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?

Biometric Loyalty Program

Loyalty is a very interesting process.  How do you drive people's behavior to make them more loyal to your service or product?  This is especially complicated in healthcare.  For example, how do you encourage people to visit your pharmacy more often without incenting them to fill prescriptions unnecessarily.  How do you encourage people to use your ER versus another ER without discouraging them from going to their primary care physician?  Aligned incentives is a problem that HR and performance management consultants have worked on for years.  It isn't easy.

I was intrigued by another article in Chain Store Age (July 2007, pg. 150) about Green Hills Market in NY.  This is a small, $18M company which is using technology from Pay By Touch to take their loyalty program to the next level of personalization by introducing biometrics.

• No more need to carry a card.
• The ability to know use by family member.

It seems to work.  Participants are shopping more often and spending more.  After they scan in at the front of the store, they get personalized promotions based on their shopping habits.  They are getting supply chain efficiencies and improving cross-selling. 

I also found it interesting that the author pointed out that at many stores you could scan any loyalty card and get the discounts.  As she pointed out, this makes some of the data suspect. 

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. 

Medical Devices and the 10 Faces of Innovation

Today, I unsuccessfully searched for a smart consumer device that would link process and medical monitoring.  I am sure it is out there, but I couldn't find it.  The opportunities are numerous. 

Imagine having a device that monitored your blood sugar levels and sent off messages based on your current levels.  The messages could be to home to make something different for dinner.  It could be a note to yourself to remember to snack earlier in the day.  It could be a note to your physician keeping them aware of your situation.  I think that the opportunities for consumer centric medical devices that have embedded intelligence and plug into some type of BPM or process centric model are great.

This made me think of one of my favorite companies - IDEO.  If you don't know them, you should.  They have been involved in all types of innovation and product design.  The Art of Innovation by Tom Kelley is a great book about their process.  You should also read the article about the different types of innovators in Fast Company. 

This article categorizes them into Learning, Organizing, and Building personas.  Which are you?  I am either a Cross-Pollinator or a Collaborator (in my mind anyways).

BPI Example

I often get asked the question of what I mean by BPI or Business Process Innovation.  I often talk about how process can create a competitive differentiator for companies.  There is technical innovation, product innovation, cultural innovation, etc. 

Here is a quick example.  I am a die-hard Quicken user.  Every time I get gas, I print my receipt, carry it around for a day, and then enter it in the computer.  To Amoco, Mobil, BP, I am someone what "invisible" as a customer.  They don't have a relationship with me.

Why don't they think about their role in the process.  It wouldn't be too hard to get me to register my cards with them in return for them sending me an e-mail with a digital receipt.  They could even send me a file that I could launch which would place the transaction in Quicken for me. 

This benefits me (simpler, no risk of losing the receipt).  And, it benefits the gas companies because they now have a relationship with me.  They could include a coupon for goods inside the store or a car wash with the receipt.  Next time I go in, they can now cross-sell me.

This is what I mean by BPI.  Thinking about the process differently and looking at how you can impact the process in a novel way to capture more value and add value to the constituents.