1. David L. Kellogg (29 July 2003) Return-On-Investment is a key measure of an Enterprise’s ability to operate in the business environment and market of its own choosing. Efficiency (from a Return-On-Investment standpoint) is the ability of an Enterprise to produce a product or provide a service with minimum effort, expense, and waste. Effectiveness (from a Return-On-Investment standpoint) is the ability of an Enterprise to produce a product or provide a service meeting customer requirements and the demands of other interested parties. Return-On-Investment = Effectiveness / Efficiency = Output / Input Enterprise Management exerts prime responsibility for organizational leadership in Return-On-Investment considerations. Take-Make-Break paradigm: Productivity is rejuvenated by taking vast quantities natural resources, making products to be mass marketed, and replacing (i.e., breaking) products as they are sold. Realize-Capitalize- Customize paradigm: As products or services are realized, they are capitalized through partnerships and customized to satisfy the wants of customers. Return-On-Investment is a key measure of an Enterprise’s ability to operate in the business environment and market of its own choosing. Efficiency (from a Return-On-Investment standpoint) is the ability of an Enterprise to produce a product or provide a service with minimum effort, expense, and waste. Effectiveness (from a Return-On-Investment standpoint) is the ability of an Enterprise to produce a product or provide a service meeting customer requirements and the demands of other interested parties. Return-On-Investment = Effectiveness / Efficiency = Output / Input Enterprise Management exerts prime responsibility for organizational leadership in Return-On-Investment considerations. Take-Make-Break paradigm: Productivity is rejuvenated by taking vast quantities natural resources, making products to be mass marketed, and replacing (i.e., breaking) products as they are sold. Realize-Capitalize- Customize paradigm: As products or services are realized, they are capitalized through partnerships and customized to satisfy the wants of customers.

2. DOMINANT 21 ST CENTURY INVESTMENT DOMINANT 21 ST CENTURY INVESTMENT BROKERS MUTUAL FUNDS MUTUAL FUNDS LEGAL EAGLES LEGAL EAGLES STOCK SWAPS STOCK SWAPS CPAs ANALYSTS NEWS MEDIA NEWS MEDIA ACADEMIA BANKERS MONEY MEN MONEY MEN GOVT. PRINT MEDIA PRINT MEDIA David L. Kellogg (29 July 2003)

3. G Global Competition and 21 st Century World Events have changed the way Enterprises must transact business. Quality Goods and Services are no longer expected, they are DEMANDED. [Note: Before they are DEMANDED, they must be WANTED.] Such DEMANDS require ACTION, not TALK. [Note: Establishing WANT also requires ACTION, not TALK.] ISO 9000:2000 World-Wide Standards provide guidance and identify Required Actions for Agile Enterprises of the 21 st Century. 1.ISO 9000:2000 – addresses Quality Management Principles and Fundamentals. 2.ISO 9001:2000 – addresses Requirements for Quality Management Systems. 3.ISO 9004:2000 – provides Guidance for establishing a Quality Management System. 4.ISO 19011 – provides Guidance for Planning and Conducting Quality Management Audits. Global Competition and 21 st Century World Events have changed the way Enterprises must transact business. Quality Goods and Services are no longer expected, they are DEMANDED. [Note: Before they are DEMANDED, they must be WANTED.] Such DEMANDS require ACTION, not TALK. [Note: Establishing WANT also requires ACTION, not TALK.] ISO 9000:2000 World-Wide Standards provide guidance and identify Required Actions for Agile Enterprises of the 21 st Century. 1.ISO 9000:2000 – addresses Quality Management Principles and Fundamentals. 2.ISO 9001:2000 – addresses Requirements for Quality Management Systems. 3.ISO 9004:2000 – provides Guidance for establishing a Quality Management System. 4.ISO 19011 – provides Guidance for Planning and Conducting Quality Management Audits. David L. Kellogg (29 July 2003)

4. COUNCIL Organizational governance by principle officers and 18 elected members COUNCIL Organizational governance by principle officers and 18 elected members BrazilFranceUSA BotswanaUnited KingdomChina Czech RepublicGermanyMalaysia EgyptRussiaJapan NorwaySingaporeSouth Africa Sri LankaTrinidad/TobagoItaly BrazilFranceUSA BotswanaUnited KingdomChina Czech RepublicGermanyMalaysia EgyptRussiaJapan NorwaySingaporeSouth Africa Sri LankaTrinidad/TobagoItaly ISO GENERAL ASSEMBLY: Principle officers of annual business meeting David L. Kellogg (29 July 2003) Operational Consequences of ISO 75% Ratification Procedure: 1.Majority votes of 51% - 74% cannot ratify proposed standards. 2.Minority votes of 26% - 50% can refuse to support the Majority. End Result: ISO Standards take too long in an Agile Economy and the ISO Standard for “Agility” was needed yesterday. Operational Consequences of ISO 75% Ratification Procedure: 1.Majority votes of 51% - 74% cannot ratify proposed standards. 2.Minority votes of 26% - 50% can refuse to support the Majority. End Result: ISO Standards take too long in an Agile Economy and the ISO Standard for “Agility” was needed yesterday.

5. Plan Do Check Act Management Responsibility Management Responsibility Resource Management Resource Management Process Management (Product Realization) Process Management (Product Realization) Measurement & Analysis Improvement Measurement & Analysis Improvement InputProcessesOutputProcesses RequirementsProduct Customers (other interested parties) Customers (other interested parties) Continual Improvement of Quality Management System David L. Kellogg (29 July 2003) Note1: Under the take it, make it, break it paradigm “Requirements” are the Input and “Product” is the Output. Note 2: Under the realize, capitalize, customize paradigm “Wants” are the Input and “Requirements” are the Output.

6. Agreement Processes Technical Processes Project Processes Enterprise Processes David L. Kellogg (29 July 2003) Enterprise Environment Management Process Enterprise Environment Management Process Investment Management Process Investment Management Process System Life Cycle Management Process System Life Cycle Management Process Resource Management Process Resource Management Process Quality Management Process Quality Management Process Project Planning Process Project Planning Process Project Assessment Process Project Assessment Process Project Control Process Project Control Process Decision Making Process Decision Making Process Risk Management Process Risk Management Process Configuration Management Process Configuration Management Process Information Management Process Information Management Process Stakeholder Requirements Definition Process Stakeholder Requirements Definition Process Requirements Analysis Process Requirements Analysis Process Architecture Design Process Architecture Design Process Implementation Process Integration Process Verification Process Transition Process Validation Process Operation Process Maintenance Process Disposal Process Acquisition Process Supply Process The System Life Cycle Processes

7. David L. Kellogg (29 July 2003) Enterprise Processes Enterprise Processes Project Processes Project Processes Technical Processes Technical Processes Enterprise Processes Enterprise Processes Project Processes Project Processes Technical Processes Technical Processes Enterprise Processes Enterprise Processes Project Processes Project Processes Technical Processes Technical Processes Agreement Processes Agreement Processes Organization A Organization C Organization B Agreement, Enterprise, Project, and Technical Processes in Cooperating Organizations Note: Unique applicability to the Realize-Capitalize-Customize paradigm.

8. David L. Kellogg (29 July 2003) Strategic Planning Strategic Planning Market Selection and Business Planning Market Selection and Business Planning Business Pursuit and Capture Business Pursuit and Capture Product Realization Product Realization Product Support Product Support Enterprise Infrastructure Services Customers Product Realization Product Realization Program Planning and Resource Allocation Program Planning and Resource Allocation Product Manufacture and Delivery Product Manufacture and Delivery Product Development Wants Development Needs Development Product Development Wants Development Needs Development Generic 21 st Century Enterprise Process

9. David L. Kellogg (29 July 2003) Develop and Validate Requirements Develop and Validate Requirements Develop the Product Concept Develop the Product Concept Develop the Preliminary Product Description Develop the Preliminary Product Description Develop the Detailed Product Description Develop the Detailed Product Description Verify and Certify Product Verify and Certify Product Release to Production Release to Production Project and Technical Management Determine Customer Requirements Analyze Customer Requirements Validate Requirements Document Requirements Develop Alternative Product and Mfg. Concepts Model and Validate Product Concepts Select Preferred Concept Refine and Verify Product and Mfg. Concept Document Product and Mfg. Concept Determine Potential Suppliers Develop Alternate Preliminary Product and Mfg. Design Model Product Preliminary Designs Select Preferred Preliminary Design Refine and Verify Preliminary Product and Mfg. Design Document Preliminary Design Develop Detailed Product and Mfg. Design Analyze Product and Mfg. Design Verify Design Details Release Detailed Product and Mfg. Design for Prototypes Select Suppliers Build Product and Mfg. Prototypes Verify Product Verify Mfg. Processes Certify Product Release Final Definition of Product and Mfg. Generic Product Development Process

10. David L. Kellogg (29 July 2003) MaturityPerformance LevelLevelGuidance 1No formalNo systematic approach evident, no results, approachpoor results, or unpredictable results. 2ReactiveProblem-based or corrective-based approachsystematic approach, minimum data on improvement results available. 3Stable formalSystematic process-based approach, early system approachstage of systematic improvements; data available on conformance to objectives and existence of improvement trends. 4ContinualImprovement process in use; good results improvementand sustained improvement trends emphasized 5Best-in-classStrongly integrated improvement process; performanceBest-in-class benchmarked results demonstrated. MaturityPerformance LevelLevelGuidance 1No formalNo systematic approach evident, no results, approachpoor results, or unpredictable results. 2ReactiveProblem-based or corrective-based approachsystematic approach, minimum data on improvement results available. 3Stable formalSystematic process-based approach, early system approachstage of systematic improvements; data available on conformance to objectives and existence of improvement trends. 4ContinualImprovement process in use; good results improvementand sustained improvement trends emphasized 5Best-in-classStrongly integrated improvement process; performanceBest-in-class benchmarked results demonstrated. ISO 9004:2000 Performance Maturity Levels

11. David L. Kellogg (29 July 2003) MalfeasancePerformance LevelLevelDescription 5No formalTotal discretion of executive approachmanagement on case-by-case basis. 4ReactiveExecutive management somewhat approachconstrained by past decisions on case-by-case basis. 3Stable formalExecutive management constrained system approachby past decisions across all cases. 2ContinualExecutive management no longer improvementexercises discretion on case-by-case emphasizedbasis. 1Best-in-classExecutive management no longer performancedirectly involved. MalfeasancePerformance LevelLevelDescription 5No formalTotal discretion of executive approachmanagement on case-by-case basis. 4ReactiveExecutive management somewhat approachconstrained by past decisions on case-by-case basis. 3Stable formalExecutive management constrained system approachby past decisions across all cases. 2ContinualExecutive management no longer improvementexercises discretion on case-by-case emphasizedbasis. 1Best-in-classExecutive management no longer performancedirectly involved. Levels of Executive Malfeasance

12. Before Status Quo can be overcome, it must be defined. Simply characterizing Status Quo as the way things are will not do. THERE IS A REASON FOR THINGS TO BE THE WAY THEY ARE. FIND IT! The Reason must be understood. Not knowing the Reason has consequences. 1.You cannot quantify Effectiveness. 2.You cannot quantify Efficiency. 3.You cannot determine the Return-On-Investment. Knowing Why you do What you do is the new 21 st century requirement. “Just Do It!” – Nike Shoe Company Before Status Quo can be overcome, it must be defined. Simply characterizing Status Quo as the way things are will not do. THERE IS A REASON FOR THINGS TO BE THE WAY THEY ARE. FIND IT! The Reason must be understood. Not knowing the Reason has consequences. 1.You cannot quantify Effectiveness. 2.You cannot quantify Efficiency. 3.You cannot determine the Return-On-Investment. Knowing Why you do What you do is the new 21 st century requirement. “Just Do It!” – Nike Shoe Company David L. Kellogg (29 July 2003)