Business Design And Performance

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September 2008

Business Design

www.stankirkwood.com

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Business EntitiesBusiness Blueprints™

Copyright: www.stankirkwood.com

Entity

College

Large corporation

Non-profit org

Individual employee

Department

Government agency

What do these entities have in Common?

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What do they have in Common?Business Blueprints™


Entity

College

Large corporation

Non-profit org

Individual employee

Department

Government agency

Students

Shoppers

Refugees

Other employees

Internal/External

Citizens

Each entity creates products or services for customers

Customer

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What do they have in Common?Business Blueprints™


Entity

College

Large corporation

Non-profit org

Individual employee

Department

Government agency

Students

Shoppers

Refugees

Other employees

Internal/External

Citizens

Board of Directors

Board of Directors

Donators

Manager

CEO

Tax Payers

Each entity creates products or services for customers

Each entity has stakeholders looking for a return on their investment

Stakeholder Customer

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Common StructureBusiness Blueprints™


EntityEntity CustomerStakeholder

This is the Fundamental Structure of every business, agency, department, process or employee.

Each entity has processes to create products and/or services for internal or external customers.

- and –

Each entity has stakeholders looking for a healthy return on their investments. The type of entity will determine the form of investment return.

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Metrics

Common Structure

Business Blueprints™

(VP) Value Proposition - Measures market satisfaction o Desirability o Price o Quality o Lead time

Entity CustomerStakeholder

ROI VP

(ROI) Return on Investment - Measures stakeholder satisfaction o Customer satisfaction o Financial Success o Operational Effectiveness o Management Effectiveness

In order to be managed every entity needs to be measured. These are the metrics for a Balanced Scorecard applicable to every level of the business.

Common Metrics


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Framework

Common Structure


Entity CustomerStakeholder

Fulfill Demand

Support the Entity

Create Demand

Manage the Entity

All businesses perform these four overarching processes regardless of the size of the business or the industry.

Common Framework


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Common FrameworkBusiness Blueprints™

Entity

Fulfill Demand

Support the Entity

Create Demand

Manage the Entity

SalesMarketingAdvertisingMerchandisingProduct DevelopmentCustomer Service

PurchasingManufacturingAssemblyOperationsWarehousingDistribution

FinanceAccountingHuman ResourcesInformation TechProgram MgmtLegal Services

Strategic MgmtTactical MgmtCommunications

A process perspective of the entity


Framework

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Common ComponentsBusiness Blueprints™

Entity

Process Model

OrgModel

Market Model

SystemsModel

MarketsCustomersProduct GroupsProductsValue Proposition

Customer ExpectCompany PerformCompetitive Perform

Create DemandFulfill DemandSupport the EntityManage the Entity

RolesResponsibilities- Skills- Talents- Knowledge- Experience

Strategic EquipInformation SysBusiness PartnersSuppliers

Capstone

VisionMissionValuesEnvironment- Internal- ExternalStrategic Goals

A model perspective of the entity. These are the 5 components of every business model.


Components

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AlignmentBusiness Blueprints™

Capstone

Market Performance Requirements

Process Performance Requirements

Organizational Performance Requirements

System Performance Requirements

Expectations of market for services

Competitor offerings of services

How services designed to meet customer expectations

How processes designed to deliver services

How organization designed to execute processes

How Systems are designed to support

The 5 components of a business must work together just like the parts of a finely tuned automotive engine. Each part is interrelated. The business design starts with the Capstone and cascades down to the Systems Model.


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Business Blueprints™ Market Performance

Focus on what is Important!

Which Market will you go after?

0

5

10

15

20

25

30

35

40

45

K-12 Universities First Responder

Market Importance


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Business Blueprints™ Customer Performance


Customers use your products and services. Which customers will you appeal to?

Customer Rankings - Pie

Police

Fire

EMS


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Business Blueprints™ Product Performance


Your products and services must have a compelling Value Proposition.

0

5

10

15

20

25

30

35

40

Std Duty Heavy Duty Turnout Storage

Products


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Business Blueprints™ Process Performance

The Process designs must support Market designHow are your processes designed?

Process Designs affect the Value Proposition


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Business Blueprints™ Organizational Performance

Organizations use Processes to create Products / Services

Right People on BusWrong People off BusRight People, Right Seats

Does your organization have the right:- Skills- Talents- Knowledge- Experience?


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Business Blueprints™ Systems Performance

Systems are used by Organizations to execute Processes

Are your IT systems designed to support your organization?

Do you have the right equipment?


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Business Blueprints™ Business Performance

To have maximum performance parts must be aligned

Don’t start with IT systems and work your way up. IT is not the silver bullet.

Markets Aligned to Goals

Processes Aligned to Markets

Organizations Aligned to Processes

Systems Aligned to Organizations

Markets Aligned to Goals

Processes Aligned to Markets

Organizations Aligned to Processes

Systems Aligned to Organizations


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Business PerformanceBusiness Blueprints™

Four steps necessary for sustained maximum performance:

– Quality Design– Implementation of design– Execution of design– Management of design and execution

Boils down to:

Performance = Design X Execution


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Performance = Design x ExecutionBusiness Blueprints™

Designs become obsolete as

the environment changes.

If your design only rates a 2 the level of performance you can ever achieve is a 20

Businesses and

agencies waste

money with Execution

Improvement Activities

Need an updated design

and good execution of the design

to achieve performance goals

Environment

Sub-standard Performance

Good Performance

Poor Performance

Sub-standardPerformance

Design

Ex

ec

uti

on

5

10

5 101

100


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ConfidenceBusiness Blueprints™

What if:• Uncertain what to do next• Uncertain of where to go

What if:• Confident of what to work on• Confident of direction of

agency


You want confidence in your business design

http://www.inmagine.com/pdsi019/pdsi019810-photo

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Business DesignBusiness Blueprints™

What does a business design need to look like to instill confidence?

“It depends”– Goals– Environment– Desired strategies– Existing business design– Execution by organization


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Updated designs should be based upon these five inputs

Updated Business DesignBusiness Blueprints™

A company moving forward without the consideration of each of the above five factors incurs significant risk. Environments are changing faster and faster which means designs are becoming obsolete sooner and sooner.

OrganizationalCapabilities

Current Business

Design

DesiredStrategiesEnvironmentGoals

UpdatedBusiness

Design


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Business Blueprints™ Deliverables

Road Map

Updated set of Business Blueprints

Strategic Plan

Governance ModelCompetitive Environment

Goals

Change Goal

ExistingDesign

Strategies

Execute Strategy with

Existing Design

PerformanceCapabilities

Strategic Plan &

Road Map

No

Yes

Modify Design, Goal, or Strategy

Change Design

ChangeStrategy

B

A

C

B

C

PerformanceRequirements

A

ExecuteDesign

A

How to achieve Goals

Steps to performance:

- Set strategic goals in context of the environment- Identify strategies you wish to execute to achieve those goals- Update the existing design of the business to be able to execute those strategies- Implement the new design - Execute the strategies.

ExecuteStrategies

Copyright: Business Design Concepts, LLC 2004

Strategic Management

Business Design Concepts, LLC

At the end of the day each business should have these four documents to work from.


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Business Blueprints™ Business Blueprints™

Senior ManagementEmployees

Copyright: Business Design Concepts™ 2004

Without the set of business blueprints your management teams will never know if they are saying the same thing. Can not implement effective change

with only a strategic plan, project plan and a budget

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Blueprints provide context and common understanding


Design team Implementation Team

Without the set of Blueprints how likely is it that the Implementation Team will build what the Design Team had in mind? The same is true in business.


Business Design And Performance

Business

Transcript of Business Design And Performance