Framework for Strategic Improvement Governance

Improvement Management Framework

Organizations have a finite amount of resources available to use for improving their value. A competitive advantage can be achieved by establishing an apparatus that improves the likelihood that those finite resources are consistently used to maximum advantage. In this case, maximum advantage simply means doing the following consistently well:

1. Reveal the most lucrative opportunities for profitable growth (opportunity risk).

2. Right-size the opportunities with the organizations capacity to fund, execute and absorb change (realization risk).

3. Achieve the desired results quickly with minimum risk and wasted resources (value risk).

The following is a best practices framework (high level) for accomplishing the above objectives.

Measurement Framework (Reveal Reality)

The improvement measurement framework is a learning methodology/system that gathers and synthesizes customer, competitive, technology and thought leadership insights to reveal the most potent opportunities and credible threats/risks at a strategic level. This process uses a combination of insight tools and methods to gather validated learning to improve the effectiveness of where and how to focus innovation resources and how well innovation activities are achieving results. Core tools include instrumented customer journey maps, net promoter system, test&learn exercises, self-disruption (red flag) exercises and various other customer oriented outside-in insight gathering methods. This system is also oriented toward key customer impacting activities (where the following functions closely intersect processes directly related to the customer value chain: merchandising, services, engagement marketing and store leadership) to inspire fact based customer centric policies, procedures and decisions.

Improvement Strategy Committee (What to Achieve)

This committee is charged with periodically setting the strategic direction for innovation and improvement efforts. Recognizing that the lifecycle of business models is shrinking and increasingly susceptible to disruption, this committee synthesizes insights from the Improvement Measurement Framework to reveal clarity around the most significant opportunities where unique strengths can be leveraged to maximum effect to achieve differentiated/sustainable value. These are opportunities that intersect on the three dimensions of Desirability, Feasibility and Viability. This group then crafts a strategic guiding policy which describes, at a high level (yet actionable), the ideal business outcomes that innovation resources should strive to achieve. This guiding policy sets a focused theme for innovation investments to better ensure coherent/synergistic action across all fronts.

Investment Committee (How to Achieve)

This committee creates and oversees the strategic improvement plan/roadmap. Where the Strategy Committee sets the direction for innovation and improvement, this committee is charged with its execution. This group also serves as an advisor to the strategy committee. Working with the project portfolio management function, this committee formulates a synergistic collection of improvement initiatives that are optimally balanced with the organizations capacity to fund, execute and absorb. This group not only conceives of initiatives; it also encourages proposals from the organization. All initiatives are organized as a balanced prioritized portfolio (using something similar to Gartner’s PACE layer model). Beyond promoting a pipeline of differentiated capabilities, this portfolio helps clarify the most appropriate risk mitigation techniques based on how deterministic the business outcomes are (given assumptions and predefined constraints).

This group is ultimately accountable for monitoring the progress/success of each investment. Recognizing that the majority of initiatives (which are essentially experiments) ultimately fail to fully achieve original expectations, standardized execution methods are used to recognize and mitigate investment risks rapidly. Investment opportunities are pre-qualified using consistent criteria (equivalent to BCG’s DICE model and/or the R-W-W screening framework). Similarly, for each investment, quantitative success criteria are established up front (to avoid confirmation bias) and measured often. Large efforts are structured into phases and require formal approval to proceed through each successive phase (continued rounds of funding). Early phases are structured to test the core assumptions of the value proposition. Instrumented least cost minimal viable products are used to rapidly evolve solutions with minimal risk.

Project Portfolio Management Function (Enable Achievement)

· Serves as an advisory function to the investment committee (IC).

· Uses the improvement measurement framework to identify high value improvement opportunities.

· Provides alternative optimized improvement plans to the IC.

· Monitors the health of in-progress initiatives and serves as an advisor to project and IMT teams.

· Organizes a balanced pace layered portfolio of improvements

· Establishes project practice/methods, controls and standards to reduce risk and improve execution quality and efficiency. This includes team formation, role composition and tools.

Improvement Management Team (Achieve)

IMT’s provide a way to organize improvement teams and resources around business capabilities. These teams transcend organizational hierarchies based on technology (for IT) and functions (business). They are a self-contained fully enabled teams that can quickly adapt and execute with a high degree of autonomy.

· Continuous Improvement Team assigned to a business subject area (capability). Established by the Investment Committee to pursue high value incremental improvement opportunities along a business process, customer journey and/or product.

· Charged with generating and maintaining a prioritized list of “best” enhancements.

· Acts as a product owner advocate for a full-stack SCRUM team.

Initiative (Achieve)

· Cross-functional team formed to achieve a sanctioned outcome (value proposition) within the established parameters of budget, scope and schedule.

· Team composition, roles and methods may vary based on the type of initiative. However, in all cases it follows the best practice guidelines established by the Project Portfolio Management Function.

Change Management Framework (Achieve)

Organizational Change Management. The intent of this discipline is to increase the rate/speed with which the organization can absorb change and fully leverage new assets/ processes/ capabilities/ behaviors. Recognizing that the cost of change ranges between 2%-5% for the primary group over the life of the change cycle and change initiatives are more than six times more likely to succeed by incorporating formal organizational change management (and human factors engineering) disciplines, this function not only helps reduce the risks that impede achieving successful change but also reduces the costs, disruptions and duration of realizing change.

IT Change Management. Frictionless continuous deployment using smaller batch sizes for non-system of record solutions. Quality is built into the length of the value delivery pipeline. Controls ensure unintentional disruption is mitigated. The entire value delivery pipeline is synchronized based on the least constraint principle to reduce work in progress and effectively manage technical debt.