cycle time, customer focus, and culture change efforts can fail if they do not address all Three Levels of Performance. It goes on to examine two performance improvement efforts that have benefited from covering all Three Levels.

Chapter Eight provides human resource, industrial engineering, and systems analysts with a comprehensive process for diagnosing organization Performance Needs before prescribing “solutions,” such as training, reorganization, and developing management information systems. A case study illustrates each of the fourteen steps in this performance improvement process.

Chapters Nine and Ten describe the Process Improvement methodology that companies such as AT&T, Caterpillar, GTE, and Motorola have used to improve quality and customer satisfaction and reduce cycle time and costs. Chapter Eleven describes the traps we have seen that lessen the return organizations realize on their investment in process redesign.

Measuring performance and designing a performance management system is the focus of Chapter Twelve. This chapter addresses the “what,” “why,” and “how” of establishing a measurement system that encompasses all Three Levels of Performance. Examples illustrate establishing measures, developing a performance tracking system, and using measures as the basis for planning, feedback, performance improvement, and rewards.

Chapter Thirteen describes how to use measurement as the basis for the continuous management of processes, once they have been redesigned. It then shows how to integrate these Process Management efforts into enterprisewide “managing the organization as a system.” Readers are given a description of how the systems culture differs from the traditional hierarchical culture and a set of questions for diagnosing the effectiveness of the organization system in which they work.

Chapter Fourteen presents a nine-step process for designing an organization structure that supports—rather than inhibits—the efficient delivery of high-quality products and services that meet customer needs. Using Relationship and Process Maps (introduced in Chapters Three and Four), a viable organization structure is developed for a sample company.

Chapter Fifteen draws on our experience working with human resource development professionals and shows how the Three Levels approach can help these professionals make a more substantial contribution to organization performance. It describes how the Three Levels tools can help in needs analysis, training design, and evaluation, and how they can transform the training operation into the organization’s “performance department.”

The final chapter describes a three-step process for getting started on a Three Levels project. It also provides examples of how the Three Levels tools have been unbundled and used to address specific issues and to help develop a customer-focused, participative, low-conflict, accountability-based culture.

How Is This Third Edition Different?

For readers familiar with the previous editions of this book:

Chapters Nine

and

Ten

are new. These fifty-plus pages are packed with useful, proven process improvement project tools.

The remaining chapters have changed only moderately or slightly.

THE AUTHORS

Geary A. Rummler was cofounder of the Rummler-Brache Group (RBG). He received his BA degree, his MBA degree, and his PhD degree from the University of Michigan.

Rummler was a pioneer in the application of instructional and performance technologies to organizations, and he brought this experience to the issue of organization effectiveness. His clients in the private sector included the sales, service, and manufacturing functions of the aircraft, automobile, steel, food, rubber, office equipment, pharmaceutical, telecommunications, chemical, and petroleum industries, as well as the retail banking and airline industries. He also worked with such federal agencies as the Internal Revenue Service, the Social Security Administration, the Office of Housing and Urban Development, the General Accounting Office, and the Department of Transportation. His research and consulting took him to Europe, Japan, Korea, Malaysia, China, and Mexico.

Alan P. Brache is cofounder of the Rummler-Brache Group. His consulting, training, and writing have focused on Process Improvement and Management, which is a methodology for implementing strategy and resolving critical issues through the identification, documentation, analysis, design, measurement, and continuous improvement of business processes. Much of his recent work has involved using Process Improve­ment and Management as a tool for strategy implementation, designing measurement systems, and installing infrastructures for continuous improvement.

Rummler-Brache is a registered trademark. The Rummler-Brache Group is a consulting and training firm specializing in the design and development of organization performance systems for business and governmental organizations. RBG works with large and medium-sized companies in both the manufacturing and service sectors. Its clients include banking, pharmaceutical, telecommunications, insurance, technology, government, health care, utilities, petrochemical, and consumer products companies. Our firm measures the results of a specific project in terms of quality improvement, cost reduction, and/or cycle time reduction. We measure the success of a client relationship not only in terms of project results but also in terms of the degree to which the organization has institutionalized the RBG methodology and has transformed itself into a process-managed company.

We provide a technology, a set of tools, an experience base, and facilitation. Our methodology has been applied to processes that include product development, order fulfillment, hiring, procurement, manufacturing, sales, financial planning, distribution, and accounting.

RBG believes that while an outside consultant can provide tools, experience, best practices, and perspective, the changes and the results should be owned by the client organization. To achieve that objective, RBG works through internal teams and supplements its consulting with training that ultimately enables its clients to be self-sufficient.

The Rummler-Brache Group can be reached at:

800-992-8849

[email protected]

www.RummlerBrache.com

PART ONEA FRAMEWORK FOR IMPROVING PERFORMANCE

CHAPTER ONEVIEWING ORGANIZATIONS AS SYSTEMS

Adapt or die.

—UNKNOWN

The Traditional (Vertical) View of an Organization

Many managers don’t understand their businesses. Given the recent “back to basics” and “stick to the knitting” trend, they may understand their products and services. They may even understand their customers and their competition. However, they often don’t understand at a sufficient level of detail how their businesses get products developed, made, sold, and distributed. We believe that the primary reason for this lack of understanding is that most managers (and nonmanagers) have a fundamentally flawed view of their organizations.

When we ask a manager to draw a picture of his or her business (be it an entire company, a business unit, or a department), we typically get something that looks like the traditional organization chart shown in Figure 1.1. While it may have more tiers of boxes and different labels, the picture inevitably shows the vertical reporting relationships of a series of functions.

FIGURE 1.1.TRADITIONAL (VERTICAL) VIEW OF AN ORGANIZATION

As a picture of a business, what’s missing from Figure 1.1? First of all, it doesn’t show the customers. Second, we can’t see the products and services we provide to the customers. Third, we get no sense of the work flow through which we develop, produce, and deliver the product or service. Thus, Figure 1.1 doesn’t show what we do, whom we do it for, or how we do it. Other than that, it’s a great picture of a business. But, you may say, an organization chart isn’t supposed to show those things. Fine. Where’s the picture of the business that does show those things?

In small or new organizations, this vertical view is not a major problem because everybody in the organization knows each other and needs to understand other functions. However, as time passes and the organization becomes more complex as the environment changes and technology becomes more complicated, this view of the organization becomes a liability.

The danger lies in the fact that when managers see their organizations vertically and functionally (as in Figure 1.1), they tend to manage them vertically and functionally. More often than not, a manager of several units manages those units on a one-to-one basis. Goals are established for each function independently. Meetings between functions are limited to activity reports.

In this environment, subordinate managers tend to perceive other functions as enemies, rather than as partners in the battle against the competition. “Silos”—tall, thick, windowless structures, like those in Figure 1.2—are built around departments. These silos usually prevent interdepartmental issues from being resolved between peers at low and middle levels. A cross-functional issue around scheduling or accuracy, for example, is escalated to the top of a silo. The manager at that level addresses it with the manager at the top of the other silo. Both managers then communicate the resolution down to the level at which the work gets done.

FIGURE 1.2.THE “SILO” PHENOMENON

The silo culture forces managers to resolve lower-level issues, taking their time away from higher-priority customer and competitor concerns. Individual contributors, who could be resolving these issues, take less responsibility for results and perceive themselves as mere implementers and information providers. This scenario is not even the worst case. Often, function heads are so at odds that cross-functional issues don’t get addressed at all. In this environment, one often hears of things falling between the cracks or disappearing “into a black hole.”

As each function strives to meet its goals, it optimizes (gets better and better at “making its numbers”). However, this functional optimization often contributes to the suboptimization of the organization as a whole. For example, marketing and sales can achieve its goals and become a corporate hero by selling lots of products. If those products can’t be designed or delivered on schedule or at a profit, that’s research and development’s, manufacturing’s, or distribution’s problem; sales did its job. Research and development can look good by designing technically sophisticated products. If they can’t be sold, that’s sales’ problem. If they can’t be made at a profit, that’s manufacturing’s problem. Finally, manufacturing can be a star if it meets its yield and scrap goals. If the proliferation of finished goods sends inventory costs through the roof, that’s the concern of distribution, or marketing, or perhaps finance. In each of these situations, a department excels against traditional measures and, in so doing, hurts the organization as a whole.

In the good old days of a seller’s market, it didn’t matter. A company could introduce products at its own pace, meet only its own internal quality goals, and set prices that guaranteed adequate margins. There were no serious consequences to the evolution of functional silos like those illustrated in the examples. Those days are over. Today’s reality requires most organizations to compete in a buyer’s market. We need a different way to look at, think about, and manage organizations.

The Systems (Horizontal) View of an Organization

A different perspective is represented by the horizontal, or systems, view of an organization, illustrated in Figure 1.3. This high-level picture of a business:

Includes the three ingredients missing from the organization chart depicted in

Figure 1.1

: the customer, the product, and the flow of work

Enables us to see how work actually gets done, which is through processes that cut across functional boundaries

Shows the internal customer-supplier relationships through which products and services are produced

FIGURE 1.3.SYSTEMS (HORIZONTAL) VIEW OF AN ORGANIZATION

In our experience, the greatest opportunities for performance im­provement often lie in the functional interfaces—those points at which the baton (for example, “production specs”) is being passed from one department to another. Examples of key interfaces include the passing of new product ideas from marketing to research and development, the handoff of a new product from research and development to manufacturing, and the transfer of customer billing information from sales to finance. Critical interfaces (which occur in the “white space” on an organization chart) are visible in the horizontal view of an organization.

An organization chart has two purposes:

It shows which people have been grouped together for operating efficiency and for human resource development.

It shows reporting relationships.

For these purposes, the organization chart is a valuable administrative convenience. However, it should not be confused with the “what,” “why,” and “how” of the business; all too often, it’s the organization chart, not the business, that’s being managed. Managers’ failure to recognize the horizontal organization explains their most common answer to the question “What do you do?” They say (to refer to Figure 1.1