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Library of Congress Cataloging-in-Publication Data
Rummler, Geary A.
Improving performance : how to manage the white space on the organization chart / Geary A. Rummler, Alan P. Brache. — Updated ed., 3rd ed.
p. cm.
Includes index.
ISBN 978-1-118-14370-4 (cloth); ISBN 978-1-118-22559-2 (ebk.); ISBN 978-1-118-23902-5 (ebk.); ISBN 978-1-118-26367-9 (ebk.)
1. Industrial productivity. 2. Performance. 3. Organizational effectiveness. I. Brache, Alan P., 1950– II. Title.
HD56.R86 2013
658.4'02—dc23
2012030713
1.1. Traditional (Vertical) View of an Organization
1.2. The “Silo” Phenomenon
1.3. Systems (Horizontal) View of an Organization
1.4. An Organization as an Adaptive System
1.5. The Super-System of Computec, Inc.
2.1. The Organization Level of Performance
2.2. The Process Level of Performance
2.3. The Job/Performer Level of Performance
3.1. Layers of Organization Systems in an Automobile Company
3.2. Computec, Inc., Organization Chart
3.3. Relationship Map for Computec, Inc.
4.1. Computec Order Filling: An “IS” Process Map
4.2. Computec Order Filling: A “SHOULD” Process Map
4.3. Selected Process Subgoals for Computec’s Order-Filling Process
5.1. The Human Performance System
5.2. Hierarchy of Performance Goal Setting
5.3. Factors Affecting the Human Performance System
6.1. The Impact of Strategy on the Components of an Organization System
7.1. Top Management’s Role in a Performance Improvement Effort
8.1. The Three Levels Performance Improvement Process
8.2. PCI Relationship Map
8.3. PCI Claim-Handling Process
9.1. Phase 1 Steps
9.2. Determinants of Full, Partial, or No Facilitation
9.3. Sample Process
9.4. Components of a Standard PRM
9.5. Sample Chart
9.6. Sample Chart with Process Box
9.7. Sample Chart with “Upstream” and “Downstream” Processes
9.8. Sample Chart with Input and Output Arrows
9.9. PRM Example 1
9.10. PRM Example 2
9.11. Sample General FRM Template
9.12. Sample Specific FRM Template
9.13. FRM Example 1
9.14. FRM Example 2 (General FRM)
9.15. FRM Example 3 (Specific FRM)
10.1. The Ten Core Steps of Phase 2
10.2. Cross-Functional Process Map Template
10.3. Cross-Functional Process Map Labeled
10.4. Cross-Functional Process Map with Subprocesses
10.5. Cross-Functional Process Map: Steps
10.6. Cross-Functional Process Map: Output
10.7. Cross-Functional Process Map: Output, cont.
10.8. Mapping Conventions
10.9. Example: “SHOULD” Design Specifications
10.10. Remote Job Entry
10.11. Centralized Front End
10.12. Vendor Option
10.13. Sample Macro Process Blocks
10.14. Macro Process Blocks with Outputs, Output Requirements, and Assumptions
10.15. Linear Process Map with Outputs, Requirements, and Assumptions
10.16. High-Level View, Cross-Functional Process Map of Major Process Steps
10.17. Example: Measures Chain
10.18. Sample Steps for Completing the Cross-Functional Role/Responsibility Matrix
10.19. A Model for Troubleshooting or Designing an Effective Human Performance System
10.20. Example: Readiness and Disruption Matrix
10.21. Example: Readiness and Disruption Matrix Highlighting Clusters
10.22. Example: Completed Implementation Strategy Matrix
12.1. Measuring the Three Levels of Performance Within the Organization System
12.2. Computec Product Development and Introduction: “SHOULD” Process Map and Sample Goals
12.3. Output Measures
12.4. Computec Product Development and Introduction: “SHOULD” Process Map and Sample Functional Goals
12.5. A Three Levels Performance Measurement/Management System
12.6. Performance Management System
12.7. Components of an Organization Performance Management System
13.1. The Rummler-Brache Process Improvement and Management Methodology
13.2. Managing the Organization as a System
14.1. Ace Copiers, Inc., Original Organization Chart
14.2. Ace Copiers, Inc., “IS” Relationship Map and Disconnects
14.3. Ace Copiers Product Development: Partial “SHOULD” Process Map
14.4. New Ace Copiers Organization Chart
14.5. Ace Copiers “SHOULD” Relationship Map
15.1. The “Vacuum” View of Performance
15.2. Two Approaches to Training-Needs Analysis
15.3. Four Types of Evaluation
15.4. Model of a Performance-Focused Training Function
2.1. The Nine Performance Variables
2.2. The Nine Performance Variables with Questions
4.1. Examples of Business Processes
4.2. Selected Functional Goals Based on Computec Order-Filling Process Goals
5.1. Role/Responsibility Matrix for Finance Function and Customer Order Process
6.1. Strategy’s Position in the Nine Performance Variables
8.1. PCI Organization Analysis and Improvement Worksheet
8.2. PCI Process Analysis and Improvement Worksheet
8.3. PCI Claims Supervisor Job Model
8.4. PCI Job Analysis Worksheet
8.5. PCI Performance System Design Worksheet
9.1. Significance of Related Processes
9.2. Project Goals Example 1
9.3. Project Goals Example 2
9.4. Example of a Partial Process Inventory
9.5. Example: Project Plan
10.1. Example: Order Fulfillment Process Disconnect List
10.2. Output Specifications
10.3. Input Specifications
10.4. Process Specifications
10.5. “COULD BE” Prioritization Worksheet
10.6. Example: “COULD BE” Prioritization Worksheet
10.7. Example: Cross-Functional Role/Responsibility Matrix
10.8. Example: Human Performance System Checklist
10.9. Recommendation Analysis Worksheet
10.10. Expected Results
10.11. Expected Costs
10.12. Risks
10.13. Implementation Strategy Analysis Worksheet
10.14. Implementation Strategy Matrix
12.1. Examples of “Sound Measures”
12.2. Computec Product Development and Introduction: Performance Tracker
12.3. Role/Responsibility Matrix for the Computec Product Development and Introduction Process
12.4. Portion of the Computec Marketing Function Model
12.5. Role/Responsibility Matrix for the Computec Marketing Function: New Product Development and Introduction
12.6. Portion of a Job Model for the Computec Market Research Analyst
13.1. Comparison of the Traditional (Vertical) and Systems (Horizontal) Cultures
13.2. Systems Management Questions
14.1. Ace Copiers Product Development Role/Responsibility Matrix
15.1. Training’s Role in the Nine Performance Variables
Improving Performance: How to Manage the White Space on the Organization Chart was the first book written on the mechanics of process improvement, the nuts and bolts of how you actually do it.
The methodology in the book was so embraced by readers that Rummler and Brache became the godfathers of process improvement. They helped spawn a cottage industry of business process management analysts, software vendors, consultants, authors, and conferences.
Today, there are dizzying numbers of process improvement methodologies and technologies competing with one another. But in the light of day, practically all of them owe their origin to their predecessor, the Rummler-Brache methodology.
The Rummler-Brache approach to process improvement is the gold standard. It’s a systematic, disciplined framework that does more than just isolate process performance. The methodology addresses all three levels of performance: organization, process, and job performer. And it’s all linked to support the strategy and goals of the organization.
Over the years, I’ve been amazed by the cult-like devotion to the methodology that many of its practitioners have demonstrated. Initially, I thought they were all a little too enthusiastic, sort of like Trekkies at a Star Trek convention. However, since I’ve seen Rummler-Brache principles applied, I get it. The passion out there for the methodology is really a passion for what it delivers: hard results.
The authors provide a clear blueprint on how to achieve sustainable, tangible improvements. This third edition of the book reveals the latest enhancements to that blueprint: tools to create project deliverables for an accelerated project.
The book is a classic and worth revisiting, especially in the current competitive climate, when organizations must make the right systemic changes in tighter time frames.
Joe Aberger
President, PRITCHETT, LP
Managers face an awesome challenge in this competitive and constantly changing environment, and this is not a passing phenomenon. As customer demands, global competition, and regulatory scrutiny have increased, it has become clear that the current instability in our marketplaces is not going away. Change is and will continue to be the only constant.
The call to arms, chronicled in numerous books and articles, is widely understood by American businesspeople. Our concern is not managers’ failure to understand the problem; it is their failure to do anything substantive to address it. We wrote this book because we have a framework and a set of tools that can substantively address the problem. There are plenty of books on management and organization behavior. However, we find that most of them fail to present tools (leaving the reader saying, “I’m a believer, but what do I do tomorrow?”) or they provide tools that deal with only one aspect of a multidimensional need. In our review of management literature, training courses, and consultant services, we have encountered some very valuable theories, hints, and tools. However, we have not come across a single methodology for the improvement of organization performance that is conceptually sound, practical, experience-based, and comprehensive. We immodestly believe that our approach, based on Three Levels of Performance, meets these criteria and, by doing so, provides a blueprint for managing change.
Our second reason for writing this book is our desire to capture our fifty years of combined experience in improving organization performance. We both started in the field of training (before it became human resource development). Like many other people in our position, we were quick to realize that training is only one variable that affects human performance. Early in our careers, we began learning about the environmental and managerial variables that influence performance. We then turned our attention to the impact of organization strategy on performance and developed a technology for documenting, improving, and managing the business processes that bridge the gap between organization strategy and the individual.
With the evolution of Process Management, and more recently, of “managing organizations as systems,” we believe we have a comprehensive approach that addresses the major variables in the system that influence the quality, quantity, and cost of performance. Through the application of Process Management, we have learned that managers (particularly at senior levels) should concentrate as much or more on the flow of products, paper, and information between departments as on the activities within departments. Process Management provides a methodology for managing this white space between the boxes on the organization chart.
The purpose of this book is to explain the underpinnings of our Three Levels framework and to demonstrate the tools through which the framework is applied and by which the white space can be managed. We have written it for performance improvement specialists (who may be professionals in human resource development, industrial engineering, quality, or systems analysis) and for line and staff managers who want to examine a process that can bring about significant performance improvement. We expect that performance improvement specialists will most often constitute the first wave of readers in an organization and that they will recommend all or part of the book to the managers who are their customers. In addition, business and organization behavior professors may find that our approach presents a different perspective.
American management has a tendency to manage by executive summary. A director gets a one-page summary of an issue, a vice president gets a paragraph, and the president gets a three-item list. At a recent conference on improving American manufacturing’s ability to compete in the global market, one conferee criticized a session by saying, “If an idea can’t be summarized in one page, it doesn’t have any merit.” We do not see how U.S. companies will ever beat their global competitors with that view of executive information and analysis.
We are opposed to the “get it to one page” school of management. Managers who are successful over the long haul understand their businesses in detail. As a result, the Three Levels approach has a fair amount of rigor. It is practical, involving a series of straightforward questions and steps. The process has been validated, through application to companies and agencies of all kinds, in all parts of the world. It can even be fun, because teams improve the quality of work life as well as improving productivity and the quality of products and services. But often it is not simple because the challenge is not simple. Any manager or performance improvement specialist who is looking for a quick-fix formula or for the latest program to keep employees stimulated is liable to be disappointed by this book.
Chapter One contrasts the traditional functional view of the organization (as represented by the organization chart) with the more descriptive and useful systems view. We describe the system components that must be managed to establish an organization that is competitive, adaptive (reactively and proactively), and focused on continuous performance improvement.
The second chapter introduces the Three Levels of Performance and presents the Nine Performance Variables that determine the effectiveness and efficiency of an organization. At each of the Three Levels—the Organization Level, the Process Level, and the Job/Performer Level—this chapter describes the three Performance Needs—Goals, Design, and Management—and shows how they can be used by executives, managers, and analysts.
One of the Three Levels of Performance is explored in each of the next three chapters. Chapter Three provides a set of questions for diagnosing the effectiveness of the Goals, Design, and Management at the Organization Level. It illustrates the use of these questions in a sample company and presents the Relationship Map as a tool for understanding and improving performance at this level.
Chapter Four gives the reader tools for understanding and improving the Goals, Design, and Management of the cross-functional processes through which an organization provides products and services to customers. This chapter continues the examination of the company introduced in Chapter Three and presents the Process Map as a methodology for meeting the needs at this Level of Performance.
Chapter Five uses the sample organization from Chapter Three to explore the role of people in improving organization and process performance. It presents the Human Performance System as a tool for understanding and meeting the Performance Needs (Goals, Design, and Management) of individuals and work teams.
The remaining chapters discuss the application of the systems view of the organization and the Three Levels framework to a variety of performance improvement opportunities faced by most North American corporations today. Chapter Six examines the role of the systems view in ensuring that top management has answered all eleven questions that must be addressed to establish a clear, viable strategy. It goes on to show how the Nine Performance Variables can help in implementing that strategy.
Through four examples, Chapter Seven shows how quality, productivity, cycle time, customer focus, and culture change efforts can fail if they do not address all Three Levels of Performance. It goes on to examine two performance improvement efforts that have benefited from covering all Three Levels.
Chapter Eight provides human resource, industrial engineering, and systems analysts with a comprehensive process for diagnosing organization Performance Needs before prescribing “solutions,” such as training, reorganization, and developing management information systems. A case study illustrates each of the fourteen steps in this performance improvement process.
Chapters Nine and Ten describe the Process Improvement methodology that companies such as AT&T, Caterpillar, GTE, and Motorola have used to improve quality and customer satisfaction and reduce cycle time and costs. Chapter Eleven describes the traps we have seen that lessen the return organizations realize on their investment in process redesign.
Measuring performance and designing a performance management system is the focus of Chapter Twelve. This chapter addresses the “what,” “why,” and “how” of establishing a measurement system that encompasses all Three Levels of Performance. Examples illustrate establishing measures, developing a performance tracking system, and using measures as the basis for planning, feedback, performance improvement, and rewards.
Chapter Thirteen describes how to use measurement as the basis for the continuous management of processes, once they have been redesigned. It then shows how to integrate these Process Management efforts into enterprisewide “managing the organization as a system.” Readers are given a description of how the systems culture differs from the traditional hierarchical culture and a set of questions for diagnosing the effectiveness of the organization system in which they work.
Chapter Fourteen presents a nine-step process for designing an organization structure that supports—rather than inhibits—the efficient delivery of high-quality products and services that meet customer needs. Using Relationship and Process Maps (introduced in Chapters Three and Four), a viable organization structure is developed for a sample company.
Chapter Fifteen draws on our experience working with human resource development professionals and shows how the Three Levels approach can help these professionals make a more substantial contribution to organization performance. It describes how the Three Levels tools can help in needs analysis, training design, and evaluation, and how they can transform the training operation into the organization’s “performance department.”
The final chapter describes a three-step process for getting started on a Three Levels project. It also provides examples of how the Three Levels tools have been unbundled and used to address specific issues and to help develop a customer-focused, participative, low-conflict, accountability-based culture.
For readers familiar with the previous editions of this book:
Geary A. Rummler was cofounder of the Rummler-Brache Group (RBG). He received his BA degree, his MBA degree, and his PhD degree from the University of Michigan.
Rummler was a pioneer in the application of instructional and performance technologies to organizations, and he brought this experience to the issue of organization effectiveness. His clients in the private sector included the sales, service, and manufacturing functions of the aircraft, automobile, steel, food, rubber, office equipment, pharmaceutical, telecommunications, chemical, and petroleum industries, as well as the retail banking and airline industries. He also worked with such federal agencies as the Internal Revenue Service, the Social Security Administration, the Office of Housing and Urban Development, the General Accounting Office, and the Department of Transportation. His research and consulting took him to Europe, Japan, Korea, Malaysia, China, and Mexico.
Alan P. Brache is cofounder of the Rummler-Brache Group. His consulting, training, and writing have focused on Process Improvement and Management, which is a methodology for implementing strategy and resolving critical issues through the identification, documentation, analysis, design, measurement, and continuous improvement of business processes. Much of his recent work has involved using Process Improvement and Management as a tool for strategy implementation, designing measurement systems, and installing infrastructures for continuous improvement.
Rummler-Brache is a registered trademark. The Rummler-Brache Group is a consulting and training firm specializing in the design and development of organization performance systems for business and governmental organizations. RBG works with large and medium-sized companies in both the manufacturing and service sectors. Its clients include banking, pharmaceutical, telecommunications, insurance, technology, government, health care, utilities, petrochemical, and consumer products companies. Our firm measures the results of a specific project in terms of quality improvement, cost reduction, and/or cycle time reduction. We measure the success of a client relationship not only in terms of project results but also in terms of the degree to which the organization has institutionalized the RBG methodology and has transformed itself into a process-managed company.
We provide a technology, a set of tools, an experience base, and facilitation. Our methodology has been applied to processes that include product development, order fulfillment, hiring, procurement, manufacturing, sales, financial planning, distribution, and accounting.
RBG believes that while an outside consultant can provide tools, experience, best practices, and perspective, the changes and the results should be owned by the client organization. To achieve that objective, RBG works through internal teams and supplements its consulting with training that ultimately enables its clients to be self-sufficient.
The Rummler-Brache Group can be reached at:
800-992-8849
cservice@RummlerBrache.com
www.RummlerBrache.com