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?

Gift cards - young shoppers

I have always wondered about gift cards and young people.  I still prefer to give presents versus a gift card.  I might as well be giving them cash.  It seems just as general.  Now the following article didn't talk about gift satisfaction, but I found these statistics interesting in Chain Store Age (July 2007, pg. 152):

• 60% of children have received a gift card in the past few months
• 58% of children use gift cards for impulse purchases (seem logical)
• Toys and board games were purchases with older kids (9-14) more likely to use them for video games or apparel
• Cards were biased by gender - boys (entertainment, electronic stores) and girls (department stores, clothing stores, book stores)
• The average card value was $44
• 39% of recipients spent more than the card value (so they work)

Myths of Innovation

Guy Kawaski has another great interview on his blog.  This is an interview with Scott Berkun, author of "The Myths of Innovation".  If you are fascinated with innovation, this is a good read.  I have tried innovation internally and externally.  These last few start-ups which I have worked on have been great.  This article addresses some of the things I have learned the hard way. 

• Innovators are born and made
• Innovators face lots of challenges outside the creative process - support
• Get out of the ivory tower and "tinker"
• Problem definition (i.e., asking the right questions) is key  (At HOK, we used to use a book called Problem Seeking for architectural requirements which is a helpful framework here.)

There is a lot more here.  I think companies often miss the importance of "sponsoring" innovation through several actions:

• Encouraging people to try things and having a culture that allows risk
• Capturing ideas and having people who look across ideas for new combinations of things
• Having funds allocated to try things...if VCs who get their pick of ideas only expect 2 of 10 to flush out, why do companies look for 10 of 10
• Bringing in people with diversity (background, culture, education, industry)

Innovation is a critical process for companies.  Thinking about how you create it, capture ideas, and manage your portfolio is important.  In this blog, I have talked about P-TRIZ and ROT which are both relevant here. 

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

Lessons Learned

I often try to reflect on what I have learned with different experiences.  Last year, I tried to start a new pharmacy kiosk company (CentralScript).  I learned a lot.  I had a lot of fun.  I had a lot of stress.  In the end, it was too early to gain adoption. 

I get asked a lot what I learned out of that experience.  I put some of my thoughts down on paper reflecting on that experience and others.  (see page)

Misc Articles to Read

I have been trying to keep up with my reading and falling behind.  There are a lot of articles that I skim and take something from, but that I hoped to synthesize and share.  Rather than get too far in the hole, I am going to share a few here. 

Two sources I would recommend for reading are Align Journal (new magazine) and BPTrends.  They both have great process related articles.

1. McKinsey on applying lean to application development
2. McKinsey survey on IT Strategy
3. Several McKinsey articles on pricing
4. Good overview of DFSS (Design for Six Sigma)
5. Article on the book Payback and Innovation
6. Article on Experience Mapping in Healthcare
7. Article on Business Process Innovation (BPI) at TransUnion
8. Top 10 Technology Projects
9. Article on whether to fix before you outsource
10. Creating a process centered organization
11. Creating a business process approach to management
12. ITIL and Six Sigma
13. What is TRIZ
14. Compliance and BPM
15. Lean for Service Processes
16. Sub-processes
17. Value mapping vs. detailed process mapping
18. Skills of a business process expert

Asking a 90-year Old to Use E-mail

You can use business rules in many ways.  I think one of the most important areas is in customer segmentation.  There is initial segmentation around which customers to target with which offering (e.g., cross-selling, multi-variate analysis).  There is secondary segmentation around which message will compel them to act on an offering (e.g., campaign management).  Additionally, there is segmentation around which channel they are likely to respond to (i.e., e-mail, text message, letter, call, web, TV, radio).

My 90-year old grandmother who does Masters swimming called earlier this week because she had a letter asking her to send in some information to them via e-mail.  She can barely use a phone without silver dollar size numbers so asking her to respond using e-mail is ridiculous.

As you design processes that spawn communications or create messaging, thinking through the multiple levels of segmentation and the supporting rules is critical.  Ideally, some type of "artificial intelligence" by which the rules are automatically updated as the system learns is ideal.  Linking success (i.e., outcomes) to the logic used allows you to refine and improve your communications and marketing over time.   

The Art of Ware

I was just skimming a story from Guy Kawasaki's blog about The Art of 'Ware by Bruce Webster.  I was a little skeptic, but Guy always has great instincts.  I read a few of the chapters in the book and think you would enjoy it.  Especially if you work with or at a software company. 

Here is some text from the home page about The Art of 'Ware...

Back in the early 1990s, I [Bruce Webster] wrote and published The Art of ‘Ware (M&T Books, 1995), a reinterpretation of Sun Tzu’s The Art of War, a 6th century BC treatise on conflict and warfare. My reinterpretation of Sun Tzu’s maxims applied to developing and marketing information technology products, most particularly software. Here’s an example:

• Sun Tzu (Chapter 2, ‘Waging War’, 1910 Lionel Giles translation): Now, when your weapons are dulled, your ardor damped, your strength exhausted and your treasure spent, other chieftains will spring up to take advantage of your extremity. Then no man, however wise, will be able to avert the consequences that must ensue.
• The Art of ‘Ware (Chapter 2, ‘Supporting Development’, 1995 edition): When your developers are burned out, your technology aging, your resources diminished, and your advantages gone, then others will take advantage of your weaknesses and cut into your market. Even expensive consultants and new CEOs won’t be able to turn things around.

Generation Y Summary...for BPM

"They're ambitious, they're demanding and they question everything, so if there isn't a good reason for that long commute or late night, don't expect them to do it. When it comes to loyalty, the companies they work for are last on their list - behind their families, their friends, their communities, their co-workers and, of course, themselves."

This is from a Fortune article titled "Attracting the twentysomthing worker" by Nadira Hira from May 15, 2007.  Here are a few of the highlights from the article...then I will tie it back to BPM and why you care.

• Someone born between 1977 and 1995
• 79.8M of them (versus 78.5M Boomers)
• "Most high-maintenance workforce in history" (see RainmakerThinking for more)
• They go to the gym.
• Over 1/3 have tatoos.
• 30% have piercings (other than in their ears).
• Accustomed to diversity.
• Electronic.
• Not just willing to work long hours for the sake of facetime.
• Communicate different ways (e.g., text messaging).
• Live at home after college.
• Involve their parents in the decision of the job more.

So why do you care as you think about BPM?

1. You have to hire them to work on your project.  Like Myers-Briggs, understanding personality, motivation, and interests helps you build a high-performance team.
2. They will be part of your process so you need to think about how they experience the job and how they will interact with technology.  Your solution is for the future not necessarily for the past.
3. This should make you think about generational differences - X, Y, Boomers.  All of this is important when you facilitate an event to flush out the process.
4. They may someday be your boss.  (It is an interesting experience the first time you realize you are old enough to have a boss younger than you and more successful than you.) 
5. They will get BPMS and wonder why you use paper and don't have integrated systems today.  They can help drive change.

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."