Author name: Forrest Breyfogle

Key Performance Indicators (KPI’s) might be created for tracking how well an organization is moving toward achievement goals aligned to executive-retreated-worded strategies. The balanced scorecard and hoshin kanri are techniques that are to then provide a vehicle for aligning organizational-chart work efforts to these executive retreat strategies and goals. Traditional management systems might also use red-yellow-green scorecards or dashboards to assess how well every business area is doing relative to achieving their individual business goal. However, what is the implication of this business management approach? Does it lead everyone in the organization to do what is best for the business as a whole? What is really important for success is that the business moves toward achievement of the 3 Rs of business; i.e., everyone doing the Right things, and doing them Right, at the Right time. This whitepaper describes a Corporate Performance Management (CPM) system that helps organizations move toward achievement of the 3 Rs of business through a no-nonsense framework for: establishing a predictive value chain scorecard system; incorporating effective analytics using such tools as Theory of Constraints (TOC) to determine where improvement efforts should focus; conducting analytically/innovatively strategic planning efforts to identify targeted areas for improvement that help the entire business; utilizing a business improvement system so that the enterprise as a whole benefits. This Integrated Enterprise Excellence (IEE) business management system goes beyond the balanced scorecard and a Lean Six Sigma project-based improvement system.

Lean Six Sigma, Total Quality Management (TQM), and other process improvement efforts have helped organizations improve; however, these efforts often occur in organizational silos, where the benefits are not felt at the big picture executive level. Lean conference presentations often describe how all company associates in a spirit of organizational improvement need to continually identify and resolve waste-reduction problems; i.e., overproduction, waiting, transportation, inventory, over-processing, motion, and defects. Even though there can be significant benefits from these efforts, Lean practitioner conversations at those same conferences can be describing how their organization eliminated much operational waste only to find that executive management decided to close their facility. There are some elephant in the room business management governance policies that nobody seems to openly discuss. These topics and discussions can include red-yellow-green goal setting scorecards, variance to metric goal tracking, strategic planning sessions often lead to statements that are to have measurements and activities aligned to them, silo improvement efforts that don’t impact the big picture, control systems that are not effective (e.g., Sarbanes Oxley – SOX – did not prevent our current financial crisis from occurring. A business system to address the above issues and accomplish these objectives is the Integrated Enterprise Excellence (IEE) system. In the IEE system, strategy is not step one but set five in a nine-step process. A Chief Performance Officer can use the IEE methodology for their Corporate Performance Management system.