“Thanks for your questions this morning, everyone. I was deliberately general in my responses, but keep the questions coming. I intend to answer some of those questions in detail as we go through the structure of the Checklist and the implementation methodology we call the ‘Proven Path.’ First, let’s turn to the Class A Checklist. At my suggestion, Greg purchased copies of the book for each of you. Let me hand these out, but try not to dive into the book yet. Isn’t that the most difficult thing anyone can ask you to do? People are inherently inquisitive, and already several of you have flipped through a few pages. No harm, but let’s close the books for a few minutes, please.

“First, a bit of background. For Effective Management, our passion is to support companies seeking to be consistent winners by aspiring to excellence. This Checklist is the comprehensive statement of excellence in business today. It embraces every part of the business to be pursued for business excellence, and sets out those business processes and practices that we see over and over at the heart of successful and excellent companies. It is written so that your people can see for themselves what excellence is and what each of them has to do in order for the company to be excellent. Its chapters align with core business processes and the enablers of those processes, covering the entire business. Simultaneously, it is demanding and rewarding—very demanding at times—but true excellence never comes easily. Class A companies operate consistently in the upper quartile of companies in their industry in each of the processes, or chapters, below.” Roxanne paused after this introduction as the team took in her message.

“There are nine chapters in the new Checklist [see Figure 6.5]. The first four are ‘priority chapters’:

“In these chapters, we’ve brought together the processes and practices that are common and fundamental through all other business processes, and that enable the entire business to be excellent. The remaining five chapters address the processes that distinguish each company in the marketplace:

“I suggest these chapters cover the entirety of your business.”

David responded first, “Although I’m not familiar with all the detail in the Checklist, I can see our responsibilities as individuals and as the executive team falling within these processes. So I agree with you.” The others agreed. Roxanne continued.

“I’ll not get into much detail yet; I’ll just say a few words about each chapter, but understand that all the chapters are interdependent.

“Chapter 1, Managing the Strategic Planning Process: You have to be clear about your business vision and strategy for your people to plan what they must do to get there. This chapter challenges your process for the longer term planning of the business. It demands the setting of business priorities and clear communication when deploying your plans and your business excellence program throughout the business. You’ve probably gathered by now that I’m passionate about vision, strategy setting, and planning. It’s a simple equation: no vision and strategy = no direction = excellence impossible. And good luck because you’ll be facing some very stormy seas out there!”

“Been there; done that; got the scars to prove it!” Greg thought to himself.

“We ask you to establish and manage the process for setting purpose-vision, strategy, and direction to become an upper quartile company. The chapter requires that this purpose is reflected in all plans, projects, and actions throughout the company. Chapter 1 is not about how to create a strategy so much as it challenges you to set your direction and your value proposition, and then your supporting value discipline focus. You then ensure there is alignment with Amalgamated’s corporate vision and strategy. When that’s complete you must deploy Cosmetics Products’ business vision and strategy throughout your organization, even down into your supplier base. Then everyone will be—no, make that ‘must be’—engaged in delivering that strategy and living your value proposition. In this chapter, you’ll find references to the benchmarking process we discussed yesterday. The importance of strategy, once you have developed it, is knowing where you are heading and keeping that vision clear and meaningful in the face of changes in the business landscape. The strategy must be dynamic and energizing. Your job is ensuring that the strategy remains relevant, and that it is actually executed.

“Chapter 2, Managing and Leading People: People are the ultimate differentiator as the marketplace becomes more demanding and competitive. This chapter leads you to think through your business values and organization for the tasks ahead. The chapter requires that you are clear about the company culture and behaviors needed, and that you design supporting programs to develop the competencies of your people for the challenges ahead. It challenges your processes for knowledge management, and your culture of leadership and teamwork. It also challenges your style of leadership, your commitment to respecting and developing your people; and among other topics, how you ensure a safe and healthy environment for your employees and society. It underscores the reality that the only sustainable competitive advantage a company has is its people.

“Chapter 3, Driving Business Improvement: This chapter articulates an approach for assessing the maturity of your business and its processes. It then challenges how you prioritize your business improvement program to secure the early gains that create a solid foundation for the future. This chapter challenges you to walk before you try to run, and to give value to those everyday issues that are at the heart of excellence in business. Driving Business Improvement establishes the improvement architecture that underpins and generates the company’s overall business performance improvement program. Chapter 3 focuses on driving out waste and variability to increase velocity in all business processes, and to establish a culture of sustained results and continuous improvement. In addition, it helps steer the company as it grows from a culture of defensive behavior and the chaos of never ending unplanned events, to a culture of cross-functional continuous improvement across the entire business with a clear focus on meeting and exceeding the needs of the stakeholders—investors, customers, employees, and society.

“Chapter 4, Integrated Business Management: This chapter articulates the continuing, natural evolution of the Sales and Operations Planning process. It has been designed and developed over many years, building on client needs and experiences in all sectors, and in all parts of the world. Integrated Business Management is the unique, yet now de facto standard approach to managing the gap between company strategic goals and everyday activity. It is the prime tool for keeping all parts of the company aligned to a common agenda and set of priorities. Integrated Business Management allows the company to manage the entire business through one set of numbers and ensures timely decisions to maintain management control. It drives gap-closing actions to address competitive priorities and to deliver management commitments. In fact, it is the critical process in deploying the business strategy throughout the company. In essence, Integrated Business Management is the process with which executive management links strategy to execution.

“So these are the four priority chapters. They must be addressed directly by you as the executive team. You could say that they define quite simply in four nuggets your role in the organization.”

After answering a few questions for clarification, Roxanne prepared to move ahead when Greg commented. “I like the idea of nuggets—pieces of gold—it expresses my, and our, accountabilities well. I can see that I need to know more about this to do my job better.”

David added, “And it gives us a clearer view of our accountability as a team as well.”

“Good points, Greg and David. Now we move on to the five chapters covering the processes that distinguish each company in the marketplace.”

“Chapter 5, Managing Products and Services: In every business sector, product life cycles are getting shorter. Portfolios require an increased frequency of new products and services and a carefully planned phase-out of old. This chapter establishes best practices for how you establish your product portfolio and manage your products and services. It expects you to have a clear supporting technology strategy as well. It challenges your practices for delivering sales and profit to your business through an increased number of successful products and services introduced into your market. It also defines the latest practices in Program Management for large complex projects.”

Alexandra couldn’t hold back. “Take me to that chapter—right now!” Everyone laughed and commented in agreement. Roxanne continued.

“May be a bit premature, Alexandra, but I agree this chapter would help you because it focuses on aligning product and service activities to business strategy and market needs while not forgetting about making money through an intense passion for customer success. While under the leadership of Marketing, overall process governance and linkage to supply and execution processes is achieved through the Integrated Business Management process. This way, the resulting product plans are completely integrated with company operating plans.

“Chapter 6, Managing Demand: Greater understanding of customer needs and of your marketplace leads directly to increased predictability in your short-, medium-, and long-term business requirements. Best practices in Managing Demand enable better understanding and planning of your position in the marketplace and the creation of order-winning plans that are consistently more successful. This chapter challenges to improve how you create and plan demand. It also challenges you to improve your control of supply and demand in the short-term through sales activities. Managing Demand is a marketing-led process for delivering strategic and business plan requirements by ensuring that planned and predictable revenue streams are realized. While all companies find forecasting and demand planning to be an inexact science at best, Class A companies become very good at getting closer to their customers. Through this linkage, they collaboratively develop better demand plans. They also do a much better job of influencing customers and consumers to match their requirements with the company’s capabilities whenever there is a supply constraint. Class A companies treat a forecast as a request to create products and services, not just as a casual prediction. Class A companies create products and services when they are needed; deploy finished goods inventory, if needed; and then quickly turn the resulting inventory into cash.”

“Okay, Alexandra, there’s your job description,” Sara piped up, to general laughter.

“Chapter 7, Managing the Supply Chain: As technology evolves and your target market expands, you face an increasing challenge in delivering your products and services to the point of use. This chapter challenges your understanding of your extended supply chain. It establishes best practices for improving your strategic and tactical extended supply chain design to deliver optimum customer service and bottom-line performance. It challenges you to build an increasingly responsive supply chain that plans, integrates, links, and shapes the supply planning and execution processes so that they deliver competitive advantage, leading to consistent upper quartile performance. Don’t panic when you read through this chapter! This is what we call a ‘Phase 2’ activity. Much of it is not possible until you have made significant progress in your internal planning capability, as defined by the Capable Planning and Control Milestone. You need to understand now what’s in the chapter so that you’ll have a vision of what is beyond the capable level. Chapter 7 also deals with creating a supply chain strategy that supports supply and demand segmentation, and then redesigning the supply model to permit complete integration of the end-to-end supply chain. The final challenge presented in this chapter is to provide equitable benefits in service, inventory, capacity, costs, and benefits for all extended supply chain partners. Everyone must be a winner. You’ll also find collaborative supply planning, six sigma, agile, flexible, and lean approaches at work in this chapter.

“Chapter 8, Managing Internal Supply: While business focus is moving to the extended supply chain, excellence in core supply activities remains vital in meeting the needs of customers and consumers, and in meeting the challenge of global cost competition. This chapter challenges your internal operating groups that make and deliver goods and services to understand just how quickly they must be able to modify and execute internal supply plans in response to changing marketplace demands while optimizing costs. Managing Internal Supply challenges your current paradigms for managing internal capabilities and resources. It asks you to plan and execute business and supply strategies through integrated supply planning and control. Internal supply processes feed required information into the monthly Supply Review, and are linked directly to performance tracking, and financial planning and reporting with one set of numbers. It’s really about people creating valid plans inside the company, and then executing those plans to satisfy customer commitments with optimal inventory, effectiveness, and cost. Fundamental elements of this process include master supply planning and scheduling, material supply planning, logistics (through Distribution Resources Planning), supplier planning, capacity planning, asset management, and maintenance management. There is a fundamental, underlying expectation that all related data has a high level of integrity and accuracy.

“Chapter 9, Managing External Sourcing: The trend of a rapid increase in products and services and a wider market present new challenges to the make/ buy decision-making for products, components, and materials. The challenge extends to sourcing strategies that follow those decisions. Technology offers new procurement approaches with major savings potential, and has significantly advanced the use of total cost of ownership consideration in procurement decisions. This chapter sets new standards for assessing excellence in your procurement processes and in planning and coordinating the movement of goods into your supply chain. It also questions the way you manage sourcing to create competitive advantage and consistently operate in the upper quartile of supply chains in your industry. The expectation is that you balance risk and total cost of ownership, rather than focus your analysis on purchase price variance.”

David interrupted. “We rely almost solely on purchase price variance to manage our purchasing spend. I’ve heard of total cost of ownership, but I’ve always thought of it as a theoretical consideration. I obviously need to understand its implications much better than I do today.”

“Thanks, David, for your honesty. It helps to get all the issues on the table so that we make the best decisions about where to focus our limited resources. To continue, in this chapter you’ll find the best practices for developing strong relationships with companies that can effectively and efficiently supply the goods and services you need to create your products and services. By that I mean relationships in which the principals act more like partners on your journey to the future you envision. These are very different concepts from the all-too-present outsourcing to suppliers offering the lowest purchase price. You’ll find suppliers who want to be your preferred suppliers, but you need to hold up your end of the agreement. You need to be a preferred customer if you intend to operate most effectively.

“By the way, how often have you asked your suppliers how good a customer you are?”

“Interesting concept,” David replied. “I don’t think we’ve ever asked our suppliers that question. I know for a fact that we haven’t asked since I’ve been in the business. We’re quick to criticize and squeeze our suppliers, however. I realize that we are a difficult customer. There probably isn’t a single day when we don’t ask at least one supplier to jump through hoops to meet our changing needs. In fact, we believe a good supplier is one that can meet an unreasonable request without whining. I take it, Roxanne, that you would not define us as a good customer.”

“If that is really your concept of a good supplier, David, you couldn’t be more right about not being a good customer. The kind of behavior you just described increases supply chain costs significantly. Class A companies have long-term relationships and work closely with their trading partners to continuously improve quality, reduce variation, and eliminate waste in the supply chain. Perhaps the most overlooked aspect of being a good customer is providing your suppliers with reliable forward visibility of your needs. No matter how good a customer you want to be, unless you have robust planning and control processes in place you just can’t provide your suppliers with that kind of information. There are significant savings to both trading partners in that kind of relationship.” David nodded in agreement.

“As I said a few minutes ago, I don’t want to get into the details of the best practices in each chapter at this time. If you decide to work with us on a program to improve Customer Service—that would be our Capable Planning and Control Milestone and, perhaps our Capable Integrated Business Management Milestone as well—you will become familiar with the Checklist details that support reaching those milestones. If, later on, you decide to undertake the journey to business excellence and want to achieve Class A performance standards, you’ll have to become familiar with the content of the entire Checklist. For now, I want to turn to implementation—how you get there from where you are today.”

“Perfect segue, Roxanne,” Greg said. “We’re beginning to get a better understanding of business excellence; we understand more about the transitions we’ll go through; we know more about the best practices in the Class A Checklist; and we know that Zachary doesn’t think we can get there in his lifetime. But we have only a limited amount of time to deliver breakthrough customer service results or we’ll all be looking for new careers. How do we do it?”

“Thanks for the setup, Greg; let’s pick that up after we take a break for lunch.”

After lunch, Roxanne continued, “With your last question, Greg, you’ve directed our attention to the final subject for the day. Stan Stevens, one of my partners who, with Mary Medford, presented at the seminar you attended, talked about what we call our ‘Proven Path,’ our proven methodology for helping companies transform their culture, accomplish milestones along their journey toward business excellence, and ultimately achieve business excellence operating at Class A performance levels. What he discussed was a fairly conceptual model. What I want to discuss with you now is our approach in helping clients reach their milestones and, ultimately, Class A status. Based on the extensive experience of all of our colleagues, we can say that our ‘Proven Path’ to business excellence works every time it is followed diligently and is supported by senior management” [see Figure 6.8].

“You’re now in the middle of the Leadership Engagement phase [Figure 10.1]. All the work leading up to the Point of Commitment is the responsibility of the executive leadership and sets the stage for successful implementation and completion of the milestone(s) along the journey to business excellence. The implementation clock starts at the Point of Commitment. I want to be completely clear that in Cosmetics Products it is your team Greg, that has accountability for completing the Leadership phase and for deciding whether to commit. You can and should have other people to work with you in this phase of the Proven Path, but when it comes to the final decision to proceed, it is yours and yours alone. Let’s look at those Leadership elements, in which you begin to build excitement and commitment among the leadership team and set the direction for the organization.

“To begin the work, we recommend education for the executives and potential initiative leaders, as we’ve done this week and last. You’ve already been through a Diagnostic assessment of all chapters to assess your current state, and you’ve had some exposure to a desired future state. More detailed education is needed for those who will participate in the milestone assessments so that they understand the concepts and principles of business excellence related to the selected milestone templates. Based on what you’ve told me so far, I’m quite certain your first initiative will be all about improving customer service. When you’ve decided which milestone or milestones will best address that issue, we’ll provide the required education for a larger assessment team and facilitate a detail assessment of the associated business processes and behaviors. That work, however, will come after the Point of Commitment [see Figure 6.8]. The detail assessment helps you determine and quantify quite precisely the specific gaps between current business processes and behaviors versus Checklist best practices, information critical to accomplishing the initial milestone(s).

“It’s important that all who participate in the detail assessment receive education similar to what you are receiving, but in much greater depth. As you’d expect, we have a complete portfolio of courses to fit education needs at all levels of the organization involved in such an initiative. For each milestone, we educate management and key non-management leaders first, and then at the right time we provide more specific detailed courses supporting the milestone to your process design teams. I want to be clear, we provide education to your people; you will then conduct training or retraining classes related to process changes coming from your design teams. Our objective is to transfer enough of our knowledge to enable you to design your business processes for success, and then for you to train your people in how to carry out those processes.

“Your process design teams must be deeply involved in what we call ‘facilitated detail assessments,’ against the Checklist topics and descriptions referenced in the milestone template. Our facilitation allows the assessment to be completed quickly and ensures accurate results. We guide your people in comparing current processes with those in the template, provide clarifying comments, and ask probing questions. We provide insight into the meaning of the Checklist, subjects, and definitions; but we ask your people to determine assessment scores. Our calibration ensures that your teams are neither too critical nor too easy on themselves. I got a bit ahead of myself talking about the milestone detail assessment. Just let me remind you that the design teams’ education and facilitated assessments are conducted after you have passed the Point of Commitment.

“To help you reach that point in completing the Leadership phase, we would facilitate for this team a pretty intense two-day workshop. The first deliverable of that workshop is a formal milestone initiative mission statement designed to keep the team focused. This statement must support the corporate and Cosmetics Products’ vision/mission statements for the business. The initiative mission statement, however, is focused specifically on the business excellence work and on what you want to accomplish with your initial milestone.” Greg interrupted.

“Actually, Roxanne, I’m pretty much convinced after considerable thought that our first initiative must be customer service, and to accomplish that, we must include two milestones—Capable Planning and Control and Capable Integrated Business Management.”

“Good for you, Greg. You need to be careful you don’t stretch beyond the resources you can deploy, but those seem well within your capabilities. Keep in mind that a journey to business excellence is not a sprint; it’s more like a relay race. There are many distractions along the way, so it’s good to break the journey into bite-size chunks aligned with our milestones; that approach will allow you to better focus your resources on the most important business issues at the time. So it’s important to keep your initiative mission statement in front of everyone. Use it in making decisions about priorities. An ongoing part of your team’s work, Greg, is to maintain meaningful business-level vision and mission statements. This initiative would be one of the resulting strategic business objectives. By making these visible, your people should challenge you when your decisions don’t seem to support your business vision or objectives.

“Having made the decision about your initial milestones during the workshop, it is important to be clear about the value and opportunity the work presents. In an earlier session, we have already seen that for Cosmetics Products the potential benefits far outweigh the best-guess implementation costs. However, you need to go through that analysis more thoroughly using your standard cost/ benefit procedures.

“Organization is next. Each milestone would have a team accountable for achieving that milestone” [Figure 10.2].

“This slide is a good representation of the organization our successful clients use to manage their initial milestone when they’re starting in Phase 1—and they mostly are. Realistically, only companies already at the top of Phase 1 are in a position to decide to pursue the entire journey because they have some enablers in place that make it more feasible. Whatever the initiative decision at this early stage, you, Greg, must be the champion. Within the initiative, each and every milestone supporting that initiative also must have a top management champion at the executive level. The milestone champion keeps close touch with the project work, clears away barriers and keeps the executive team on track when the going gets tough. The champion has to be a real enthusiast. In your case, since your first milestones are likely to be Capable Planning and Control and Capable Integrated Business Management, and since they are so critical to your division’s success, I suggest you consider David as the champion of Capable Planning and Control and Alexandra as the champion of Capable Integrated Business Management. The Effective Management coach works closely as a mentor and confidante with the initiative and milestone champions. Together, they are catalysts for the change effort. The coach also works with members of the Steering Committee to keep the effort on track. I presume that in your case, the people in this room would constitute the Steering Committee for any identified milestones and for the journey in general. Each steering team member, by the way, is expected to serve as executive sponsor for one or more of the business process design teams. The EM coach also serves as confidante and personal coach to the steering team members in their support of the milestone teams. Our role is to help you accelerate the flow of benefits to the bottom line.

“As you see, the steering team includes a member called the ‘Milestone Leader,’ who coordinates the efforts of all the business process design teams related to the milestone, as dictated by the milestone template. Ideally, the milestone team is made up of the milestone team leader and the business process design team leaders for a specific milestone, plus any enabling subteams.

“The Milestone Leader also works closely with the executive management milestone champion and the outside coach to ensure that proposed improvements meet the milestone requirements and to ensure that milestone work remains on schedule.

“The coach works closely with the Milestone Team and with the individual process design teams. The routine points of contact with Effective Management would be the milestone champion and the Milestone Leader. Normally Process Design Team Leaders forward design questions that their teams cannot answer to the Milestone Leader who may be able to answer the question. If not, or to validate a response, the Milestone Leader can contact the EM coach to coordinate a reply.

The Milestone Leader is responsible for ensuring that the overall design remains technically sound and integrated across all teams. The milestone team has accountability for achieving the milestone, but most of the groundwork to accomplish that milestone is done by the business process design teams. We provide a good deal of education to the teams, and then rely on those teams to train the rest of the organization as they redesign their operating procedures and work instructions. This is all part of our operating principle of knowledge transfer. It would be easy and profitable for us to train everyone in your organization. We would enjoy that the opportunity, but that would limit your ability to sustain the results after we leave. Instead, we prefer to coach your people to the point that they can continuously develop those who move into new assignments or are new to the organization, and have you call us when you need public education to bring someone new aboard or to provide some refresher education privately for your company.

“If you choose to work on more than one milestone, someone must ensure that the efforts of all the milestone teams are in alignment and integrated with each other, and that the company is efficiently utilizing its resources. We therefore recommend an initiative leader in addition to an initiative champion.

“Looking ahead, having reached the top of Phase 1, the Capable level of your selected milestone, we hope you would choose to embark on other Phase 1 milestones to broaden your capabilities, and then go on to a Phase 2 milestone that could take you to an Advanced level, on the way to full Class A.

“As you can see, before each decision to go further we would help you define your competitive priorities and business case for each additional step in the journey [Figure 10.3]. This isn’t a jigsaw puzzle where you put in milestones to make a pretty picture. Assuming that people and empowerment aspects have been addressed, you would begin to see a rather different organizational model. By this time, you will be organized as process teams—cross-functional, empowered, and maybe self-managing. This aspect of integration will become an integral part of your culture. When they reach this point in their ‘People’ maturity journey, companies find it impossible to understand how they ever managed their business without these teams.

“You can see in this slide [Figure 10.4] that the process teams are even more cross-functional since the advanced milestones are truly focused on process, rather than on any particular function. Having achieved business integration, the process teams become more and more self-managed with guidance and coordination from the Business Excellence Leader, who, as you see in the model, leads Phase 2 initiatives, and steering team. Nevertheless, for each milestone in either Phase 1 or Phase 2, an important responsibility of the executive team is to establish and prioritize performance objectives and goals. Each template includes the critical goals and the minimum levels of performance required. Early on, these may satisfy your needs. But as you progress I would also expect that you might have additional objectives and goals resulting from benchmarking other companies in your industry. In the later milestones on the journey, you’ll need to achieve results consistently in those defined areas in the upper quartile of your industry. You’ll also need to define and achieve the bottom line business results that you have defined in the Leadership portion of the proven path. We can provide coaching and workshops in all those areas. It’s important for you to review and understand all performance goals and business objectives for each milestone up front so that you don’t surprise and demoralize your milestone and business process teams with new requirements at the last minute. One word of caution: beware of trying to carry forward today’s performance measures that don’t fit in the integrated environment. If you think you need an extra measure, or you think a measure in the template is redundant, please call us first. Most often it’s a misunderstanding that can be resolved quickly.

“When you’ve completed the leadership tasks, you’ll be well positioned to decide whether to proceed with the first milestone or milestones. If you choose to proceed, you’ll schedule a formal kick-off event marking deployment of the initiative. In that meeting, you can communicate your vision of the future, the mission for the team, the performance objectives, the organization including the milestone and process design teams and the Milestone Leader(s) responsible for success of the effort, and, most importantly, the bottom-line improvement objectives such as costs, customer service, inventory, and savings.

“The first job of the teams as you move into the second part of the Proven Path [Figure 10.5] would be to lay out a time line, based on the steps in the Proven Path, and bounded by management’s delivery expectations. The time line would include the initial detailed education for both milestone and process design teams.

“Here is a list of the typical teams companies need to support Capable Planning and Control [Figure 10.6]. In assigning the process design team leaders, do not select people who are easy to free up. The better the people you select, the better the results you’ll get. You’ll get faster and more sustainable results if you assign the managers of the associated areas to the project. If they aren’t your best people, perhaps you don’t have the right people in management. Have the Team Leaders recruit their cross-functional team members. Since these are the people who will redesign your business processes, you need people you can trust to do a conscientious job. As quickly as possible, the executive team should charter and commission the milestone and process design teams, and provide whatever internal orientation and business case education necessary to begin to get people excited and up to speed. That would give us time to schedule your people into our public courses and arrange for private courses to fit in with the teams’ needs and your timetable.”

Greg interrupted. “Don’t get too far ahead, Roxanne. We haven’t yet decided to move ahead with this initiative.”

Roxanne noticed her look of exasperation as Sara said to Greg, “Like, what else do you propose, Greg? The Plan B you’ve been talking about?”

Roxanne intervened. “Hold on, Sara. Greg’s absolutely right. You all need to sit down and create a proper business case, however rough-cut, and consider how you’re going to free up resources; set out a rough time line; assign budget, and then decide whether to go ahead. If you bypass these, you’ll be missing a vital step in reaching your formal Point of Commitment. Remember the Proven Path? You need to work on the business case, then the deployment structure, and then do the milestone selection and planning.

“I did get a bit ahead of myself. My apologies, Greg, but I know you’ll forgive my enthusiasm!” Greg acknowledged Sara’s apology with a smile. Roxanne continued.

When teams are formed and a timetable created, that’s the point at which we would begin a series of courses for the business process teams and others who will be working closely with them. This education focuses on how to achieve best practice processes related to the selected milestone, to begin closing the gaps identified during the Diagnostic assessment, and to prepare the teams for the detail assessments. It enables the business process design teams to develop a common language and understanding, and to begin developing their work plans.

“If you are wondering why I stress education, it is because education is the key to your success. Employees must understand why they are being asked to do something differently. You may have noticed that I said Effective Management would educate your teams; but I didn’t mention the rest of your people for a good reason. That part is your job, internally, through what we call ‘cascade education.’ And remember, when we’re no longer here to help, you will be responsible for sustaining your people’s knowledge of how you want your integrated processes to operate, and why. This need for education is especially relevant when a senior manager joins the team. Just for your information, Greg, turnover among leadership team members is far and away the biggest reason that companies experience an erosion of their procedures and lose their performance edge.”

Greg interrupted Roxanne. “I agree with you, Roxanne; you talk a great deal about the importance of education, as did Stan Stevens and Mary Medford in the seminar David and I attended. There must be a less expensive and less time-consuming way of educating people than by sending them away to courses. We have smart people; can’t smart people simply read technical books and get the same information?

“There are lots of ways to learn, Greg. People should take advantage of every learning opportunity including reading books, attending courses and seminars, using e-learning for technical training, acquiring specialist certifications and talking with peers at professional association meetings. All of those methods are good and important throughout a career. But where speed is of the essence, where you are seeking a culture change and you want the best and the most up-to-date information, you need the sort of education we provide. Our clients tell us that the education we provided was critical to transforming their organizations. We’ll help you save time to achieve bottom line results. I believe it is a question of value, not cost.”

Roxanne continued. “Let’s table that discussion for now and follow up with further discussion offline. I want to go back one slide and spend some time discussing the Development phase of the Proven Path [Figure 10.5].

“Following education, the teams are ready to participate in detailed assessments against their milestone template. Because people have had the education and received our help in facilitating the event, they begin to see and quantify gaps against best practices. And, because they know your current processes, they begin to develop some initial thoughts about the redesign. We keep them calibrated against the best practice concepts and goals, and provide insight and guidance where necessary.

“Then the fun work begins. Teams redesign their processes, test, revise, validate goodness of fit to the business, and begin to determine how best to configure the ERP system to support those new processes. Then they finalize their new designs and formally document their new business processes. The milestone team ensures there is integration between the process teams’ redesign efforts, and keeps the design teams on schedule. When all that work is complete, there is a formal design review with the steering team to ensure that the final design is fully tested and integrated, to answer the executives’ questions, and to convince the steering team that the new design is ready for implementation.

“Around this point, it is often helpful to convert a slice of the business to the new processes in order to demonstrate that they work and deliver the expected early benefits. After this first cutover, rapid implementation across the whole business is required by the executive team, which is counting on the improved results across the board.

“Implementation is the process of training all affected people on the new business processes, establishing ownership, developing the capabilities and competencies of the people involved and ensuring that the required new behaviors are in place. That is when the results begin to really flow to the bottom line.”

Greg interrupted. “Roxanne, you said it typically takes three months to start seeing results and a year before we would be ‘Capable.’ I’m still concerned about how much time we really have left to solve our customer service problems. I need to fix those problems now!”

“Assuming you reach the Point of Commitment and make a ‘go’ decision, I would assign a small team of coaches—two or three, plus myself to support an urgent implementation. We could begin working with your people very soon after that if you can free up some of their time. Between us, we should be able to complete the design teams’ education, workshops, and milestone assessments within a matter of weeks. The rest of the Development phase, specifically the actual redesign and the beginning of cascade education, depends on the size of the gaps, the complexity of your company and, again, the focus of your steering team. Quite frankly, the biggest factor regarding speed to results often seems to be the commitment and attention span of executive management.

“Benefits follow as work is completed; the more focused the effort, the sooner on-time delivery improves, revenue and profits increase, and customer service improves. Regardless, improved performance won’t come instantaneously, but improvements in planning the business internally will soon work their way into improved customer service results. Of course, global companies take longer to get to the redesign, maybe as long as six months, given the realities of geography, regional differences, and logistics.

“When the Steering Team stays focused, many companies begin to see the first signs of improved customer service and financial benefits about three months after the Point of Commitment. Greg, it’s my experience, and that of my colleagues, that if the path to business excellence is followed, milestone results and targeted bottom line benefits are achieved as predicted and often exceeded. But there’s no magic wand to wave and there is no quick fix; don’t let anyone tell you otherwise. I hope that answers your question, Greg.”

“It does, Roxanne. Of course I’d like to see immediate improvement in customer service but your answer makes sense. We took about three years to screw it up; it’s going to take some time to put it back together correctly. The way your company approaches the work as knowledge transfer and culture change probably requires a bit more time up front. But I see how it can accelerate the realization of improvements and reduce the total time needed to get the benefits. More importantly, I can see clearly that the resulting improvements would be more self-sustaining. What would you suggest we do next?”

“As individuals and as a team, you have some serious thinking to do. Some rhetorical questions come to mind. Are you going to focus on the Capable Planning and Control and Capable Integrated Business Management Milestones? Have another look at that rough-cut business case and determine if it’s close enough, or if you need more economic analysis? How quickly can you reach the Point of Commitment? How quickly can you set up the organization structure for change? Who will be on the various teams? How soon can you free up some of their time? Will your team lead aggressively and support the effort required?

“Greg, you and your team have to answer these questions. If and when you decide to ‘go’, we’ll be right there to help you get going, to provide education, the relevant facilitated milestone assessments, mentoring, and coaching. Then we’ll step back so your redesign teams can develop and own their redesigns. I’d normally come in every month for a few days to assess progress and provide help as necessary, and also to coach you through any tough spots. Members of my team would be here as often as necessary to speed up your redesign and accelerate the transfer our knowledge.”

“Roxanne, before we break, just run over the next steps following Point of Commitment. I want to see if I’ve got it right.”

“Okay, Greg. When you’ve assigned and freed up your teams, we’ll provide detailed education in two parts. First, an overview of business excellence for the milestone team, and any other managers you’d like to put in the loop at that time. We would then start the milestone template assessments, so by then you’ll also need your executive champion in place.

“I’ll facilitate your milestone assessment with David and Alexandra. You’ll begin to understand your business as never before, I promise you. At times you’ll be shocked by what’s common practice today. You’ll have to bite your tongue and just make a note of it and remember that the current processes have been, by default, sanctioned by today’s management. Overview education and facilitated assessments would take two to three days each. I’ll then spend a day with that same team in a high-level workshop on areas for redesign. If you discover that there may be some other implications of the design such as safety or quality, the milestone team could charter a subteam to look at those issues.

“Part two of the education is usually more detailed private courses on best practice concepts, process by process, for each of the redesign teams. To remind you, the people on process design teams would typically spend two days a week in team activities. As I said before, given your urgency, it sounds like you’ll want to put in more of their time, maybe three or four days a week, but not 100 percent. Education for the design teams would take one or two days for each, depending on the gap from best practice. That’s about twenty education days, probably covering about 100 people in your case. Before you say it Greg, if you think education is expensive, try calculating the price of ignorance!” Greg smiled, “I’m sure I’ve heard that before,” and nodded in agreement.

“Then it’s up to your steering team through the Milestone Leader and executive champions, to drive the redesign activities to conclusion. As a reminder, when a process redesign team has completed its redesign, it is disbanded, leaving the milestone team to take implementation forward. Is that enough information for now?”

David spoke first. “That gives me a much better sense of what’s involved, especially with the facilitated detail assessment. I can see redesign will follow as a natural next step.” Greg spoke next.

“That helps me a lot too, Roxanne. I’m beginning to see that this could really work for us.”

Greg brought the day’s session to a close. “Roxanne, I like the idea of getting a more definitive estimate of the cost and the benefits of completing the first milestone, and maybe the next one or two. You can guess pretty well where I’m headed, but first I would need a costed proposal for the use of Effective Management’s services if we go ahead with you. Price your proposal as if we will pursue both the Capable Planning and Control and Capable Integrated Business Management Milestones. That’ll give us the information we’ll need for going after just Capable Planning and Control, or both.”

“Sure, Greg, and I’d like to include your expenditures to date as well so you see the big picture. We use common milestone program templates with all our clients as a starting point and adjust it to individual company needs. I’ll get that to you next week—but only as a starting point for further discussion until we complete the detailed assessment. The good news is that our program pricing template assumes everything is wrong, so usually we can reduce it a bit.”

“I’ll believe that when I see it, but I’m impressed with your approach.”

“Greg, my company’s purpose-vision is ‘to help clients make themselves successful through sharing our experiences in a committed relationship.’ We want, passionately, for our clients to be winners. We work closely with and alongside your project teams to ensure client success. As I said earlier, we are successful only if our clients are successful in meeting their business objectives.

“I’ve come full circle back to the start of this monologue. I would really enjoy working with you. Your potential for success, from my vantage point, is enormous. Regardless of whether or not you choose to work with Effective Management, I will be happy to be an ongoing resource and sounding board for you, Greg, and for the rest of your leadership team. I don’t have anything else to add at this time, except that you can expect my proposal within a week. Do you have any final questions for me?”

There were no questions, so Greg closed the day’s meeting. “You’ve been very helpful, Roxanne. I appreciate your candor, insight, encouragement, and your willingness to stay with us until this late hour. We’ll get back at it on Monday, team. We’ll see if we can make a decision or at least come to grips with what else is needed to make a decision quickly.”

Later that evening, Greg shared the events of the day with Penny, and then phoned Susan. “Sorry for bothering you at home, Susan, but I want to bring you up to date on the meeting with Roxanne Barnes. I need to review her proposal for the next steps, but I don’t think that will be a barrier to moving forward. I’m really encouraged. Specifically, I’ve asked her for a proposal to provide initial education to a cross-functional group of people from our business offices and plants. That education would prepare those people to participate in a detailed assessment, with Roxanne’s help, of our current business practices against what are called the ‘Capable Planning and Control Milestone’ and the ‘Capable Integrated Business Management Milestone’ based on Class A best practices. You’ll find out more about these terms when we can sit down together. Alongside the diagnostics we’ve already run as a management team, that would give us a clear view of what’s broken, and needs attention; what’s not effective and needs to be improved; and what’s good that we don’t want to lose. We can then determine accurately the cost and potential bottom-line benefits of putting in the Class A processes required to achieve our customer service objectives. We’ll then be able to decide whether to proceed.

“My confidence is growing that we can get the customer service problem behind us. However, I know just lurking around the corner are other issues to be addressed, including profit objectives. Let me tell you what I found staggering. Based on some benchmarks, and please don’t hold me to this yet, we did a very rough estimate of potential benefits. We came up with annual, reoccurring savings of about twelve million dollars plus another fifteen million dollars in a one-time reduction of our growing working capital investment while at the same time increasing customer service to at least 95 percent.”

“Impressive! Tell me honestly, Greg, do you really believe those numbers? Is Roxanne capable of delivering that kind of financial windfall?”

“She was very clear with us that we would be responsible for delivering those savings. She and a very small number of her colleagues would coach us, but they insist that we learn the concepts and principles of business excellence that will lead us to Class A performance levels, implement the required culture changes, and deliver the results. Now, to answer your question about her capability, I would say unequivocally, she is capable. Roxanne has a grasp of the supply chain that even impressed David. She has been through similar business excellence journeys as a member of a leadership team before becoming a consultant, and has a wealth of knowledge about how other companies faced and overcame challenges similar to ours. I need to stay objective as I review her proposal, but I haven’t been this encouraged about turning the business around in a long time. I really can’t wait to get started.”

“I like it when you get passionate about a plan, Greg. Sounds like you had a great session this week. Please let me know when you’ve reviewed Roxanne’s proposal. If you choose to proceed, let me know your plan. I’ll need some details, especially about when we might begin seeing the twelve million dollars on the bottom line. Needless to say, the Board is still looking for a return on their investment in Cosmetics Products. By the way, if you go forward, I’d like to meet Roxanne.”