The question posed is to comment ( feedback) about how you might construct and u

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The question posed is to comment ( feedback) about how you might construct and use results for your company or a company you are familiar with?

One of the great challenges for management is seeking segments of operations to improve that yield the most results. Some managers prefer to use a SWOT analysis or a KRA analysis.  A SWOT analysis (strengths, weaknesses, opportunities, threats) looks at the internal strengths and weaknesses of the organization and then also takes an outward view towards opportunities and threats.  With those in view, management then is able to develop strategies for growth. My observation in industry is that many people struggle with the SWOT analysis because it requires a level of strategic thinking—a world view—that most new managers do not possess.  A Key Results Area (KRA) analysis is a seemingly more simplistic approach, yet it can often yield powerful and actionable insights.  My experience has shown that managers at almost any level in an organization are able to contribute to the KRA analysis; and it can become the more useful tool.    A note about KRA versus KPI.  Key Results Area (KPI) is the identification of “what” can be changed and improved. A Key Performance Indicator (KPI) is a measure of that improvement.  In that regard, a KRA    Is the process you have identified for improvement, and KPI are the measures of that process over time.   For example, an online retailer might have a KRA of shipping to customers within one day of the order being placed. The KPI would be the measure of speed of order processing over time.  KRAs and their metrics (KPIs) normally have some dimension of customer complaints, late shipments, employee turnover, and so forth. However, the metrics can also be used in the larger sense of “state of being”.   Numbers vs. Words:  KRAs tend to be qualitative; however, it is possible to assign numeric values which enable unambiguous decisions. KPIs may be qualitative in nature, an example being customer satisfaction. That can be stated in words (qualitative) or as a numerical index (quantitative).       Ultimately, you will identify a process that needs improvement and that improvement will most likely have a cost and you will need to be able to assess the financial impact. With that knowledge, you can state that you have identified a process that needs improvement, the cost of that improvement, and the earnings.   In a perfect world, the earnings are greater than the costs; however, life is not always so simple and you may have processes that need to change yet do not yield improved earnings.  For example, a regulation may change that governs your process. You must change the process but it yields no improvement in earnings.    BEST PROCESS IMPROVEMENT: Get rid of the process if that is possible.  Typical thinking is to accept the current process and try to improve it.  That is not the correct approach.  Keep in mind that processes add cost and time to your operations. Only 25% of all processes are valueadding for the customer; all the rest are cost burdens you impose on the customer.  Your goal as a manager is to understand those that add value and those that add cost and time.  Once you are able to do that, then the list of processes to improve is simple: Start by looking at the ones that add cost.    A KRA analysis has the customer at its core. It asks the questions: Do we delivering what the customer wants?  And do we deliver the value they expect?  We might use this to map both our own organization against who we perceive is the competition or it might be a purely internal mapping. We might look at many aspects and use one map, or we might create many maps, one for each process. Start by drawing a simple quadrant map as shown below.  In most organizations, customer perception of value is critical so that is where we typically start.     We ask the simple question: How well do we perform a process and how important is it to the customer?  Put a dot in the quadrant that answers that question. Now evaluate the quadrants and where that dot is placed.  I can also color code this for presentation to management. It says the same thing, but sometimes the “traffic light” colors speak volumes. IMPORTANCE: QUADRANT #1: If you are in quadrant #1, the process is important to the customer; however, you are not good at delivery. In that case, you would want to allocate time and resources to move the process towards quadrant #2.  This is a Key Performance Area that must remain in your focus.     QUADRANT #2: If you are in quadrant #2, you are great and your customers love what you do, then maintain that process.  The temptation is to continuously throw money and resources at quadrant #2 processes, but the reality is all you want to do is maintain them.   QUADRANT #3: If you are in quadrant #3, you are not good at delivery and your customers do not care. Consider deleting the process and reallocating the resources. Odds are that your customers will not notice and your bottom line will improve.   QUADRANT #4:   If you are in quadrant #4, you are really good at delivery but your customers don’t care too much. Consider maintaining the process but reallocating resources to quadrant #1. Importance Effectiveness KRA Key Results Area 12 34 COST: You can use the same quadrant analysis but this time with a view towards financial efficiency. Note that the management actions change depending on quadrant.  You can use this quadrant for INCOME or for COSTS.  I am using it for COSTS.  If you use it for INCOME, then what actions you take will change. For example, if you have high income and lost human resources, the quadrant #1 becomes “maintain”.    QUADRANT #1: If you are in quadrant #1, that means the process has a high cost but not too many human resources. For improvement, consider what is driving the costs.  Can those costs be reduced.   QUADRANT #2: If you are in quadrant #2, the process has high cost and is laborintensive. Improvement would be to reallocate labor and also try to reduce costs. Human resources might be reallocated to other processes.    QUADRANT #3: If you are in quadrant #3, the process is costefficient and does not use many human resources. Maintain.  This assumes the process has already been vetted through the first KPI analysis; meaning, the customers see value in the process and you are good at it.    QUADRANT #4: If you are in quadrant #4, the process takes a lot of human resources but does not have too much cost.   Evaluate how essential this is to customers and consider discontinuing the process.      KRA Income 1Fix 2Delete 3Maintain 4Reallocate People 3 =  Low monetary and labor requirements 1 =  High monetary and low labor requirements 4 =  Low monetary and high labor requirements 2 =  High monetary and high labor requirements RISK: This uses the same quadrant analysis but with a view towards risk.    QUADRANT #1: The chance of failure is not too high but it consequences of failure are very high.  You need to mitigate the risk.  This is an important KPI  for your organization.   QUADRANT #2: High probability of failure and high consequences of failure. Your organization needs to be keenly aware of risk mitigation; ultimately discontinue the process if possible.   QUADRANT #3: The process is stable and has low risk. Maintain.   QUADRANT #4: The process has a high chance of failure and even though the consequences might be minor, organizationally you might want to mitigate risk by reassigning resources.          Chance of Failure KRA Key Results Area Consequence of Failure   1Fix 2Delete 3Maintain 4Reallocate So which evaluating approach ranking.  T maintain. over all ot company    “Fix” has well. “Ma    There mig process a process do w g; you can us this; howeve The simplest   Think about thers, becaus can have. monetary im intain” gets t ght be many p nd the highes we concentrat e this step to er, this starts approach is t t why those n se it consume pact but migh the lowest sco processes we st score “wins te on?  Presum quantify you to put some to assign a va umbers are u es cash and do ht take longe ore because i e look at, but t s”.   ming you hav u actions.  The numbers on t lue of 100 to used. If you ca oes add value r. Likewise “r t is working w the scoring p ve more than ere is no “righ the words so delete, 75 to an delete a p e. That is the reallocate” ha well and effic rocess might one process ht” or “wrong that we can o fix, 50 to rea rocess, then t worst possib as a time com iently.   look like this you are g” way to arrive at a allocate, and that takes pri le process a mponent to it s. Do this for e 25 to iority as each APPENDIX Here is a short slide presentation that gives you one more view of this process.    1 How Good Are You? Action Mission and Responsibilities Identify Customers Customer Requirements Performance Gaps 2 STEP 4: Identify Performance Gaps Purpose: To assess the current status of the function’s performance Payoff: To target KEY RESULT AREAS requiring improvement   

Explanation / Answer

The company is ABC which falls under the quadrant 2 that is the company is delivering what the customers want are met and are happy with the services and the company needs to mainatain it with proper allocation of resources.

Customers are provided with all emenities and their requirements are properly met. The only thing it can do as a part of KPA is to maintain the service and bring in new improvement or changes with additional human resources.

The gaps are generally filled with additinal people and cost is minimum and yield is also high compared to the cost.

The metrice for measuring KPI are speed in fulfilling customers orders , the price with which the customers are satisfied. In both these indicators considerable change can bring in more results.

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