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Overview of BPE/BPT Process
It will help your organization achieve Business Performance Excellence
(BPE), which is the state where an organization is generating the maximum
level of profitability possible given the human, financial, capital, and
other resources it possesses. It will improve profit performance
without capital expenditures or head count reduction and deliver a
data-driven business strategy that horizontally integrates and cascades
throughout the organization. Back
There are many indicators of the need for BPT, or, for that matter, any
change in management strategy. Some of these indicators are listed
below:
 | Your organization has a Vision and Mission that is mostly for
inspiration and serves no added value to the organization. Often
times these become posters, slogans and/or wallet cards. |
| The Vision and Mission have no link to the strategic and/or business
plans, and have no integration with the critical performance
measurements (CPMs) that drive the business. |
| The themes or constructs within the Vision and Mission are never
measured. Therefore no one really knows if the organization is
achieving them. |
| The organization has little to no integration between the Strategic
and Business Plans and the CPMs. Furthermore, the Strategic and
Business plans are four-inch, three-ring binders that rarely, if ever,
get viewed. |
| Individual responsibilities are related to the Vision, Mission,
Strategic and Business plans only by coincidence. |
| The organization creates hundreds of "Number One Priorities," even
though everyone realizes that it does not have the resources to
achieve a fraction of them. |
| Projects are selected for their interest level, rather than for a
measurable strategic intent, and cannot be killed off. |
| The organization believes that any business is better than no
business (i.e. revenue is king). In the worst cases, the
organization sells more product/service, loses more money and cannot
understand why. |
| The organization utilizes Standard or Average Cost Accounting
methods ensuring the impossibility of understanding which
products/services/divisions are profitable. True cost and profit
cannot be broken down by flow path, customer, product, etc. |
| Due to this, incentives are set up to encourage the sale/production
of any units rather than an optimized richness of product/service mix. |
| The organization in turn works on Just-In-Time and Lean
Manufacturing projects that ultimately reduce profit. |
| The divisions and/or departments within the organization all
successfully reach their targets while the organization as a whole
fails to make an acceptable profit. |
| The organization uses a fixed percent headcount reduction policy
(i.e. 10% across the board), in the name of fairness, to reduce costs,
and does this, along with capital equipment investments, as a first
choice, rather than a last choice, to improve profitability. Back |
It is a much more highly integrated methodology that cascades
throughout an organization and combines all the following elements:
Vision, Mission, Strategic Analysis, Business Analysis, Performance
Measurement, Product/Customer Selection, Process Improvement, and Cost
reduction. The other methodologies only incorporate some of these
elements, and many are not designed to proliferate throughout the
organization. For instance, the Balanced Scorecard does not
incorporate Vision, Mission, Process Improvement, and Cost
reduction. Six Sigma does not incorporate Vision, Mission, Strategic
Analysis, Business Analysis or Product/Customer Selection. Back
The first thing to ask yourself is this: At the end of the day, how do
I know I'm performing to the best of my ability? If you have an
answer to this question, you can measure what you do. It may not be
as intuitive or easy as you would like, but it can be measured, and BPT
can help. Back
Business Performance Technology consists of two primary phases of
implementation: Phase I - Policy Deployment and Phase IIA - The Voice of
the Customer & Phase IIB - The Voice of the Business. Click here for a flow chart
of the process.
Phase I
Policy Deployment (Hoshin Planning or Hoshin Kanri) integrates an
organization's strategic and business plans with its vision, mission, value
proposition, core competencies, and each individual's annual work plan(s).
Phase IIA and Phase IIB
Phase II involves the implementation of the Voice of the Customer (VOC)
and Voice of the Business (VOB). The VOC involves the Customer
Satisfaction Improvement Process while the VOB involves the
Customer/Product/Process Rationalization (CPR) Process. Click here
for a diagram of the two processes.
CPR combines the Total Asset Utilization (TAU)
model, which is used for planning and analysis to achieve breakthrough
improvements in profitability, cost reduction, revenue growth, and market
share, with Activity Based Costing and an
analysis of the product/service portfolio.
CPR creates a horizontally integrated Strategic Plan for revenue growth
and maximizes return on asset dollars. The result is a comprehensive
plan integrating the sales and marketing strategy with the
operations/manufacturing/development strategy, altogether supporting the
organization's model for strategic differentiation.
VOC and VOB are diagnostic, and are intended to guide management in
making the changes required to achieve BPE. Back
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