Performance Management Maturity Methodology Mitchell Weisberg – Lumen, Inc

Performance Management Maturity Methodology

Mitchell Weisberg – Lumen, Inc.

Recommendation: IF YOU ARE PLANNING TO COME TO THIS

SESSION:

Take our Performance Management Maturity Assessment before attending this session for greater value from the session.

You can take the assessment survey at:

www.Lumeninc.com/Maturity

We will email you your results prior to the session so you can compare your results with others in the session.

http://www.surveymonkey.com/s.aspx?sm=ZqXusrUbaCl9VYJUdqtq1A_3d_3d&c=CognosForum

Objectives> Provide deeper understanding of how performance metrics

will drive higher performance in your company

> Understand why knowing maturity is key is achieving success in any performance management implementation

> Learn how to adapt approach to your organization’s performance maturity to accelerate implementation and achieve faster results

> Learn from the execution of performance metrics at Amgen

> Develop next steps to apply learnings in your organization

Agenda> Welcome & Introduction

> Lumen, Inc. Overview

> Current Situation

> Amgen Case Study: CPM Maturity Applied

> Performance Management Maturity Model

> Lessons Learned

> Discussion

Lumen, Inc. is a specialty management consulting firm of senior, experienced professionals who collaborate with clients to rapidly transform them into high performance businesses.

Reengineer processes for greater productivity

Manage change more effectively for rapid achievement of competitive advantage

Align business performance with the business strategy

Establish and execute performance management throughout the organization

Rethink customer and employee relationships for greater profitability, satisfaction and retention

Technology Agnostic: Relationships with Vendors Across the CPM Landscape

> Our deep familiarity with all the key vendors in the CPM space is a strength

> Counsel is objective, choosing the right product for the client based on needs and best-in-class solutions

> Vendors provide training to our consultants on a regular basis, so our service to clients is always current



> Current Situation



> Lessons Learned

> Discussion

9April 21, 2023

Businesses Continue to Face the Same Challenge of Faster Growth and Higher Performance

> Over abundance of data and information

> Management demands for better information for decision making

> Increased market expectations

> Greater internal complexity

> More dynamic markets require higher business agility

> Measure performance outcomes with leading metrics enabling managers to anticipate and respond to change with decisions or actions

> Consistently and systematically monitor progress towards goals and targets to enabling proactive addressing of issues

> Enable execution of the company’s strategy through line of sight objectives, processes and practices

> Increased ability to manage internal performance to market demands

Benefits of CPMOrganizational Performance Issues

10April 21, 2023

Today’s Economy Superimposes a Greater Challenge: Decrease Costs While Maintaining Capability for Growth

>Improving operational efficiencies

• Without reducing production capability

>Reducing human capital

• Without losing valued employees

>Reducing sales and service expenses

• Without customer attrition

>Maintaining financial results

• Without missing forecasts and market expectations

More dynamic markets requiring higher business agility…

… and greater visibility

> Corporate Performance Management: system of metrics, processes and supporting IT that enables users to define, monitor, manage and optimize process outcomes while creating alignment with strategic objectives across multiple organization levels

Strategy Map

• % Ground crew trained

• % Ground crew stockholders

Objectives Measures

• # Customers• FAA On Time

Arrival Rating• Market Survey

• On Ground Time• On-Time

Departure

Strategic Theme:Operating Efficiency

Initiatives

• Cycle time optimization

• Ground crew training

• ESOP

•Customer loyalty

program• Quality management

Targets

• 30% CAGR

• 20% CAGR

• 5% CAGR

• 12% growth• Ranked #1• Ranked #1

• 30 Minutes• 90%

• yr. 1 70%yr. 3 90%yr. 5 100%

• Profitability

• Grow Revenues

• Fewer planes

• More Customers • Flight is on -time• Lowest prices

• Fast ground turnaround

• Ground crew alignment

Strategic Theme: Operations Excellence

Profits andRONAFinancial

Learning

Ground crew alignment

Fewer planes

Customer

Internal

Fast ground turnaround

Attract & Retain More Customers

GrowRevenues

Lowest prices

On-time Service

• Incorporates tool and methodologies: Balanced scorecard, performance metrics, strategy map, Lean, SixSigma, value tree, process improvement or redesign, change management

>Successful CPM requires: • Standard methodology and consistent

metrics

• Culture supporting fact-based decisions

• Technology to deliver accurate metrics and analysis

CPM Delivers Capability for Better Business Performance

CPM Closes the Gap Between Strategy and effective Execution

ExecutionStrategy

http://www.keystonecivic.org/images/ClipArt/chain.gif

Performance and Management

Conduct the Business

Man

ag

e t

he B

usin

ess

Business

Inte

lligence

Achieving the Value of CPM

>Significant resource savings

>Simplified reporting environment

>Reduced budget and reporting cycle times

>Lowered cost of compliance

>Reduced spreadsheet proliferation

Intangible BenefitsTangible Benefits

>Movement to a flexible, rolling forecast and budget cycle.

>Significant improvements in forecasting accuracy

>Improved decision-making capability

>Increased accountability through better visibility

>Information to manage the business more effectively

15

>Why isn’t Performance Management (CPM) delivering the expected value for everyone who is implementing it



> Current Situation



> Lessons Learned

> Discussion

Amgen: A Biotechnology Pioneer> Founded in 1980, Amgen was one of

the first biotechnology companies to successfully discover, develop and make protein-based medicines

> Today, Amgen is leading the industry in its next wave of innovation by:

• Developing therapies in multiple modalities

• Driving cutting-edge research and development

• Continuing to advance the science of biotechnological manufacturing

Amgen’s Mission…

…to serve patients

Inflammation OncologyNephrology

Amgen's Business at a Glance

The Netherlands

Belgium

Ireland

Spain

Switzerland

Juncos, Puerto Rico

Washington, DC

Louisville, KY

West Greenwich, RI

Cambridge, MA

Toronto, ON

Thousand Oaks, CA

Seattle, WABothell, WA

Hungary

England

Denmark

Portugal

Italy

Germany

Norway

France Czech Republic

Sweden

Austria

Poland

Australia

Japan

Boulder, COLongmont, CO

Finland

South San Francisco, CA

Slovenia

Slovakia

LithuaniaLatviaEstonia

Luxembourg

New Zealand

Fremont, CA

Burnaby, BC

United Arab Emirates

Mexico City, Mexico

Hong Kong

India

Russia

Greece

2007

Revenue $14.8 B R&D Investment $3.1 B

Locations

Amgen’s Products

For additional information about Amgen products, including important safety information, please visit www.amgen.com

What Was the Problem?

>Over a dozen Dashboards with different metrics and design

>Large number of non-Standard metrics

>Significant manual effort to deliver dashboards

>Challenges to do factual comparisons between multiple organizational unit performance

Solution: Service Partnership of Business & IS to Deliver Metrics Using Standard Methodology

> Amgen’s approach

>CASE STUDY DISCUSSION

Approach : 3 Step Process

>Created Custom Performance Management Methodology

>CASE STUDY DISCUSSION AND ANSWERS

Performance Management Methodology

> Framework to consistently implement metrics

> Repeatable and flexible process from project inception to delivery

> Drives top-down and bottom-up approaches

> Playbook contains instructions, templates, and roles & responsibilities

Performance Management Methodology

1.0 Establish Metrics 2.0 Develop Metrics 3.0 Manage Performance

Process Steps

1.3Develop Strategic

Metrics

1.2Evaluate Metric

Maturity

1.1Initiate

1.5Establish Targets

1.4Align Operational

Metrics to Strategy

1.6Finalize Metrics

& Scorecard

2.1Gather Metric Components

2.2Develop Detailed

Design

2.3Construct Metrics

& Scorecard

3.1Deliver Metrics &

Scorecard

3.2 Continuous

Improvement

Technical Solution Maintains Standard Metrics Enabling Cross-business Unit Comparisons

IBM Cognos Metrics Studio

> Amgen standard IT scorecarding application

> Powerful tool to track and analyze scorecard & metrics performance

> Indicates the current status of the business

> Supports a performance management culture

Sco

reca

rd H

iera

rch

y

Met

ric

Per

form

ance

SCREENSHOTS OF IBM COGNOS

SCREENS DELETED

The Scorecard Enables Root Cause Analysis of Problems

Metrics Studio contains rich features …

>Quickly identify and focus on problem areas

>View performance trends over time

>View metric relationships & impact diagrams

>Drill-down reports & analysis for details or context


SCREENS DELETED

Metrics Definitions are Held in a Central Repository

Metrics Catalog

>Web-based tool integrated with IBM Cognos Report Studio

>Supports the performance management methodology


SCREENS DELETED

But was it complete?

Methodology Technology Prototype Pilot…

Did it deliver expected results?

Why not? ?

What Was the Problem “2”?

• CASE STUDY DISCUSSION AND ANSWERS

• (Hint: Performance Management Maturity)



> Current Situation



> Lessons Learned

> Discussion

Performance Management Maturity Model: Charting the Course

>Developed with input from across industries and thought leaders

>Represents a formula for long-term success that is a function of three fundamental capabilities

>Outlines a path forward as companies work toward closer alignment of business strategy and execution

Three Dimensions of the Performance Maturity Model

>Organization and Culture

• The practices and integration of metrics into the organization’s behaviors; includes the breadth and depth of metrics in managing performance

>Processes

• The practices and structures for producing, distributing, managing and using performance metrics; includes the quality of the metrics

>Technology and Data

• The technology support and data quality that underlies the metrics, scorecards and dashboards

The Model is Based on Three Dimensions

Performance Maturity ModelOrganization & Culture

Processes

Technology & Data

Organization & Culture

Processes

Technology & Data

Lumen Performance Management Maturity Model

Lumen Performance Management Maturity ModelOrganization & Culture

Processes

Technology & Data

Sponsorship: Board to Worker

Compensation Link to Enterprise Performance

Cultural Focus: Strategy & Value Chain Driven

Org Structure: Enterprise + Bus Partners

Balanced Scorecard w/ Leading Indicators

Seamless Management & Process Views

Certified Data Quality

Data Source Integration –“Plug & Play”

Strategy & Value Based Planning & BPM

Analysis through Embedded Analytics & AI

Cycle Time:: Continuous –On Demand

Standard Procedures at All Org Levels

Anticipatory Alerts

Global Technology Consistency at All Org Levels

Lead/Lag Balance Real-time for Operations Level

Technology Availability: Anytime / Anyplace

Sponsorship: Mgt Team/Board

Compensation vs. Perf: Exec & Middle MgmtOrg Structure:

Enterprise & Cross Functional

Strategy Driven Org w/ Focus on Leading Indicators

Global, Standardized Scorecard Supporting all Levels

Balanced & Leading Measures

Data Quality: Integrated, Consistent and Measured

Data Sourced from Internal & External

Process Integration: Global Enterprise level

Analysis: On-Demand & Solution Based

Immediate Cycle Time

Business Processes Techniques Include Formal reviews, Best Practice Learnings, Collaboration & Rewards

Integrated Technology (ERP, DW, Planning, BPM)

Redundancy: Fully Integrated

Seamless Functionality w/ Drilldown and Across

Fully Automated Technology Environment

Sponsorship: CFO/CEO

Compensation vs. Perf: Executive Level Only

Org Structure: Regional / Functional

Org Focus: Region / Function -Tactical & Strategic Mix w/ some Process Metrics

Corporate & BU Scorecard

Balanced Measures w/ Some “Leading”

Data Quality: StdardizedSources & Definitions

Internal Data Source: Standard w/ Supporting Detail

Process Integration: Functional/Segment

Common KPIs & Definitions

Cycle Time:•Monthly for Mgt •Wkly for Operational

Reg Reviews & Reward

System Supported with Supporting Reports

Redundancy: Department/Regional

Standard KPI s and Reports

Independent Systems

Data Manually CompiledLocal / Independent Data Stores

Local Metrics and Definitions

Local Mgr/Director Sponsorship

Organization Silos

No Compensation/Performance Linkage

Tactical / Reactive Culture

Non-Existant / Lagging

Indicators

Poor Data QualityInternal Data Source

Process & Org Scorecard

Sponsorship: Board to Worker

Compensation Link to Enterprise Performance

Cultural Focus: Strategy & Value Chain Driven

Org Structure: Enterprise + Bus Partners

Balanced Scorecard w/ Leading Indicators

Seamless Management & Process Views

Certified Data Quality

Data Source Integration –“Plug & Play”

Strategy & Value Based Planning & BPM

Analysis through Embedded Analytics & AI

Cycle Time:: Continuous –On Demand

Standard Procedures at All Org Levels

Anticipatory Alerts

Global Technology Consistency at All Org Levels

Lead/Lag Balance Real-time for Operations Level

Technology Availability: Anytime / Anyplace

Sponsorship: Mgt Team/Board

Compensation vs. Perf: Exec & Middle MgmtOrg Structure:

Enterprise & Cross Functional

Strategy Driven Org w/ Focus on Leading Indicators

Global, Standardized Scorecard Supporting all Levels

Balanced & Leading Measures

Data Quality: Integrated, Consistent and Measured

Data Sourced from Internal & External

Process Integration: Global Enterprise level

Analysis: On-Demand & Solution Based

Immediate Cycle Time

Business Processes Techniques Include Formal reviews, Best Practice Learnings, Collaboration & Rewards

Integrated Technology (ERP, DW, Planning, BPM)

Redundancy: Fully Integrated

Seamless Functionality w/ Drilldown and Across

Fully Automated Technology Environment

Sponsorship: CFO/CEO

Compensation vs. Perf: Executive Level Only

Org Structure: Regional / Functional

Org Focus: Region / Function -Tactical & Strategic Mix w/ some Process Metrics

Corporate & BU Scorecard

Balanced Measures w/ Some “Leading”

Data Quality: StdardizedSources & Definitions

Internal Data Source: Standard w/ Supporting Detail

Process Integration: Functional/Segment

Common KPIs & Definitions

Cycle Time:•Monthly for Mgt •Wkly for Operational

Reg Reviews & Reward

System Supported with Supporting Reports

Redundancy: Department/Regional

Standard KPI s and Reports

Independent Systems

Data Manually CompiledLocal / Independent Data Stores

Local Metrics and Definitions

Local Mgr/Director Sponsorship

Organization Silos

No Compensation/Performance Linkage

Tactical / Reactive Culture

Non-Existant / Lagging

Indicators

Poor Data QualityInternal Data Source

Process & Org Scorecard

SO Where Was Amgen:

CASE STUDY DISCUSSION

Amgen: Metric Maturity Survey Results (Example)*

*NOTE: Numbers disguised, but demonstrating trend

People Process & Technology Overall metrics maturity

• CASE STUDY DISCUSSION AND DATA

• (Hint: Performance Management Maturity)

Map Yourself Against the ModelPerformance Maturity Model

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x x xx

x xx

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xx

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xx

Organization & Culture Processe

s

Technology & Data

327 7

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Data subset to highlight

participants in Session

Process Dimension Appears Least Mature

Overall

Tec

hnol

Pro

cess

Org

aniz

Process Dimension Appears Least Mature

Overall

Pro

cess

Org

aniz

Overall

Pro

c

Org

aniz

Overall

Tec

h

Pro

cess

Org

aniz

Tec

h

Tec

h

Finance IT

Operations



> Current Situation



> Lessons Learned

> Discussion

Observations

>Performance Management Maturity is quite low

>Maturity levels may vary by department

>You must balance multiple dimensions of maturity challenges

>The Organization/Culture and Process dimensions (Methodology for dashboard/scorecard, metrics) are the least mature areas

>CPM delivers significant benefits, and, in today’s economy is a critical management methodology to implement.

Observation:

Take our Performance Management Maturity Assessment atwww.Lumeninc.com/maturity

Use the Results to Put your Project Back on the Fast Track

>Use the Performance Maturity Model to benchmark your dashboard initiatives and goals

>Adapt methodology to address different maturity of organizational units

>Expand your approach to address the dimensions of performance maturity

• Cultural, Process and Technology

You can accelerate value delivery by addressing maturity issues:

http://www.lumeninc.com/maturity

http://www.lumeninc.com/maturity

Throw Away “The Box”> Use the Performance Maturity Model to initially to establish your

CPM initiatives and goals• Adapt methodology to address different maturity of organizational

units

> Expand methodology to fit dimensions of performance maturity

• Cultural

• Process

• Technology

> Target the value for your maturity level “don’t shoot for the moon”

• Value delivered is relative to the maturity of the organization

> Use the Performance Maturity Model to ensure that your CPM initiatives have the right balance of people, processes and analytic applications

Garter, 2008

Key Takeaways

>Customizing the Performance Management approach to the company’s Maturity is a key element to achieving efficient, successful implementation…

and ultimate USE of a CPM methodology

> Start now with an assessment of Performance Maturity!

Thank you!

Contact Information:

Mitchell Weisberg

• [email protected]

• +1 781-894-9202 (office)

• +1 781-249-3750 (mobile)

Take our Performance Management Maturity Assessment now:

www.Lumeninc.com/Maturity

We will email your results.

Documents

Performance Management Maturity Methodology Mitchell Weisberg – Lumen, Inc