Leading your Business Customer

With Business Capability AnalysisA Lean-Agile Approach to Enterprise Analysis

Dean StevensSynaptus

@leanopinions

Capability ModelingHBR: The Next Revolution in Productivity

• Business capability is an outcome based view of what the business does

• Capability Model presents – A graphical view of the business

or value stream– Specifies value by a relative

assessment of capabilities• Promote a shared understanding

– Identify, scope & prioritize initiatives

– Maintain business context throughout the project

Value Manager

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I have a question!…DEV

I have a question!…Other

Stakeholders

I need to help them discover GOOD answers

… Value Manager

I have a question!…BIZ

• Prioritization– What feature do we work on next?

• Scope– Should I add more functionality? Or is this done?

• Quality– Is it good enough?

• Trade offs– Will the easy solution be sufficient?

Value ManagerGood Answers to Hard Questions

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Value ManagerBig Picture

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What if we learned together how it fits into the big picture?

They are asking questions about the puzzle piece

Collaborate and Elaborate

Value ManagerShared Context

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Then we could TALK about what we had learned… with a shared

CONTEXT

Value Manager Value of Capability Analysis

• Provide Context

• Facilitate Discovery

• Focus on Value

• Promote Feedback

I could help them discover

GOOD answers,and QUICKLY

1. Describe Business Capabilities

2. Assess Capabilities for Value, Performance & Risks

3. Analyze Capability Model (Heat Map)

Capability Analysis Recipe

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• Start with a list of your business process– From what you already know and documents you have– Process Frameworks: APQC, ITIL

• Rename and describe them as business benefits– What’s the benefit, the outcome, the purpose– How could we measure it

• Map the value stream or network (optional)

• Validate/ elaborate with business managers.

Describe Business CapabilitiesFocus on Business Benefit

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Describe Business CapabilitiesThe “How Trap”

How Phrase Outcome Phrase

Receive Fax Receive Request

Enter Info to System Draft Quote

Create Certificate Create Certificate

Send Fax to Agent Communicate Quote to Agent

Rekey into FinApp Interface

Create Policy Agreement Create Policy Agreement

Mail Agreement Send Agreement

Send Fax is just one way to Communicate a Quote Focusing on the outcome avoids the “How Trap”

Easier to “see” drivers and results

Describe Business Capabilities

• Capability Name Review– Action verb/noun format– Identify & revise “How Trap” names

• Description Review– Objective: Make clear what this

activity is during interviews– Include business benefit, purpose

or outcome– OK to state “how” we do it

currently– Clarify & Simplify

It is hard “see” what we do in this

different way

Describe Business CapabilitiesDetailed Capability Model

Business Capability Purpose OwnerKey Metric

Key Goal Cost FTE

2.0 Generate Demand2.2 Manage Retailer Relationships

2.2.2 Support Inventory Management at Retailers2.2.3 Provide & Deliver Retailer Access to Intranet2.2.4 Develop & Provide Warranty Services2.2.5 Provide Product Technical Support2.2.7 Allocate Product to Retailer2.2.8 Create & Manage Retailer Orders

2.2.9 Create & Manage Parts Order2.2.10 Monitor retailer compliance with policies and programs

Describe Business CapabilitiesVisualize the Business

Capability Relationship DiagramLaunch New Product

Controlling

Value

Supporting/Enabling

Business ScenarioOffer high quality products that the customer desires, that can be delivered quickly and that drives increased sales and profitability. Activities include assess opportunities, plan, launch and market (initial) required to.

MetricsTime to MarketNew Product Revenue & ProfitabilityMarket Penetration

Ideation Plan Launch Post Launch

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11

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1.1.1 Analyze New PS&P Opportunities

1.1.4 Document Action Plans to Develop PS&P

Concepts

1.2.3 Design & Develop Installation Process

1.1.2 Plan, Develop & Communicate New PS&P

Strategy

1.1.3 Develop Action Plans to Develop PS&P Concepts

1.2.1 Obtain Financial Approval & Support to

Develop PS&P

1.2.2 Design, Prototype & Test New PS&P

1.2.4 Design & Develop Support Services

1.2.5 Develop Launch Plan

1.3.1 Perform Pre-Launch Activities

1.3.2 Communicate, Coordinate & Execute

Comm Plan

1.3.3 Coordinate & Execute Marketing Plan

1.3.4 Coordinate & Execute Support Activities

1.3.5 Manage Launch

1.3.6 Execute Launch of New PS&P

1.4.1 Manage New PS&P Portfolios

1.4.2 Manage Partner Relationships for New PS&P

1.4.3 Establish Price to Dealer

2.1.3 Train Dealers2.1.7 Perform Customer

Relations

2.2.5 Provide Product Technical Support

3.1.1 Identify Suppliers

3.1.3 Negotiate & Document Supplier Agreement

3.3.1 Perform Supply Chain Planning with Supplier

3.4.3 Track Performance Metrics for Service Providers

4.1.2 Assess Accessory Demand

4.2.3 Plan General Parts & Acc'y Requirements - Long

Range

4.2.5 Plan Warehousing & Staging - Long Range

3.4.2 Track Perform Metrics for Parts/Acc'y Suppliers

3.3.2 Coordinate Technical Support with Supplier

3.1.2 Qualify Suppliers

2.2.2 Support Inventory Management at Dealers

Val

ue

Add

Con

trol

Sup

port

• Elicit specific answers to specific questions for each capability– Value: Strategic, Business, Customer– Performance: Relative to expectations, Constraint– Risk: Business, Compliance, Technical

• This is Context• Very powerful approach to Organizational Learning

and Shared Understanding

Assess Business Capabilities

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Assess Business CapabilitiesCapability Model/ Heat Map

• Assessed Business Value, Performance, and Risks relative to other capabilities

• Visualize the Business with Context

Business Benefit

RiskRegulatoryCompliance Technology

High Value

Medium Value

Low Value

High Per Gap

Medium Per Gap

Low Per Gap

High Risk

Moderate Risk

Low Risk

KEY

Value:StrategyBusinessCustomer

PerformanceHow suitable is

performance relative to expectations?

Assess Business CapabilitiesValue Stream/ Network View

Capability Relationship DiagramLaunch New Product

Controlling

Value

Supporting/Enabling

Business ScenarioOffer high quality products that the customer desires , that can be delivered quickly and that drives increased sales and profitability. Activities include assess opportunities, plan, launch and market (initial) required to.

MetricsTime to MarketNew Product Revenue & ProfitabilityMarket Penetration

Ideation Plan Launch Post Launch

LowHigh

L

M

H

Low High

LEGENDBusiness

Value ChangeabilityPerformance

Not Specified

VP

M

P

Dealer Survey

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6

8

11

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1.1.1 Analyze New PS&P Opportunities

1.1.4 Document Action Plans to Develop PS&P

Concepts

1.2.3 Design & Develop Installation Process

1.1.2 Plan, Develop & Communicate New PS&P

Strategy

1.1.3 Develop Action Plans to Develop PS&P Concepts

1.2.1 Obtain Financial Approval & Support to

Develop PS&P

1.2.2 Design, Prototype & Test New PS&P

1.2.4 Design & Develop Support Services

1.2.5 Develop Launch Plan

1.3.1 Perform Pre-Launch Activities

1.3.2 Communicate, Coordinate & Execute

Comm Plan

1.3.3 Coordinate & Execute Marketing Plan

1.3.4 Coordinate & Execute Support Activities

1.3.5 Manage Launch

1.3.6 Execute Launch of New PS&P

1.4.1 Manage New PS&P Portfolios

1.4.2 Manage Partner Relationships for New PS&P

1.4.3 Establish Price to Dealer

2.1.3 Train Dealers2.1.7 Perform Customer

Relations

2.2.5 Provide Product Technical Support

3.1.1 Identify Suppliers

3.1.3 Negotiate & Document Supplier Agreement

3.3.1 Perform Supply Chain Planning with Supplier

3.4.3 Track Performance Metrics for Service Providers

4.1.2 Assess Accessory Demand

4.2.3 Plan General Parts & Acc'y Requirements - Long

Range

4.2.5 Plan Warehousing & Staging - Long Range

3.4.2 Track Perform Metrics for Parts/Acc'y Suppliers

3.3.2 Coordinate Technical Support with Supplier

3.1.2 Qualify Suppliers

2.2.2 Support Inventory Management at Dealers

Very Red – Improve PerformanceVery Green – Improve Efficiency

• Analytical Approaches– Lean Analysis– Theory of Constraints– Financial Analysis– Organizational Analysis– Technology Architecture Analysis

Analyze the Capability ModelLenses

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The Capability Model is a great way

to start these analytical

approaches

• Analytical Thinking & Problem Solving– Creative Thinking– Decision Making– Learning– Problem Solving– Systems Thinking

Analyze the Capability ModelCompetencies

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I can apply these analytical

competencies

Collaborate and Elaborate

Value Manager

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We can TALK about what we have learned

… with a shared CONTEXT

Value ManagerGood Answers to Hard Questions

• Prioritization– What feature do we work on

next?

• Scope– Should I add more

functionality? Or is this done?

• Quality– Is it good enough?

• Trade offs– Will the easy solution be

sufficient?

20

I can help them discover GOOD

answers,and QUICKLY

Value Manager Value of Capability Analysis

• Provide Context

• Facilitate Discovery

• Focus on Value

• Promote Feedback

Capability Analysis really helps me add value when I use it

to…