1. © Tesseract Management Systems / Managing by Design / 2002 - 1 MANAGING BY DESIGN Diagrams from Section B This set of slides contains the diagrams contained in Section B of the book ‘Managing by Design’. Please do not attempt to use these slides as part of a presentation until you have read and fully understood the relevant sections of ‘Managing by Design’, and you are clear on the points you wish to make with them.

2. © Tesseract Management Systems / Managing by Design / 2002 - 2 Essentials of effective teamwork OBJECTIVESOBJECTIVES PROCESSES Clear and common goals Shared processes and frameworks Defined roles and responsibilities Committed interpersonal relationships

3. © Tesseract Management Systems / Managing by Design / 2002 - 3 Measurement and Perspective

4. © Tesseract Management Systems / Managing by Design / 2002 - 4 Good/Poor Table for measures What would a company look, feel and work like if its human resource function… …worked very well?…worked very poorly? Happy people Low turnover Leaving for more senior roles Competence growth Lots of ideas Discontent Waves of people leaving Leaving for similar roles Steady or declining competence Few suggestions

5. © Tesseract Management Systems / Managing by Design / 2002 - 5 Performance Targets Target setting process: n Everybody considers what target they would set and writes it clearly on a card provided n We identify the highest and the lowest and peg them on the clothes line, others peg their cards at appropriate points in between n Everyone stands where they currently believe the target should be n We hear the arguments for and against the extremes, and people move as they are swayed n After five minutes, or after all the arguments are heard, we take the point at which most people are standing

6. © Tesseract Management Systems / Managing by Design / 2002 - 6 Weighting Address new market areas Provide excellent customer service Build leadership in platform technology Reduce production and delivery lead times Maximise asset utilisation (incl. IPR) Reduce unit production costs Build effective supplier partnerships 3 5 4 2 3 4 4 Wt.

7. © Tesseract Management Systems / Managing by Design / 2002 - 7 Benefits of Process Thinking n Breaks down functional silos n Focus on customers and delivery n Links operation with improvement n Highlights hand-over problems n Better flexibility and responsiveness n Increased efficiency / reduced cost n Reduced cycle times / more speed n Better teamwork and communication n More fulfilling involvement/activity n Improved quality assurance

8. © Tesseract Management Systems / Managing by Design / 2002 - 8 Process Models ActivityInputOutput A I AAAA O A AA A I AAA O A I A

9. © Tesseract Management Systems / Managing by Design / 2002 - 9 Example Process Models Provide & maintain facilities Plan & distribute products Provide & maintain quality mgt. system Manufacture product Ensure compliance Provide, enable & develop people Plan and control finances Develop information system Support (control) Support (enable) Primary process Provide & maintain supply line Introduce & maintain products/processes Develop new business CUSTOMER Fulfil Order Product & Process Readiness SUPPLIER Support Customer Make Product Acquire & Control Materiel Acquire Business Develop Product Configuration Control Management of people Direct Business Provide Infrastructure CUSTOMER Fulfil order Product & process readiness SUPPLIER Support customer Make product Acquire & control material Acquire business Develop product Configuration control Management of people Direct business Provide infrastructure IT STRATEGY PLANNING UNDERSTAND REQ. & DESIGN CHANGE PILOT & IMPLEMENT CHANGE MANAGE RESULT & PROVIDE SUPPORT HUMAN RESOURCESHUMAN RESOURCES HUMAN RESOURCESHUMAN RESOURCES DEFINE BUSINESS STRATEGY DEFINE BUSINESS STRATEGY DELIVER OPPORT- UNITIES DELIVER OPPORT- UNITIES processes Providing IT services Primary Support C U S T O M E R S Attracting the customer Delivering the product Serving the customer Managing the product Providing the store Providing the people Accounting for finance Strategy, planning and budgeting Attracting the customer Delivering the product Serving the customer Managing the product Providing the store Providing the people Accounting for finance Strategy, planning and budgeting Primary Support C U S T O M E R S

10. © Tesseract Management Systems / Managing by Design / 2002 - 10 Activities in Departments Management accounting Petty cash and expenses Production planning Marketing Cleaning Purchasing Annual budgeting Telephone switchboard Invoicing Accounts payable Site audit Public relations Fabric, heating, and lighting Sales and marketing Site security Reception FinanceSite services Order entry Progress chasing Market research Vendor selection Goods receiving Stores Product design Platform research Packing and despatch Equipment maintenance Manufacture Machine setups Catering Returns and repairs Complaints management Product quality inspection Recruitment Safety management Special products Competitor analysis Training HRTechnical Operations Pay awards Succession planning Industrial engineering Standards development and liaison Legal and IPR Library Information technology IT Customer support and order mgt Developing new business Stewarding assets and resources Providing an effective environment Providing and growing people Developing products and processes Producing and distribut- ing products Maintaining the supply line

11. © Tesseract Management Systems / Managing by Design / 2002 - 11 Moving Activities Product design Platform research Packing and despatch Equipment maintenance Manufacture Machine setups Returns and repairs Product quality inspection Special products Competitor analysis Industrial engineering

12. © Tesseract Management Systems / Managing by Design / 2002 - 12 Naming Processes Product design Platform research Packing and despatch Equipment maintenance Manufacture Machine setups Returns and repairs Product quality inspection Recruitment Special products Competitor analysis Training Pay awards Succession planning Industrial engineering Standards development and liaison ??? Career management Product strategy

13. © Tesseract Management Systems / Managing by Design / 2002 - 13 Examples of Direct/Indirect Processes for a Manufacturing Business Direct Processes n Sales Order Management n Product Manufacturing n Purchasing n Order Despatch n Product Distribution Indirect Processes n Quality Assurance n People Development n Facilities Management n Financial Management

14. © Tesseract Management Systems / Managing by Design / 2002 - 14 Activities in Processes Marketing Public relations Market research Developing new business Management accounting Petty cash and expenses Annual budgeting Invoicing Legal and IPR Stewarding assets and resources Cleaning Information technology Telephone switchboard Catering Site audit Safety management Fabric, heating, and lighting Site security Reception Library Providing an effective environment Vendor selection Goods receiving Stores Purchasing Accounts payable Progress chasing Maintaining the supply line Supplier relationship management Production planning Complaints management Order entry Customer support and order mgt Forecasting Producing and distribut- ing products Packing and despatch Equipment maintenance Manufacture Machine setups Returns and repairs Product quality inspection Special products Providing and growing people Recruitment Training Pay awards Succession planning Career management Developing products and processes Product design Platform research Competitor analysis Industrial engineering Standards development and liaison Product strategy

15. © Tesseract Management Systems / Managing by Design / 2002 - 15 Defining Processes Syndicate n In syndicate groups, take the yellow sticky notes and, using the affinity approach group the activities into sensible process groups. n Once the silent grouping has settled down, discuss the process model which you have arrived at, and determine suitable ‘summary statements’ for each of the groups - ideally using verbs and nouns. n Having done this, or maybe during this, you may make further movements of sticky notes to refine your process model n By discussion you may choose to split or regroup ‘processes’ to develop new ways of looking at your organisation n Be prepared to present back your model, and its underlying logic, to the group

16. © Tesseract Management Systems / Managing by Design / 2002 - 16 Process Owner Responsibilities n To adopt as their first responsibility, as part of the top team, the overall performance of the organisation as a whole n To understand clearly the needs and expectations of their process (their part of the collective responsibility) by the business, their customers, and their colleagues n To translate these needs and expectations (aspirations) into clear and specific performance improvement targets agreed by the business, their colleagues, and their customers n To convene a team of people who have a strong interest in the process, and to have built a commitment in that team to improving its performance to meet the agreed targets n To develop and document (e.g. in a process map) an accurate understanding of how the process works in practice, and how its operation is controlled and influenced n To routinely measure process performance against target, graphically trend it, and undertake rigorous analysis of any adverse trends or performance deficiencies n To develop plans for addressing root causes of any issues, ensure commitment for their implementation, and forecast the impact of this on future performance to meet target n To seek best practice related to their process, review it for applicability and implement it where appropriate

17. © Tesseract Management Systems / Managing by Design / 2002 - 17 Cell Discussion Critical: the process is fundamental to progressing the objective Major: the process is key to achieving the target performance Significant: the process will significantly contribute to the result

18. © Tesseract Management Systems / Managing by Design / 2002 - 18 Cylex QFD Grid (Empty) Address new market areas Provide excellent customer service Build leadership in platform technology Reduce production and delivery lead times 3 5 4 2 Wt. Customer support and order management Develop new business Producing and distributing product Maintaining the supply line

19. © Tesseract Management Systems / Managing by Design / 2002 - 19 Slide of 45th Cell Discussion

20. © Tesseract Management Systems / Managing by Design / 2002 - 20 Voting Cards

21. © Tesseract Management Systems / Managing by Design / 2002 - 21 QFD at 45th Cell Address new market areas Provide excellent customer service Build leadership in platform technology Reduce production and delivery lead times Maximise asset utilisation (incl. IPR) Reduce unit production costs Build effective supplier partnerships 3 5 4 2 3 4 4 Wt. Customer support and order management Develop new business Producing and distributing product Maintaining the supply line Developing products and processes Providing an effective environment Providing and growing people Stewarding assets and resources

22. © Tesseract Management Systems / Managing by Design / 2002 - 22 GROUNDRULES n Be candid and honest n Endeavour to keep to agreed times n Everybody has an opportunity to speak on each issue n Focus on the current task n Only one person to speak at a time - no side conversations n Everybody to remain involved with the discussion in hand n Seek to understand rather than explain n Have fun

23. © Tesseract Management Systems / Managing by Design / 2002 - 23 TimeItem/ description ObjectiveInputsProcessOutput Session Plan

24. © Tesseract Management Systems / Managing by Design / 2002 - 24 PROFORMA EXAMPLE Process Proposals Process proposal Process objectives: Related procTargetMeasure Business benefits: Likely strategiesDeliverablesCost Assumptions/implications: Management standardsMeeting schedule: Stakeholders: OutputsCustomersInputsSuppliers Process: Owner: Team: Scope of process and probable sub-processes Top QFD

25. © Tesseract Management Systems / Managing by Design / 2002 - 25 Consensus Process YES NO n Each proposal will be presented in turn. n The proposer will make a brief argument as to why they feel proposal should be accepted. n The group will present an initial show of the ‘Yes’, ‘No’ cards to indicate their current agreement. n By invitation, the arguments for and against its acceptance will be heard in turn until the group is comfortable that all the main arguments have been heard and understood by themselves and their colleagues. n The group will confirm that it will be happy to abide by the majority viewpoint at this time. n A final show of the ‘Yes’, ‘No’ cards will be taken.

26. © Tesseract Management Systems / Managing by Design / 2002 - 26 QFD: Cylek Top Level Address new market areas Provide excellent customer service Build leadership in platform technology Reduce production and delivery lead times Maximise asset utilisation (incl. IPR) Reduce unit production costs Build effective supplier partnerships Business from new markets Customer retention Innov. copied by compet'n Production cycle Asset utilisation Cost of goods sold Supplier led business Measure > 34% > 85% > 5 p.a. < 6 days > 55% < 70% > £80m Target 3 5 4 2 3 4 4 Wt. Customer support and order management Develop new business Producing and distributing product Maintaining the supply line Developing products and processes Providing an effective environment Providing and growing people Stewarding assets and resources 935316515013511299 Ranking 122

27. © Tesseract Management Systems / Managing by Design / 2002 - 27 Process Team Involvement Who should you involve in process management? Key staff? Representatives of the customer? Key suppliers? Internal consultants? ? Management colleagues?

28. © Tesseract Management Systems / Managing by Design / 2002 - 28 Leverage Potential Where is the leverage to really make a difference? ? ? ? ? ? ? ? Address new market areas Provide excellent customer service Build leadership in platform technology Reduce production and delivery lead times Maximise asset utilisation (incl. IPR) Reduce unit production costs Build effective supplier partnerships Business from new markets Customer retention Innov. copied by compet'n Production cycle Asset utilisation Cost of goods sold Supplier led business > 34% > 85% > 5 p.a. < 6 days > 55% < 70% > £80m Developing products and processes

29. © Tesseract Management Systems / Managing by Design / 2002 - 29 Visioning Exploration Questions to inspire thoughts about vision To what areas of your customer’s operations could your service provide additional impact; areas where it is not currently used to its full potential? What is your customer’s biggest blind-spot in the area of your service and offering? Where could you transform the operations of your customer over and above what exists now? What is the most outrageous thought you have in your head about how your service could develop? What is impossible for you at this point, but if you could do it, it would obsolete all your current projects? What sort of future for your organisation would you personally, find so inspiring that you would move heaven and earth to get it?

30. © Tesseract Management Systems / Managing by Design / 2002 - 30 Generic and Specific Outputs Examples of specific outputs Examples of generic measures Product range ‘X’ Features Sales of product ‘X’ Market position of ‘X’ Meeting launch date Correction of production problem ‘Y’ Meeting target date Within budget No lost production Adoption of technology ‘XYZ’ Implementation date Sales generated Consumer satisfaction Industry awards Average product ranking Sales margin Time to market Production satisfaction Unit production costs Average response time Support costs Machine down time Innovations ahead of competition %Rev. From new products

31. © Tesseract Management Systems / Managing by Design / 2002 - 31 Process Proposal Process objectives: Top qfd objectiveRelated process objectiveTargetMeasure Business benefits: Likely strategiesIntended deliverablesEffort/cost/resource Assumptions/implications: Process outputsRelated customersProcess inputsRelated suppliers Process: Owner: Team: Scope of process (boundaries) and probable sub-processes Process proposal Management standards to be followed by team when relevant:Meeting schedule: Primary stakeholders:

32. © Tesseract Management Systems / Managing by Design / 2002 - 32 Process Proposal Sections Business benefits: Likely strategiesDeliverablesCostAssumptions/implications:Management standardsMeeting schedule: Stakeholders: Process proposal Process: Owner: Team: OutputsCustomersInputsSuppliers Scope of process and probable sub-processesProcess objectives: Related procTargetMeasureTop QFD

33. © Tesseract Management Systems / Managing by Design / 2002 - 33 PP&D Process Measures Technical supremacy of product range Innovations copied by top five competitors Standards set in our favour Component and sub-assembly variety Cost of goods sold Production errors post pilot Value of supplier licences 65% @ #1 > 5 p.a. > 15% Reduce 20% 68% < 5 pcm > £23m Address new market areas Provide excellent customer service Build leadership in platform technology Reduce production and delivery lead times Maximise asset utilisation (incl. IPR) Reduce unit production costs Build effective supplier partnerships 3 5 4 2 3 4 4 Wt. Developing products and processes Proposed measures and targets Product and process development

34. © Tesseract Management Systems / Managing by Design / 2002 - 34 QFD Cascade Example

35. © Tesseract Management Systems / Managing by Design / 2002 - 35 Potential Problem Analysis (the fun version) n Imagine that you are a group of saboteurs, intent on derailing the plans of the team n List out, down one side of a flipchart, all of the things that you could do to make sure that the plan fails, or has disastrous results n Then come out of role, and create a second list, on the other side, of all the ways that these things could happen accidentally n When you have finished work through the second list and evaluate the probability and impact of these things happening on a scale of high, medium and low. n Think out what you will do to avoid, remove, or cope with the high risk items.

36. © Tesseract Management Systems / Managing by Design / 2002 - 36 PP&D Process Map Platform research Undertake Competitor analysis Influence current standards Update 5yr product strategy Research market and tech trends Develop platform concepts Identify target technologies Establish infra- structure Review existing products Select supplier partners Develop production processes Research customer need/benefit Confirm product specification Analyse complaint and returns data Design product Define development programme Determine portfolio Pilot and test product Appoint design teams Define and protect IPR Determine license strategy Decide make / buy balance Appoint design partners