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A previous blog, Applying 30,000-Foot-Level Predictive Metrics to Business Scorecards , described how to link predictive scorecards to organizational functions through the Integrated Enterprise Excellence (IEE) value chain. Through this business performance fundamental map, one could access information by clicking to functional procedures and their resulting performance measurements. However, the simple reporting of metrics does not improve anything.
To address this improvement desire, organizations will often set goals throughout the organization. However, the simple setting of goals does not make improvement happen. It has been said that if you can improve productivity, sales, quality or anything else, by, for example, 5% next year without a rational plan for improvement, then why were you not doing it last year? Within IEE, goals are set with an accompanying plan for making improvements, where the results from process enhancements are quantified when its operational 30,000-foot-level control chart transitions to a new, improved level of performance.
However, organizations cannot expect to improve every business function’s performance in any given time frame since they do not have enough bandwidth. In addition, improvement in all aspects of the business is not really necessary since organizations may have only a few a constraints that when identified and resolved could make a very significant impact on the big picture. What is needed is a methodology to determine where improvement efforts should focus so that the business as a whole benefits the most with the least effort. This objective is accomplished through implementing the nine-step IEE business management system, which is shown in Figure 1.
Within this IEE business management system roadmap, step two contains the value chain. What a business wishes to accomplish over time is to make positive changes so that the enterprise as a whole benefits. This is achieved when the process steps within the value chain are improved, which positively impacts the 30,000-foot-level operational metrics that in turn enhance the satellite-level financial metric performance.
To accomplish this objective, organizations need to focus on the big picture. They need to analyze the business as a whole to determine the focus areas that would provide the most benefits. This objective is addressed in step three of the nine-step roadmap, the analyze phase. Items that need to be assessed in this phase of the nine-step roadmap include:
This analyze-phase work will then eventually lead to targeted-strategies and 30,000-foot-level metric improvement goals, where process owners of these metrics are asking for improvement projects to be created in their area. I will discuss these aspects of the IEE business system roadmap more in future blogs.
The content of this blog was taken from IEE Volume III .