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Realizing Dramatic ROI Using Greenfield Analysis

April 2013 Corporate

Summary

In penning “In Search of Excellence” in 1982, Tom Peters provided the seminal, practical guide to achieving repeatable excellence.  Through a blend of case studies and insights based on his lengthy consulting experience, he educated a generation of managers and leaders on how to undertake continuous change to achieve high customer satisfaction and employee morale.  He has a number of memorable quotes, including:

  • “Excellent firms don’t believe in excellence – only in constant improvement and constant change.”
  • “All white-collar work is project work. The single salient fact that touches all of our lives is that work is being reinvented.”
  • “Leaders don’t create followers, they create more leaders.”

In our business transformation consulting practice, we are constantly testing our approaches and methodologies across industries and clients.  We found on a number of occasions that clients are able to achieve remarkable ROIs—100% to 1,000%—in their business transformation projects.  To achieve these results, it is imperative to bring together subject-matter experts (SMEs) from different parts of your company who become your change leaders.  Challenge them to use a clean-sheet-of-paper approach, or a so-called ‘green field’ approach, to develop a ‘genius’ solution.  We use our expertise to facilitate this process, and using our experience we round out the genius solution with additional dimensions to address potential weaknesses and to improve the probability of a lasting behavioral change.

The balance of this article provides more detailed background and some case-study summaries.  As you read on, consider how you could harness your SME talent to achieve breakthrough ROI.

Innovation

The O’Reilly-Tushman Innovation Continuum (see below) outlines the various types of process improvement that can occur within an organization.  On the left hand side of the graphic small incremental innovations are made – think 2- 7 % per annum – using continuous improvement approaches such as Six Sigma.

On the opposite scale we have discontinuous innovations that have a profound impact on the process and even the organization.  ROI in this case is expected in the 1,000s of percent and usually occur only rarely in the lifespan of the process.
O’Reilly-Tushman’s Innovation Continuum:

BPM_1

 

Using its Greenfield analysis method Confiance has managed to achieve dramatic ROI similar in nature as with discontinuous innovations.

This article will outline three representative projects and their results but first we will address the question:

What is Greenfield Analysis?

The term “Greenfield” carries with it a principal underlying idea: to start from scratch; to ignore what currently exists and think up new innovative ways of doing something; to brainstorm.

Where appropriate, when we run business improvement engagements, we do not want to merely rearrange the deck chairs on the Titanic, but rather prevent her from hitting an iceberg in the first place.  We do this by completely rethinking not only how our clients perform a process but also consider the why and how the process relates to their strategic objectives.

Once the as-is process has been defined and the business architect has identified waste, redundancies, poor resource utilization and weaknesses in the existing process, there are several ways to undertake a Greenfield analysis:

A. The business architect creates improved to-be models based on their knowledge of the process.
B. The business architect reviews best practices and then creates improved to-be models.
C. The business architect performs both option 1 and 2, creating straw-man models but next, gathers super SME’s (super subject-matter experts: experts that 1) have been with the company the longest, and who are the most motivated; 2) tend to be the busiest due to their in-depth knowledge and attitude; and 3) those who know how the business does things outside their own area of expertise) to create the next generation of process.

At Confiance, we believe that Option C is the only viable option to pursue.

Why include Super SMEs?

We have found that the most innovative ideas have come directly from bright, highly motivated people who have worked with the process for years.  These are the ones who have gone home and agonized over poor procedures, silly rules, and ineffective management controls.

All that is required at the start of the first work session is to put the super SMEs in the right frame of mind.  I find what really sets the tone well is an introduction from a highly respected C-level manager who tells them how important this new process is to the organization and how much they are relying on these experts to make the company competitive – thus ensuring not only the organization’s future but their very careers going forward.

Next I tell them that they have probably complained for years as to how bad the existent process is, and that they would probably have loved to have made it super-efficient and über-customer friendly in the past.  Well – now is the time! Now’s the time to forget about the budget, the company rules, et cetera.  Now’s the time to create perfection. (Naturally later we will tweak the end result for sanity in terms of dollars, resources etc. – all we are going for at this stage is pure unadulterated ideas.)

Once we have modeled their ‘genius’ solution, I introduce other components that will address weaknesses previously identified in the as-is analysis as well as include best practices where and when appropriate.  Sometimes these new ideas will eventually become the new best practices – because, in theory, this new process is going to leave their competitors in the dust, so why adopt ‘old’ ideas?

Below is a concise summary of three representative projects that Confiance have run. Each engagement had its own unique challenges, company politics, and regulatory and/or federal requirements. As can be seen, each solution was extremely successful and most of this was due to highly innovative ideas that came from the SMEs within these organizations during Greenfield analysis workshops.
Case Study 1

Who: Fortune 500 pharmaceutical company
What: Optimize the T&E process related to electronic approvals, receipt capture, and compliance

AS-IS Conceptual Model:

BPM_AsIs_1

TO-BE Conceptual Model:

BPM_ToBe_1

Result:

  • Reworked and simplified T&E overall process
  • Reduced process capture time by 17.5 weeks
  • Reduced process immediate cost by $272k
  • Duration of project: 3 weeks
  • Projected end result – 1,587 % simple ROI

Case Study 2

Who: Fortune 500 pharmaceutical company
What: Improve business operations marketing by optimizing their services, from the request through delivery of an asset or service.

AS-IS Conceptual Model:

BPM_AsIs_2

TO-BE Conceptual Model:

BPM_ToBe_2

Result:

  • Reworked and simplified business operations overall process
  • Eliminated 30% of unnecessary rework passing quality control
  • Reduced rework of all review materials by 50%
  • Cut all changes to print materials by 15%
  • End result – 1,722 % simple ROI

 

Case Study 3

Who: Fortune 500 fiberglass manufacturer
What: Improve back to front reengineering effort in their E glass line

Result:

  • Reduced non value-add processes by 45 %
  • Increased business value-add processes by 18 %
  • Increased value-add activities by 33 %
  • Identified $2.4M in additional high-value business opportunities
  • Duration of project: 10 weeks
  • End result – 2,400 % simple ROI

BPM_Pharma

 

 



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Rich Cunrad
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