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Beyond Balanced Scorecard
 
A 4TH generation Balanced Scorecard (BSC) can help your strategy execution and performance improvement and support your Business Process Architecture.
 
It is a strategy-based measurement system to assure focus and alignment of strategy execution.
 
Norton and Kaplan recommend five principles to become strategy-focused:
  • Translate strategy to operational terms
  • Align the organization to the strategy
  • Make startegy everyone's everyday job
  • Make strategy a continula process
  • Mobilize change through executuive leadership
Develop cause-and-effet objectives and describe them in Strategy Maps
 
Successful strategy execution = strategy description + strategy measurement + strategy management
 
Successful strategy execution = Strategy Maps + Balanced Scorecard + Stratgey-Focused Organization
 
 
Sim-Com (Simple-Complex) Measurement Model
 
All things are not created equal.
 
Stratgeic planning is all about determining what will and will not be focused on. It is all about prioritization. Implicitly we know that all goals, objectives, and cascading KPIs are not equal. But most organizations treat them as equal by virtue of not using a weighting perspective.  
 
 
More To Come
 
Fedex Hierarchy of Horrors Service Quality Index (SQI) Measurement Model
 

Delivering Results – Successful Customer Outcomes (SCO)

 

FedEx is the leading innovator and service provider in the overnight package delivery business. Its brand is so strong that people don't refer to "overnighting" a package, they simply say "FedEx it." FedEx's reputation for premium pricing, delivering packages when you need them and an unconditional guarantee that your delivery will be on time or it’s free, catapulted it to market leader while recording superior profits. FedEx rewards and motivates team members to deliver packages on time because that is what FedEx customers care about. The connection between what the company measures and rewards and their industry dominance is solidly linked.

 

Challenging the Status Quo

 

For years FedEx operated under the 95 percent rule, which said that to improve on time delivery beyond 95 percent would be cost prohibitive and require a price not acceptable to the majority of its customers. But to drop below 95 percent would also be unacceptable to the customer. As Michael Basch explains in his book Customer Culture: How FedEx and Other Great Companies Put the Customer First Every Day:

 

"Fred Smith has a way of standing back from the business and challenging the basic tenets of the business. One day he challenged time '95 percent rule'--a sacred cow since the very early days.

 

“If we handle a million packages a day and we mess up 5 percent, that means we mess up 50,000 packages a day,” he reasoned. “And since one person ships to another, that means we've disappointed 100,000 people each day. It doesn't take a rocket scientist to figure out that before long you've disappointed everyone in America who ships or receives packages.”

 

"Then he created what he called a Hierarchy of Horrors. Of the 5 percent disappointments, what is the worst thing you can do to the customer? What is the next worst thing, and so on, He and his senior management team identified eight major horrors."

 

FedEx’s Hierarchy of Horrors

 

The so-called Hierarchy of Horrors was the genesis for the FedEx Service Quality Index (SQI), which is a system of weighted Performance Indicators (metrics) that measure the functions of critical importance to the customer. The SQI measures the following functions, each weighted according to the degree of customer aggravation caused by a failure to perform. The number of "average daily failure points" is multiplied by that component's assigned weight to calculate the SQI:

 

 

Item

Weight

Missed pickups                      

Damaged packages                    

Lost packages                       

Wrong-day late-service failures     

Overgoods                

Complaints reopened by customers    

Missing Points of Delivery          

Invoice adjustments requested       

Traces                    

Abandoned calls                    

Right-day late-service failures     

International SQI indicator       

10

10

10

5

5

5

1

1

1

1

1

1

                               

Since being placed in service in 1987, the SQI has enabled FedEx to increase its on-time delivery performance from 95 percent to 99.7 percent without adding significant costs. The lower the SQI, the more FedEx knows it is meeting customer needs.

 
Leadership Measurement Model (Aubrey Daniels International)
 
You don't lead by results; you lead to results; and only behavior will get you there.
 
You are a leader only if you have followers. Follower behavior, not leader behavior, defines leadership.
 
True leaders bring out the best in their people, whether it is defined by courage and heroism or by integrity and diligence.
 
Four criteria of the follower's behavior define leadership.
  1. Followers deliver discretionary behavior directed toward the leader's goals;
  2. Followers make sacrifices for the leader's cause;
  3. Followers tend to reinforce or correct others so that they also conform to the leader's teachings and example;
  4. Followers set guidelines for their own personal behavior based on their perceived estimate of that which the leader would approve or disapprove.
Leadership mesurement is done to assist learning:
  • Leader's personal development
  • Allows separation of apparent effect from actual effect
Many people are trapped in counterproductive behavior patterns because they believe in the efficacy of those behaviors. With no way to prove or disprove their impact on followers, they continue doing inappropriate or ineffective behaviors. This accounts for significant leadership failure. With measures, leaders discover the true relationship betwen their actions and the impact those actions have on their on leadership potential.
 
Leadership Measurement Traps:
  • Too much judgement as the measurement method
  • Too much focus on personality instead of behaviors
Personality is usually difficult to change whereas changing someone's behavior is relatively straightforward if you properly apply a scientific understanding of behavior through consequence management.
 
Learning leadership is fundamentally a self-managament task. Since follower behavior, not leader behavior, defines leadership, the task is to determine what you want your followers to do and then determine what you must do to produce that behavior. You must measure whether the desired impact is occurring.
 
The best predictors of leadership are found in the behavior of a leader's followers and fall into four categories:
  • How do the followers respond to the leader's direction - how effectively the leader brings about change.
  • How focused are the followers on the leader's goals - how well do the followers perform their tasks.
  • How do the followers relate to each other - how well do the followers relate to the cause and to eah other.
  • How do the followers react to the leader - are the followerscomfortable enough with the leader that they seek guidance, admit mistakes, and mentored by the leader? How many leaders does the leader create?

Collectively, these indicators provide th best possible forecast of the leader's impact on the business.

Therefore, the focus is on measuring follower response, the in-process measures of leadership:
  • Momentum
    • Mass - how many followers respond to the leader's call? What percentage are delivering discretionary effort?
    • Velocity - if the leader were to announce a requirement for action, how quickly would the leader get discretionary effort at all levels of the organization?
    • Direction - what percentage of people focuses effort on the top priority of the leader?
  • Commitment
    • Vision - what percentage of the followers can relate their efforts to the vision?
    • Values - what percentage of followers can cite an organization's decision or a current example of conduct exemplifying the organization's values?
    • Persistance - at intervals, such as milestones and deadlines, what percentage of performers demonstrates continuous energy and enthusiasm for the leader's initiatives?
  • Initiative
    • Teamwork - how many acts of cooperation or assistance from peers can the leader's followers relate?
    • Interfaces - how many followers can relate acts of cooperation and assistance from other internal units?
    • Innovation - what percentage of followers offers multiple suggestions in support of the mission and vision?
  • Reciprocity
    • Trust - what percentage of the followers shares failures or mistakes with peers and the leader?
    • Respect - how many followers initiate contact with the leader seeking counsel or input to personal and professional decisions?
    • Growth - how many managers of the unit has the leader actively promoted inside and outside of the organization?
 
 
Clipper Performance Solutions
It's All About Alignment.®