1. Beyond HPT
Beyond HPT: New frontiers for Performance Improvement - Mariano Bernardez, PhD., CPT
Beyond HPT
New frontiers for the theory and practice of performance improvement
Session by:
Mariano Bernárdez, PhD., CPT
Director of the Performance Improvement & Senior Scholars Institute, Technological Institute of Sonora, Mexico.
ISPI Board Director
Performance Improvement Global Network Chapter, ISPI, President
ISPI Mexico, Performance Improvement Institute (doctoral program)

2. Sources & methodology
Meta-analysis of current research & classic literature in US, Europe, Asia and Americas
Historical review of organizational practice from 1916 to present
Economic and social surveys from
The Economist
WSJ/Heritage Foundation
Business Week
UNDP
Collaborative study involving CPTs in 16 countries
Performance Improvement Global Network survey
PI Workshops & Conference discussions in Europe, US and Latin America
Inputs from 28 CEOs of client companies

3. Special thanks to Miguel Bianchetti – CEO Refinor
Glenn Tilton – CEO United Airlines
Gonzalo Rodriguez Villanueva – President ITSON
Roger Kaufman
C.K. Prahalad

4. Objectives Revisit & expand PI roots
Branch out, explore strategic trends
“Map” the new territory
Draw lessons from practice

5. Why? New realities, new frontiers Crossroads Globalization
Knowledge-Based economy
BOP, emerging markets
E-Performance
Crossroads
Outgrow “process improvement”
Global, multinational or international?

6. Expanding the roots Growing inside-out Growing outside-in
From programmed instruction to process improvement
From training to performance
Growing outside-in
Business perspective
Outside-in disciplines:
Strategic planning
Economics
Marketing
Business development
Economics, market, social realities
Knowledge-based economics

7. Expanding the roots Inside-Out approach “NSPI” legacy
Focus on “improvement”
Internal focus
Source:
Ripley & Dean (1997) Performance improvement pathfinders

8. Expanding the roots

9. Branching out Management dimension Business dimension
From operations to tactics to strategy
From educational, HR reformers to business partners
From “improving” existing organizations to create new organizations
Learning from the “practitioners”, movers & shakers
A little history of business & organization

10. Mapping the new territory
Knowledge-based economics
The world is flat & spiky
Emerging markets, BOP realities
Serving the poor, profitably
Unlearning CW
E-Performance
From e-training, to e-learning to e-performance

11. Knowledge-based economics
The world is flat & spiky
Serving & developing the 21st century New Frontier: emerging markets

12. Performance new frontier: Knowledge-based economy
Population
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland

13. Performance new frontier: Knowledge-based economy
Light emissions
Emisión de luz
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland

14. Performance new frontier: Knowledge-based economy
Patents
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland

15. Performance new frontier: Knowledge-based economy
Papers
Citaciones académicas
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland

16. Performance new frontier: Knowledge-based economy
Knowledge Consumers
New realities: the digital divide
Knowledge producers
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland

17. Performance new frontier: Knowledge-based economy
PI as a vehicle for crossing the digital divide
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland

18. PI new frontier: Emerging markets, BOP realities
Bangalore: India
From 900,000 to 6,000,000 inhabitants ( )
From agriculture to 30% India’s tech exports
More than 1,000 tech companies outshored
Exporting online professional and technological services
Software code to Microsoft
K-12 coaching to US
Bioegineering to France
Key: Technological clusters & IIT using e-performance
Fuente: Florida, R. (2005) The World is Spiky. University of Maryland

19. PI new frontier: Emerging markets, BOP realities
China
Second largest online population
400% yearly growth
Digital Olympics
1,000,000 PhD. graduated x year
Software development for US & Europe
Technology and business incubation clusters
Shangai – Jiading (143 companies)
Shandong
Quingdao
Shandai
Weifang
4,2 billion dollars in foreign technological investment in new IPOs

20. E-Performance From e-learning to collaboration
From knowledge management to knowledge creation
Virtual organizations
Knowledge factories

21. PI New frontier: E-Performance
Beyond HPT: New frontiers for Performance Improvement - Mariano Bernardez, PhD., CPT
ONLINE MIGRATION OF.
Jobs
Workplace
Organization
Performance
ISPI Mexico, Performance Improvement Institute (doctoral program)

22. PI New frontier: E-Performance
% US workforce using IM, y cell phones for work
Fuente: Wall Street Journal

23. PI New frontier: E-Performance
1,4 %
5 %
20 %
40 %
1991
1999
2005
2020
Online
On site
Fuente: Business Week

24. PI New frontier: E-Performance
Know-how and learning embedded in technological environment
From Information Technology to Collaboration Technology
Collaboration technology for BOP markets

25. PI New Frontier Emerging markets, BOP realities
12% equity markets for 2006
9 % annual GDP growth
Largest inflow of business investment
Does your company have a BOP strategy?
Challenges
Microfinance
New business development
Knowledge-intensive
High-end, smart technologies

26. PI New Frontier Emerging markets, BOP realities
World Economy Growth Forecast
2004
2025
2050
USA
28%
27%
26% EU
34%
25%
18%
Japan
12% 7% 4%
China
15%
India 2% 5%
17%
Others
20%
21%
10%

27. PI New frontiers: Leading cases
Achieving business success by developing clients & market (Refinor case)
The new economy generator
Performance centered university
Incubation
Acceleration

28. Refinor
Achieving business success by improving market and social conditions
9 years case study
Two 3-year “conventional” PI
One 3-year strategic PI

29. The company Privatized in 1994 Gas production & distribution
North of Argentina
MERCOSUR
Underdeveloped region
Underdeveloped market
“Island” in a sea of social problems
Management development

30. Refinor

31. Strategic Performance Indicators (SPI)
Year
K hours of social work (*)
Market share
Local unemployment rate
Property loss
Riots & incidents
1994 8 4 25 20
1995
8.5
4.5 23
7.5 40
1996 9
4.8 21
7.3 50
1997 12 5 15 35
1998 14 6 2
1999 16 10 1
2000
2001 28
145
2002
4.6 32
7.8 60 n 82
45.4
191
51.6
435
Mean
9.1 48
Median 7

32. PI New frontier: Business, Social and Environmental bottom line
Investment
Bottom line
Macro
Mega

33. PI New frontier: Business, Social and Environmental bottom line

34. ITSON: strategic PI in Mexico
First PhD. in Performance Improvement
Kaufman, Rummler, Brethower, Carleton, Gerson, Bernardez, Guerra
From developing individuals to developing organizations
Three tracks
Doctoral candidates
Executives & supervisors
Corporate sponsors
Business case
Social bottom line
Conventional bottom line
Three steps to develop new businesses:
Pre-Incubation
Incubation
Acceleration

35. PI New Frontier: Business incubation
Business-centered
Social impact

36. PI New Frontier: Business incubation
Three-tiered project teams:
Doctoral candidates
Executives
Sponsors
2006: 13 new organizations
Job creation
Graduates employment
Social & regional impact
Reverse migration

37. PI Process: Get your company a PhD

38. New competencies From improving performance to creating new business
From operational to strategic planning & thinking
Creating clients, markets
Developing a true international strategy and approaches
Thinking outside of the traditional “process & micro” box
Redefining performance for BOP, emerging markets
Developing social strategies for business success: “triple bottom line”, megaplanning
Using online technology to produce and deliver e-performance
Integrating “external” disciplines and approaches: economics, social sciences, business, culture

39. Q&A

40. Q&A

41. New Performance metrics
DJSI outperforming “conventional” DJGI across industries
MNC adopting “green strategy” (GE, BP)
MNC adopting BOP strategy (Citibank, GE, Microsoft, Google, IBM)

42. A little history…of actual practice

43. Performance improvement pioneers: from practice to principles
Arsenal of Venice (1435) Pre-Manufacturing & assembly
Charles Babbage ( ) First computer, Economy of machinery & organizations
Samuel Slater ( ) English Manufacturing system
Eli Withney, Simeon North (1795) American Manufacturing system (Springfield, Colt, McCormick’s reaper)
Daniel McCallum ( ) US railroads: Functional organization
Andrew Carnegie ( ) Vertical integration, Bessemer converters
Henri Fayol (1911) General Management principles, functional organization methods & principles
Frederick W. Taylor (1914), Carl Barth , H.L. Gantt (1916) ; Frank & Lilian Gilbreth (1912) Process improvement, industrial psychology, task and process analysis
Henry Ford (1913) Assembly line, serial production, mass market
Alfred P. Sloan (1922) –first CEO- Divisional organization (GM)
Kaoryu Ishikawa (1949), Joseph Juran (1951) & W. Edwards Deming (1952) , TQM in Japanese industry
Taiichi Ohno (1958) JIT, kanban, kaizen in Toyota
Ray Kroc (1952) Franchising (McDonalds)
Jack Welch (1981) Network organization, boundaryless organization
HP & 3M: Matrix organization, self-directed work teams
Tim Berners-Lee (1989) Internet, Mosaic
Amazon, eBay, Google, Dell: virtual organizations

44. A little history… Sources:
Chandler, A.D. (1962) Chapters in the history of the American Industrial enterprise. Cambridge, MA: MIT
Chandler, A.D. (1977) The visible hand: The managerial revolution in American business. Cambridge, MA: Belknup/Harvard
Chandler, A.D. (1990) Scale and scope: The dynamics of industrial capitalism. Cambridge, MA: Belknup/Harvard
Wren, D.A. (2005) The History of Management Thought. Hoboken, NJ: Wiley

45. PI New Frontier Competing for the future

46. PI New Frontier Competing for the future

47. Quiz: who said this?
“The right price is not what the traffic well bear. The right wage is not the lowest sum a man will work for. The right price is the lowest price an article can steadily de sold for. The right wage is the highest wage the organization can steadily pay. That is where the ingenuity of the organization comes in. It has to create customers, and if it is making a commodity, then its own workers are among his best customers.
We have about two hundred thousand first-class customers in our company –in the people we directly pay wages to. And we are creating more customers everyday in the workers of the companies we buy from. For every dollar we pay in wages, we pay two for materials and parts made on the outside. “

48. Quiz: who said this?
“The right price is not what the traffic well bear. The right wage is not the lowest sum a man will work for. The right price is the lowest price an article can steadily de sold for. The right wage is the highest wage the organization can steadily pay. That is where the ingenuity of the organization comes in. It has to create customers, and if it is making a commodity, then its own workers are among his best customers. We have abvout two hundred thousand first-class customers in our company –in the people we directly pay wages to. And we are creating more customers everyday in the workers of the companies we buy from. For every dollar we pay in wages, we pay two for materials and parts made on the outside. “
Heny Ford (1924) Today and tomorrow. New York, NY: Productivity Press, Page 140

49. Ford Internal performance improvement External performance improvement
Assembly line
Serial production
External performance improvement
Mass market
Developing market purchasing power
Vertical integration
Horizontal integration
Alliances
Systemic vision of business
Supply <-> demand
Relating external & internal performance
Creating a customer, market

50. Emerging markets, BOP realities
Competing for the future
From Bottom line to Top line management
Breaking with “old future”, extension of past success
Serving the poor, profitably
Rewriting the rules of CW
New organizations
Network
Virtual
KSF
Incubation
Acceleration

51. E-Performance in BOP markets
Village Collection Centers (VCC)
Automatic weighing
Fat control
Pricing
Market price for rural producers
10,675 interconnected villages
Control and information to producers
Eliminating middlemen
Purchasing & pricing power to the producers

52. PI New Frontier: Business incubation
Integrating learning, consulting & research

53. PI new frontier: Business acceleration
Leveraging companies growth
Access to global markets
Integration to knowledge-economy’s value chain
“Match-making”

54. Agenda Revisiting & expanding the roots Branching out
Mapping the new territory
Lessons from practice