C a s e S t u d y 2 !!!

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Sustainable business improvement ina global corporation – Shell Services

!! Background

Setting up a new global organization is a challenge in itself. To do this by harmonizingexisting but different business operations across the world into a single, global organizationadds another level of complexity. This case study describes how Shell Services enabled sucha transformation by developing and putting in place a set of tools, processes and systemsthat became known as the Shell Services Quality Framework, or SQF. To put the organizationinto context, Shell Services comprised several companies across the globe employing some6500 staff with a turnover in excess of $1 bn.

With a clear focus on becoming a customer-centric organization, there was a need to look atthe core processes required to sustain improved business performance as perceived bycustomers. Many of these processes were broken. At the same time, it was recognized thatwithout helping the people in the organization to embrace the values, behaviors andcompetencies necessary to become customer-centric, the vision could not be achieved.Finally, both people and process improvements had to be underpinned by a qualityframework that could be used to define standards, targets and metrics as well as trackingperformance improvements over time (Figure C2.1).

With such a diverse and complex organization, no one existing quality model was seen asoffering a suitable basis for harmonization and inclusivity. Although some proprietarymodels were favored locally, there was seen to be benefit in seeking to bring together the bestof these into a Shell specific product. Criteria such as simplicity with completeness, inclusionof best practice, availability of supporting tools and suitability for self-assessment werechosen and several well-known quality improvement approaches were researched to arriveat the SQF (Figure C2.2). Each model contributed attributes and strengths, but no singlemodel offered the power, simplicity and completeness of the SQF.

Processes

People

Quality

CustomerCustomer

ISO 9000

Capability and control

SQF

Process classificationframework

End-to-end viewpoint

Processes

Customers

Process control

Excellence

Business excellencemodel

Drive to excellence

Baldrige

Market/customer focus

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!! Structure of the SQF

At the top level, the SQF is a simple but powerful construct consisting of five key chevrons.Four of these are enablers – namely Purpose, People, Resources and Process. The fifth is theResults chevron, which focuses on tracking performance improvement as a result ofimplementing the framework (Figure C2.3).

Although this may seem a simple construct it has proved tremendously valuable, even at thetop level, to ask a simple question about each of the five chevrons. A satisfactory answer issomewhat more difficult to provide than a business leader might expect.

Each of the chevrons is broken down into level 2 and level 3 components in order to definekey descriptors, for which tiers of practice, including best practice, can be defined at level

! Figure C2.1Components of a customer-centric strategy

! Figure C2.2SQF heritage

Enabling activities (enablers) Results

Processes PerformancePurpose

Resource

People

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four. This is best illustrated in Figure C2.4, where the Process chevron is taken down to level4 of the framework.

!! Getting started with the SQF

As part of the validation process for the SQF a baseline assessment was carried out across theorganization to determine the starting point for performance improvement and to ‘prove’ theSQF in practice. This yielded valuable data which served both objectives. Some 80 managersand leaders were interviewed and asked to assess where they thought their part of the

! Figure C2.3 The SQF – a simple but powerful construct

! Figure C2.4 Cascading the SQF down to best practice

Aver

age

scor

e

Tier 1

Tier 2

Tier 3

Best practicePurpose People Resource Process

The majority of the scores fell below tier 2

Purpose elements dealing with issues of strategy and leadership

Demonstrating rolemodel behaviour

Using external infosources to develop

policy/strategy

Developing policyand strategy

Reviewing continuingrelevance and effectiveness

of policy and strategy

Translate policy intooperational plans

Tracking performance vs.benchmarks and targets

Reviewing continuingrelevance of operational

plans and targets

0

GAP

Tier 1 Tier 2 Tier 3 Best in class

0

0

0

0

0

0

Tier 1

Tier 1

Tier 1

Tier 1

Tier 1

Tier 1

Tier 2

Tier 2

Tier 2

Tier 2

Tier 2

Tier 2

Tier 3

Tier 3

Tier 3

Tier 3

Tier 3

Tier 3

Best in class

Best in class

Best in class

Best in class

Best in class

Best in class

Unit A Unit B Unit C Unit D

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organization was in comparison to the tiers of practice in level 4 of the SQF. A fundamentalfinding was confirmation of virtually no performance measurement in many areas – indeedthe organization did not rate at all against this component. Other key findings were: goodarticulation of aspirations and purpose, but limited cascade and execution through the line;

! Figure C2.5 Average baseline findings

! Figure C2.6 Purpose elements dealing with issues of strategy and leadership

1.Improvement

tools and techniques

2.Process mapping

guidelines

3.Process

managementguide

4.Performancemeasurement

framework

5.Self

assessmentcapability

Improve Define

OperateReview

Measure

SQF

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very few common processes implemented across the organization; supplier relationships noteffectively managed; lots of initiatives activity around knowledge management and virtualteam working but little collection of institutional knowledge and intellectual capital; manyvaluable initiatives in place to improve overall performance but signs of initiative overloadand limited capacity to follow-through.

Although a sobering exercise it proved invaluable in demonstrating the need for a systematicapproach to improving the business, and in all areas. Figures C2.5 and C2.6 illustrate someof the findings from the baseline activity.

!! SQF tools and techniques

In order to achieve a sustained and consistent approach in using the SQF it was recognizedthat a set of supporting tools and techniques was required, which together would allow thefull benefits of the SQF to be realized in achieving improved business performance. This hadto be in place in order to begin to address complex, outdated and broken processes across theorganization. This was the genesis of the Business Improvement System shown in FigureC2.7.

! Figure C2.7Business ImprovementSystem (BIS)

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Improvement tools and techniques

In order to operationalize this system a structured approach to process improvement wasdeveloped around the DRIVER methodology. This provided the tools and techniques toanalyze business problems in detail. It also provided a systematic way of identifying andimplementing solutions and supported the use of tools such as affinity diagrams, cause andeffect analysis, force field analysis, metaplanning, and Pareto analysis. The six steps withinDRIVER are outlined in Table C2.1 (see also Chapter 13).

Process mapping guide l ines

This provided the ability to understand a process by graphical analysis. This was seen asnecessary to build a common understanding of issues affecting the process in question, as wellas a way of dealing with purpose, inputs, ouputs, resources, controls and interfaces. Suchmaps were invaluable to understand the ‘as is’ position when process redesign isappropriate.

Process management guide

This is where the SQF really came into its own. At level 4 (see Figure C2.4) it provided a cleardefinition of process operation reflecting best practice, and essentially provided the bedrockon which new processes were defined. This forced issues to be considered such as theoperation of processes under controlled conditions, the concept of process ownership, andstarting to think about performance measurement.

Per formance measurement f ramework

This was probably the most difficult aspect of the whole Business Improvement System toimplement. A set of project templates were developed that allowed the selection of outcomemetrics for any standard business process. Properly assembled this provided, for the firsttime, a regime of measurement and tracking for key processes, aimed at achieving the‘perfect transaction’ in spirit if not in practice. Considering the results of the original baselinestudy referred to above, this was the area most in need of improvement.

! Table C2.1

Stage Output

D Define scope of process improvement Purpose, scope and success criteriaR Review ‘as is’ process Defined process, problems and performanceI Identify ‘should be’ process Defined improvement (process, problem prevention and performance)V Verify improvements Prioritized and verified improvements to deliver benefitE Execute improvement delivery Deployed improvementsR Review implementation Measure of improvement benefit

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Sel f -assessment capabi l i ty

The intention of this component was twofold: first, to provide an ongoing self-assessmentcapability where templates, questionnaires, scoring sheets and action plans were provided,based on the SQF; second, to allow those parts of the organization for whom accreditationand recognition was important to use the SQF and the Business Improvement System to testtheir readiness for achieving their goals.

Once these tools and techniques had been developed and integrated into the BusinessImprovement System, two pilots were undertaken to validate and fine tune the approach.The first was improving the accounting processes around joint ventures in Exploration &Production. The result here was a simplified and shortened end-to end process, resourcesreleased for more value-added tasks and higher customer satisfaction levels. The secondpilot addressed problem management in the IS service delivery organization. Again, bylooking afresh at the process, particularly at performance tracking, the end result was aglobal, stable process with defined service levels and performance tracking – and happiercustomers.

!! SQF and business improvement

Once the SQF had been developed, proven in pilots and supported by a BusinessImprovement System, the task then became one of deploying the SQF such that priorityareas were addressed, improvements could be sustained and the whole approach couldbegin to permeate the organization. There is no doubt the SQF and supporting tools can be

! Table C2.2

Business focus Applied to Purpose Examples to date

Alignment Plans,projects,options

To ensure alignment with businessstrategy and priorities

Communication strategy, leadership teampriorities, strategy renewal, HSE strategy

Choice Initiatives To help prioritize by considering purpose,impact, resources, capacity, etc.

Business Improvement Program, HRagenda, stress management strategy, costreduction process FIRST

Improvement Process To improve or redesign core processes,with a focus on best practice

Contract to billing process, accountmanagement process, property sales, jointventure accounting, service delivery

Assessment Organization To self-assess for continuousimprovement

Customer service teams, customersatisfaction with HR

Recognition Business To achieve accreditation/recognitionagainst best in class standards

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used wherever business problems exist and several areas were targeted. Perhaps one of themost powerful was in helping the whole organization come together around keymanagement thrusts for the year – FIRST: Focus on customers, Improve billing, Reduce cost,Service excellence, Talent development. Work was carried out with the executive team toarrive at these top five thrusts by using the SQF to distil the really important strategies froma much longer ‘wish list’, again forcing clarity around real purpose, business impact andperformance measures. Using the SQF to help with choices in this way it was possible toreinforce important aspects of organization and culture, so critical when aligning andmobilizing support from across the whole organization.

As a summary, progress in the area of business improvement is highlighted in Table C2.2.

It is worth mentioning here another area of SQF deployment in a little more detail:discretionary expenditure – The ‘Business Improvement Program’ in Table C2.2. Everyorganization spends time and money on undertaking projects, hopefully to improve keyprocesses, market standing, profitability, reputation, etc. Faced with a wide array of some 35IT-related projects, all seemingly justified in their own right and amounting to some$80 million, the question was – ‘how do we ensure we are working on those projects that willprovide best value for money and clear alignment with our business objectives?’Furthermore, ‘how do we exercise some degree of control over such a disparate set ofprojects ranging from billing improvement, through knowledge management to hardwarerenewal?’ And finally, ‘how do we ensure a first class strategy ends up in a first classimplementation?’ The answers lay in using the SQF as a ‘filter’ to address what may appearto be 20 simple questions, but ones that were to prove to be worth their weight in gold(Figure C2.8).

Taking just one question as an example from Figure C2.8 – the second one under People –‘what is our capacity to implement the degree of change required for successful

! Figure C2.8 SQF 20 questions to ensure a structured approach to any improvement opportunity

Processes

PerformancePurpose

Resource

People

What do you reallywant to achievewith this project,

initiative oropportunity?

What numbers,capacity and

competenciesare required?

How will you knowwhen the purpose

has been achieved?

What financialand other assets

are required?

What are theprocesses, stepsor deliverables toachieve success?

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implementation of this project?’ This was a powerful question often overlooked in the rushto deliver improvements across the organization. Every organization has a limited capacityfor major changes at any one time. Is it feasible to ask people to implement a new billingsystem while a global helpdesk is being implemented and a major office move is underway?

Through this process of using the SQF to ensure discretionary expenditure was beingproperly considered, the leadership team found they were able to make better decisions,generate 100 percent support for priority projects and provide an environment for the bestpossible chance of successful implementation. Even more than this, some parts of theorganization started to ask the question at every management team meeting – ‘has this ideabeen SQF’d?’

On an even more simple scale, value was derived by asking just five key ‘acid test’ questionsabout any initiative under way in the organization. Sometimes these proved quite difficultto answer for even the most well-understood projects! These are shown in Figure C2.9.

!! My SQF

Once the SQF had been introduced for organizational improvements and it was accepted asa tool for improved decision making, there was another, perhaps more important aspect yetto be developed – using the SQF as a tool to help people in their own personal workplanning, and maybe even to start to address the issues of work/life balance.

Putting the SQF into a small leaflet format (Figure C2.10) that could be distributed to eachmember of staff proved immensely valuable. It helped in discussions between staff andsupervisors, where real issues around their workload, priorities and challenges could bediscussed in a way that took the heat and emotion out of the debate. For an individual

! Figure C2.9 Five easy questions!

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reviewing work priorities, it was important to be absolutely clear about the purpose of a taskor project, as well as having a good understanding of what was required to achieve successin implementation. It also meant having the confidence and a fair basis for saying No! tosome activities.

!! Next steps

During the two years of development, testing and implementation of the SQF, it was neverfound wanting in terms of an area of the business where it could not be applied. One of themost difficult aspects was getting people to accept the simplicity of the construct, and not tolook for complexity – as if it were perhaps a test of intellectual rigor. The SQF wasdeliberately predicated around the fact that it would outlast business fads and theories –keeping it down to earth meant that it was bound to be successful over time and not thrownaway when the next idea came along. Managers will keep using the SQF to provide ananchor to business improvement – it costs little, is difficult to argue against and helps themost important asset in the organization – the people!

!! Questions

1 List and discuss the advantages and disadvantages of developing an organization specificquality framework, such as the SQF, in comparison with adopting an existing frameworksuch as the Baldrige or the EFQM Excellence Model.

! Figure 2.10‘MySQF’ leaflet