1. Driving Business Value Through Strategic Process Management
Sloan Global Holdings
Tom Coleman
Chief Information & Process Officer
10500 Seymour Avenue
Franklin Park, IL 60131
April 12, 2013
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Step1
Strategic Planning
Step2
BPM
Step3
HCM & IT

2. About Sloan
Founded in Chicago, Illinois, USA in 1906 by William Elvis Sloan
9 Major locations IL, China (3), PA, MA, AR, Mexico, CA
4,300 distributors, 69 Rep offices, 60 countries
Privately Held, U.S. Based Commercial Plumbing Products Manufacturer
The leader in water and energy high efficiency solutions
The most comprehensive line of commercial restroom solutions
Proven reputation for innovative designs, sustainable business practices, commitment to quality, and devotion to serving our customers
Global supply chain and wholesaler distribution network
SAP Business Systems enabling breakthrough business processes
SLOAN Company Overview
Sloan is the world’s leading manufacturer of commercial plumbing systems and has been in operation since Headquartered in Franklin Park, Illinois, the company is at the forefront of the green building movement and provides sustainable restroom solutions by manufacturing water and energy high efficiency products such as flushometers, electronic faucets and soap dispensing systems, sink systems, and vitreous china fixtures for commercial, industrial and institutional markets worldwide.

3. High Efficiency | Hygienic Solutions | Trusted Performance
Product Offering
Water & Energy Efficient
Commercial Restroom Solutions
Flushometers
Sensor Faucets
Vitreous China Toilets, Urinals and Lavatories
Sink Systems
Health & Hygiene Solutions
Water Reuse Systems
Water Monitoring & Control Systems
SLOAN Company Overview
High Efficiency | Hygienic Solutions | Trusted Performance

4. Sample Enterprise “Toolkit”
Lean – Waste elimination
TOC – Eliminate the constraint (bottleneck)
Six Sigma – Reduce variability, solve problems
BPR – Holistic redesign of end-to-end processes
ADKAR – Manage the human side of change
BSC/Hoshin – Connect strategy to action/KPIs
4DX (Four Disciplines of Execution)
Create a few must do must succeed goals (WIGs)
Act on the lead measures that impact goal achievement
Create a compelling scoreboard
Create a cadence of accountability
Engage IT and HR “technologies”

5. Conclusion
Companies must take an end-to-end, holistic view of their strategy
Corporate Strategy is a governance process
Corporate Strategy is not the same as Business or Marketing Strategy
The strategy framework must tie core ideology to the value prop, core processes, Human Capital Management, Information Capital Management, and Corporate Culture
Improvement ≠ Transformation

6. Adapted from: Kaplan and Norton 2004
What Are We Trying To Do?
What?
Cash
A/R
Inventory
Equipment
Property
Goodwill
How?
Liquidity
Tangible Assets
Strategy and Process
Readiness
Human Capital
Information Capital
Organization Capital
Intangible Assets
Adapted from: Kaplan and Norton 2004

7. Achieving Superior Performance Operational Effectiveness is Not Strategy
Value
Discipline
Assimilating, attaining, and extending best practices
Creating a unique and sustainable competitive position
Choose to run a different race
(Effectiveness)
Run the same races “faster”
(Efficiency)
Source: Michael Porter

8. Source: Michael Porter
“Strategy is not about ways to get better…strategy formulation is about finding ways to get… different”
Source: Michael Porter

9. Five Tests of a Good Strategy
A unique value proposition compared to other organizations
A different, tailored value chain
Clear tradeoffs, and choosing what not to do [as well as what to do]
Activities that fit together and reinforce each other
Continuity of strategy with continual improvement in realizing the strategy
Now we talk about how to develop a good strategy
Illustrate with interesting business examples; you’ll have to address in your own context
Adapted from: Michael Porter (2006)

10. Translating the Mission/Vision into Desired Outcomes
Why we exist
Core Values
What we believe in
CULTURE
CULTURE
Vision
What we want to be
Strategy
Our game plan
Goals
Outcomes we need to accomplish
Strategic Initiatives
What we need to do
Personal Objectives
What I need to do
Strategic Outcomes
Kaplan and Norton 2001

11. Note 1: This is an example of a strategic planning process Note 2: WIG = Wildly Important Goal

12. Part 1
Note: This is an example of a strategic planning process

13. Sample Market Needs Analysis Fragment Value Attributes Vs
Sample Market Needs Analysis Fragment Value Attributes Vs. Products (Survey Sample)
Note: This analysis is done by product and also by value chain participant (customer)
Value
Attribute
SAMPLE PORTION OF MARKET NEEDS ANALYSIS
Sloan sample portion of a comprehensive market needs Analysis

14. Sample Components of Competitive Analysis (Four-Phase Analysis)
What drives the
competitor?
What the competitor is
doing and can do
Future
Goals
Current Strategy
How the business
Is currently
competing
Competitor’s Response Profile
Is the competitor satisfied with their
current position?
What likely moves or strategy shifts
will the competitor make?
Where is the competitor vulnerable?
What will provoke the greatest and
Most effective retaliation by the competitor?
Assumptions
Held about
itself & the
industry
Capabilities
Both weakness
& strengths
Source: Michael E. Porter Competitive Strategy

15. Five-Forces Framework
(“Industry Structure”)
New
Entrants
(Threat)
Suppliers
(Bargaining Power)
Industry
Competitors
(Intensity of Rivalry)
Buyers (Customers)
(Bargaining Power)
Substitutes
(Substitution Threat)
Source: Michael E. Porter (Competitive Strategy)
SAP AG

18. Part 2
Note: This is an example of a strategic planning process

19. The Envisioned Future Vision: What we need to become
Vivid description of new tomorrow
Vibrant and engaging – yet tangible
Paints a vivid picture into people’s minds
Strategic Imperatives (AKA BHAGs – Big, hairy, audacious goals)
Ambitious plans – an “audible gulp”
Reachable plans (unlike core purpose)
Rev up the organization / source of motivation
Will require 10 or more years to achieve
Inspired by Jim Collins

20. Compelling Vision Questions Sloan Compelling Vision Bullets
“What”
What does our organization look like in 5 years?
How big?
What are we famous for?
Why does anyone care about what we do?
How do our people feel about being part of our organization?
Sloan Compelling Vision Bullets
“What”
Private Company
Global Leader
Manufacturing Company
Serving the Commercial Market
Innovation that saves $ for clients
Innovation that benefits the environment by saving water
“X” revenues (to $X billion)
example

21. Compelling Vision
“What”
By 2017, Sloan will be a $X billion global manufacturing leader of innovative commercial plumbing solutions, enabling millions of people to preserve life by minimizing water consumption.
example

22. Strategic Imperatives (BHAGs)
Compelling Vision
“What”
Strategic Imperatives (BHAGs)
“What”
By 2017, Sloan will be a $X billion global manufacturing leader of Innovative commercial plumbing solutions, enabling millions of people to preserve life by minimizing water consumption.
Values
[More here later]
example
How should we behave while executing on our goals.

23. Part 3
Note: This is an example of a strategic planning process

24. Financial Value Proposition

25. Value Discipline (Strategic Position)
Best Total Cost
Achieve the low cost position on product and service support
Solve the customer’s broader problem and share in the benefit
Build a better product for which customers will pay a premium
Best Total Solution
Best Product Innovation
Lock customer in to high
switching costs
Lock-in
Adapted from: Norton and Kaplan 2003/2004

26. The Discipline of Best Total Cost
Culture
Disciplined teamwork
Process focused
Conformance to
“one size fits all” mindset
Organization
Centralized functions
High skills at core
Core Processes
Product delivery
Basic service cycle
Built on standards
No frills fixed assets
Mgt Systems
Command and control
Compensation fixed to
cost & quality
Transaction profitability
I.T.
Integrated
Low-cost transaction sys
Activity-based mgt (ABM)
Fulfillment systems
Wal-Mart
Dell
Southwest Airlines
AMD
FedEx
Adapted from: Michael Treacy and Fred Wiersema

27. The Discipline of Best Product Innovation
Culture
Concept, future driven
Experimentation
Out of the box mindset
Attack, go for it, win
Organization
Organic, cellular
Technical skills abound
Loose-knit structures
Core Processes
Invention
Market exploitation
Commercialization
Life cycle mgt
Mgt Systems
Decisive and risk oriented
Reward individuals for
innovation capacity
Product life-cycle profits 3M
Nike
Mercedes
BMW
Sony
Intel
I.T.
1-to-1 systems
1-to-many systems
Many-to many systems
Knowledge mgt
Technology enablement
Adapted from Michael Treacy and Fred Wiersema

28. The Discipline of Total Customer Solutions
Culture
Client and field driven
“Have it your way” mindset
Organization
Entrepreneurial client teams
High skills in the field
Core Processes
Client acquisition
Client development
Solution development
Responsive procedures
Mgt Systems
Revenue/share of wallet
Rewards based on feedback
Lifetime value of client
I.T.
Customer databases
Link of internal/external info
Knowledge/analytics sys
Customer relationship mgt
IBM
Nordstrom
Home Depot HP
Goldman-Sachs
Empire Carpet
Adapted from: Michael Treacy and Fred Wiersema

29. Customer Value Proposition Attributes Value Discipline. Vs
Customer Value Proposition Attributes Value Discipline* Vs. Customer Value Attributes
* Value discipline is a term used by Treacy and Wiersema which parallels strategic positioning
Michael Treacy and Fred Wiersema
Chart Adapted from Kaplan and Norton 2001

31. Source: Michael E. Porter
Low Cost
Niche Market
Source: Michael E. Porter

32. Mission, Vision, BHAGs, Core Ideology Financial Capital
key positions/skills
education/train
Knowledge mgt
teams
change management
capital asset mgmt
risk mgmt
fiduciary controls
budget controls
financial planning
Process mgmt
Systems mgmt
Knowledge mgmt
Database mgmt
Network mgmt
Financial Capital
Mission, Vision, BHAGs,
Core Ideology

33. Mission, Vision, BHAGs, Core Ideology Financial Capital
key positions/skills
education/train
Knowledge mgt
teams
change management
capital asset mgmt
risk mgmt
fiduciary controls
budget controls
financial planning
Process mgmt
Systems mgmt
Knowledge mgmt
Database mgmt
Network mgmt
Financial Capital
Mission, Vision, BHAGs,
Core Ideology

34. So…What do we have so far?
Market Needs
Competitive Analysis
OTWS (aka SWOT)
Mission
Vision
Strategic Imperatives (BHAGs)
Core Values
Financial Value proposition
Customer Value Proposition

35. Part 5
Note: This is an example of a strategic planning process

36. Focus on the Wildly Important
In addition to the whirlwind . . .
2-3
4-10
11-20
2-3
1-2
(Ask questions as you build ) When people focus on two to three goals, they tend to accomplish two to three goals…
Too often “our eyes are bigger than our stomachs.”
“The Law of Diminishing Return”
Source: FranklinCovey 4DX

37. A WIG is a goal that makes all the difference
A WIG is a goal that makes all the difference. Failure to achieve this goal renders any other achievements secondary as it relates to the long term well-being of the organization.
Source: Rick Spencer (Franklin Covey)

38. Besides the whirlwind, what are you absolutely going to do?
and…
What are you absolutely going to stop doing?

39. Strategic Imperatives
Compelling Vision
“What”
Strategic Imperatives
“What”
What does our organization look like in 5 years?
How big?
What are we famous for?
Why does anyone care about what we do?
How do our people feel about being part of our organization?
Daily Operations
“Whirlwind”
Strategy Execution
“Operating System”
Values
How should we behave while executing on our goals.
The Day Job
Wildly Important Goals
(War & Battles)
Source: FranklinCovey 4DX

40. Continuous Improvement
Transformational
Change
Daily Operations
“Whirlwind”
Strategy Execution
“Operating System”
Strategic War Plan
Whirlwind To-Do List:
This is important
So it is
So is this, but…
So is this but…
So is this
So is this…
Not as important as…
Source: FranklinCovey 4DX

41. OTC = Order-to-Cash Process STP = Source-to-Pay Process
Transformational
Change
WAR
Grow Profits from X to Y by 12/31/2013
BATTLE A
Lower COGS from X to Y by 12/31/2013
BATTLE B
Grow gross margin from X to Y by 12/31/2013
OTC Proc. Team WIG
Grow throughput from X to Y by 12/31/2013
Rick explains wars and battles
STP Mat. Team WIG
Reduce material costs from X to Y by 12/31/2013
OTC Proc. Team WIG
Increase productivity from X to Y by 12/31/2013
OTC = Order-to-Cash Process
STP = Source-to-Pay Process
Machining WIG
Reduce scrap from X to Y by 12/31/2013
Mfg Eng WIG
Reduce setup from X to Y by 12/31/2013
Inspired by : FranklinCovey 4DX

42. Wheels of Competitive StrategyX
Goals
Strategy
Objectives
Finance
Mfg
Mktg
Sales
Service HR
Engineering
Other
Order To
Cash
Process
Demand Generation
New Product
Development
Sloan
Strategy
and
Goals
Customer
Support
Functions
Functions
Functions
Functions
1980 Source: Michael E. Porter (Competitive Strategy)
2007 Source: T. Coleman

43. Sample Old Functions Vs Processes
Strategic Planning
New Product Development
Sample Old Functions Vs Processes
Marketing
Sales
Tech Support
Mat Mgt
Mfg QA
Research
Des Eng
Information Technology (IT)
Demand Generation
Order Acquisition
Finance
Human Resources (HR)
Order-to-Cash
Source-to-Pay
Cust Support
Coleman

44. New Functions Vs Processes
Strategic Planning
New Functions Vs Processes
Product Development & Lifecycle Mgt (Domain Divided)
Business Development
Information Technology & Process Mgt
Supply Chain & Ops
Product Development
Demand Generation
Financial Capital Mgt
Order Acquisition
Human Resource Mgt (HR)
Order-to-Cash
Procure-to-Pay
Cust Support
Coleman

45. APQC Process Classification Framework
Source: APQC

46. Sloan Enterprise Process Model
Master
Governance
Process
Processes
Core
Enabling
(many more)
SPP
Strategic Planning Process
EPM/OCM
Employee
Perf. Mgt. &
Org. Chg.
Mgt Process
BPM
Business Process
Mgt Process
AOP
Annual
Oper Plan
Process
QAP
Quality
Assurance
Process
S&OP
Sales & Oper Planning
Process
DGP
Demand
Generation
Process
OAP
Order Acquisition
Process
OTC
Order-to-Cash
Process
CSP
Customer
Support
Process
NPD
New Product
Development
Process
MDM
Master
Data
Mgt Process
ECM
Engineering
Change
Mgt Process
PCM
Shop Process
Change
Mgt Process
STP
Source-to-Pay
Process
HCM
Human Capital Processes

47. Where do strategic goals
key positions/skills
education/train
Knowledge mgt
teams
change management
capital asset mgmt
risk mgmt
fiduciary controls
budget controls
financial planning
Process mgmt
Systems mgmt
Knowledge mgmt
Database mgmt
Network mgmt
Financial Capital
Mission, Vision, BHAGs,
Core Ideology
Where do strategic goals
Flow to? PROCESSES!

48. 2008 Sloan Strategic Planning Cycle

49. Sloan Business Process Mgt. (Process Lifecycle Mgt.)
Strategic
Planning
Process
LEVEL 0
DIAGRAM
VERSION
Version: April 7, 2008

50. LEVEL 1
DIAGRAM
Version: April 7, 2008

51. Strategic Levers of Transformation
Integrated with Sloan’s Strategic Plan
Process Redesign as well as Improvement
Policies, Rules, Procedures
Computing & Technology
Organization Structure
Change Management
Roles & Job Changes
Paradigm Shifts
Communications
Knowledge
Facilities

52. Sample Methodology for Problem Solving and Improvement
From
PLMP
Process
Define
Problem
Measure
Problem
Analyze
Problem
Improve
Control
D M A I C
Note: There are many types of CI methods. DMAIC
Is only one of the many methods in the toolkit that
should be used depending on the objective and tool
Needed for change.
LEVEL 1
DIAGRAM
VERSION

53. Sample Enterprise “Toolkit”
BPM
CM: ADKAR
Lean
PMO
BSC/Hoshin IT
TOC
Six Sigma
ADKAR = Awareness, Desire, Knowledge, Ability, Reinforcement
BPR
Need a recipe???

54. BPM is a management discipline that treats Processes as assets that directly drive enterprise performance through (1) operational excellence, (2) business agility, and (3) strategic differentiation.

55. Mission, Vision, BHAGs, Core Ideology Financial Capital
key positions/skills
education/train
Knowledge mgt
teams
change management
capital asset mgmt
risk mgmt
fiduciary controls
budget controls
financial planning
Process mgmt
Systems mgmt
Knowledge mgmt
Database mgmt
Network mgmt
Financial Capital
Mission, Vision, BHAGs,
Core Ideology

56. “The hardest part of succeeding in the age of Process is not technical in nature; it revolves around people and organizational change.”
Source: Michael Hammer

57. DA

58. CM Tools Vs. Phases of ChangeDA
Source: Prosci
SAP AG

59. A word about HR…
Benefits, onboarding, functional OD, and related HR work is important but may do little to help the organization with transformation
An HR organization can gain high credibility by linking HCM to both functions & process work
HR is usually knowledgeable about what’s possible regarding human capability
Often HR and IT are the only functions that see operationally across the entire enterprise
The true value of HR is proportional to how they enable human beings and process teams to support the value proposition

60. Mission, Vision, BHAGs, Core Ideology Financial Capital
key positions/skills
education/train
Knowledge mgt
teams
change management
capital asset mgmt
risk mgmt
fiduciary controls
budget controls
financial planning
Process mgmt
Systems mgmt
Knowledge mgmt
Database mgmt
Network mgmt
Financial Capital
Mission, Vision, BHAGs,
Core Ideology

61. Labor is the single biggest operating expense in most businesses
IT Contribution
U.S. Bureau of Labor Statistics – 2000 to 2010

62. A word about IT…
There is a strong correlation between companies that view IT as a strategic enabler and those that outperform their competition financially
An IT organization can gain high credibility by substituting “technology” with “Process” as THE major discussion point
IT is usually knowledgeable about what’s possible
Often IT is the only function that sees operationally across the entire enterprise (add HR to the mix)
The true value of IT is proportional to how integrated company systems are to core processes
Core processes must support of the value proposition and strategic differentiation
IT must consider becoming “BT”

63. Note 1 : This is an example of a strategic planning process Note 2: WIG = Wildly Important Goal

64. Conclusion
Companies must take an end-to-end, holistic view of their strategy
Corporate Strategy is a governance process
Corporate Strategy is not the same as Business or Marketing Strategy
The strategy framework must tie core ideology to the value prop, core processes, Human Capital Management, Information Capital Management, and Corporate Culture
Improvement ≠ Transformation

65. Any questions?