In response to my recent post on the Process Owner Grid, Richard Rawling responded that he frequently uses a tool called Process Evaluation Grid. This tool also has the process laid out along the top of the grid – same as my adjusted Process Owner Grid. The difference is that down the side of the grid are listed performance evaluation criteria, such as customer satisfaction and cost – see example from Nous Group.
This tool reinforces my earlier blog about the value of positioning the process steps along the top of the grid. It also fits with a strategy tool that I often use which I call “value chain analysis”. This involves laying out the value chain and then asking under each step in the chain two questions
- Is the cost of this step, as a percent of sales, higher or lower than that of competitors and why?
- Is the value that this step creates for the customer, higher or lower than that of competitors and if so why?
To do this well, you need to have an idea of the cost of each step, at least in terms of percent of sales; and you need to know where the customer touch points are and what factors customers most value.
The Nous Group chart has some other questions on it – which can be selected to suit the issue being examined. It also has the customer touch points and the expectations of the customer at each touch point on the chart, which helps ensure this is front of mind.
My first reaction is that the Process Evaluation Grid is more about strategy analysis than operating model analysis, but I can see the benefit of using it as part of a toolbox for operating model work as well. It could be used to back up the value chain map. As you may know, it is often helpful to record “areas of competitive advantage or excellence” and “areas of problem or opportunity to improve” on the value chain map. This helps ensure that attention is directed at the most important steps in the value chain map. The Process Evaluation Grid is a tool you might use to help you make these “competitive advantage” and “problem” judgements.
Andrew, two questions:
a) what makes you feel this is more strategy analysis than operating model analysis?
b) what makes you distinguish between these two? you seem to imply that operating model analysis is not strategy analysis – why not?