Business of BPM

Management Frameworks

I have used this site a few times to look up concepts.  It is called Value Based Management.  It is a data dump of lots of theories.  One theory that I have been particularly interested in lately is called Blue Ocean Strategy.  I have not read all the press on it, but as one friend explained it to me, it is about collaborating with your clients to expand your market.  Rather than go out into new markets seeking new clients (which is the Red or Bloody Ocean), you focus on developing new growth through your client base.  This website above explains it a little different, but you can always go to the official website or read the book to get all the details.

Here is one of their tools called the Four Actions Framework:
To break the trade-off between differentiation and low cost and to create a new value curve, there are four key questions to challenge an industry's strategic logic and business model:              

• Which of the factors that the industry takes for granted should be eliminated?
• Which factors should be reduced well below the industry's standard?
• Which factors  should be raised well above the industry's standard?
• Which factors should be created that the industry has never offered?

Picture is worth a thousand words (at least)

As a former architect, I am a big believer that pictures have significant value in the business world.  I have been asked dozens of times to take complex ideas and simplify them down to a single-frame image that people can post in their cube or use in a meeting.  These images can be powerful. 

At Express Scripts, we choose to take on the battle of moving market share from Lipitor to Zocor a few years ago.  This was set up to save clients and patients billions of dollars as the Zocor patent expired.  We had a list of 50 ideas which we paired down to 30.  The challenge was how to get people to think about and rally around the 30.  I came up with what was initially called the "bubble chart" which showed the 30 ideas in swim lanes and then time-mapped horizontally against key milestones.  This became used everywhere and even presented to the street. 

This is important to BPM in several ways:

1. If BPM is to be transformational, you need a future state vision that can be captured and disseminated across the company.
2. If process mapping is part of your communication strategy, a simple to understand process map is critical.

I started thinking about this when I received an e-mail newsletter from BentonsEdge which is a company that helps you frame out your value proposition.  I have met with Dan Davison, the CEO, several times.  He seems to have a great process and good understanding of helping clients get to a simple story about their value proposition. 

One example is below.  It is a little busy, but it captures all the complexities of raising capital in a one-page slide which is amazing. 

http://www.tellingyourstory.com/content_library/files/whitepapers/RaisingCapital.pdf

The McKinsey Way

You can certainly never go wrong looking at McKinsey.  Their consultants are usually very top notch and their process of thinking and root cause analysis is great.  Although this post is more about how you analyze a problem (i.e., business process innovation), it also makes a point about how important process and methodology is.  The only way of delivering consistent, high-quality advice worldwide is to have a process of training and consulting that leverages smart people and delivers them to clients.

(Never mind the fact that McKinsey once told me that they only interview people with a 4.0 or people with a 3.8 and above from a top 5 business school.  I didn't fit the bill, but I have several good friends who were there.  I have lots of respect for them.)

The McKinsey Way is actually a book so you can see some insight into the company.  I have read the book and recommend it.  Rather than re-type all my notes, I found comments about the book at MeansBusiness and on blog called Brian Groth's Life at Microsoft and looked at notes on MECE (mutually exclusive, collectively exhaustive) from a book review on The McKinsey Mind.

My old boss who worked for McKinsey was a genius at asking the probing questions.  She new how to get to root cause better than anyone I worked for.  This is essential is diagnosing any problem not least of which are process problems.  (Since I assume you only look at BPM to drive value where you have some type of problem.)

So MECE, as Brian states in his blog, it suggests you should do the following:

1. Identify the problem using a mutually exclusive, collectively exhaustive framework and then map the problem out using some type of logic tree (see example).
2. Create a hypothesis (or hypotheses) about the solution...this drives your analysis.
3. Analyze the data...remember that the only thing that is right is data (assuming some data integrity).
4. Repeat steps 3 & 4 until you find a fact-based solution that makes sense.

  From the book, some of the other key points are:

1. "The most brilliant solution, backed up by libraries of data and promising billions in extra profits, is useless if your client or business can't implement it."
2. "Most business problems resemble each other more than they differ."
3. "If you get your facts together and do you analyses, the solution will come to you."
4. "If you keep your eyes peeled for examples of 80/20 in your business, you will come up with ways to improve it."
5. "Know your solution so thoroughly that you can explain it clearly and precisely to your client in 30 seconds."
6. "It's much better to get to first base consistently than to try to hit a home run and strike out 9 times out of 10."
7. "Just as you shouldn't accept I have no idea from others, so you shouldn't accept it from yourself, or expect others to accept it from you. This is the flip side of I don't know."
8. "When you're picking people's brains, ask questions and then let them do the talking. Keep the interview on track by breaking in when necessary."