Kearny & Silber 1

Wearing Business Glasses

The Business Glasses Model:

Research at Archstone Smith

Kenneth H. Silber, NIU

Joseph Druzo, Archstone Smith

ISPI International Conference, 2007

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A BUSINESS PERSPECTIVE

What

Who

Why

A business model: getting the big

picture … from a line manager’s

perspective

For specialists with no general

business background (MBA, etc)

To be effective, we must:

work within our clients culture

speak their language

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A BUSINESS PERSPECTIVE

How

Experts

Identify client business logic

Identify clients’ key metrics for

critical success factors

Determine questions to ask

Use worksheets to find implications

Albrecht, Porter, Kaplan & Norton,

Engle, Kearny, Silber, You, your Clients,

& hundreds more

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Introducing:

BUSINESS

LOGIC

What are they

trying to do, as a business?

Does it logically hang together?

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Supporting Logic With Data

Logic Measures Target Current Gap

Perfor-

mance

Problems

Interven-

tions

Measured

Results

External

Economic

Strategy

Customer

Product

Process

Internal

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External Logic

THE INDUSTRY

New entrants

Suppliers

Buyers

Substitutes

Rivalry

Industry

growth

THE TRENDS

Economic

Demographic

Political/legal

Technological

Socio-cultural

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Economic Logic

Cost Structure

Fixed vs. Variable

Financial Focus

Profit

Source

The Financial

Picture:

Measures

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Economic Logic How well is the Economic Logic working?

What key financial metrics do you look at :

FINANCIAL PICTURE FINANCIAL

PICTURE

Profit

Costs

Cash flow

Reinvestment

ROI

Return on

capital

employed

Profitability:

Return:

on assets

on sales

on equity

Margins

Solvency:

current ratio

debt to equity

efficiency

asset turnover

collection

period

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Strategy Logic

Mission and

Vision

Growth

Strategy

Objectives and

Initiatives/

Tactics

Pricing Strategy

Culture

Alignment

Core

Competencies

MARKETING

R&D

PRODUCTION

DISTRIBUTION

POINT OF SALE

MARKETING

R&D

PRODUCTION

DISTRIBUTION

POINT OF SALE

Measures

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Strategy Logic How well is the Strategy Logic working?

What key strategy metrics do you look at?

SCORECARD

Are they:

Identified

Documented

Clearly Understood

Specific & Measurable

Consistent

Supported

Agreed to

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Customer Logic

Market Strategy

Relationship vs.

Transaction

Strategy

Measures

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Customer Logic How well is the Customer Logic working?

What key customer metrics do you look at ?

SCORECARD

Size of market segment

Share of market

New customers

Customer retention

Complaints

Net profit/customer

Value (benefits vs. cost)

How do you

count?

absolute, growth,

overall, in niche,

compared to the

competition, #, %,

decrease, margin

per customer sale

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Product Logic

Product

Strategy

Differentiation

Company Image

Measures

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Product Logic How well is the Product Logic working?

What key product metrics do you look at?

SCORECARD

Product/service:

functionality

quality (defects, returns)

price (vs. cost, etc)

timeliness

safety

volume, etc.

Company image:

knowledgeable

proactive, etc

Relationship w. cust:

convenient

responsive, etc.

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Process Logic

R&D Process

(Product

Development)

Production

and/or Logic

Processes

Post-Sale

Processes

Measures

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Process Logic How well is the Process Logic working?

What key process metrics do you look at?

SCORECARD

Production/Logistics:

quality

value added activities

Post Sale:

returns

repairs, updates

coordination, etc.

R&D:

products created

cycle time

process time, etc.

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Internal Logic

Internal

Structure

Information

Systems

Learning and

Innovation

Measures

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Internal Logic How well is the Internal Logic working?

What key internal metrics do you look at?

SCORECARD

Learning/innovation:

job design

recruitment/retention

Structure:

alignment

reward/recognition

Info. Systems:

knowledge mgmt

system performance

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Business Logic Summary

Economic Strategy Customer Product Process Internal

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Supporting Logic With Data

Logic Measures Target Current Gap Performance

Problems

Interven-

tions

Measured

Results

External

Economic

Strategy

Customer Cust.

Satis. 95% 84% 11%

Stds

Uncle

Stds &

Fdbk 89%

Product

Process

Internal

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Research Study

Case Study Research

Questions:

• relationship between an organization’s profile and

(a) its performance on success criteria

(a) the success of ID/HPT solutions?

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Research Method

Instruments

• Re-validate existing tools above

Data Collection

• Extant Data, Interview, Observation

Data Analysis

• Descriptive Summary

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Research Results

Archstone Smith Business Glasses Profile

• TBD during study

Archstone Smith Organization Peformance & Solution Success

• TBD During Study

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Research Conclusions

Data Analysis

• Relation between Model and Organizational Performance

Next Research Steps

• Study more organizations

• Do more qualitative and quantitative research

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YOUR MOVE

What

Adapt the model for your own

use

Do research on it

Share it with clients

Suggest improvements….NOW

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