The Helix Factor Ii

THE HELIX FACTOR II
The key to streamlining your business processes
The Implementers Edition
By
Michael R. Wood
ii
Copyright 1999 by Michael R. Wood.

All rights reserved. Except as permitted under the United States Copyright
Act of 1976, no part of this publication may be reproduced or distributed in
any form or by any means, or stored in a database or retrieval system,
without the prior written permission of the publisher.
ISBN: 0-9659809-2-8
Library of Congress Card Catalog Number: applied for
Printed in the United States of America.
First published in the United States in 1999 by:
The Natural Intelligence Press
Electronic version published in 2009.
For more information about Michael R. Wood, this book, or other
publications email mike_wood@msn.com.
iii
Preface
The HELIX Factor II provides people and the organizations they serve a
detailed method for identifying, analyzing and improving their ability to
achieve strategic outcomes.
This book is intended for implementers of process improvement and
reengineering projects. Its step-by-step building block approach shows you
how to build operationally measurable business objectives, resolve barriers
for achieving those objectives and develop new business processes that
ensure their achievement.
To my knowledge, HELIX is the most comprehensive, complete and
fundamentally sound strategic alignment/process improvement method in
existence. When embraced and faithfully followed, HELIX will assist you
to achieve profound results.
iv
EVERY PROCESS
IMPROVEMENT INITIATIVE
BEGINS AND ENDS WITH THE
STAKEHOLDER
Table of Contents
PREFACE
TABLE OF CONTENTS
TABLE OF FIGURES
YOUR MASTERPIECE
ABOUT THE AUTHOR
1
INTRODUCTION ................................................................................ 1
IDENTIFYING WINNING PROJECTS ........................................... 3
WELCOME TO JONATHAN, MILLS INC. .................................... 8
KICKING OFF THE PROJECT ...................................................... 35
FACILITATION TOOLS AND TECHNIQUES ............................ 39
CONDUCTING FACILITATION WORK SESSIONS ................. 53
CONDUCTING POST DIAGNOSTIC WORK SESSIONS

BASIC DIAGNOSTICS .................................................................. 107
CONDUCTING POST DIAGNOSTIC WORK SESSIONS

ADVANCED DIAGNOSTICS ......................................................... 171
CONDUCTING SUBSEQUENT WORK SESSIONS AND

PRESENTATIONS ........................................................................... 232
10 IMPLEMENTING IMPROVEMENT RECOMMENDATIONS 252

CLOSING COMMENTS ......................................................................... 258
APPENDIX ................................................................................................ 260
SUMMARY OF HELIX FACTORS ...................................................... 262
IMPLEMENTERS CHECKLISTS ....................................................... 272
JMI CASE STUDY DOCUMENTATION ............................................. 280
GLOSSARY OF TERMS......................................................................... 299
SUGGESTED READING AND LISTENING ....................................... 303
INDEX ........................................................................................................ 305
vi
Table of Figures
FIGURE 3-1 - FLIP CHART QUESTION FORMAT ........................................................................................ 18
FIGURE 3-2 - SAMPLE OF PREFORMATTED QUESTION. ........................................................................... 19
FIGURE 3-3 LEVEL OF EFFORT ESTIMATE ............................................................................................ 30
FIGURE 3-4 - PROJECT OBJECTIVES ALIGNMENT MATRIX ....................................................................... 31
FIGURE 4-1- TYPICAL WORK SCHEDULE .................................................................................................. 38
FIGURE 6-1- MAKING A COMPLETE COMMUNICATION .......................................................................... 53
FIGURE 6-2 - CHANGE ANALYSIS............................................................................................................. 60
FIGURE 6-3 - MODEL SYNTAX ................................................................................................................. 62
FIGURE 6-4 CUSTOMER CALLS IN ORDER ............................................................................................. 63
FIGURE 6-5 - SALES ORDER SENT TO CREDIT DEPARTMENT ................................................................... 65
FIGURE 6-6: PRE-NUMBERED LEVEL 1 WORKFLOW MODEL.................................................................... 67
FIGURE 6-7 NUMBERED LEVEL 1 WORKFLOW MODEL ......................................................................... 69
FIGURE 6-8: WFL2 SKELETON FORMAT ................................................................................................... 73
FIGURE 6-9: PHASE A OF WFL2 MODEL ................................................................................................ 75
FIGURE 6-10 - CREDIT LIMIT EXAMPLE ................................................................................................... 78
FIGURE 6-11: MODELS AFTER APPLICATION OF RULES. .......................................................................... 80
FIGURE 6-11 MODELS AFTER APPLICATION OF RULES (CONT.)........................................................... 81
FIGURE 6-12 - CORRELATION PROCESS ................................................................................................... 88
FIGURE 6-14 - CORRELATION OF GOALS TO PROPOSED WFL2 ................................................................ 96
FIGURE 6-16 - CONTRIBUTION OF VADS TO PROJECT OBJECTIVES........................................................ 104
FIGURE 7-1- WORK SESSION KNOWLEDGE SUMMARY EXAMPLE ......................................................... 109
FIGURE 7-2 - KNOWLEDGE SUMMARY EXAMPLE ................................................................................. 110
FIGURE 7-3 - CHANGE ANALYSIS FORM LAYOUT .................................................................................. 111
FIGURE 7-4 - CHANGE ANALYSIS AFTER FIRST WORK SESSION ............................................................. 113
FIGURE 7-5 - CHANGE ANALYSIS ON FORM .......................................................................................... 115
FIGURE 7-6- CHANGE ANALYSIS ........................................................................................................... 127
FIGURE 7-7 - LEVEL 1 WORKFLOW ........................................................................................................ 130
FIGURE 7-8 - COMPLETED WFL1 ........................................................................................................... 132
FIGURE 7-9 - LEVEL 1 WORKFLOW MODEL SYNTAX .............................................................................. 134
FIGURE 7-10 - OUTBOUND T ............................................................................................................. 139
FIGURE 7-11 - COMPARISON OF COMPLEX VERSUS SIMPLIFIED WFL1 MODEL ..................................... 141
vii
FIGURE 7-12 - LABELING OF COMMUNICATION LINES .......................................................................... 143

FIGURE 7-13 - WFL1 AFTER APPLICATION OF DIAGNOSTIC RULES ........................................................ 146
FIGURE 7-16 - CA COORDINATES POSTED TO EWFL2 ............................................................................ 163
FIGURE 7-17 - CA COORDINATES POSTED TO PWFL2 ............................................................................ 164
FIGURE 7-18 - EXISTING AND PROPOSED WFL2 MODELS TO CA AND PROJECT OBJECTIVES ................. 165
FIGURE 7-19 - UPDATED CHANGE ANALYSIS AND PROJECT OBJECTIVES .............................................. 166
FIGURE 8-1 - PART 2 OF THE CHANGE ANALYSIS................................................................................. 175
FIGURE 8-2 - UPDATED PART 2 OF CHANGE ANALYSIS ......................................................................... 179
FIGURE 8-3 - COMPLETED PART 2 OF THE CHANGE ANALYSIS .............................................................. 181
FIGURE 8-4- ALIGNMENT MATRIX ........................................................................................................ 182
FIGURE 8-5 - VADS SUMMARY ............................................................................................................. 183
FIGURE 8-6 EXAMPLE OF COMPLETED VADS SUMMARY ................................................................... 187
FIGURE 8-9 UPDATED PROPOSED WFL2, PHASES A AND B ................................................................. 196
FIGURE 8-10 - COMPLETED STIMULUS TRIGGER DIAGNOSTIC FORM (PHASES A & B)........................... 197
FIGURE 8-11 - OVERVIEW OF WAREHOUSE PAGING CONCEPT ............................................................. 198
FIGURE 8-12- FAILURE ANALYSIS FORM ............................................................................................... 202
FIGURE 8-13 - PHASE C AND D OF THE PROPOSED LEVEL 2 WORKFLOW MODEL .................................. 203
FIGURE 8-14 SUMMARY OF TRANSFORMATION RULES - CUSTOMER AND INVENTORY OBJECTS FOR
VADS PHASES C AND D ........................................................................................................... 205
FIGURE 8-15 SUMMARY OF SECONDARY OBJECT TRANSFORMATION FAILURES - CUSTOMER AND
INVENTORY OBJECTS FOR VADS PHASES C AND D .................................................................. 207
FIGURE 8-16 COMPLETED SUMMARY OF SECONDARY OBJECT TRANSFORMATION FAILURES CUSTOMER AND INVENTORY OBJECTS FOR VADS PHASES C AND D ....................................... 209
FIGURE 8-17 COMPLETED FAILURE ANALYSIS FORM ......................................................................... 211
FIGURE 8-18 DOCUMENTATION AT END OF FIRST DIAGNOSTIC WORK SESSION ............................... 216
FIGURE 9-1 - OVERVIEW OF DOWNLOADING SALES ORDERS TO PICKING CARTS ................................. 236
FIGURE 9-3 - STIMULUS TRIGGER DIAGNOSTIC FORM (ADD STIMULUS TRIGGER FOR CART
CONCEPT) ............................................................................................................................... 240
FIGURE 9-5 SAMPLE IMPLEMENTATION PLAN ................................................................................... 246
FIGURE 10-1 HOW HELIX DISCOVERY PROJECT DOCUMENTATION SUPPORT THE REQUIREMENTS
DEFINITION PHASE..254
SECTION 1 - PROJECT SCOPE & OBJECTIVES AND BENEFITS (FIGURE 3-4) ............................................. 280
SECTION 2 - SCOPE OF WORK PERFORMED TO DATE ........................................................................... 280
SECTION 3 - PROJECT COST AND TIME LINE FOR COMPLETION (FIGURE 3-3)........................................ 280
SECTION 4 - PROJECT WORK SCHEDULE (FIGURE 4-1)........................................................................... 280
SECTION 5 - PROJECT KICK OFF AND AUTHORIZATION TO PROCEED .................................................... 280
viii
FIGURE 7-25 - VADS SUMMARY ........................................................................................................... 280

FIGURE 7-19 - CHANGE ANALYSIS AND PROJECT OBJECTIVES ............................................................... 280
FIGURE 7-22 - PART 2 OF THE CHANGE ANALYSIS................................................................................. 280
FIGURE 7-13 - EXISTING LEVEL 1 WORKFLOW ...................................................................................... 280
FIGURE 8-18 - EXISTING AND PROPOSED LEVEL 2 WORKFLOW MODELS .............................................. 280
FIGURE 8-10 - STIMULUS TRIGGER DIAGNOSTIC FORM (PHASES A & B) ............................................... 280
FIGURE 8-17 - FAILURE ANALYSIS FORM .............................................................................................. 280
FIGURE 8-16 - SUMMARY OF SECONDARY OBJECT TRANSFORMATION FAILURES
CUSTOMER AND INVENTORY OBJECTS FOR VADS PHASES C AND D
...................... 280
FIGURE 7-1 - WORK SESSION KNOWLEDGE SUMMARY ........................................................................ 280

FIGURE 7-2 - KNOWLEDGE SUMMARY ................................................................................................. 280
SECTION 1 - PROJECT SCOPE & OBJECTIVES AND PROJECT SUMMARY ................................................. 281
SECTION 4 - PROJECT COST AND TIME LINE FOR COMPLETION (FIGURE 3-3)........................................ 282
SECTION 5 - PROJECT WORK SCHEDULE (FIGURE 4-1)........................................................................... 283
FIGURE 8-6 - VADS SUMMARY ............................................................................................................. 284
FIGURE 7-19 - CHANGE ANALYSIS AND PROJECT OBJECTIVES ............................................................... 286
FIGURE 7-13 - WFL1 AFTER APPLICATION OF DIAGNOSTIC RULES ........................................................ 289
FIGURE 8-13 CONTINUED - PROPOSED LEVEL 2 WORKFLOW AFTER CORRELATION PROCESS............... 291
FIGURE 8-10 - COMPLETED STIMULUS TRIGGER DIAGNOSTIC FORM (PHASES A & B)........................... 292
FIGURE 8-16 - COMPLETED SUMMARY OF SECONDARY OBJECT TRANSFORMATION FAILURES --CUSTOMER AND INVENTORY OBJECTS FOR VADS PHASES C AND D
295
FIGURE 7-1 - WORK SESSION KNOWLEDGE SUMMARY ........................................................................ 296

FIGURE 7-2 - KNOWLEDGE SUMMARY ................................................................................................. 297
ix
Your Masterpiece
Life is your canvas,
You are the artist.
Each stroke of the brush,
Each color chosen, adds to the over all result
Let
Your canvas be broad and full of possibilities.
Your pallet robust with colors of Love, Trust,
Caring and Charity.
Your technique superb with an eye towards the
finished work.
Reach deep from within and beyond yourself.
Give way to inspiration.
Produce a work that lives beyond tomorrow.
Paint with Passion, Persistence and Pride.
Fill your canvas with Beauty, Faith and Hope.
Life is your canvas,
You are the artist,
Paint a MASTERPIECE!
About the Author
Pioneers are a breed apart. Their sense of vision and purpose drives them to
explore, innovate and achieve beyond the norm. By their nature they
observe, question, reflect and create.
Michael R. Wood is a pioneer in the true sense of the word. His life has
been a continuous quest toward finding new paths to forge, new systems to
develop. HELIX represents just one facet of Michaels quest. It is the
culmination of over 16 years of questioning conventional wisdom and
accepted practices and reflecting on ways to improve the business world.
The result is an alignment and organizational improvement technique called
HELIX.
Michael was born in San Diego, California in 1950. In 1966, he was
introduced to mastery concepts through the study of the Martial Arts. He
graduated in 1972 from the University of Southern California with a
Bachelor of Science degree in Business. In 1974 he became a CPA.
Immediately upon entering the professional ranks, Michael became
immersed in accounting, consulting and data processing. Four years later,
he began seeking ways to align the expectations and needs of an
organization to the emerging information technology age. By 1981 he had
developed a formal Systems Development Life Cycle methodology called
The HELIX Methodology. What differentiated this from other techniques of
the day was its focus on discovering organizational needs before defining
solutions. At the time, these ideas were so radical that Michael received
little recognition from the systems methodology community.
During the 1980s, Michael strived to improve the methodology. His focus
moved away from technology and toward aligning an organizations
strategic direction with its work processes.
As an educator, he served as an adjunct professor in Pepperdine Universitys
MBA program and as an associate professor at California Lutheran
University. He has conducted workshops and seminars on a national and
international level for organizations like Penton Learning Systems and the
California Society of CPAs.
xi
As an involved professional, Michael has served on the Board of Directors

of the Texas Instruments International User Group and the Financial
Management Systems International User Group. He has served on the
California Society of CPAs educational advisory board as well as on the
editorial advisory board of Beyond Computing Magazine. He has been
published in ComputerWorld, CIO Magazine, Los Angeles Business Journal
and other trade magazines and newspapers. He is often quoted in periodicals
as an expert source on process improvement and reengineering.
As a CPA, Michael has worked for a national firm and as a partner in local
and regional CPA firms.
As an entrepreneur and executive, he headed up the successful Helix
Corporation for over six years. During that period, Michaels clients
included Golden Nugget, Hughes Aircraft, Warner Bros., and Western
Communications, Kelley Blue Book and more. During most of the 1990s,
Michael served as a Key Executive in a billion dollar hospitality and
casino / gaming company. Currently, Michael provides consulting services
as the national Subject Matter Expert in the areas of IT Strategic Planning,
Business Process Improvement and Organizational Alignment for
www.gantthead.com.
Michael still actively consults and is always seeking stakeholder value
driven engagements.
xii
Introduction
From Theory to Execution
Welcome to The HELIX Factor II - The Implementers Guide and Case

Study Workbook. This is the second book in the HELIX Factor series and
presents detailed instructions and examples on how to plan for, organize,
conduct and present the findings of a HELIX (process improvement /
reengineering) project. To enhance the ease of learning, the reader is
presented with a how-to approach in a case study format.
In the first book of The HELIX Factor series, the 17 key factors that
underscore the principles and philosophies of HELIX were presented. The
importance of aligning an organizations strategic direction to its objectives
and to its Value-added Delivery Systems (VADS) were discussed.
If it has been a while since you read The HELIX Factor - the key to
streamlining your business processes, you might find it helpful to review
the essential principles and alignment concepts provided in the appendix
before you begin this book. Thus, there will be no confusion over the
terminology and general concepts presented in this Implementers guide.
As you venture into your first HELIX project, keep this guidebook with you.
For the best results, follow every step and procedure. Resist the urge to take
what appear to be shortcuts. Remember, it is not how fast but how well you
finish that counts.
This guidebook provides all the tools and techniques needed to organize and
conduct a HELIX project. The methods presented have been tested and fine
tuned for over a decade. You can expect your efforts to produce results that
are nothing short of impressive. Remember, achieving returns of 500 to 1,000
percent on HELIX projects is very common.
The guidebook is organized in the sequence of a project. It walks you through
each step needed to produce successful results.
First, you will learn how to identify winning projects. Next, you will learn
how to kick off projects to achieve energy, momentum and executive support.
1
From there, a realistic case study will be explored in detail to show you how
to perform the work needed to complete a project successfully. Finally, how
to package, present and implement project recommendations will be reviewed.
In short, this book contains everything you need to identify, conduct and
implement high-payback, process improvement / reengineering projects.
Identifying Winning Projects
Assessing Support, Payback and Succe ss
There seems to be an unlimited number of projects an organization can

pursue. A persons success or failure in an organization is often based on the
outcome of projects on which he or she has worked. Ideally, people want to
get involved only with projects that are guaranteed to be successful.
Unfortunately, there are no guarantees. So how are winning projects
recognized? Do projects have inherent attributes that make some more likely
to succeed than others? What about payback? What is it? Does payback
mean a high return on investment, or is it driven by perception?
How Money is Spent

First, I want to explain how organizations spend money. The monies an
organization spends can be grouped into three categories. I call the first
category positioning dollars. Positioning dollars are those monies spent
with a specific objective or return on investment (ROI) in mind. Typically,
positioning dollars are future-oriented and highly visible. Capital
expenditures, research and development and various projects are budgeted in
terms of positioning dollars. Because of their high visibility, getting
positioning dollars usually requires a proof of concept, cost justification
studies, persuasion and political skill.
I call the second category inertia dollars. Inertia dollars are found on
income statements. They represent cost of sales, salaries and operating
expenses. Justification for these dollars is typically based on what was spent
the previous year. They are spread over multiple divisions and departments
among hundreds of accounts. The costs related to projects financed through
inertia dollars are difficult to track. Many unofficial (underground) initiatives
are paid for with inertia dollars.
The third category involves bias, preference and emotion. This type of
spending always takes the form of positioning or inertia dollars; however, the
justification process is an afterthought used to rationalize and justify the
spending. Although there are no studies to reference, I believe that about 50
percent of positioning dollar spending is really biased, preference and
emotional spending in disguise.
3
Process improvement, reengineering and organizational alignment projects

typically require positioning dollars. These types of projects can be justified
in two ways. The first way is to promise to reduce future costs. The concept
is that by spending positioning dollars now, the organization can save inertia
dollars in the future.
To determine the amount of savings or ROI requires an understanding of how
many inertia dollars are currently being spent compared to how many will be
spent after the project is completed. The difference is the return and should
exceed the cost of the project. This means that a project costing $250,000 in
positioning dollars would need to save $250,000 in inertia dollars to break
even. If it were to provide an annual return on investment of 15 percent over
the next three years, it would have to generate $362,500 in inertia dollar
savings ($250,000 [original investment] + $37,500 x 3 [15 percent return for 3
years]).
However, it gets more complicated than that. The monies being saved are
future dollars. Any good CFO will want to justify the project based on a
minimum ROI that takes into account the net present value of future cash
flows. Typically, in the absence of an ROI justification, the project will be
viewed as a cost without an underlying benefit and therefore will go nowhere.
Even harder to justify are projects that promise to increase revenues. These
types of projects require great salesmanship because the paybacks are focused
on forecasting the performance of customers, markets or investments, each
harder to control than costs.
The Resistance Factor

Because most projects threaten someones territory, they are met with varying
levels of resistance. This resistance is manifested in a number of ways. The
first way is resistance to the project being approved. This opposition may be
motivated by political or budgetary considerations. Whatever the reason, the
risk faced at this point is not getting the project approved.
Once the project is approved, resistance may then manifest itself as a lack of
cooperation and participation. This can be subtle or overt. Getting projects
approved without the right level of support is tantamount to committing
project suicide, since it is unlikely that the project will ever be completed on
time or within budget, if at all. In general, it is better to propose a project and
have it never be approved than it is to get a project approved and then fail in
its implementation.
Few organizations forgive someone who squanders millions of positioning
dollars. However, most organizations seem to unknowingly reward those who
4
squander millions of inertia dollars due to inefficient operations and work

processes. Remember, inertia dollars are buried and spread out among many
entities and accounts while positioning dollars are highly visible, both
financially and politically.
In assessing potentially winning projects, two levels of risk need to be
considered. First, is the risk of promoting the project and not getting it
approved? Second, is the risk of getting approval and failing to achieve the
promised objective or payback?
Success Criteria
When assessing a projects probability for approval, consider the following:
Is there a good business case?
Be sure that the project has the potential for a higher-than-average ROI
and can be achieved within a reasonable period. Ideally, the ROI
should be a percentage greater than inflation or other competing
projects, and should be achievable within a reasonable period. For
example, most highly successful technology projects are completed in
18 to 30 months. A longer time frame increases the possibility of
technology changing or perhaps having to confront a different set of
needs.
Has low-hanging fruit been identified?
A project that starts providing paybacks right away is said to have lowhanging fruit. These immediate paybacks often help fund the project
and build the teams credibility to deliver. Always look for lowhanging fruit. Do not forget about low-hanging fruit that might be
preference or bias motivated. Remember people tend to buy on
emotion not logic.
Is there grassroots support?
Assess whether the people in the rank-and-file buy into the project.
Getting their support will often influence their superior to support the
project. Bottom-up supported projects typically have a greater chance
of succeeding than top-down driven projects. On the other hand, topdown driven projects have a better chance of being approved. Having
both types of project support is ideal.
Is there an executive sponsor?
Start with the CEO and work down. Having the right sponsor may be
all that is needed. After all, in the final analysis, it is often not what the
project can achieve but who wants it that counts.
Is there a sense of urgency?
Many organizations urgently react to fixing something in order to avoid
experiencing painful situations. The greater the pain, the greater the
urgency to relieve the pain. This will increase the chance for project
approvals. Remember, it is managements perception of pain that is
important. Sometimes management responds to perceived pain where
none really exists. Pain must be perceived and truly exist if a project is
going to be successful.
It is very difficult to convince someone to change if there is no pain.
That is one reason why people pursue habits like smoking, drinking or
taking drugs. The pain is future-based while pleasure is based on the
present. Companies are no different. They tend to do what feels good
at the moment, even though it will damage their future success.
Likewise, it is difficult to deliver true improvements where there is no
need. Pain that is merely perceived, but in fact is not present, usually
cures itself once the perception is corrected. Thus, unnecessary projects
rarely see completion.
Once the project has been approved, it needs to be assessed as to its
probability for successful completion. Here, the five preceding questions can
be used again. However, the greatest factor for potential success lies in the
answer to this question: Is the organization and the key people involved
committed to the project?
Commitment to a project often increases directly in proportion to a persons
personal stake in its success. The worst form of commitment is verbal.
Assess what each person has to lose or gain by the projects success. No
matter what the sponsorship and funding, lack of commitment will doom even
the best-intentioned or highest ROI projects.
There are no magic formulas for achieving the support, time and funding
needed to create a successful project. There are some criteria for assessing
which projects are most deserving, so beware of projects that have too many
negative answers to the previous questions.
To maximize the potential for success, consider breaking a project into small
pieces to deliver value on the completion of each piece. HELIX projects can
have either a scope that addresses an entire organization or one that is tailored
to address a single Value-added Delivery System (VADS).
6
Start with a single VADS as the scope. Often, these projects can be
completed quickly with big paybacks. A single VADS project can take from a
few weeks to about three months. Market the project as a proof of concept
study focused on introducing HELIX to the organization. Select a VADS that
top management and the workgroups involved view as currently inefficient
and expensive. The projects goal should be to build consensus and to
identify opportunities for practical and cost-effective improvements.
Approaching the project in this way will minimize the political risk. It will be
funded with inertia dollars and maintain a low-profile posture. My experience
is that the implementation of the projects recommendations will be
significant and impressive (over 100 percent ROI) making future projects
easier to initiate and complete. The level of grass roots acceptance of the
process will increase, as will your creditability.
Welcome to Jonathan, Mills Inc.
Introduction to the Case Study
This case study is based on a cross-section of actual projects, so it is very

realistic. However, in order to keep this case study manageable, it has been
simplified. The company, people and information contained within the case
study are fictitious and are not intended to represent any specific individual or
group of people. The company, called Jonathan, Mills, Inc. (JMI), is a
wholesale distribution company that sells fabric to interior designers. In
working through the case study, keep in mind that the tools and techniques are
totally independent from the case study data, example content and the industry
selected. They can be applied to any organization regardless of industry, size
or process function (planning, staff or line). At times, you might get so
engrossed in the case studys content that you will forget about the lessons
being presented. For the best outcome, stay focused on the tools and
techniques.
Through this case study, each aspect of HELIX will be covered: from project
identification to developing project support to delivering the finished product.
Key areas presented include:
Project Planning and Estimating
Facilitating Managements Objectives and Buy-in
Working with HELIX Facilitation Tools
Workflow Modeling and Mapping
Conducting Post-Work Session Diagnostics
Estimating Time and Cost of Implementation
Organizing, Packaging and Presenting Results
Each section will present theories, tools and techniques, followed by their
application within the context of the case study. This way, there will be dual
reference points. The first is an academic presentation, while the second are
real life examples that build one to the next. This approach will prove helpful
8
as an ongoing reference point during the planning, conducting and

implementing of actual HELIX projects.
In order to set the stage for conducting a HELIX project, some background on
the case study company is needed.
JMI sells primarily to large interior designers, retail outlets and large principal
buyers like hotels and developers. During the past 18 years, the company has
experienced average growth and has maintained its fair share of the market.
In recent years JMI has found itself losing market share and experiencing
virtually no growth. The company is concerned that its business processes are
out dated thus hampering its ability to compete.
Two of JMIs competitors have recently gone through major reengineering
efforts that seem to have improved their bottom line by reducing costs
(downsizing). JMI rejects the notion of downsizing, and has always
considered itself strongly loyal to its 7,500 employees, many who have been
with the company since its inception 20 years ago.
You work for the HELIX Foundation (HF), a nonprofit organization. After
JMIs CEO, Robert C. Jonathan, listened to a HELIX presentation, he became
convinced that a process improvement project using HELIX might provide
some needed insights into how to turn the company around. He was interested
specifically in the potential of aligning JMIs strategic direction to its
operational processes. Mr. Jonathan arranged for a meeting between your
team and his top executives:
Cynthia Mills, Executive Vice President (EVP)
Michael Jacobs, Chief Financial Officer (CFO)
Brad Crenshaw, General Manager and Chief Information Officer (CIO)
Steven Ethridge, Vice President, Human Resources
Marie Richards, Vice President, Sales and Marketing
The purpose of the meeting was to provide you with some background on
JMI, as well as its current situation and future aspirations. Here is what you
learned:
The discussion centered on JMIs belief that it needs to make major
improvements to the inventory and order management functions. For the last
two years, the companys sales have stabilized at about $600 million (no
growth) even though the industry overall has enjoyed an eight percent growth
rate.
9
The average customer buys about three fabrics per order at about 100 to 150
yards per fabric. JMIs markup is about 40 percent. Direct cost for fabric
ranges from $7.50 to $38.50 per yard, the average being about $28.50 per
yard. However, JMI does carry some very expensive lines that run as high as
$150 per yard. JMI receives about 150 orders per day.
At any given time, JMIs active customers number about 5,000. The typical
customer orders about eight times a year. Inventory levels average about $60
million at any given time. Accounts receivables are currently averaging about
47 days in age. About 12 percent of orders are lost due to out-of-stock
inventory situations. A typical order takes about five days to ship and two
more days to bill.
When you asked to see JMIs business plan, the executives smiled politely.
Ms. Mills stated that they (top management) were a tightly knit group who
shared a common understanding of the goals and plans of the company. As a
group, they felt no need to write it all down. Given this answer, you asked for
a briefing on JMIs strategic direction and current years plan of action. At
the briefing you learned:
Vision
JMI wants to be the industry leader.
JMI would like the company to become public within the next three
years.
Plan
Increase sales about 20 percent a year.
Stabilize workforce at current levels.
Increase cash flow by $15 million a year.
As Ms. Mills stated, there appears to be 100 percent consensus among the
executive team. Another meeting would be scheduled after you had an
opportunity to digest the information JMI had given you.
Whats Going on at JMI?

At first blush, JMI seems to understand its situation and has a clear idea of
where it wants to go. But what does the data actually mean? To understand
all this, the data needs to be reviewed in concert with some of the alignment
10
concepts presented in The HELIX Factor (see appendix for summary of

alignment factors). This way, the team can identify any additional
information needed. Remember, it is just as important to know what is known
as it is to know what is not known.
As you conduct the initial management work session, look for information and
clues that help build an understanding of where potential misalignments
between stakeholder needs, strategic direction, business objectives and VADS
exist. This effort typically requires one or two work sessions with upper
management. The first session should focus on becoming comfortable and
familiar with your contacts and to learn how top management views the
situation. Understand their perspective as to what improvements need to
occur. Also, take advantage of the work session to increase the teams
industry perspective. Be careful not to dominate the session by trying to
educate people about HELIX or lecture them about why alignment is so
important. Remember that this is a time to listen and learn, not to teach.
After the first session, the team needs to perform some diagnostics on the
collected data. The core project team (Facilitator and Analysts) does this
away from project participants. The focus of the diagnostics will be to:
Correlate and align the information collected.

Identify missing information and gaps in knowledge.
Identify potential alignment gaps.
Develop a list of questions to help explore and

validate the understanding of top managements
needs.
Develop a basic plan of action for the project. Using the data
collected at the first meeting, the team can perform this diagnostic
process.
Correlating and aligning the information collected

When correlating information, look at both the explicit and the implicit
information collected. First, take each piece of collected information and
work from the company vision down to specifics. At JMI, the team explored
the following:
Vision
JMI wants to be the industry leader in fabric distribution.
11
What does this mean? Does being the industry leader mean having
the highest sales, best bottom line, largest market share or best
reputation? If JMI defines an industry leader as one having the
highest sales and market share, then it might want a strategy of low
margins and aggressive credit terms. On the other hand, if the
bottom line is the goal, then the strategy might lean more toward
pursuing fewer but more profitable customers who will support
higher margins. The team will need to define clearly this industry
leader concept with JMI management.
JMI wants to take the company public within three years.
How does this align with becoming an industry leader? As an
industry leader, would JMI be attractive to future stockholders? If
so, then bottom line performance will be critical to its success.
However, if JMI is striving for the largest market share, then it may
become unattractive to investors. Here, the needs of future
stakeholders must be discussed.
Implicit to any vision or goal is the assumption that the originators
believe them to be good. We can assume that JMIs management
believes that being the industry leader and going public is good. The
question is, good for whom? At the next meeting with JMI, the team
will want to hear JMIs thoughts on how the two vision points would
benefit the following stakeholders:
Customers
Owners (current and future)
Employees
Community
12
Business Plan
JMI wants to increase sales about 20 percent a year.
Why 20 percent? Is 20 percent what JMI believes will make it the
industry leader? Why not 5 percent or 30 percent? It would be
erroneous to assume that this objective ties directly to the vision. It
may be that JMI is merely trying to recover some lost ground.
Is 20 percent achievable? What changes does JMI think it must
make in order to achieve this growth? What percent of the growth
will come from industry growth vs increased market share? Again,
the answers to these questions will help establish the degree of
alignment that exists between their vision and plan.
JMI wants to stabilize the workforce at about 7,500.
Why 7,500? From the work session, you know that reducing the
workforce is not philosophically desirable. How does JMI intend to
grow sales without increasing the number of employees? Does it
believe that the current workforce can take on the additional volume
that comes with 20 percent growth a year? If that is true, then JMI
must believe it has substantial unused capacity. How many
employees do comparable competitors employ?
Remember that the team is seeking to understand how the vision and
the plan support each other. Misalignment at this level will result in
operational confusion and chaos. Before attempting to solve lowlevel issues, the team must understand any high-level anomalies that
might be driving the organization in the wrong direction.
JMI wants to increase cash flow by $15 million a year.
Again, why $15 million? What is driving this perceived need? Will
a strong cash position make the company more attractive to
investors? Is JMI planning to retire its debt, buy out competitors or
pursue large capital investments? Certainly, increased sales with
stable costs should improve cash flow, but will 20 percent growth
produce the $15 million needed?
By now, more questions have been raised by the data than have been
answered. That is good. The seeds for a productive dialogue with
management have been planted.
13
The Issues
JMI wants to make major improvements to its inventory and order
management functions.
While a number of statistics have been collected, it is unclear what
JMI wants to do about them other than make improvements. It
would be easy to assume that, since these statistics were provided in
the context of making improvements, JMI is not happy with one or
more of the following:
Markup (40%)
Average order size ($14,963)
Number of active customers (5,000)
Order frequency (8 per year)
Inventory levels (average = $60 million)
Outstanding account balances (average = 47 days)
Out-of-stock situations (12%)
Order processing times (end-to-end = 7 days)
The team needs to formulate questions that will help JMI contrast these
statistics with what it thinks they should be. Most likely, some of the statistics
will be targets for change while other statistics will not. The team will also
want to develop questions that help JMI determine how the planned
improvements will help the company achieve its vision and objectives.
Finally, the team needs JMI management to identify potential VADS for
review. At this point, signs are pointing to the VADS that are related to
selling products to customers.
The Questions
Using HELIX Factors 9 through 11 (see appendix for summary of the HELIX Factors) for
reference you can now create the questions to be explored at the next meeting
with JMI.
Factors #9 & #10 - Alignment of Stakeholder Needs to Strategic Direction
and Business Objectives. Conspicuously missing from JMIs data was any
reference to its stakeholders and how JMI does, or wants to, add value to
them. This is not unusual since most organizations overlook this. Therefore,
the first questions should be aimed at clarifying how JMI sees its vision and
objectives benefiting the stakeholders.
The team should take care to watch its communication skills and not come
across as preachy or arrogant. The questions need to be structured to
14
encourage dialogue and to educate the team so it can propose the best
approach for helping JMI achieve its goals.
Reading the diagnostics on the vision and business plan, the team found itself
asking traditional who, what, when, where, why, and how questions. Here
are some examples of questions that could be formulated from the data so far.
What does being the industry leader mean to you (JMI)?
Who will benefit from JMI achieving the industry leader position?
Why is taking the company public important, and who will be the
beneficiaries by doing this?
What is the connection between becoming the industry leader and going
public?
What do the employees think of going public?
What do the customers think of going public?
How does increasing sales by 20 percent a year help JMI achieve a
leader position and eventually go public?
What has kept JMI from achieving this kind of growth in the past?
How much of the growth does JMI expect from general industry growth
vs. increased market share?
How does stabilizing the workforce at 7,500 support becoming an
industry leader, going public and growing at 20 percent a year?
Why does JMI want to increase cash flow by $15 million a year?
How does this cash flow increase support becoming an industry leader
and going public?
Certainly more questions might be developed. However, these should provide
an ample framework from which to work. In reviewing these questions,
notice they are open-ended in nature. They cannot be answered yes or no.
Also, notice that there are no right or wrong answers. Each question is
designed to foster dialogue and increase shared understandings.
Factor #11 - Alignment of Business Objectives to Value-added-Delivery
Systems and Process Groups. The next set of questions focus on the more
detailed operational data received from JMI. Here, the same open-ended,
dialogue-fostering approach is used for each question. The goal is to develop
an understanding and let JMI management reflect on the data gathered and
begin to develop some specific objectives. The questions target some of the
operational functions and related VADS for review.
15
Statistic Questions
How long should it take to ship and bill an order?
What is an acceptable level of orders lost due to out-of-stock situations?
How long should it take to collect an invoice for an order from an
average customer?
What should be the average value of inventory at any given time?
How many orders will JMI need to process each day in order to meet its
growth objectives?
What should be the average value of those orders?
How many of those orders will come from new customers vs increased
order frequency or size?
What changes to the 40 percent markup does JMI need to make to
support its objectives?
VADS Questions
What organizations within JMI participate in processing orders and
managing inventory?
How many different ways does JMI sell fabric?
What are the various stages through which a sale goes, starting from the
point at which a customer makes an inquiry through shipment and
payment for the product?
In what ways can JMI increase or decrease inventory?
Up to this point, the project team has performed some basic diagnostics based
on the information collected after one work session with JMIs management.
So far the diagnostics performed centered around developing a series of
clarifying questions to be used in the second work session with JMIs
management team. To assist the team in formulating the questions, HELIX
factors #9, #10 and #11 were utilized.
The questions developed in the first management work session will be
reviewed in the second session. As stated previously, when working through
the questions, it is important to remain cordial and friendly. The team should
expect to encounter some resistance during these and other types of
facilitation work sessions. Do not press too hard for answers. Instead, gather
whatever insights you can and come back to unanswered questions later.
Most likely, the team will leave the meeting with most of what they need.
16
You want to end with the knowledge that management felt the team listened,
heard and demonstrated an understanding of their needs and concerns.
Preparing for Management Work Session Two

Before going to the second management work session, the team needs to
organize its questions thus helping management focus and provide meaningful
answers. A flip chart, tape and a few fresh marking pens (three colors should
do) are needed for this work session. Using the flip chart, the team organizes
the questions in the form of an interactive presentation. As the team works
through each question, managements responses are summarized on the flip
chart. This process will guarantee that management stays involved in the
session and reinforces their confidence that the team understands their
expectations.
The first page of the flip chart should state the goal of the session. In the JMI
example, it should read something like this:
The goal of this session is to demonstrate that the team understands
JMIs objectives and to align the outcomes of the improvement project
with JMIs strategic direction.
This type of statement helps to set the stage for the upcoming dialogue. It
reinforces the idea that the project is going to happen. It also sets an
objective, To ensure that the outcomes of the improvement project support
JMIs strategic direction.
Each of the subsequent pages should focus on one question. At the top of
each page, list the facts or statistics from the first meeting that led to the
question. Next list the question. Under the question, leave enough room to
write a summary of the answers received.
Figure 3-1 presents the suggested format to be used for framing each question.
Figure 3-2 presents a sample question with enough blank space to write
answers
As each page is finished, remove it from the flip chart and tape it to the wall.
This will allow each data sheet to be kept in view throughout the work session
making it easy to refer to items when clarifying questions and it will also
demonstrate how much is being accomplished.
Certainly, many other tools that can be used to conduct a work session: white
boards, PC projection units or electronic white boards to name a few.
However, I have not found any medium as flexible and as effective as a flip
chart for facilitating this kind of work session. Posting completed flip charts
17
pages on the walls in full view of the work session participants allows for easy
reference and demonstrates what is getting accomplished.
Figure 3-1 - Flip Chart Question Format
Flip Chart Question Format

Statistics or Data that led to the Question
The Question
Summary of the Answer
18
Figure 3-2 - Sample of preformatted question.

JMI wants to become an industry leader.
JMI wants to grow 20% a year.
JMI wants to stabilize the workforce at 7,500
10. How does stabilizing the workforce at 7,500 support becoming
an industry leader, going public and growing at 20% a year?
Work Session #2 Facilitating, Clarifying and Aligning

Dialogue
The second work session focuses on facilitating dialogue. Provide
management with the opportunity to reflect on its vision, objectives and plans.
The goal is to help management revisit the vision and objectives in context of
the questions developed. Do not be surprised if a lively discussion ensues
among the management team. It is through such animated discussions that
real issues surface and can be addressed in an open and candid manner. The
teams role is to facilitate these discussions, using the summary answers from
the flip chart as a stimulus trigger for moving on.
19
Limit the work session to two hours. This pace will help maintain the work
sessions momentum and direction. In addition, keep in mind that time is
precious to everyone and even more so for executives.
Here is what was learned from the second work session with JMIs
management:
What does being the industry leader mean to you (JMI)?
JMI wants to be the most profitable distributor within the industry. The
companys management realizes that JMI cannot become the leader in
gross sales within the next three years. However, by taking most of
JMIs planned growth to the bottom line, they believe JMI can become
the most profitable in terms of operating profit as a percent of gross
sales.
Who will benefit from JMI achieving the industry leader position?
JMI believes that everyone except its competitors will benefit from
achieving an industry leader position. The owners, Mr. Jonathan and
Ms. Mills, benefit because the company becomes worth more. The
employees benefit because JMI will be able to offer better salaries and
benefits. The customers benefit because JMI will have the means to
provide higher levels of customer service.
Why is taking the company public important, and who are the
beneficiaries of this?
Robert Jonathan is now 67 years old. Cynthia Mills is 63. They take a
great deal of pride in having taken JMI from a small organization 18
years ago to the successful business it is today. However, they feel that
if the company is to continue to prosper, it will need to grow and
expand. They also want to allow employees to share in the ownership
of the company. Finally, they would like to retire soon. Taking the
company public provides a vehicle for all these things to happen.
What is the connection between becoming the industry leader and going
public?
By becoming the industry leader, JMI will become a very attractive
company to investors. Management believes that achieving this position
What do the employees think of going public?
At first, the employees were not in favor of the concept, primarily due
to poor communications. As part of taking the company public, JMI
will set aside 20 percent of the offering for employees. Communicating
this to the rank and file breathed life into the operation. As Cynthia
20
Mills stated, There is something in this for everyone and thats the way
we want it.
What do the customers think of going public?
There has not been any formal discussion with the customers over the
plan to go public. JMIs management team feels that communicating
its plans to go public will require careful planning and should occur at
the right time and place.
How does increasing sales by 20 percent a year help JMI achieve a
leader position and eventually go public?
Achieving a 20-percent-growth-per-year track record will demonstrate that
JMI is on a strong growth path and is an aggressive competitor. This will
make JMI more attractive to investors. The 20 percent growth will also
exceed the current 8 percent trend in the industry. Based on JMIs
calculations, although it needs only an 18 percent growth rate to achieve an
industry leader position, the extra 2 percent offers a safety net.
What has kept JMI from achieving this kind of growth in the past?
JMI believes that it has become inefficient over the years. Its
operations need to be streamlined, and its facilities, systems and
approaches should be upgraded. This is why the company is talking to
us.
How much of the growth does JMI see coming from general industry
growth vs. increased market share?
The industry has been growing at about 8 percent in recent years.
Based on this continued growth, JMI has projected that it will need to
make up the rest in increased market share. To do this, a very
aggressive marketing effort will need to be implemented.
How does stabilizing the workforce at 7,500 support becoming an
industry leader, going public and growing at 20 percent a year?
JMI has too many employees for its current volume. The management
hopes that their expansion efforts will allow the work force to become
efficient and productive. The management believes that downsizing is
a last resort and a sign of defeat. They also feel that by sharing this
point to its employees, the company will build momentum for the
growth effort. Since JMI has the capacity to support the growth, it can
do so in a relatively stable cost structure. Building a record of
accomplishment as an efficient and aggressive company can only
improve JMIs image to prospective investors.
Why does JMI want to increase cash flow by $15 million a year?
21
JMI is relatively debt free. However, it is also relatively cash lean. The
management team understands that in order to streamline the operations
and facilities, it will probably need to invest capital. Preferably, this
capital will come from cash flow and not debt. The $15 million per
year represents the management teams best guess of what the
expansion effort will cost.
How does this increase support becoming an industry leader and going
public?
To the extent that debt can be avoided and the capital investment is
successful, the increased cash flow strategy supports the overall goal.
How long should an order take to ship and bill?
Orders take about five days to process. Competitors average about four
days. JMIs goal is to process an order, from point of order through
shipping, in 24 to 36 hours. All orders shipped should be billed the
following workday.
What is an acceptable level of orders lost caused by out-of-stock
situations?
JMI knows it will probably never tune the inventory to eliminate all out-ofstock situations. However, JMI does not want this to exceed one percent.
The company wants to do this without creating massive overstocking
situations. Currently, the management agrees that JMI stocks too much
low-demand fabric and not enough high-demand fabric. They definitely
see the alignment of inventory levels to customer demand as an important
area for improvement.
How long should an average customer take to pay for an order?
JMI was not as interested in average collection periods as it was in changes
in customers paying habits. Certainly being paid quickly (30 days) would
be great. What management really wants is an early-warning system that
indicates when customers are changing their payment habits in a way that
negatively affects JMI.
What should the average value of inventory be at any given time?
JMI was quick to point out that this was very much related to the lost
orders and overstocking issues. Its first goal is to tune inventory levels to
reflect customer demand. Once that is achieved, JMI would like to work
on improving the inventory turnover rate. JMI firmly believes that a
properly tuned inventory would increase turnover and reduce the average
inventory from $60 million to about $40 million.
22
How many orders will JMI need to process a day to meet its growth
objectives?
What should be the average value of those orders?
How many of those orders will come from new customers vs
increased order frequency or size?
The JMI team had not discussed these areas before. Their projections were
done at a macro level. However, Cynthia Mills saw the value in knowing
the answer to these questions. The team agreed that part of the project
should be to develop a model that would help them understand the impact
of the growth objective on order volume, frequency and value.
What changes to the 40 percent markup does JMI need to make to
support its objectives?
To stay competitive, JMI believes it will not be able to increase its
margins. However, by becoming more efficient and stabilizing operating
costs, JMI expects to keep more of the gross profit from sales.
What organizations within JMI participate in processing orders and
managing inventory?
This question generated the most discussion. The management had never
really thought in terms of organizations and processes before. It required a
few rough diagrams to help them visualize the processes. Consequently,
management identified the following groups:
Order Desk
Field Sales
Sampling
New Accounts
Shipping
Credit
Billing
Collections
Purchasing
Receiving
Will Call
Contracts
How many different ways does JMI sell fabric?

JMI sells fabric COD, on account and via contracts.
What are the various stages through which a sale goes, from the point a
customer makes an inquiry until the order is shipped and paid for?
Although it varies by the type of sale, the basic stages (from left to right)
are as follows:
23
Open Quote
Open Order
Credit Approved Order
Shippable Order
Shipped Order
Billed Order
Paid Order
What are the ways JMI can increase or decrease inventory?

JMI identified the following ways to move fabric in and out of inventory:
Buying it
Selling it
Taking it back from

customers
Throwing it away
Finalizing the Data Gathered and Proposing the

Project
At this point in the project, the team has spent about three hours with JMIs
management and a few hours performing some diagnostics on the data
collected. In the last meeting, the team facilitated answers to 22 questions
from JMI. The team now needs to review and perform a few diagnostics on
the answers to those 22 questions. As in all HELIX diagnostic work sessions,
this one should be done immediately after the meeting. To help do this, it is
best to schedule the team for the entire day. Conduct facilitation sessions
in the morning and perform the diagnostics during the rest of the day. At the
end of this diagnostic session, a project proposal will be produced. This
proposal will contain:
Objectives of the project
Scope of the project
Preliminary project plan (time line, tasks and level of effort)
Before meeting with JMI, the team had very little knowledge about the
company, its goals, objectives and challenges. After a few hours of
interfacing with the management, the team has discovered a great deal and
increased its understanding of JMIs desires and expectations.
After every work session, always take some time to document the information
gathered. By doing this, new knowledge is not taken for granted. Becoming
consciously aware of new knowledge ensures that the whole team interprets
the information in the same way. The concept is to huddle and make sure
everyone is playing the same game and running the same plays. The
24
knowledge gains are documented throughout the 22 pages of flip chart paper.
The flip chart is good, too, because it clearly distills the data as it is collected
so the whole group sees it, thus helping to ensure consensus.
The first step is to formalize the data from the flip charts by simply entering
the data into a computer. It is best to do this in a group setting using a large
PC screen or PC projector unit.
At this point, some team members will be tempted to make their first
departure from HELIX. Typically new teams will want a secretary or clerk to
type up the data. Some questions may be: Why do we all have to do the data
entry? Isnt this a waste of our time? The answer is this:
Doing the work as a team is critical to fostering continuing dialogue
and to avoiding misinterpretations of the data.
Using a football analogy, for instance, the team watches the game films
together. This way they maintain the same set of goals and strategies from the
teams point of view.
The second step is to take the documented knowledge gained and formulate
the projects objectives.
The third step is to correlate the data collected. To do this, develop a matrix.
This will help demonstrate alignment between the project objectives, JMIs
stakeholders, vision and plans.
Finally, the results of the effort will be packaged into a proposal for
conducting a HELIX project.
S TEP 1 - F ORMALIZING
TH E
F LIP C H ARTS
The summarization of the 22 questions will serve as the documentation of the

flip chart data. Again, resist the urge to view this step as a clerical process.
The team needs to function as a single unit during these diagnostic sessions.
They must possess one mind and one understanding. Take turns at the
keyboard. Use this opportunity to have constructive dialogues.
S TEP 2 - F ORMULATING
THE
P ROJECT S O BJECTIVES & S COPE
From the knowledge gained to date, the team can see that JMI has analyzed its
goals to become an industry leader and take the company public. Its plans to
grow 20 percent a year, stabilize the workforce and generate $15 million a
year in additional cash flow appear to support the vision. Finally, through the
answers received in the second work session, JMIs management has
expressed some definite expectations related to improving its operations. The
25
projects objective is to discover how those expectations can be satisfied.

Below is a summary of the expectations articulated to date:
The company can increase its volume without a significant increase in
operating costs. This allows it to add more profit to the bottom-line,
making JMI more attractive to investors when it goes public.
When the company is successful enough to go public, it will be able to
reward its employees by providing them with 20 percent ownership.
The company expects that by achieving its growth objectives it will
avoid any downsizing programs.
JMI anticipates that this project will help it to achieve the following:
Reduce order-processing time from five days to two or three days.
Reduce lost sales due to stock shortages from 12 percent to less than
1 percent of the orders taken.
Implement an early warning system for detecting changes in
customer payment habits.
Eventually reduce average inventory from $60 million to $40
million, improving inventory turnover by 33 percent.
Develop a model that would forecast the impact of achieving various
growth objectives on order volumes, order frequency and order
value.
Improve operating profit margin by becoming more efficient while
keeping gross profit margins at 40 percent.
With these expectations and the information gathered in questions 19 through
22, the team has the necessary data to establish the objectives of the project.
HELIX Factor # 5 - The Principle of Context states that objectives must be
presented so that the project participants can understand them in the context of
the jobs they perform.
For example, In order to achieve our vision of becoming an industry leader,
taking our company public and providing our employees with an ownership
opportunity, we need to become more aggressive, focused and efficient. This
project signifies our first step in this quest. The objective of this project is to
discover ways to:
Improve our customer service and beat the competition by reducing the
time it takes to process an order through shipping, from five days to two
days.
26
Increase our sales by over $40 million a year by keeping the number of
lost sales due to stock shortages to less than two a day.
Improve our collections by identifying when a customer has a three day
change in their paying habits.
Become the industry sales leader by increasing our sales volume by 30
orders a day.
Notice that the objective does not try to address every expectation of JMIs
management. Increasing inventory turns and developing predictive models
are difficult to express in terms of operational actions that need to be taken.
Often, they are side-bar objectives that can be achieved while achieving the
main objectives.
These objectives could be stated in many ways. What is important to
understand is the way in which the focus has been reduced to a few, very
tangible goals. The objectives reflect an opening context sentence or two
that aligns with the companys vision. The project objectives are expressed
in operationally measurable terms so success will be easy to track.
Given these objectives, the team can construct a scope statement that reflects
the work to be done. Scope statements should identify what areas of the
business will be reviewed, the approach that will be deployed and the time
frame in which the work will be completed. The JMI scope might read
something like this:
The scope of this project will consist of reviewing the processes related to
sales (contract, on account, C.O.D. & returns), purchasing (replenishment,
new products) and inventory management with the intent of discovering ways
to:
Improve our customer service and beat the competition by reducing the
time it takes to process an order through shipping, from five days to two
days.
Increase our sales by over $40 million a year by keeping lost sales to
less than two per day because of insufficient inventory.
Improve our collections by identifying when a customer has a 3-day
change in their paying habits.
Become the industry sales leader by increasing our sales volume by 30
orders a day.
Participants in the project will consist of representatives from:
27
Order Desk
Field Sales
Sampling
New Accounts
Shipping
Credit
Billing
Collections
Purchasing
Receiving
Will Call
Contracts
Representatives from these groups will work together in cross-functional,

collaborative teams to identify opportunities to streamline operations and
achieve the stated objectives. The project will be conducted over the next six
months and will culminate with a report to management targeting
improvement opportunities.
This scope of work provides a clear basis for organizing the project. It
restates the objective and clearly identifies the groups, the approach to be used
and the period for completion.
Keep in mind that the JMI case study is intended to provide a set of examples
from which to learn. Remember to focus on the organization of the material
and not on the specifics of the data being presented.
S TEP 3 - F ORMULATING
THE
P ROJECT P LAN
AND
C OST E STIMATE
To complete the proposal requires a project plan and associated project costs.
Since HELIX uses a very pragmatic series of steps, estimating the level of
effort and related costs of a project is relatively straight forward. The
following givens apply to the estimating process:
Every HELIX project consists of conducting a series of three
facilitation work sessions for each VADS identified. Each facilitation
work session is followed by a diagnostic work session to formalize and
correlate the data gathered (three facilitation work sessions and three
diagnostic work sessions).
Each facilitation work session is limited to 2 hours.
Each subsequent diagnostic work session takes about eight hours per
person to complete.
Each facilitation work session is comprised of representatives from the
groups that participate in the VADS and two project team members
(facilitator and monitor).
Each non-team member project participant can expect to spend two
hours of data-collection time for every work session attended.
28
The number of VADS and participants will change during the project
but not significantly. Remember that this is a discovery process, so
flexibility needs to be built into the plan and related estimates.
The management-report production process takes about 40 hours to
complete.
There are only three variables that need to be known to forecast the cost of the
project: 1) the number of VADS to be reviewed, 2) the number of participants
and 3) the hourly cost/rate of each participant. Given these three pieces of
data, the team can calculate the level of effort and the related costs required to
complete the project. Given the level of effort, the team can forecast the
duration of the project based on scheduling the facilitation and post-diagnostic
work sessions. A good general rule is to allow for one facilitation and one
diagnostic work session per week per facilitator/monitor team.
For the purposes of JMI, assume the following:
There is only one facilitator/monitor team.
There are six VADS to be reviewed; items in the (#) column are the
number of groups/participants involved.
Contract Sales (field sales, sampling, contracts, order desk, credit,
shipping, billing/collections) (7)
Sales on Account (order desk, credit, shipping, billing/collections)
(5)
New Account sales (field sales, new accounts, sampling, order desk,
credit, shipping, billing/collections) (8)
Backorder Sales (field sales, order desk, credit, purchasing,
shipping, receiving, billing, collections, accounts payable) (9)
Replenishment Purchasing (purchasing, receiving, accounts payable)
(3)
New Product Purchasing (marketing, purchasing, receiving,
sampling, field sales, accounts payable) (6)
The average cost per participant is $35 an hour.
The cost of the two-person team is $200 an hour.
Figure 3-3 provides a summary of the calculations based on the above
assumptions.
29
1,260
1,500
1,500
4,800
4,800
4,800
9,135
7,718
10,553
10,080
Estimated Weeks to Complete Project at One Facilitation/Diagnostic Work Session per Week
23
74,906
1,575
630
1,500
4,800
8,663
Total Estimated Project Cost
New Products
788
1,890
1,500
4,800
9,608
11,151
Replenishment
2,363
1,680
1,500
4,800
Allowance for New VADSs and changes in JMI participant levels (20%)
Backorder Sales
2,100
1,050
1,500
8,000
New Account Sales
1,313
1,470
Report Packaging (40 hours @ $200 a team hour)
Sales on Account
1,838
Facilitation
Post Diagnostic
Session Cost
Session Cost
($200 x 2.5
Total Cost
($200 x 8 hours
hours x 3
x 3 sessions)
sessions)
55,755
Contract Sales
Post Session
Costs ($35 x 2
hours x # of
staff x 3
sessions)
Project Team
Total Base Cost
VADS (6)
Facilitation
Session Cost
($35 x 2.5
hours x # of
staff x 3
sessions)
JMI Staff Participants Cost
Figure 3-3 Level of Effort Estimate
The logistics of scheduling dates and times for each specific work session
goes beyond the scope of this case study.
30
At this point, the team has developed the projects objectives, scope and cost
estimates.
S TEP 4 - B UILDING
TH E
A LIGNMENT M ATRIX
Before a formal proposal can be drafted, the team needs to develop the
alignment matrix mentioned earlier. This matrix will help demonstrate that
the projects objectives are aligned with JMIs stakeholder needs, vision and
plan.
Figure 3-4 presents the matrix based on the data gathered.
Figure 3-4 - Project Objectives Alignment Matrix
Supports
Value-added to
Project Objective
Vision
Plan
Customers
Improve our customer

service and beat the
competition by reducing
the time it takes to process
an order (from the order
desk through shipping)
from 5 days to 2 days.
Better sales and

service levels
improves industry
leadership
position.
Supports 20%
growth
objective.
Improved
service levels.
Better service
Reduced
levels improves frustration and
sales.
customer
complaints.
Increase our sales by over

$40 million a year by
keeping lost sales due to
stock shortages to less
than 2 a day.
Increased sales
makes JMI more
attractive to
investors.
Supports 20% Improved

growth
service levels.
objective.
Improves cash
position.
Better service
Reduced
levels improves frustration and
sales.
customer
complaints.
Improve our collections by

identifying when a
customer has a 3-day
change in their paying
habits.
Better sales and

service levels
improves industry
leadership
position.
Supports cash
flow objective
and reduces
bad debts
Avoids
embarrassing
bad debt
situations.
Improves value
of company.
Moves them
closer to
ownership.
Avoids
downsizing.
Become the industry sales

leader by increasing our
sales volume by 30 orders
a day.
Better sales and

service levels
improves industry
leadership
position.
Supports 20%
growth
objective.
Improves cash
position.
Demonstrates
customer
satisfaction
with JMI's
products and
services.
Improves value
of company.
Moves them
closer to
ownership.
Avoids
downsizing.
S TEP 5 - F ORMALIZING
TH E
Owners
Employees
P ROPOSAL
The proposal can be prepared once all the diagnostic and preparation work is
completed. Proposals for HELIX projects should be brief and to the point.
31
This will increase the probability that it will be read. Along with the proposal,
there should be a second document: the project workbook which contains all
the documentation assembled to date. Use the project workbook as an
important source of reference to answer managements questions at the
proposal presentation.
There are many ways a successful proposal can be organized and presented.
Below is a structure for the proposal that has worked well:
Section 1 - Project Scope and Objectives
Section 2 - Scope of Work Performed to Date
Section 3 - Project Benefits and Alignment Matrix
Section 4 - Project Cost and Time Line for Completion
Section 5 - Project Work Schedule
Section 6 - Project Kick Off and Authorization to Proceed
The proposal should be limited to about 15 pages. The first section should
summarize everything that management needs to know to approve the project
(short description, costs, savings, ROI, timeframe and staff commitments).
The rest is backup and support material.
Assume at this point that the project has been approved, and the team is
moving forward at full steam. For the sake of brevity, the case study will be
limited at this point to two VADS: Sales on Account and Replenishment
Purchasing. The case study will be limited further as it moves deeper and
deeper into the details. Each reduction in scope will serve to enhance the
learning process.
Before launching into the project, the team needs to summarize what it knows.
So far, the team has met with management three times.
Although this number of meetings could vary based on the size and
geographic locations of the project, it should never take more than five
work sessions. If more than five are needed, it is usually due to lack of a
sponsor or that no one understands the projects benefits.
At the first work session, the team received an orientation of
managements vision, goals and expectations. It then developed a
series of questions for management and prepared them in a format that
would facilitate dialogue and understanding.
32
Based on what was learned at the second meeting, the team formulated
the objectives, scope, costs and timeline for the project. It developed
an Alignment Matrix to satisfy itself that the projects objectives
supported the companys vision, business plan and stakeholder value.
Finally, the team formalized the work into a proposal that was brief and
to the point and presented it to the management team. Management
approved it.
Up to this point, the team has invested about 20 to 30 hours on the project
over a two-to-four-week period.
Take a moment to reflect on this. In under a week of effort, and in less than
one months time, the team has gone from ground zero to developing a
fundamental understanding of the business needs and objectives. They have
distilled that data into objectives that are compelling and translatable into
specific workflows. The team has a plan to share those objectives with JMIs
knowledge workers. The team has the opportunity to facilitate these workers
expertise and creativity through a series of cross-functional collaborations,
and thus jointly discover ways to achieve the projects objectives.
33
A good leader provides a compelling

vision of the outcomes the organization
aspires to achieve.
A great leader knows how to engage an
organizations workforce to determine
how to achieve the vision set forth.
34
Kicking Off the Project
Setting the Right Tone Sending the Right Message
JMI management has now authorized the project. The first step toward a
successful
project is a proper kickoff. To do this, a formal kickoff meeting needs to be
held. At this meeting, at least one of the executive management team
members should be present to endorse the project. Ideally, the CEO would do
this. If the CEO is not available, then the next choice is to have the
endorsement made by an executive who represents the groups performing the
VADS.
If the project is of a strategic nature, as is JMIs, it should be kicked off with a
formal event. Before the project kickoff event, those being assigned to work
on the project should be briefed in advance about the projects scope,
objectives and their individual roles. Formal invitations should be sent for the
kickoff. Refreshments should be served. The goal is to begin building a team
and to impress on that team how important each person is to the project and to
the company.
The kickoff should be formal, yet social in nature. Each team members
rapport with the other members is crucial to the projects success. As the
project progresses, the messages team members bring back to the work place
will have a major impact on both overall morale and implementation efforts.
Messages that support the project will build success. Messages that are
negative about the project will breed failure.
Often, the most difficult part of the project is selecting the project participants.
No matter how much effort is put into this, there are bound to be changes.
The key to selecting the projects participants resides in the VADS to be
reviewed. If the number of VADS increase or decrease as the project unfolds,
the number of participants will also change. Typically, the number of a
projects participants will need to be adjusted once or twice. The work effort
estimate (see figure 3-3) identifies the VADS within the project.
35
For each VADS included in the project, key knowledge workers from each
workgroup or department who perform the work will need to be identified. It
is important to recruit employees who actually perform the work on a daily
basis. Try not to fill the group with management and supervisory personnel.
A line supervisor, for example, who grew up through the ranks and is well
respected by subordinates, is acceptable. The objective is to get people who
live and breathe the VADS onto the cross-functional team.
Some workgroups usually participate in more than one of the VADS being
studied. In these cases, select more than one person from those workgroups to
participate. If there are multiple shifts involved, select people from different
shifts. Form the project team using participants who mirror the VADS as
closely as possible.
At this point, the case study consists of two VADS: Sales on Account and
Replenishment Purchasing. Based on the work done with upper management,
the following workgroups have tentatively been identified in ( ):
Sales on Account (order desk, credit, shipping, billing and collections)
Replenishment Purchasing (purchasing, receiving and accounts
payable)
Overall, there are eight workgroups. The team will, therefore, want at least
eight project participants, one from each area listed above. Since participation
in this project will be over and above the participants normal workload, the
team will want people who are energetic, highly motivated and well versed in
their job. They must be willing to undertake this additional responsibility and
continue to be accountable to the team as well as to their immediate
supervisors. Their supervisors and subsequent chain of command must be
supportive of the peoples work on the project. This is why it is so important
to have a project kickoff and that the project be properly endorsed by
executive management.
However, as the project progresses, be prepared to meet resistance from
middle management. Remember that resistance to change is natural. To
minimize this resistance, be prepared to offer constant feedback on the
projects progress to supervisors and management. Do this on a one-to-one
basis. Use memos only as a confirmation tool. One technique is to conduct a
formal debriefing on the projects progress about every two weeks. At the end
of the meeting, hand out a memo that covers the status as well. Keep each
meeting to 15 minutes or less.
Once the teams have been formed and the kickoff meeting completed, there is
only a little more administrative work to do. A tentative work-session
36
schedule needs to be developed. For each VADS, three work sessions will be
scheduled with the project participants. Each work session will be limited to
2 hours. These work sessions should be scheduled at the beginning of the
week in the morning hours. Try to meet with each VADS group each week
once the sessions have started.
This means that an entire VADS should be able to be reviewed in about three
weeks from the date of the first work session. In the early stages of learning
HELIX, it is best to focus on one VADS at a time. It is better to take the
VADS sequentially than to rotate through them throughout the life of the
project. Since there are only two VADS to review, they will be done at the
same time. This will allow the team to complete the work session efforts in a
total of three weeks.
Figure 4-1 presents a typical schedule based on the case study.
37
Figure 4-1- Typical work schedule

VADS / Task
Sales on Account
Facilitation Work Session Diagnostic Work Session

Other Tasks, Date & Time
Date & Time
Date & Time
Week 1 - Monday - 9 to
11:30 am
5 pm
Tuesday - All Day
11:30 am
5 pm
Tuesday - All Day
Week 3 - Monday - 9
to11:30 am
5 pm
Tuesday - All Day
Replenishment
Purchasing
Week 1 - Wednesday - 9
to 11:30 am
minute debriefing with
management - 11:45 am
Week 4 - Monday &

Tuesday - Package
Results
to 5 pm
Thursday - All Day
to 11:30 am
to 5 pm
Thursday - All Day
to 11:30 am
to 5 pm
Thursday - All Day
Present Findings &

Recommendations to
Top Management
Week 2 - Friday - 15
management - 11:45
Week 4 - Wednesday &

Thursday - Package
Results
Week 5 - To Be
Announced
This simple schedule is all that is needed to manage the case study. Feel free
to present it in any way that is appropriate for your organization. However,
keep it simple. At a major film studio, a twelve hundred-hour project was
successfully tracked and managed from a single piece of paper similar to the
schedule above. It was performed by a new team in just three months and was
completed under budget.
38
Facilitation Tools and Techniques
What Every HELIX Analyst and Facilitator Should

Know
The team is now ready to start the facilitation and diagnostic work sessions.
During these work sessions, the team will be using a set of tools and
techniques specifically designed to accelerate the work process and achieve
success. The tools will take the form of models. The facilitation work
sessions are centered on helping the project participants toward identifying
how VADS work and how VADS can be improved. The information is
collected using a series of models. The subsequent diagnostic work sessions
focus on applying a series of rules to the models to ensure they are complete
and accurate.
Since the tools are dynamic, they will be covered first in terms of their
technical syntax and construction, and then in context of the case study.
Facilitation work sessions rely heavily on a structured form of facilitation.
During the initial work session on a specific VADS, the HELIX facilitators
goal is to work with the knowledge workers to develop and correlate three
basic models. For many, facilitating a group, and simultaneously constructing
models, feels like juggling while walking a tightrope. For others, facilitating
is easier. In either case, the concept to facilitation needs to be reviewed in
context to HELIX.
First, consider these definitions for facilitation:
To make easier (Websters Dictionary)
To lessen the labor of. To help promote movement forward. To
allow progress with little or no effort. (Oxford English Dictionary)
Both of these definitions apply to facilitation in context of a HELIX work
session. However, one more definition is needed:
HELIX: The act of drawing out affably, courteously and graciously without
thoughtlessness.
Using these three definitions, a HELIX facilitator can be defined as follows:
39
A person who is able to draw out of a group of knowledge workers

information related to a specific VADS and how to improve it, in a
manner that encourages and rewards participation.
A person who is able to work with an organizations knowledge
workers to identify, plan for and implement change.
A person who, because of his or her mastery of the key HELIX models
and facilitation techniques, can develop and correlate those models
interactively with a cross-functional group of knowledge workers to
accurately depict how a VADS functions today and how it might be
improved to achieve key organizational and workgroup goals in the
future.
By now, you might be asking yourself, Who in the organization can do this?
This is a very good question. Experience indicates that not all people can
become HELIX facilitators. Some are just not comfortable standing up in
front of a group. Others cannot seem to stick to the process or the models.
The fact is, though, HELIX facilitators can be trained and developed. In many
ways, facilitating a HELIX work session is easier than conducting normal
group facilitation. HELIX facilitators conducting a structured facilitation
know they need to build a specific set of models. They know there is a
specific subject matter to be addressed: the VADS. They have props: flip
charts and colored marking pens. They know the order in which the models
are to be developed. Finally, they know the kinds of questions needed to be
asked to help the group stay focused and work through the model
development process.
What makes the facilitation effort difficult is encouraging
participants to contribute freely while structuring the output.
In virtually every initial work session, participants go through a process of
catharsis and revelation (see appendix - Factor # 7 - The Principle of
Catharsis and Revelation). This is good, because it helps people become
more creative and inspired. However, this process is a double-edged sword.
The accomplished facilitator knows how and when to let the group run on and
when to reign them in, in order to complete the modeling tasks at hand. This
balancing act represents the challenge for the HELIX facilitator.
All good HELIX facilitators share the following attributes. They have the
ability to:
Project a good sense of humor.
Focus at macro and micro levels of detail in real time.
40
Maintain poise in front of a group (regardless of the management level

present).
Take control of a group without being obtrusive, abrasive or autocratic.
Stay on course while allowing freedom in dialogue.
Improvise with confidence when under pressure.
Work well with knowledge workers to discover improvement
opportunities.
Work well with the HELIX models.
Not improvise or take license with the HELIX models or modelbuilding process (until mastery has occurred).
Resist imposing personal views and opinions during the process.
Demonstrate basic business acumen ensuring understanding of
dialogue.
Those who have demonstrated these abilities and have honed their facilitation
and HELIX modeling skills make excellent HELIX facilitators.
The need to strictly follow the HELIX facilitation process cannot be stressed
strongly enough at this point. When the facilitator departs from the process,
by either changing the props, the format or the approach of the work sessions,
any of the following may result:
The existing VADS models do not reflect how the organization does
business.
The proposed VADS models do not reflect the achievement of the
organizations needs.
There is failure to build credibility and rapport with the knowledge
workers and management.
The focus becomes individual-oriented and not process-oriented,
resulting in hostility, resistance and resentment.
The environment becomes counter-conducive to moving forward
toward achieving positive change.
In essence, bad facilitators set the stage for achieving the opposite of HELIXs
purpose. With all good intentions, they undermine their own success.
Remember: the goal is to develop models that reflect how to achieve key
objectives and to build a team that can demonstrate its understanding and
ability to achieve those objectives.
41
Our focus will now be turned toward some specific facilitation techniques.
During each work session, five things will need to be managed:
Props (flip chart, marking pens, tape, wall space)
Tools (HELIX models)
Pace (how fast or slow the session moves)
Language (body and verbal)
Group dynamics
In many ways, conducting a work session is like giving a performance.
Facilitators are on center stage. The audience is composed of the knowledge
workers. The goal is to keep the knowledge workers focused on the plot.
Therefore, the facilitator must use the set, props and skills to direct the action
while letting the specific details (model content) develop on their own.
Props
At every work session, the facilitator will use some props. These include:
One or two flip charts with full pads of paper
Masking tape
Three different colored marking pens (black, red, green)
Plenty of empty wall space (for taping up completed flip chart pages)
These props are the tools of the trade for the HELIX facilitator.
The flip chart should have at least 20 sheets of paper on it. This is where the
models will be developed during the work session. Flip charts allow easy
reference to all the models developed during the work session, while white
boards, overhead transparencies or other mediums do not.
As each page is completed, it is taped to the wall so everyone can see it.
There are reasons for doing this beyond ease of reference. Part of the
facilitators job is to build trust. By working in the open, the participants can
see exactly what is being produced. This helps build trust. In addition, as the
sheets are posted on the walls, the participants can begin to visualize the big
picture and become more focused. Finally, posting all the completed work
tends to keep the dialogue honest. In a sense, all the work is on display and
must pass the light of day. Using a flip chart helps to promote dialogue
while building trust and openness.
42
HINT: To speed up the hanging process, use 3M self adhesive flip

charts or pre-tear about 40 two-inch strips of tape and place them on
the back of the flip chart easel. As each page is completed, place two
pieces of the tape on the paper and hand it to one of the participants
to mount on the wall. Involving participants in the hanging process is
a subtle way to build involvement and ownership.
Using at least three different colored marking pens allows the facilitator to add
contrast and distinction to the models. The use of various colors helps draw
peoples eyes to important points and makes the models easier to read. As
obvious as it seems, be sure that the marking pens are fresh. Color usage will
be covered later as specific models are reviewed.
HINT: Jumbo markers work very well. Their chiseled tips allow for
line width variation, adding more flexibility to the drawing process.
The wall space needs to be ample. There should be enough space to hang
about 20 flip chart sheets. Typically, the pages will be hung one above the
other, making two rows of 10 sheets.
HINT: Be very careful when removing the sheets from the wall. The
tape needs to be peeled off slowly. If it is jerked off, it can remove
wallpaper, paint and even pieces of wallboard.
Tools
The tools used during the work sessions are the HELIX models. Three basic
models will be used:
Change Analysis Model
Level 1 Workflow Model (existing)
Level 2 Workflow Model (existing and proposed)
These models capture all the raw data needed to implement the diagnostic
work sessions. While they are simple in nature, they are rich in content. Each
is intuitive, understandable and easy to read. Each is designed to work in
context with the other, and yet each is meaningful by itself.
The models provide the structure around which the facilitation takes place.
The models are developed in the order listed.
In the next chapter, the creation and use of each of these models will be
defined in detail.
43
Pace
The pace of the work session is crucial. If the pace is too slow, participant
concentration will drift. They will begin sketching on paper, or having sidebar conversations. In effect, the facilitator will lose them. If the pace is too
fast, participants will not be able to keep up. The effect is the same.
Recording the models on the flip charts will help keep the pace from going too
fast.
The limit of 2 hours for the work session will help it avoid dragging.
However, the facilitator must constantly meter the pace to ensure the goal of
the work session is accomplished. Pacing the work session takes practice. If
not all three models are completed within the 2 hour limit, dont panic.
There will be time in later work sessions to catch up.
Language
Language is very critical to the effectiveness and success of the work session.
In evaluating language, you must consider how it is seen as well as heard.
How the facilitator is seen in terms of body language will influence how
people will interpret what is being said. Conversely, how the facilitator
speaks will influence how the body language is interpreted. Therefore, verbal
and physical language play an important role in how the facilitator is received.
There are seven important areas to keep in mind regarding verbal language:
Pace of speech (how fast or slow)
Volume and intensity (how loud or soft)
Inflection and tonality (what is emphasized)
Vocabulary (what words are chosen)
Timing (when to speak)
Duration (how long)
Focus (the subject of the message)
Each of these blends together every time anything is said and will shape the
way the message is received and interpreted. Talking quickly and loudly with
harsh inflections can sound angry. Interrupting while others are talking can
appear to be rude and inconsiderate. Talking too long can come across as
boring or self-absorbed. Speaking softly and slowly, using inflections and
words that convey reflective insight can make one appear wise and get an
audiences attention. Other times, talking softly and slowly will put the
44
audience to sleep. The timing and use of pace, volume and inflection are
critical to maintaining the attention and focus of the audience.
While these verbal cues are important, they must be considered in context to
body language. Body language is what is conveyed visually to others.
Postures, clothing, use of space, eye contact and mannerisms all play a role in
how your words are interpreted. The only question is whether the message
being sent is the intended one.
Consider how many ways the phrase, good morning, can be said and how
each conveys a different message.
If you say good morning in a low, muttered voice while staring at the floor
as you hurry by someone in the hall, a person might doubt your sincerity.
Good morning whispered in a loved ones ear while giving them a gentle
hug says, I love you. If it is said with a warm smile in a happy, energetic
and confident voice with about two seconds of eye contact it tells the world
its great to be alive.
However, the same energetic and confident good morning made wearing
tattered, disheveled clothing might confuse the receiver and generate thoughts
such as, Why should he be so happy?.
Remember: the HELIX facilitator is both an actor in and a
director of a play that must immerse the audience in focused
creativity and problem solving.
Everything that can be done to provide an outstanding performance should be
considered. The facilitator needs to be constantly aware of how he or she is
being perceived and received.
Group Dynamics
Managing group dynamics is an important aspect of the HELIX facilitators
job. A typical work session will have four to eight participants, each
representing a different functional area of the organization and each sharing a
common interest in a particular VADS. Since the facilitator is directing the
flow of the meeting, he or she takes on the role of leader. The facilitator needs
to be mindful of the following points to be an effective leader:
The facilitator needs to maintain a balance between gaining,
maintaining
and giving control during the work session.
45
If the facilitator is too controlling, the participants will abdicate

their views to those of the facilitator and will not buy into the
process or the results produced.
If the facilitator cannot maintain a certain level of control in
directing the work session, there will be chaos and confusion,
resulting in loss of focus and a failure to produce the needed
HELIX models.
If the facilitator fails to give control to others who are expressing
insights and helping to move the process forward, then he or she
will lose the benefits of those insights. Also the facilitator risks
turning off the participants desire to contribute.
This balancing act requires the facilitator to be aware of
peoples responses to his or her questions. The facilitator needs
to become skilled in reading the verbal and visual cues of the
work session participants and to adjust to them.
The facilitator needs to demonstrate respect for the knowledge workers
participation in the work session. Participants may be intimidated by
the facilitators position, the project or just speaking in a group. The
facilitator needs to take active steps to encourage all the knowledge
workers and treat their questions, insights and ideas with respect. This
will help build the facilitators credibility and the participants selfesteem. Each has a valid contribution to make to the project.
As the leader, the facilitator must keep the work session on track. He or
she must be outcome-oriented yet process-focused. This means that
neither the outcome nor the process can be sacrificed. Again, this
balancing act requires the facilitator to be acutely aware of the pace,
tone and content of the dialogue. If the focus wanders, the facilitator
needs to redirect it back to the VADS. If the pace stalls, the facilitator
needs to infuse energy into the group. Again, the facilitator is
managing them self, the group and the models while not stifling
participation.
Since the results produced during the work session can be dramatic, and
since the facilitator led the work session, credit for the results are often
given to the facilitator. Here, the facilitator must redirect the credit for
success to the knowledge workers. In doing this, the facilitator does not
lose credit but rather builds respect as a leader and rewards the
knowledge workers participation.
The facilitator should take every opportunity to recognize the
knowledge workers while down playing his or her own role.
46
Statements such as, All I did was write the stuff down. Tony from
purchasing and Sally from sales are the ones who really made the
difference, gives credit to the knowledge workers.
Finally, the facilitator must be patient while being compelling and
inspiring. This patience comes into play when allowing the participants
to struggle with concepts and ideas. Often, the facilitator will discern
ideas and solutions more quickly than the knowledge workers. He or
she will then share them with the group. This can suck the life out of a
work session. Part of the gratification
and reward of participating in
work sessions is coming up with ideas for improvement. The facilitator
needs to let the knowledge workers have this fun and gratification. The
facilitators gratification should come from his or her success in
inspiring the group to participate in the process and be creative.
Another area of the group dynamics of a work session deals with the interplay
between the facilitator and the group and between the group members. Since
the work session is a structured facilitation, the facilitator needs to maintain
focus on the VADS and on completing the models. Here are some concepts
and techniques that will help the facilitator accomplish this:
Filtered Listening - As the facilitator is developing models with the
knowledge workers, the conversation will not necessarily be direct and
to the point. Discussions will tend to wander, and the exchange of ideas
will be very fast paced. To allow this to happen, the facilitator needs to
listen for information that belongs on the models. As that information
surfaces, the facilitator needs to take control of the dialogue. The
facilitator needs to refocus the group back to the flip chart and update
the model by feeding back what was heard. Getting confirmation that
the hearing was correct is accomplished by paraphrasing the
information on the flip chart and asking the group if the paraphrased
information is correct. This filtered listening allows the facilitator to
give a great deal of freedom to the dialogue process, while maintaining
focus and control over the process. It also ensures that the results are
captured in the proper form.
Mind Pictures - From time to time during a work session, momentum
might slow or the participants may have mental blocks. This is a
natural occurrence. When momentum slows or people have mental
blocks, the facilitator can employ mind pictures to help everyone
visualize alternatives and solutions. Mind pictures can take the form of:
an analogy
an example through experience
47
a simulation or exercise
Since facilitators are dealing with abstraction when working with
models, they need to be ready to provide avenues for helping
participants maintain their level of creativity and momentum.
Analogies can help draw parallels between concepts that are foreign to
people and concepts that are familiar. In The HELIX Factor the key
to streamlining your business processes, I used the analogy of a football
teams organization to demonstrate the flaw in stovepipe organizations.
Simulations and exercises help people physically experience an idea or
situation. An example through experience reduces skepticism. When
solutions that have merit are discounted because they are radical to the
group the use of a real life example can help them become comfortable
with the idea. The story of the data entry operator in The HELIX Factor
(page 84) is an excellent example of a real life situation.
Defusing Conflict - During the course of a work session, energies will
be high and tempers might flare. When this happens, the facilitator
needs to get things back on course. There is a difference between
lively, constructive dialogue and verbal jousting. The way to tell the
difference is easy:
Dialogue focuses on the subject, not the individuals. People,
although animated and loud, are exchanging ideas and are enjoying
the exchange. Emotions are running high people but are not
exhibiting anger or hostility.
Arguing, on the other hand, tends to focus on the people, not the
subject. People are not engaged in dialogue, but in alternating
monologues. They tend to respond to their opponents viewpoints
with personal attacks or defensive language.
The key for the facilitator is to discern the difference and to stay on course.
To do this, the facilitator must remain neutral and mediate the opposing
views. Here, the facilitator can help to clarify each persons point of view.
He can inject humor to break tension and reduce stress. She can refocus
energy away from the individuals and on to the subject. He can paraphrase
key points and ask open-ended questions to help draw out ideas and create
common ground for constructive dialogue. This is not easy to do, and in
the heat of battle, stepping between two opposing forces can be risky.
Both can turn on the mediator and attack. While this breaks the deadlock,
it does little for the mediator.
The least desirable alternative is to stop the work session. This does not
allow closures and resolves nothing. When conflict arises between
48
knowledge workers, it must be resolved. The teams continuity and

rapport must be maintained. Therefore, the facilitator must make every
effort to resolve such conflicts quickly and amicably.
One way this can be done is by the facilitator interrupting the process and
asking each person to help him understand that persons point of view.
This process begins by having the first person present his issues and
opinions uninterrupted. The facilitator then paraphrases and writes down
(on the flip chart) what was heard and asks if the understanding is correct.
The facilitator then asks the next person to contrast their point of view to
the one paraphrased on the flip chart. The contrasts are then paraphrased
and written down. This goes on until all the contrasting viewpoints are
recorded and acknowledged.
The facilitator then works through the contrasting viewpoints seeking to
understand them in terms of their objective merit. This process takes the
emotions out of the discussions and refocuses people on the information on
the flip chart. Ideally, a compromise or consensus will be found. If not,
the parties can agree to disagree and the group can get back to the goal of
the work session.
Mind Games - There are times on a project when some people will
consciously try to derail progress. These efforts can take the form of:
Passive Resistance - finding reasons not to get things done in order
to slow progress.
Subtle Sabotage - taking direct but hard-to-detect actions that
hinder progress.
Overt Resistance - frontal attack approach. Typically using
politics, budgets or character assassination to stop the project dead in
its tracks.
Passive resistors are subtle saboteurs who frequently use mind games in
work sessions to be disruptive. They are adept at understanding,
manipulating and exerting control over a process. One of the most
prevalent tactics is called bear trapping or the Now I Got You, You
SOB approach. In bear trapping, the trapper asks seemingly innocent
questions of participants or the facilitator with the intent of embarrassing
or discrediting the respondent. In essence, the question is the trap.
Excellent examples of bear trapping can be seen in any courtroom or,
better yet, on TV nighttime news/interview shows. A question can be
discerned as a trap when it is conclusive in nature. For example, the
question, Isnt it true that your company knowingly cut prices to put the
49
competition out of business? is an allegation in the form of a question

intended to place respondents on the defensive.
If the person being questioned defends himself or herself, he or she looks
guilty. The questioner might roll his eyes or feign an incredulous look.
These theatrics are all part of the game and are done for the benefit of the
audience. If respondent denies the allegations, the questioner responds
with another attack, maybe something like this: NO, you didnt
knowingly cut prices or NO, you didnt try to put the competition out of
business?. The questioners goal is to fluster and confuse the respondent
so he loses his composure or says something that can be taken out of
context and blown out of proportion. If this happens, the trap is sprung.
One way to avoid this type of trap is to respond with a question. In the
example, the respondent might have replied with: What would lead you to
believe that our company would ever engage in such a practice? Here, the
tables have been reversed. The response is made in a rationale, cordial
manner. The burden of proof has been shifted. The audience tends to the
see respondent as reasonable and concerned.
When the facilitator senses bear trapping between knowledge workers,
he or she should interrupt the process and diffuse it at once. If one of the
participants is persistent in this practice, he should be removed from the
team.
Another popular tactic is Yes, but For every idea presented, users of
this tactic begin their response by agreeing with yes, followed promptly
with a but. The yes gives them the floor and the but allows them to
shoot down the idea presented. When this happens, the facilitator should
interject by asking what the yes, but persons ideas or alternatives are.
Since they cannot rebut their own thoughts, they are on the spot. If they
have nothing to contribute, the group will tend to discount their
distractions and the facilitator can allow peer pressure to correct the
situation. If the situation persists and the distraction becomes too great,
such a member should be removed from the team.
Removing someone from a team is very rare. However, there are several
ways to remove a person from a team and minimize the repercussions. The
first is to explain the situation to the person and hope that she will remove
herself. Many times this works because the disrupter wants out of the
process anyway. Another way is to speak with the persons supervisor and
have the person reassigned to efforts that are more appropriate. There are
no guarantees. The facilitator should use removal as a last resort. It is
50
usually time to consider removal when the process disrupter begins to

introduce negative value to the work sessions.
The success of the project will largely depend on the models that are
developed during the work sessions. These models represent the input into
the entire diagnostic process. If the models are flawed, or the knowledge
workers do not buy into them, then it is unlikely that improvement
opportunities will be implemented. The skills and adeptness of the HELIX
facilitator are of paramount importance to the quality of the results and the
buy-in achieved during the facilitation work sessions.
51
Simple is Better!
52
Conducting Facilitation Work Sessions
Working with the Change Analysis Model
The first model to be developed or updated in a work session is the change

analysis model. The change analysis (CA) is a tabular model that contrasts
existing situations (situations needing improvement) with preliminary goals
(solutions that constitute an acceptable improvement). The CA is developed
interactively with the knowledge-worker group, using a flip chart to record the
situations and goals. It is very important that this model be done first. The
CA sets the stage for achieving the catharsis and revelation needed to release
creativity in the work session (see appendix-Factor 7 The Principle of
Catharsis and Revelation). About 45 minutes of the 2 hours allocated for
the work session is used to develop the CA.
During the development of the CA, the facilitator takes on the role of
paraphraser, clarifier and recorder. As each situation is expressed by
participants of the work session, the facilitator paraphrases the situation and
writes it on the flip chart. This act of feeding back the situation, getting
acknowledgment that understanding took place and writing it down completes
a communication loop that is essential to the CA process. This
communication loop can be seen in Figure 6-1.
Figure 6-1- Making a Complete Communication
Communications Model
1
Sender
2
3
Sends Message
Paraphrases Message Back
Receiver
Acknowledges
Understanding
53
This send-paraphrase-acknowledge process ensures that the knowledge

workers feel they are heard as well as understood. Paraphrasing and
committing that paraphrased statement to paper also has a psychological
impact on the sender. The sender and the group become committed to the
statement as it takes printed form. Situations and goals tend to be more honest
as people realize that the information is being recorded formally and will be
shared.
Once the paraphrased situation has been written down, the facilitator opens
the situation for discussion among the group. Here the facilitator helps the
group determine the level of consensus that collectively exists regarding the
situation. Typically, some dialogue and clarification will go on for a few
minutes. During this time, the facilitator adds supporting and clarifying
information below the original situation on the flip chart.
Once this process has finished, the facilitator begins the process of clarifying
vague aspects of the situation with measurable support. The facilitator will
read the situation aloud to the group and underline adjectives and phrases like
too fast, too slow, too much, etc. The facilitator then goes through each of
the underlined items and ask the group to provide clarification of what they
perceive to be a measurement of that item.
During the first JMI work session on the Sales on Account VADS, the first
existing situation reads:
It takes too long to process sales orders through credit.
Too long is not well defined in this statement. What is too long in one
persons opinion may be too short for someone else. Here the facilitator
will query the group for a definition of too long. As the group discusses the
definition of too long, the facilitator is listening for quantifiable definitions.
As quantified definitions emerge, the facilitator moves towards the flip chart
and writes them down. It is important for the facilitator to stand about four
feet from the flip chart while group discussion takes place. When the
facilitator wants the group to finalize their discussion on a topic, he or she can
move toward the flip chart. Doing this a few times will create a subconscious
cue for the participants to complete their discussion.
In the case study, the finished situation appears as:
It takes too long to process sales orders through credit.
Too long = more than 45 minutes from the time the Credit
Manager receives the order from the order desk
until the time the order is released to the warehouse
for shipping.
54
Now there is a definition of too long. However, what is not known is why
45 minutes is too long. This leads to the next question. Here the facilitator
is trying to develop a consensus of what makes 45 minutes bad and what
would be good. The participants are now focusing on how taking longer than
45 minutes detracts value from some stakeholder group(s). Repeating the
same filtered listening and communications loop process, the facilitator
updates the current situation to read:
It takes too long to process sales orders through Credit.
Manager receives the order from the order desk
until the time the order is released to the warehouse
for shipping.
This is bad because orders received after 2 p.m.
cannot be shipped until the next business day. This
results in poor customer service and, sometimes, in
lost orders.
The above statement represents a fairly complete situation. It states the
situation in measurable terms and why it detracts value from a stakeholder
group.
The next enhancement to the situation is to establish the frequency that it
happens, the cost of each occurrence (if possible) and an explanation of why
the situation happens. Again, the facilitator puts the questions to the group
and helps facilitate an answer.
Opinions on frequency, cost and why, typically vary depending on which
knowledge worker is talking. However, the why aspect of the situation
should be answered only by the work group that performs the task. At JMI,
this is the Credit department. A knowledge worker from the Credit
department (Credit) should be part of the group. If not, then one should be
added at this point. Since this situation deals directly with the actions of
Credit, only members of that group can speak to it.
It is important for the facilitator to keep the groups focus on the process and
not on those who work in Credit. Frequently, the reasoning given behind why
the situation happens can expand the discussion to include others. It is
common for one department to assign blame for a situation to another
department. Sometimes the situation is denied and dismissed out of hand.
When this happens, it is up to the facilitator to redirect the group away from
one another and on to the process.
At JMI, the representative from Credit said the following:
55
Of course, it takes over 45 minutes. I have to process over 150

sales orders a day. Each one requires me to look up the customers
credit status, reduce his credit line by the value of the order and, in
many cases, call the customer and work out terms. That assumes
the order forms are completed correctly by the order desk, which
isnt too often. What do you expect-miracles?
This defensive response is typical. Here, Credit has blamed the situation on
volume and poor input from the order desk. Credit could be right or just
trying to avoid embarrassment or accountability. In either case, the
facilitators job is to maintain focus, defuse potential emotional outbreaks and
direct everyone to the same side. The flip chart is very useful here because
people tend to focus on the chart and not the people. Since the chart cannot
fight back, it is hard to sustain an argument. In addition, the facilitator can
focus on the objective aspects of Credits statement.
Two points emerged from the above:
First, Credit has revealed that there are over 150 orders that must be approved
each day. Second, there is another situation that needs to be explored: the
completeness of sales orders being sent from the order desk to Credit for
approval.
The order volume can be verified quite easily. Examples of missing
information can likewise be verified. However, neither is the point here.
What is important is to complete the current situation statement and develop a
preliminary goal that would resolve the situation to everyones satisfaction.
By now, it should be apparent that the group is in a cathartic phase of the
situation-goal process (see appendix-Factor #7 - The Principle of Catharsis
and Revelation). Based on Credits response, assume that the situations
final form is as follows:
Manager receives the order from the order desk until the
time the order is released to the warehouse for shipping.
This is bad because it means that orders received after 2
p.m. cannot be shipped until the next business day. This
results in poor customer service.
This occurs because of the volume of orders (greater than 150 a
day) coupled with the number of steps required to review and
approve credit and complete the order. Based on an average
56
wage of $30 an hour and 45 minutes of processing time, the cost

to approve a sales order is $22.50. Given a volume of 150
orders a day, it requires about 14 Credit staff members to keep
up with the volume. Since there are only six Credit staff, there
is substantial overtime and use of temporary help. At present,
the daily cost for overtime and temporary staff is about $1,785.
The average daily cost to process orders through credit with 14
staff members would be about $3,375 a day.
Now the statement is complete. The situation statement developed reflects:
What is happening
Why it happens
How much it costs
What makes it undesirable
Who is impacted (loses value) because of it happening
Notice that the statement is focused on sales orders being approved and not
the individuals who work in Credit. The statement is subject focused.
People and personalities are not part of the process.
The facilitator can now shift the emphasis toward helping the group develop a
preliminary goal for resolving the situation. The goal statement should always
start with the phrase The ability to
In the case study, JMI is seeking a goal that will give it:
The ability to process a work order through Credit in less than 45
minutes.
The question is how much under 45 minutes? Here, the facilitator turns the
question back to the group. The facilitator wants to help the group determine
what would be worth achieving. What would constitute Good? Is it 44
minutes, 30 minutes or 1 minute?
Now the group is in the revelation, or creative mode. The facilitator is
directing the focus to a future state statement that reflects the credit
approval process in an ideal form. When completed, the statement must
reflect the following:
What should happen?
When should it happen?
What changes so it can happen?
57
Why is it better than the way it is done now?

How much will it save?
Who will benefit (gain value)?
To achieve this, the facilitator must allow participants to do some active
brainstorming. The group needs to explore some what if scenarios. To
expedite the effort, the variables that can be manipulated need to be identified.
In the example, these variables include:
The number of orders requiring credit approval
The steps being performed to approve credit
The number of people used to perform the approval process
The information needed to perform the approval process
The facilitator should ask the group to challenge each one of these variables.
This can be done by asking questions like: What if we changed the number
of orders requiring credit approval? What would happen then?.
Alternatively, What if we only approved credit on orders over a certain
amount, how might that work?
Here the goal is to encourage the group to explore possibilities and the
implications each presents. As ideas begin to crystallize and the group moves
toward a consensus, the facilitator returns to the flip chart and begins the
process of paraphrasing and recording.
At JMI, the following preliminary goal could be developed:
The ability to process work orders directly to the warehouse
when the customers available credit line is greater than the
order amount and the outstanding balance is current. This
would require a change to our order processing system.
Specifically, it would require the system to automatically check
the order for credit-related data and route it to the appropriate
location (Credit department or warehouse).
This would allow about 125 orders a day to be processed to the
warehouse in less than 5 minutes, from the time the order was
taken, saving about $3,700 a day (elimination of overtime and
temporary help). This would also allow the 6 staff members in
Credit to focus on orders with real credit issues and collections
and position them to support more volume.
58
This will benefit our customers by allowing the company to ship

merchandise quicker, thus improving service levels. This will
also reduce the stress in the understaffed Credit department.
The above illustrates a preliminary goal with far-reaching implications. It sets
forth a goal that resolves the conflict between the order desk and the Credit
department, while simultaneously streamlining the process, reducing costs and
improving customer service levels. This is typical of the quality of goal
statements that are developed by knowledge workers during work sessions.
Sometimes, achieving the level of completeness reflected in the above
example takes more than one work session. The facilitator should take each
current situation and preliminary goal as far as the group can at any one time.
However, by the end of the third work session, the statements should be as
complete as the one above.
The facilitator can expect to generate 8 to 12 situations and goals during a 45minute period. Each will be at various levels of completeness. Each will
require post work session diagnostic time to generate questions for the group
during the next work session.
As each situation/goal pair is completed the facilitator posts it to the wall.
This allows it to be seen by all the participants and easily referenced
throughout the work session.
Figure 6-2 illustrates the JMI situation/goal pair as it might appear after the
first work session:
The change analysis provides the first point of buy-in to improving a VADS
by the knowledge workers. By recognizing what is BAD about the current
situation and by projecting themselves into what is GOOD about the
preliminary goal, the knowledge workers begin developing the creative
tension (see appendix-Factor # 5 -The Principle of Context) and leverage
needed to support successful change.
Notice that the statements are not as complete as in the full example. During
the first session, capturing 8 to 12 statements at level of completeness
illustrated in figure 6-2 represents a job well done. Since it is done in about
45 minutes, it is a substantial accomplishment. The key is to capture
sufficient detail and insight to allow the process to continue smoothly. If the
pace drags, post the developed situation/goal pairs on the wall and move on to
the next model. It is more important to make a pass at all the models than to
develop only an eloquent CA at this point.
59
Figure 6-2 - Change Analysis
Change Analysis
P re lim in a ry G o a l
Current Situation
1 . It takes 3 da ys for a sales orde r
to get fro m cre dit to the

wa reho use:
1 . T he ab ility to get orde rs to
wa reho use with in 6 ho urs of

placem e nt:
Competition averages 2 days.
M ain reason custom ers com plain

and leave.
W ould undercut com petition by at

least 1 day.
W ould require stream lining of order

processing through credit.
2. 3 0% of first-tim e cu sto m er
qu otation s u nde r $ 200 a re
ne ver tu rned into orde rs:
New custom ers cannot wait for

credit approval (takes 2 weeks).
Competition approves in 24 hours.
Lose up to 300 orders & new

customers a month.
2. T he a bility to au th orize cre dit

lim its u p to $ 200 o ver th e pho ne
for first- tim e custom e rs:
W ould increase sales $60,000 a

m onth with m inim al bad debt risk.
W ould require stream lining of order

processing to handle increase in
volum e .
The change analysis will be revisited later in the sections on diagnostic work
sessions, at which time the process of taking the goal from the status of
preliminary to realistic will be explored. Indexing of the models into a set of
formal working papers will also be reviewed.
Review
About 45 minutes have elapsed in the first facilitation work session. The
facilitator has captured 8 to 12 change analysis statements on flip chart paper
and posted them on the wall for easy reference. Each current situation and
preliminary goal has been tested for measurability and completeness.
The next step is to understand where the changes in the VADS process
identified in the preliminary goal need to occur. To do this, the facilitator will
work with the knowledge workers to develop two workflow models.
60
Building the Level 1 Workflow Model

The next model to be developed in the facilitation work session is the Level 1
Workflow (WFL1). This model presents a simplified version of the VADS by
depicting the workgroups and the information that is shared between them in
order to complete a VADS cycle.
The WFL1 is developed in real time (on a flip chart) at the work session with
the knowledge workers. It provides the first complete picture of a VADS on a
single piece of paper. It has a very simple and intuitive syntax, making it easy
to draw, read and understand. The average WFL1 takes about 15 to 20
minutes to complete during the work session.
Model Syntax
The WFL1 model has a very limited syntax. This is what allows it to be
complete yet simple to understand.
Figure 6-3 lists the components of the Level 1 Workflow Model.
61
Figure 6-3 - Model Syntax

Symbol
Process Group
File or Data Store
Scope Constraint Boundary
To WFL1 - 2.1
From WFL1 - 1.4
Outbound / Inbound Ts
Description
The oval or circle represents a work or

process group that participates in the VADS.
This group represents one or more people
who perform a specific set of procedures on
a VADS. This group can be a suborganization within the organization
(division, department, specific job title or
specific work area). The group can also
represent outside organizations or people
(customers, vendors, government, etc.). An
icon can be substituted for this symbol.
However, if icons are used they should be
consistent throughout all models.
The rectangle represents a file, data
store or system. This object can be a file
cabinet, ledger card, a computer system or
any other non-human repository for storing
information. An icon can be substituted for
this symbol. However, if icons are used they
should be consistent throughout all models
The arc represents a constraint or
boundary. It denotes an intentional
limitation in the scope of the model. The
text behind the arc is used to clarify the
scope limitation. For instance, in a sales
VADS, the model may not reflect how the
customer decided to place an order. If this
information was not going to be reflected in
the VADS, a scope constraint boundary
would be placed on the edge of the
customer process group to reflect the scope
limitation.
The T represents a link between two
models. This linkage can be inbound
(feeding this model) or outbound (feeding
another model). The direction of the
connection is indicated by the arrow.
Arrows pointing toward the top of the T are
outbound. Arrows pointing away from the
T are inbound. The text at the end of the
T is the reference to the model being
referenced.
Drawing the WFL1 Model

62
The WFL1 model is initially drawn interactively with the knowledge workers
during the first work session. It is drawn right after the change analysis.
Using the flip chart, the facilitator has the participants systematically walk
him or her through the VADS from the point of the first communication
between process groups through its successful completion.
The basic conversation begins with a question from the facilitator like: How
does this process start?. As the starting point is identified, the facilitator
draws the first oval and labels it with the name of the workgroup or process
group that begins the process. Typically, the model starts with some form of
communication between two process groups. In the JMI work session, the
person representing the sales order desk might say, It starts when a customer
calls an order into the order desk. In that one statement the following were
identified:
The customer (process group)
The sales order desk (process group)
The order (an object)
At this point, the facilitator would post the data on the flip chart (see Figure 64).
Figure 6-4 Customer Calls in Order
Customer Calls in Order

Customer
Sales Order Desk
Notice that the arrow connecting the customer to the sales order desk is not
yet numbered. Numbering will take place after the rough model is completely
drawn.
From this point on, the facilitator asks, What happens next? The knowledge
worker whose area is listed will typically begin describing what the
department does with the object received. As the knowledge worker describes
the tasks, the facilitator is listening for the moment when the knowledge
worker initiates a transfer of information to another process group or data
store. When this happens, the facilitator moves to the flip chart and asks the
knowledge worker to repeat that part of the description pertaining to the new
transfer of information. As the person describes the transfer, the facilitator
updates the model. Initially, the facilitator is not interested in what goes on
63
inside each process group. The facilitator is interested in how and when
information is transferred between process groups and/or data stores.
However, most people need to talk their way through a process to accurately
identify and describe the interactions that occur. It is the job of the facilitator
to filter out the needed data and capture it on the model.
In the above example, the dialogue might resemble this:
Facilitator: So the customer calls the order desk to place an order.
Sales Order Desk Knowledge Worker (order desk): First, I bring up
a new order screen and identify the customer on the computer. Then I
take her order information.
Facilitator: The customer and order information is maintained on the
computer?
Order Desk: Yes, and it really causes us problems.
Facilitator: Sounds like we should talk about that, but let us finish
this
first. Go on.
Order Desk: Well, once I enter the order, I print out the rough order
and send it to Credit for approval.
Facilitator (moving to flip chart): So a rough order is one that
needs to be approved by credit?
Order Desk: Thats right.
Here, the facilitator stops and updates the model to reflect the movement of
information from the order desk to Credit. The facilitator also has the option
at this point to reflect the computer system interaction that was discussed.
Figure 6-5 illustrates what the model would look like if it was updated for
both.
64
Figure 6-5 - Sales Order Sent to Credit department

Customer Calls in Order
Sales Order Desk
r
de
r
sO
er
t
En
Sales Order
System
r
rde
O
h
ug
o
R
pproval
Order for A
Customer
Credit Department
Notice that the arrow labeled Enters Order is a two-way arrow. This
denotes the interaction between the order desk and the sales order system
(system). Since the system does not contain people, it is drawn as a rectangle.
In addition, notice how some lines appear to be action oriented customer
calls in order vs. rough order, which is just a type of order. Each is okay.
The key here is communication and understanding. Generally, the more
complete the text on the line the better. Rough order, could have read
rough order is printed, That also would have been okay. Finally, notice
that the model has no crossed lines. To make the model readable, minimize
crossing lines. Too many crossed lines makes the model look like a plate of
spaghetti and meatballs and is difficult to read.
At this point, the facilitator has one more decision to make before going on:
whether to take time now to talk about the system issue raised by the
knowledge worker. If the decision is yes, then the facilitator simply turns the
WFL1 model over the back of the flip chart and starts a new change analysis
page. If the answer is no, the facilitator will want to make a note on the next
flip chart page to discuss the system issue later. Either way, the issue must be
dealt with sufficiently to allow the group to deal with it and move on.
65
To continue building the model, the facilitator turns to the Credit department
knowledge worker and asks, What happens next to the order? A similar
dialogue ensues and the model is updated. The dialogue continues with the
group until there are no more communications required to process an order
through a VADS cycle.
As the model unfolds, there will be times when the knowledge worker will
respond to the What happens next? question with something like It
depends. Since the model syntax, by design, does not support choices, the
facilitator must focus on one choice at a time. Here the facilitator asks the
knowledge worker to talk about the option that happens most often or
represents the process when it works correctly. Once a choice is made, it is
written at the top of the model as an assumption. In the example, the Credit
Manager must make a choice to approve or deny the order. Since order
approval happens more often than not, that choice is taken. However, another
model may need to be drawn of the process when the order is denied. This
will be done in a subsequent work session.
The first version of a VADS always should be the positive view
(when things work right). A positive view model can always be
challenged at each step in the process for what happens when the
process breaks down.
Once the model appears to be completed, the facilitator performs some realtime diagnostics with the group. The first diagnostic is to ensure that the
model has no loose ends. Specifically, the facilitator is looking for arrows
pointing to process groups and/or data stores that are open-ended. Assume
the example appeared as depicted in Figure 6-6.
As the facilitator begins the diagnostic process, a number of discrepancies can
be identified:
Billing posts the customers payment to the sales order system.
However, nowhere on the model does Billing ever receive the payment
from the customer. There is no line between the customer and Billing
to reflect the receipt of a payment.
Billing invoices the customer. How does billing know to do this?
There is no indication of an invoice ever being sent to the customer.
A system is reflected in the model. The facilitator can logically ask
how it is used in context to tracking the customers credit status. If the
Credit department does not use the system, then what files or
paperwork is being used to track this information?
66
One by one, these questions are discussed with the group and the model is
updated as needed.
Figure 6-6: Pre-numbered Level 1 Workflow Model
ASSUMPTION: Sales order process when credit is good, inventory is in stock and the customer pays on time.
- C u sto m e r C a lls in O r d e r
-
Customer
Sales Order Desk
-
gh
Sales Order
System
- B il le
- P ost
P aym e
nt -
- S h ip p e d O rd e r -
ou
rd
er
va l -
de
d Or
-R
pro
fo r A p
er
r
- O rd e
er
rd
r-
nt
Billing
Warehouse
- Approved Order -
Credit Department
When the model is completed to the best of the groups ability, the facilitator
starts from the beginning and numbers it. Numbering the steps in the model
does two things. First, it allows the knowledge workers to walk through the
model again, helping to ensure it is accurate. Second, it provides the
sequential cause and effect relationships needed to understand the
information flow and related stimulus triggers.
The facilitator should select a different colored pen to number the model.
This allows the eye to quickly trace the numbers from one point to the next.
By the time the facilitator has completed numbering the model and making
any needed updates, the group has actually walked through the VADS four
times as follows:
Change analysis - a negative view of the process
67
Undiagnosed version of the WFL1 model

Diagnosed version of the WFL1 model
Numbered version of the WFL1 model
Going through the model multiple times is important because each time the
process is walked through; it becomes a more accurate reflection of what
really happens. By the time the work session is done, the VADS will have
been reviewed four more times. Each pass through the VADS will add
incremental value to it.
At this point in the work session, the knowledge group has developed a
change analysis and a numbered WFL1 model. This has taken about an hour
and fifteen minutes of the scheduled two and one-half hours.
At this point, the number model appears as shown in Figure 6-7.
68
Figure 6-7 Numbered Level 1 Workflow Model
A SSU MPTIO N: Sales order process when credit is good, inventory is in stock and the customer pays on time.
1 - Customer Calls in O rder Sales Order Desk
s O
rd e r
r -
8
- F in a liz e O rd e
r
& P rin t In v o ic e
-
Sales O rder
System
Billing
- Post P aym ent -
11
5
ev
- Or
der
fo r
B i ll i
in g
-
- R
ie
ws
Cr
ed
it
-
Warehouse
- Approved Order -
Credit Department
Now each communication line on the model is numbered. This number

indicates the sequence of communications. Each communication is dependent
on the prior communication. For example, the warehouse needs to have an
approved order from the Credit department before it can ship that order to the
customer. This is because the information on the approved order is required
by the warehouse (who to ship to and how much product to ship).
The model does not reflect what procedures are performed by each process
group on the sales order being processed. The identification of these
procedures will be completed on the next model to be developed.
69
O r de r f o r A p p ro v a l
- R
ou
gh
Or
de
- En
te r
- M a i l In
v o ic e
10
- S h i p p e d O rd e r -
Paym
ent
Custom er
One final note on the above model. Notice that there are two 7s emanating
from the warehouse process group. This represents a distribution of
paperwork.
The communications happen almost simultaneously and are not sequentially
bound, therefore they are numbered the same. Do not worry about making the
model perfect at this point. There is still a set of diagnostic work sessions and
two more facilitation work sessions to be performed to clean up any loose
ends.
The above example did not depict any constraint boundaries or
inbound/outbound T connectors. These will be explored later in the case
study.
Review
The project team and knowledge workers have now completed 8 to 12 change
analysis items and a depiction of the VADS process via the Level 1 Workflow
model. The WFL1 provides a basic picture of how information is shared
between process groups when processing an order from the customers initial
call through payment.
About 1 hour and 15 minutes has elapsed since the start of the work session.
The team now has the information needed to build a Level 2 Workflow
Model. The Level 2 Workflow Model will provide a more detailed view of
the VADS and will be developed next.
Building the Level 2 Workflow Model

The Level 2 Workflow Model (WFL2) is developed immediately after the
WFL1 model during the facilitation work session. It represents an expanded
view of the WFL1. The WFL2 provides the detail needed to understand what
procedures are performed during the VADS process. The WFL2 also
identifies the phases through which the primary object (in the JMI example-a
sales order) moves during a VADS cycle. Each column of the model
represents a phase within the VADS. Each phase has five components as
follows:
Beginning Status - The beginning status appears at the top of each
column of the model. It indicates the status of the primary object
before the subsequent procedures take place.
Procedures - The procedures appear beneath the beginning status. The
procedure section lists the actions that must take place to move the
object to the ending status. These actions reflect all the information/
70
communication steps found in the WFL1 model plus the critical steps
taken within each of the process groups.
Ending Status - The ending status appears next on the model. It
reflects the status of the primary object of the VADS after the
procedures have taken place. The ending status becomes the beginning
status of the next phase on the model.
Lapsed Time - The lapsed time is how long it takes to complete the
related phase of the VADS. It can be expressed in any unit of time
(days, hours, minutes, etc.). Comparing lapsed time with level of effort
can help to identify workflow bottlenecks and improvement
opportunities. If the lapsed time is greater than the level of effort, there
could be an opportunity for improving the VADS in that area.
Level of Effort - The level of effort represents the actual labor needed
to perform the procedures of the VADS phase. This too, can be
expressed in any unit of time. The cost per hour of those performing
the VADS multiplied by the total hours of effort provides an estimate of
the cost to complete one cycle of the VADS.
The WFL2 model provides a snapshot of the phases, procedures, time frames
and effort needed to complete a single cycle of a VADS. Once the number of
cycles that occur per year are established, an estimate of the total cost of the
VADS to the company can be developed. This cost can be evaluated in light
of the VADS contribution to the organization to establish its ROI or cost
benefit.
The WFL2 also provides insights as to the number of objects being
transformed (changed) during each cycle of the VADS. With that knowledge,
the group can assess whether the record keeping and information systems are
being properly updated to reflect these transformations.
The WFL2 model becomes a focal point for linking situations identified in the
change analysis to specific phases and procedures within the VADS. It also
becomes the vehicle for conceptualizing how work processes can be changed
to achieve the objectives and goals identified by management and the
knowledge workers.
The Level 2 Workflow Model is the pivotal model of a HELIX Discovery
project. Around this model a framework can be established for:
Understanding where specific improvement opportunities exist in the
context of how work is done,
71
Pinpointing flaws and improvement opportunities in existing

information systems that support VADS,
Establishing the cost/benefit relationship of the VADS to the
organization and its stakeholders,
Aligning business objectives of the organization to the actual business
activities that achieve those objectives,
Conceptualizing new VADS and related systems, policies and
procedures for achieving breakthrough improvements.
During the work session, two WFL2 models are developed. The first reflects
the existing VADS based on the WFL1 model. The second represents a
concept for a new VADS that achieves managements project objectives and
achieves the goals identified by the knowledge workers.
There are six rules related to the WFL2 model construction.
Rule 1: Each phase must be sequentially dependent on the successful
completion of the preceding phase.
Rule 2: Each phase must reflect all the communication steps contained in the
related WFL1 model and the process group actions needed to transform the
main object of the VADS from its current status to the next.
Rule 3: Each phase can only contain one transformation to the primary object.
Rule 4: Each phase must contain at least one input, process and output related
to the primary object.
Rule 5: Each phase must identify secondary objects and any transformations
taking place on those objects within that phase of the VADS cycle.
Rule 6: Each phase must contain estimates for the lapsed time and actual level
of effort needed to complete the phase.
Figure 6-8 illustrates a skeleton of a WFL2 model form with three levels.
Typically, a WFL2 will have between three and eight phases. There are rarely
more than five objects being transformed within any one VADS. Like the
WFL1, the WFL2 model is easy to read without understanding its nuances and
syntax.
72
Figure 6-8: WFL2 Skeleton Format
VADS Name: __________________________

VADS Reference: WFL2 - ___________________
VADS Cycles per Year: __________________
VADS Estimated Annual Cost: _______________
Beg. Status
Assumption: [from WFL1]: _________________________________________________
Phase B
Phase C
The Status of the Object

when the Cycle begins
Phase A's Ending Status
Phase B's Ending Status
1 Text about action
1 Text about action
1 Text about action
2 Text about action
2 Text about action
2 Text about action
3 Text about action
3 Text about action
3 Text about action
4 Text about action
4 Text about action
End Status

when the Phase ends

when the Phase ends
The Final Status of the

Object. When no more
transformations can take
place and the Cycle ends.
Lapse
Time
5 Text about action
Time it takes to go from

first to last procedure


Effort
P
R
O
C
E
D
U
R
E
S
Phase A
Labor it takes to complete

the phase

the phase

the phase
It takes from 10 to 20 minutes to complete the existing version of the WFL2

model during the work session. The model is drawn on the flip chart. Using
the WFL1 as a starting point, the facilitator draws the first column (phase) and
asks the group what label they want to give as the VADS starting point. In
the case study this is: A customer wanting to order product.
73
The facilitator then asks, What is the first thing that happens on the WFL1?
(This is posted in full view in the room). Looking at the first item on the
chart, the groups response is: The customer calls the order desk with an
order.
Hint: As the facilitator, it is often a good idea to walk over to the
WFL1 and point to the first communication line to draw the groups
attention to it. After that, they will understand what is being asked.
The facilitator writes down the groups response as the first procedure. The
facilitator then turns to the order desk knowledge worker and asks him to
describe the actions taken on the order before it is sent to Credit for approval.
Here the knowledge worker talks his way through all the processes that take
place. This might go as follows:
Knowledge Worker: First, I bring up a new order screen and identify
the customer on the computer. Then I enter the order information. I
confirm the inventory availability and ship dates with the customer.
Then I print out the rough order and send it to Credit for approval.
Combining this information with the data on the WFL1 model, the facilitator
updates the WFL2 model.
The result to this point appears in Figure 6-9.
Once the order was entered, its status became rough. Technically, the order
(the primary object) has transformed at this point. However, until it is printed
and sent to Credit for approval, only the order desk person who entered the
order knows that the order status has changed. The act of sending the order to
Credit and its subsequent receipt becomes the stimulus trigger for taking more
action on the order.
74
Figure 6-9: Phase A of WFL2 Model
Beg.
Status
Phase A
1 The customer calls the order

desk with an order.
2 Order desk identifies the customer
and enters order via order entry
screen.
3 Inventory availability and ship
dates are verified with the customer.
4 Rough order is printed and sent
to credit for approval.
Rough sales order pending credit approval
Effort
Lapsed End
Time
Status
P
R
O
C
E
D
U
R
E
S
A customer wanting to order product
At this point the facilitator will do a quick test of the model by using the
WFL2 rules to help ask clarifying questions, if any, of the group.
Since this is the first phase of the cycle, there are no prior phases. Rule
1 does not apply to the first phase of the model.
related WFL1 model and process group actions needed to transform the main
object of the VADS from its current status to the next.
Looking at the WFL1 model reveals that the group is now at step four
Order for Approval. This means there should be four
communications represented in phase A of the WFL2. In this case, the
four procedures correlate exactly with the WFL1 model.
75
Had the order desk performed other steps, such as stamping the order or
keeping a copy for reference, this correlation would not be so exact.
The key is that the WFL2 has to have the number of communications
represented on the WFL1. It can have more procedures, it just cannot
have less.
The only question that comes to mind at this point is one related to the
sales order system. Other than printing the order, what else does the
system do? If this observation were overlooked at this point, it would
be picked up in the diagnostic work sessions later. Just as the
facilitator wants to know what people do with information, the
facilitator also wants to know what systems do with information. In
this case study, by asking the question now, the facilitator might have
learned the following:
Knowledge Worker: The system simply stores the order with a status
of rough.
The facilitator updates phase A with this information.
Rule 3: Each phase can only contain one transformation to the primary
object.
What is the primary object of this VADS? Is it the customer, the
inventory or the order? The answer comes from examining the what
that is being moved through the VADS.
The primary object of a VADS is the subject matter that is being
moved between process groups via the communication lines.
In the example, the primary object is the order. In the first phase, the
order went from a status of nothing to a status of rough order. It
changed its state, it transformed. Phase A passes rule 3.
Rule 4: Each phase must contain at least one input, process and output
related to the primary object.
What is the input to phase A? In the example, it is the
customer calling the order desk with an order. The stimulus
trigger (the customers call) sets the order desk into action and
results in the entry of the order into the sales order system.
What is the process in phase A? The order desks interaction
with the customer and related data entry function represent the
process that transforms the order from nothing to rough.
76
What is the output in phase A? There are two outputs. The

first is the output of the system storing the order with a status of
rough. The
second is the physical sales order itself,
which is printed and sent to
Credit for approval. Phase A
passes rule 4.
Rule 5: Each phase must identify secondary objects and any
transformations taking place on them within that phase of the
VADS cycle.
Are there any secondary objects explicitly or implicitly
referenced or transformed in phase A? The answer is yes. To
identify these objects look again at the WFL1 model. On the
model, there are clues about secondary objects. Those clues
reside in the text written in the process group ovals and on the
communication lines. There are three process groups involved in
phase A: the customer, the order desk and Credit. By asking:
Does the company track or want to track any information about
the process groups or subject(s) being communicated in context
to this VADS?
The facilitator can determine if secondary objects exist. Asking
this question about the customer process group the answer is yes,
because JMI wants to know who its customers are, where they
are, what they have purchased, how much they owe, etc. Given
the answer is yes, the facilitator now asks:
As a result of the procedures performed in phase A, has
anything about the customer changed?
According to the model, thus far the answer is no. However, in
actuality, the customers credit line has changed by the value of
that order (assuming it is not COD). Nowhere in the model has
this been explicitly indicated. Two possibilities arise at this point.
Either the model is wrong (it does not reflect what procedurally
happens) and must be updated or the model is correct (reflects
what procedurally happens) and, therefore the process is flawed.
If the process is flawed, the possibility exists for the customer to
order product that exceeds their credit limit. In JMIs case,
assume the model reflects the actual way the company does
business and there is a flaw in the process and related record
keeping. Reviewing the change analysis will indicate whether
the flaw has been addressed yet. If it has not, the facilitator
77
would update the change analysis with a new current situation

and develop a preliminary goal that resolves it.
This initial update might appear as in Figure 6-10.
Figure 6-10 - Credit Limit Example
Change Analysis
Cu rren t S ituation
3
T h e c u s to m e rs c re d it lim it is n o t
u p d a te d in th e c o m p u te r u n til th e
s a le s o r d e r is a p p ro v e d b y t h e
c re d it d e p a rtm e n t.
T h is s o m e tim e s r e su lt s in t h e
c u s to m e r b e in g s o ld
p ro d u c ts b e y o n d w h at th e ir
c re d it lim it s u p p o r ts .
W h e n th is h a p p e n s , it is
e m b a rra s s in g fo r t h e
c u s to m e r a n d e x p o se s th e
c o m p a n y to a p o te n tia l b ad
d e b t.
P reliminary G oal
T h e a b ility to u p d a te th e c u st o m er s
c re d it lim it a t t h e t im e t h ey p la c e
a n o rd e r
T h is w o u ld allo w th e o rd e r d es k to
c a tc h p o te n tia l c re d it lim it
p ro b le m s b e fo re th e o r d er is
ta k e n a n d a d e liv e ry d a te
p ro m is e d .
T h is w o u ld im p ro v e cu s to m e r
s e rv ic e an d r e d u ce b a d d e b ts .
Based on the review so far, it can be deduced that the customer is

a secondary object that transforms in phase A and that the current
VADS fails to recognize the credit limit transformation correctly.
Are there other secondary objects reflected in the process
groups that transform in phase A? The sales order desk and
Credit departments are not objects that make sense to track in
the context of this VADS. JMI might want to track the number
of orders processed and approved each day, or track some other
aspects of the two departments productivity and efficiency. That
efficiency would always be stated in terms of those departments
efficiency in handling objects like customers and orders, not in
terms of the physical characteristics of the departments (square
feet of work area, furniture, etc.).
78
The final area in which to look for secondary objects is on the

communication lines. It has already been determined that the sales
order is the primary object of this VADS. However, the facilitator
will still want to ask a few questions about the primary object. The first
question is: What subjects of information does the primary object
address?
In the example, the order deals with two subject matters. The first is
the customer. The second is inventory or product. Since the customer
has already been identified as a secondary object, nothing more needs
to be done at this point.
How does the facilitator know that inventory is a subject related to the
order? There is nothing on the WFL1 about inventory. However,
product and inventory are mentioned in phase A of the WFL2. Product
is referenced in the Beginning Status and inventory is mentioned in
procedure 3.
The facilitator does not need to be pre-educated about order processing
or customer and inventory management to know this. They are simply
looking for nouns and pronouns for clues. As nouns and pronouns are
found on any of the models, they should act as stimulus triggers for the
facilitator to begin asking subject and transformation-oriented
questions.
Does inventory transform in phase A? Again, the answer is yes, but
this model does not reflect any such transformation. However, there is
in fact, less inventory available for sale than there was before the
customer placed the order. As before, the same two possibilities exist
Either the model is incorrect or the VADS has a flaw in it. Assume that
for JMI, the VADS is flawed - that JMIs procedures and records do not
accurately reflect reality for orders in the rough status. The action is
to update the change analysis and move on.
Although phase A passes rule 5, the testing of the phase has identified
flaws in the VADS with respect to the customers credit limit (not
beingreduced for the value of the order) and the inventory (quantity
available for sale not being reduced for the quantity ordered). These
flaws will need to be resolved in the proposed VADS.
Rule 6: Each phase must contain estimates for the lapsed time and
actual level of effort needed to complete the phase.
How long does it take to move an order from the point of the customers call
to the point when the rough order is sent to Credit for approval? How much
79
labor is involved? Looking at phase A we see that this data has not yet
been entered. Here, the facilitator would ask the group for their best guess
as to lapsed time and labor. The facilitator is not looking for precision here,
for a relatively accurate approximation. Later, if needed, the estimate can be
honed. Assume for now that, on average, it takes about 5 minutes to enter and
print an order. Because the process is interactive, assume that there is also 5
minutes of labor expended.
Now that the facilitator has completed the quick test of phase A, the models
can be updated and the group can move on to modeling the rest of the phases.
At this point, the models appear as shown in Figure 6-11
Figure 6-11: Models After Application of Rules.
Change Analysis
Cu rren t Situation
1
It takes too long to process sales orders

through Credit.
Too Long = more than 45 minutes from the
time the Credit Manager receives the
order from the order desk until the time
the order is released to the warehouse
for shipping.
This is bad because it means that orders
received after 2 p.m. cannot be shipped
until the next business day. This results
in poor customer service.
Preliminary G oal
The ability to process work orders directly to the
warehouse where the customers available
credit line is greater than the order amount
and his outstanding balance is current.
This would require a change to our order
processing system.
Specifically, it would require the system to
automatically check the order for credit-related
data and route it to the appropriate location
(credit department or warehouse).
80
Change Analysis
Current Situation
2
Inventory is often over sold resulting in

missed delivery dates, poor customer
service and / or canceled orders.
Preliminary Goal
The ability to reserve inventory at the time the
order is taken.
This happens because the inventory is

not reserved at the time the order is
taken.
This would make the inventory records more

accurate and would insure that the stock
would be there when the warehouse went
to ship it.
About 12 to 18 orders are lost a day due

to inaccurate inventory.
This would increase sales by about $ 57,000

a day.
Figure 6-11 Models After Application of Rules (cont.)
C hange Analysis
Cu rren t Situation
3
The customers credit limit is not updated

in the computer until the sales order is
approved by the credit department.
This sometimes results in the customer
being sold products beyond what
their credit limit supports.
When this happens, it is embarrassing
for the customer and exposes the
company to a potential bad debt.
Preliminary G oal
The ability to update the customers credit
limit at the time they place an order
This would allow the order desk to catch
potential credit limit problems before the
order is taken and a delivery date
promised.
This would improve customer service and
reduce bad debts.
81
ASSUMPTION: Sales order process when credit is good, inv entory is in stock and the customer pays on time.
1 - Customer Calls in Order Sales Order Desk
rder
Customer
Ord
er -
8
- Finalize Order
& Print Invoice -
Sales Order
System
Billing
- Post Payment -
11
s
iew
ev
- Ord
er
Billiin for
g-
-R
Order for Approval
- Ro
ugh
10
- Ent
ers O
Payme
nt
- Mail Inv
oice
- Shipped Order -
it
ed
Cr
-
7
6
W arehouse
- Approved Order -
Credit Department
82
Beg. Status
Figure 6-11 - Models after application of rules (cont.)

Phase A
Phase B
Phase C
Phase D
Phase E
Rough sales order pending credit

approval
Approved sales order ready for

shipping
Shipped sales order ready for billing
Billed sales order pending collection
P
R

desk with an order.
1 Credit receives rough order from

the order desk.
1 Warehouse receives order

from Credit.
1 Billing receives order from

warehouse.
2 Order desk identifies customer

2 Credit retrieves order from

system and verifies the credit
2 Warehouse picks order and

updates quantities picked on
2 Billing retrieves order from the

system and enters the actual
C
E
D
screen.
limit.
the order form.
3 Credit reviews customer's

dates are verified with customer.
4 Credit approves order on system,
to Credit for approval.
stamps it approved and forwards
3 Warehouse packages and

ships order to customer.
4 Warehouse sends shipped
order to Billing.
3 The system updates inventory,

adjusts the customer credit limit
and creates the invoice.
4 Billing prints the invoice and
mails to customer.
posts the payment.

4 The system updates the
customer's credit limit and
End
Status
accounts receivable balance.

approval

shipping
Collected sales order
Lapsed
Time
it to warehouse for shipping.
3 Billing retrieves the customer's

invoice from the system and
5 minutes
2 days
1 day
2 hours
45 days
Effort
E
S
outstanding A/R.
quantities shipped.
1 Customer receives the invoice.

2 Customer sends payment to
billing.
5 minutes
45 minutes
1 hour
10 minutes
10 minutes
85
Review
The three core models have now been completed. About two hours of the two
and a half hours has been spent in the work session. There are a few more tasks
to be completed before the work session is over. These tasks are:
Correlate, MAP, the existing situations from the change analysis with
the WFL2 model.
Develop a proposed WFL2 model that will reflect how the VADS might
function if the preliminary goals from the change analysis were
achieved.
Correlate the project goals to the proposed WFL2.
Review session accomplishments and make any data collection
assignments needed to support and clarify the VADS models developed.
Correlating Situations to Workflow - First proof of

Correctness
The next step in the work session is to conduct the first Proof of Correctness.
This is done by correlating the situations developed in the change analysis (CA)
to the WFL2 model. The process of mapping these two models together will
verify that all the situations identified apply to the WFL2. If the change analysis
does not correlate to the WFL2, it could mean one of the following:
1. The current situation of the change analysis applies to a different
VADS. If this is true, a decision will be needed to determine if the VADS
in question is to be added to the scope of the project.
2. The WFL2 of the current VADS is incorrect. If this is the case, the
WFL2 will need to be corrected before continuing with the correlation
process.
3. Both 1 and 2 are true.
The correlation process is done by indexing the current situations, via their
number, directly onto the WFL2. This technique helps the group visualize where
each situation occurs within the workflow. Knowing this will help the group to
develop a proposed WFL2 (a Level 2 Workflow Model that represents an
improved VADS).
The facilitator starts the process by working with the group to determine where in
the WFL2 the first situation from the CA occurs. Once this location is identified,
86
the facilitator will write the number of the situation next to the procedure or at the
top of the phase where the situation correlates. To help the group see this
correlation clearly, the facilitator uses a red marker pen.
The facilitator will continue this process until all the situations are correlated to
the VADS being worked on or linked to another VADS.
Once this is completed, the facilitator will conduct a quick test of the correlated
data to ensure it reflects where a situation was introduced into the VADS and
where its impact is felt throughout the VADS. Both of these mappings are
important.
Understanding where the situation is introduced into the VADS points to where
the VADS will need to be changed. This coordinate on the WFL2 will make
developing new concepts and procedures to achieve the project objectives and
preliminary goals much easier.
Understanding the impact of a situation in terms of disruptions to the current or
future cycles of the VADS will help everyone understand how the situation
detracts value from the stakeholders it is intended to benefit. The facilitator must
ripple the occurrence of each situation through the current cycle and future
cycles. It is possible that an error in a VADS in cycle 1 may not cause erroneous
actions or decisions until cycle 2 or beyond. It is also possible for the results of
an error introduced in one VADS to be manifest in another VADS.
For example: Overselling inventory, followed by customers canceling their
orders because of missed delivery dates might cause the purchasing department
to buy more stock than is actually needed.
This multiple VADS situation typically occurs when erroneous information about
the status of an object is introduced into the organization. This erroneous
information becomes a false stimulus trigger to a workgroup and seemingly
correct actions are taken in error. In the example, the overselling of inventory
created an out-of-stock condition. This out-of-stock status on the inventory
triggers purchasing to replenish the stock in order to satisfy future demand. The
subsequent event of order cancellations by disgruntled customers reduces the
back order situation that created the out-of-stock state. The net result is an
overstock situation.
In rippling each situation through the VADS, the facilitator wants to be sensitive
to any situation that erroneously influences primary and/or secondary objects.
When this occurs, the facilitator should have the group identify any other VADS
that use this object. Each VADS identified may represent an increase in the
scope of the project. Remember, adding a new VADS into the projects scope
will require an update to the projects time line and cost.
87
The final step in this correlation process is to determine if any of the project level
objectives can be mapped to the WFL2. The facilitator will repeat the correlation
process for each of the project objectives. Again, this will help focus the group
on where the VADS can be changed to achieve project level objectives. Also, it
will ensure that the project objectives are constantly focused on and dealt with.
Figure 6-12 graphically illustrates the correlation process.
In the case study, three situations have been identified that should correlate
directly with the Sales on Account VADS. There are also four major project
objectives. Taking each one in sequence, they can be correlated to the WFL2.
Figure 6-12 - Correlation Process
Correlating Situations to Workflow

First Proof of Correctness
Situation
Goal
A. No inventory
available
No shortfalls
B. Slow
.collections
Average
38 days
Isolating
Isolatingproblems
problemsalong
along
flow
line,
helps
flow line, helpspeople
people
visualize
visualizewhere
whereproblems
problems
occur
and
occur andget
getleverage
leverage
on
onchange.
change.
Existing WFL2
Beg
Status
P
r
o
c
e
d
u
r
e
s
End
Status
Customer wants
product
Open Order
1. ------ 1. -----2. ----A

3. ----- 2. ----4. ---3. ----Open Order
Shipped Order
Shipped Order
Billed Order
1. ------ 1. -----2. ----3. ----- 2. B----4. ---3. ----Billed Order
Paid Order
88
Situation #1: It takes too long to process a sales order through Credit.
Where does this situation occur on the WFL2? Analyzing the model (figure 611), we can see that it would logically occur in phase B. This is the phase in
which the order is transformed from the status of rough to the status of
approved.
The question now is: Which procedures cause this process to take too long (45
minutes)? If there were one specific procedure, the facilitator would write the
situation number by it. If the situation applies to the phase in general, due to
volume or some other variable, then the facilitator would write the situation
number at the top of the phase. In this case, assume that the situation is phase
specific and a S1 (situation 1) is written at the top of phase B in red.
Situation #2: Inventory is often oversold resulting in slipped delivery dates,
poor customer service and/or canceled orders.
Where does this situation occur on the WFL2? This situation is a little more
complicated than the first. Even though the error in the status of inventory occurs
in phase A (when the order was taken), it remains benign until the warehouse
goes to pick the product only to find that there is insufficient inventory to fill the
order. Discovering this error in inventory can occur one to two days after the
order is taken. By the time the inventory shortfall is discovered, more of the
same product may have been ordered exacerbating the situation (causing more
shortfalls in inventory). This can also affect the actions of Purchasing.
If the system reflects ample inventory to satisfy demand when, in fact, there is
not ample inventory, purchasing has no reason to replenish it. Once purchasing
becomes aware of the need (warehouse backorders an item), they may tend to
replenish more inventories than needed to compensate for the backorder
situation.
Meanwhile, the customer may try to order more product. However, their credit
limit may not support the purchase. Since the customer has not been billed for
products not shipped, they have not paid for it. They may find it appropriate to
cancel the backorder in order to get product that is in stock. If this happens after
purchasing has filled the backorder, a complete breakdown occurs in matching
inventory to customer needs. Here the facilitator will want to write a number S2
on the procedures A2 and C2. A2 represents phase A, procedure 2 and C2
represents phase C, procedure 2 (figure 6-13).
The facilitator will also want to update the change analysis to reflect the ripple
effect of this situation to the replenishment purchasing VADS.
89
Situation #3: The customers credit limit is not updated in the computer
until the order is approved by Credit.
Where does this situation occur on the WFL2? Again, it appears to relate to
phase B. Specifically, the approval occurs on procedure B4. The complication
related to this situation occurs when the customer orders more products before
the credit limit is updated. This can cause the customers credit limit to be
overstated and potentially result in a collection problem in procedure E2
(customer sends payment to billing).
What happens when Credit discovers the problem during a subsequent
cycle? It is here a potential for poor customer service arises. The customer
might be upset that they were not notified of the situation at the time the order
was taken. The customer might be embarrassed, cancel the order and reconsider
doing business with JMI.
Finally, when this event occurs in conjunction with situation # 2, the customer
will find himself in a Catch 22 dilemma. The customer may find it easier to
cancel all outstanding orders rather than address the problem. This can result in
JMI experiencing a serious loss of business and goodwill.
On the WFL2, the facilitator places a S3 by E2 (customer sends payment to
billing).
Project Objective #1: Improve our customer service levels and beat the
competition by reducing the time it takes to process an
order from the order desk through shipping from five to
two days.
Where does the WFL2 keep this objective from being achieved? Here, there
is a conflict in the data. The knowledge worker group has indicated that it
presently takes about three days to process an order. This is calculated by adding
the lapsed times of phases A, B and C. The management believes it to take five
days. Both cannot be right. Here the facilitator may want to dig deeper into this
difference in perception. For now, the facilitator simply notes the difference.
From the first three situations, we can see that there the process that can be
improved by resolving existing impediments. We can also see that improvements
related to project objective 1 will need to take place in phases A, B and C.
Therefore, the facilitator would post objective 1 (PO1) on the model at the top of
these phases.
Project Objective #2: Increase our sales by over $40 million a year by
keeping lost sales resulting from stock shortages to less
than two per day
90
Where can stock shortages occur in WFL2? The first place they can occur is
during the ordering process. Since the inventory quantities are most likely
overstated in the system, the order desk will tend to sell more than is available.
As previously seen, this flaw in the WFL2 corrupts the inventory object and
causes a ripple effect through Purchasing, creating a state of disequilibrium in the
management of inventory.
Resolving situation # 2 of the change analysis will contribute to achieving this
project objective.
Therefore, the team would place a reference to objective #2 (PO2) at A2 on the
WFL2.
Project Objective #3: Improve our collections by identifying when a
customer has a three day change in their paying habits.
Where does the customer have the opportunity to pay for the order?
Looking at the model, we can see that the payment cycle begins when the
customer receives an invoice. The time between the day the customer has the
invoice and remits a payment constitutes the number of days it takes the customer
to pay their bill.
Over time, the average number of days to pay could be calculated. This average
could be monitored against a baseline to detect a three-day variation. Given this,
is there anything in the current model that would prevent JMI from identifying a
three-day change in a customers payment habit? The answer is no because the
process records invoices billed and payments received in a logical and timely
manner. So, why isnt this being done? Is there another VADS that needs to be
reviewed? The answer lies in the assumption on which this VADS is based.
This version on the VADS assumes that the customer pays on time. What
happens when the customer does not pay on time? Is there another VADS for
this or a variation on this VADS?
For now, assume there is a collection process for collecting invoices that are past
due. This will have the same A through D phases as the current WFL2. The
process changes occur after the customer fails to pay on time. Project objective
#3 does not map to the current WFL2. However, in a subsequent work session,
the facilitator will need to model the procedures that take place when a customer
does not pay on time. The facilitator will need to develop a concept with the
knowledge workers on how payment habit variations can be monitored in order
to achieve project objective #3.
Project Objective #4: Become the industry leader by increasing sales
volume by 30 orders per day.
91
How does this objective correlate to the Sales on Account VADS ? Is

there anything in the VADS that keeps the sales volume from
increasing? The answer is yes and no. The VADS has the tendency to
promote lost sales through the overselling of inventory. Resolving that flaw will
contribute to increased sales volume. So the facilitator would post objective #
(PO4) to A3 (inventory availability and ship dates are verified with the customer)
on the WFL2. However, at best that will only account for about 12 orders a day
(lost sales). Where will the remaining 18 orders come from? Again, the
facilitator asks the question: Are there other VADS that influence sales
volume?. In the case study, we find that JMI has a Field Sales and Marketing
group. The team might learn that this group is responsible for promotion sales,
trade shows and direct sales calls. Since this is the case, it is likely that the
projects scope would be expanded to understand how the related VADS function
and how they might be improved.
Figure 6-13 presents the WFL2 model after completing this correlation process.
(Note: Situations start with an S and Project Objectives start with PO):
92
Figure 6-13 -- Existing WFL2 after Correlation process.
Beg.
Status
Phase A
P
R
O
C
E
D
PO1
desk with an order.
Phase C
Phase D
Phase E

approval
S1 PO1

shipping
PO1

the order desk.

from credit.

warehouse.

the order form. S2

quantities shipped.

PO4

outstanding A/R.


adjusts the customer credit limit and
creates the invoice.

stamps it approved and forwards
S3

order to Billing.

mails to customer.

posts the payment.
4 The system updates the customer's
credit limit and accounts receivable
balance.
End Status

limit.

Billing.
S3

approval
Approved sales order ready for shipping
Lapsed
Time

screen.
S2
PO2
5 minutes
2 days
1 day
2 hours
45 days
Effort
U
R
E
S
Phase B
5 minutes
45 minutes
1 hour
10 minutes
10 minutes
93
Notice how the clustering of the Existing Situations on the WFL2 draws the eye
to specific areas of the model. Reviewing these clusters provides clues as to
where change will most likely need to occur in order to streamline the VADS,
correct inherent flaws and achieve the preliminary goals contained on the change
analysis and in the related project objectives. When situation clusters are
accompanied by large differences between the lapsed time and the level-of-effort
data for a phase, bottlenecks in workflows are most likely to exist.
This correlation process is the first step in helping the VADS knowledge
workers visualize what and where improvements to the current way of doing
work should occur.
Probably for the first time they will have a Big Picture understanding of how
the work they do relates to other coworkers and customers.
This is a significant achievement. The group is now ready to create a new WFL2
model that will depict the VADS as it could be.
Correlating Goals to Conceptual Workflow - Second Proof of

Correctness
Now that the change analysis and project objectives have been correlated to the
existing WFL2, the group is ready to begin building a proposed WFL2. The goal
of the proposed WFL2 is to present a new workflow that achieves the preliminary
goals established on the change analysis and contributes to the achievement of
the project objectives.
Starting with a fresh flip chart page, the facilitator quickly roughs out the phases
of the VADS in the WFL2 format. Referring to the existing WFL2, the facilitator
begins talking through each phase and procedure. As situations or project
objective annotations are encountered, the facilitator asks the group what would
need to change in order to achieve the preliminary goal associated to the situation
and/or the project objective referenced. As the groups dialogue ensues, the
facilitator listens for consensus.
94
Sometimes there will be a group mental block stalling the creative process.
When mental blocks happen, the facilitator can throw out an idea to the group.
Typically, this would start with the phrase:
What would happen if . . .
-orLets try out this idea and see where it leads us?
The facilitator needs to use this technique sparingly. The group must own the
ideas generated. When a facilitator offers too many concepts, he or she runs the
risk of having the group abdicate ownership, leaving the facilitator with a model
that has no buy-in and thus no support from the group. If the facilitator senses a
rejection and/or abdication of an idea he or she offers, it should be scrapped and
new concepts pursued. The facilitator should never defend or fight for a concept
not supported by the group.
As different concepts surface which seem to have the seeds of consensus, the
facilitator works the concept through the model. This process helps the group
think through the viability of the concept. It also allows them to assess the
impact of the change on their role in the VADS. Questions like:
Does it create more or less work?
or
Does it increase or reduce the importance of their position?
often run through peoples minds when assessing the impact of change on their
day-to-day work lives. This process is good because it enables each person in the
group to project themselves into the proposed VADS allowing the process of
buy-in to begin.
Palatable concepts are introduced and unpalatable concepts are quickly rejected.
As consensus occurs, the facilitator updates the proposed WFL2 to reflect the
changes. Procedures that do not change are copied from the existing WFL2.
New or changed procedures are posted to the model and a box is drawn around
them to signify that they are new or changed. These new or changed procedures
are also labeled with the number of the goal and/or objective they are supporting.
By the end of the work session, the group will have produced a proposed VADS
that they collectively support and can promote to their coworkers.
After just 2 hours, a significant step toward aligning business objectives to
workflows will have been achieved (see appendix-Factor #11 - Alignment of
Business Objectives to Value-added Delivery Systems and Process Groups).
95
These knowledge workers will be able to articulate how the changes being
proposed achieve their improvement goals as well as those of the organization.
Figure 6-14 - Correlation of Goals to Proposed WFL2 illustrates this correlation
process.
Figure 6-14 - Correlation of Goals to Proposed WFL2
Correlating Goals to Conceptual Workflow

Second Proof of Correctness
Situation
Goal
A. No inventory
available
No shortfalls
B. Slow
collections
Average
38 days
Mapping
Mappinggoals
goalsto
tothe
the
proposed
workflow
proposed workflowhelps
helps
people
visualize
new
people visualize new
procedures
procedures and
andunderstand
understand
operational
impact.
operational impact.
Proposed WFL2
Beg
Status
P
r
o
c
e
d
u
r
e
s
End
Status
Customer wants
product
Open Order
Shipped Order
Billed Order
1. ------ 1. ------ 1. ------ 1. -----2. ----2. ----3. A----- 2. ----- 3. ----- 2.B ----4. ---4. B---3. ----3. ----Open Order
Shipped Order
Billed Order
Paid Order
Change
ChangePoints
Points are
are
Identified
Identified
In the case study there are three goals and three objectives (1, 2 & 4) that the
proposed VADS must achieve to be viable. The following presents how the
Sales on Account VADS might be changed to achieve these goals and objectives.
The language of the goal has been paraphrased for the sake of brevity.
Preliminary Goal #1: The ability to print orders directly to the warehouse
when the customers credit line and outstanding balance
are okay.
By looking at the correlated existing WFL2 model, the facilitator can quickly
pinpoint where current situation #1 occurs. Since preliminary goals have a oneto-one correlation with current situations, it is most probable that the changes
96
needed to implement the preliminary goals will most likely occur on or before the
point where the current situation is posted.
Situation #1 occurs at phase B. However, preliminary goal #1 indicates that in
order to approve orders for printing directly to the warehouse, the system would
need to test the order during the order entry process, which is in phase A. The
facilitator verifies this with the group and asks them to indicate where the change
should be made and to provide the wording to be used on the proposed WFL2.
This is important because the group, not the facilitator, must own the proposed
WFL2.
The facilitator updates the model with the wording, draws a box around new or
changed procedures and labels them with a PG1. Based on the correlation of
preliminary goal #1, the proposed WFL2 would reflect the following changes.
A2 (order desk identifies customer) would include a check of the
customers outstanding account balance to determine if it was current. The
system would flag the order as clearing the credit check since, in this
version of the WFL2, the assumption is the customers account balance is
current.
Procedure A4 would be changed. The new procedure would total the order
and compare the total order against the customers available credit limit.
Since the assumption is that the credit limit is okay, the system would
update the order to the status of approved and print it directly to the
warehouse. By approving the customers credit during order entry, phase
B (rough sales order pending credit approval) is eliminated. However,
what happens when the order does not pass the outstanding account
balance and credit check process? Since there has been a dramatic change
in the VADS under the assumptions listed, a new version of the VADS
would need to be developed. This version would depict the workflow
when the outstanding account balance and credit are not cleared during the
order entry process. This would be done at another work session.
At this point, the ending status of the order in phase A is an Approved
sales order ready for shipping. By eliminating the need to process the
order through Credit, the cycle time of orders is improved by two days. In
addition, 45 minutes of labor is saved. However, there will be a need to
install one or more printers in the warehouse. This will involve some cost
for the printer and the related cabling as noted in the change analysis.
Preliminary Goal #2: The ability to reserve inventory at the time the order
is taken.
97
Situation 2 (inventory is often oversold) appears at A3 and C2 on the existing

WFL2. When a situation appears on a WFL2 more than once, the facilitator
needs to determine which occurrence represents the source of the problem and
which one represents a symptom. Typically, the first occurrence on a WFL2
represents the source. By implementing a correct change in the model, the source
situation is easily identified. In the case of this situation, it is clear that the failure
to update the inventory for the quantity ordered (A3) is the reason the inventory
is not available for shipping (C2). Therefore, adding an inventory update to the
model in phase A should eliminate related shortfalls in inventory from occurring
in C2. However, this corrective action will not mean that discrepancies in
inventory (what the records show vs. what is actually in the warehouse) will be
eliminated altogether. Since the integrity of inventory is critical to JMI, the
project scope will need to be expanded to include a review of every VADS where
inventory is transformed (increased or decreased).
With the group supplying the wording, the facilitator adds the inventory update to
the model, draws a box around it and labels it PG2. The inventory update occurs
in A4. The new A4 incorporates the reserving of inventory, a new concept, into
the system. This concept of reserving inventory for an order in process might
require a substantial change to the order processing system.
When information system changes are being proposed, it is advisable
to include a knowledgeable MIS applications analyst in the group.
Changes to information systems are typically complex and more difficult to
implement than expected. By including the proper technical staff from the start,
issues related to the complexity of the change can be identified and discussed. In
this case, the systems database may not have a place to store the data about the
inventory being reserved. Unlike PG1 which merely changed where the system
would update the order for approval, PG2 implies that the system is going to be
expected to do something it never did before. This could signify a major change.
98
Preliminary Goal #3: The ability to update the customers credit limit at the
time they place an order.
Situation 3 appears in the existing WFL2 at B4 and at E2. However, the goal is
to perform this credit limit update during order entry at A2 through A4. This
goal appears to have been addressed as part of PG1, where A4 was revised to
reflect the credit approval of the order. Here the facilitator reviews A4 again
with the group and confirms that PG3 is indeed resolved. PG3 is then posted to
the model at A4.
Project Objective #1: Reduce the time it takes to process a new order
through shipment from five to two days.
This goal is posted on the WFL2 at the top of phases A, B and C. Based on the
changes made to the model thus far, it would appear that orders with good credit
and available inventory would meet this goal. The issue about orders that do not
meet this criterion remains. At this point, it would be helpful to know how many
orders per day fall into the version of the VADS being developed. This might
require some research outside of the work session. However, it should be
available by work session number two. Other VADS scenarios of orders, in
which the customer does not pass credit approval and/or when the inventory is
not available will also require discussion at subsequent work sessions. For now,
the facilitator posts PO1 to the proposed model in the lapsed-time row in phases
A and B.
Project Objective #2: Keep lost sales due to inventory shortages to less than
two per day.
PO2 appears at A2 on the existing WFL2 model. Since A4 has already been
changed to reflect the achievement of PG2, the facilitator will review the
proposed A4 to see if it already achieves PO2. Theoretically, reserving the
inventory at the time the order is taken should greatly reduce the potential for
inventory shortfalls in the warehouse. An estimated 12 orders a day were
affected by this situation. The question is whether resolving this specific
inventory problem will achieve the improvement desired. Certainly, it will help.
However, other VADS related to purchasing, such as returns and shrinkage will
need to be reviewed to ensure that inventory is properly aligned with customer
demand. Each of these areas, if not already included in the scope of the project,
would require managements approval before knowledge groups could be formed
and facilitation work sessions conducted. Assume for the sake of the case study
that six of the twelve orders with inventory problems were created because of the
anomaly introduced into the inventory object as reflected in the existing WFL2.
99
Respectively then, the proposed WFL2 can expect to increase order volume by
six orders a day. The facilitator need only post PO2 at A4 in the proposed model.
Project Objective #4: Increase sales order volume by 30 orders per day.
PO4 appears to be tightly linked to PO2 in terms of this VADS. They both
appear in phase A on the existing WFL2 model. By achieving an increase of six
orders a day via PG2, PO4 is supported. Therefore, what is needed to achieve all
of PO4 is to find opportunities in other VADS to increase orders by 24 a day.
The facilitator need only post PO4 by A3 to complete the level 2 correlation
process.
The proposed WFL2 model for JMIs sales order process when credit is
approved, inventory is available and the customer pays on time appears in Figure
6-15.
100
Beg. Status
Figure 6-15 - Proposed WFL2

Phase A
Phase B
Phase C
Phase D

shipping
Billed sales order pending

collection
1 Warehouse receives order via
desk with an order.
printer.

warehouse.
Order Entry Process

P
2 Order desk identifies the

customer and verifies that their
outstanding balance is current via
O
C
the order entry screen. The system

flags the order as clearing O/S
PG1
Balance review.
E
D
U
billing.
the order form.
PO4
4 Upon completion of the order, the
system reserves the inventory

quantities shipped.

posts the payment.


3 For each item ordered, the order

desk verifies the inventory is
available and confirms ship dates.

order to billing.


mails to customer.
being ordered, sets its status to

"Approved" and prints it directly to
the warehouse printer.
PO2
End
Status
PG3
Lapsed
Time
PG2
5 minutes
Effort
PG1
5 minutes
PO1
Shipped sales order ready for

billing
1 day
1 hour
PO1
2 hours
45 days
10 minutes
10 minutes
101
All the real changes to the WFL2 occurred in phase A. This is not always the
case. However, since most of the problems occurred because of the failure to
accurately record transformations at the beginning of the process, it makes
sense that the changes needed to correct the VADS take place there. Also,
notice that on phase B where Credit approved the order, is gone. Since credit
approval is done in phase A, the old credit approval phase is eliminated.
However, the version of the VADS for when customers do not clear the
automated credit check must still be developed. It is likely that Credit will
play a major role in that version.
Review
At this point, the work session is almost complete. The group has:
Identified opportunities for change (the change analysis),
Developed models of the way work is done today (WFL1 and existing
WFL2), and,
Conceptualized a proposed model of how the process could be changed
in order to achieve the goals and objectives established (proposed
WFL2).
This complete process has only taken about 2 hours. This is a significant
achievement!
The only remaining tasks are to review what has been accomplished, make
any data collection assignments and schedule the next work session.
Summarizing the HELIX Facilitation Work Session

The first work session is complete. It will be useful to review some key
aspects about the work session and summarize what has been accomplished.
The first work session is the most demanding of the three allotted to each
VADS. Each work session should be limited to 2 hours. Participants
should include the facilitator, a monitor and the knowledge workers (4 to 12)
who represent all the workgroups that are involved in the VADS.
If changes to the information systems are identified, then the MIS
organization should also be included in the work session.
The first order of business for the work session is to have the participants
introduce themselves, if needed. Next, the project scope and objectives are
reviewed. Preferably, there are summary handouts to accompany the review.
Finally, the mission of the group is reviewed. These activities are done at the
102
beginning of the session to ensure that the team members are familiar with
one another and that the focus of the session is clear.
During the work session, four models are developed. The first is the change
analysis. This model sets forth the situations that currently exist in the VADS
that hinder its effectiveness and diminish the value it adds to stakeholders. It
also identifies preliminary goals that, if implemented, would resolve current
VADS deficiencies and contribute to the achievement of the projects
objectives. About 8 to 12 change analysis items are developed during this
segment of the work session. Each situation/goal pair is written on a flip chart
and posted for easy reference in full view of all the participants.
The next model is the existing level one workflow (WFL1). This model is
drawn on a flip chart by the facilitator as guided by the knowledge workers.
The WFL1 depicts the information that is shared between workgroups in order
to achieve the goal of the VADS it represents. The model is also posted in
plain view of the participants.
The next model is the existing Level 2 Workflow (EWFL2). This model is an
extension of the WFL1. Like the WFL1, it is drawn on a flip chart by the
facilitator as guided by the knowledge workers. The WFL2 presents the
phases and procedures that take place during the VADS to move its main
object from its point of origination through its completion (final transformed
state). When completed, the model is correlated with the current situations of
the change analysis and the projects objectives. The correlation process
results in a map of where problems occur along the workflow and where
change would most likely need to occur to resolve undesirable situations and
achieve the projects objectives. The correlated EWFL2 is posted for easy
reference.
The final model is the proposed WFL2 (PWFL2). This model is driven by the
correlated WFL1 and the creativity of the knowledge workers. This model
reflects the procedural changes needed to achieve the preliminary goals of the
change analysis and contributes to achieving the projects objectives. When
complete, the model clearly and graphically pinpoints what changes could be
implemented to achieve the related goals and objectives. It also clearly
identifies where these changes would have to be made in the VADS. The
WFL2 creates a graphical reference point for dialogue and allows easy
visualization of a change scenario that has support and buy-in from the work
session participants.
With all the models drafted, the facilitator conducts a quick review of what
was accomplished in the 2 hour session. The facilitator then highlights the
key improvements that the group has developed and issues any data collection
103
assignments needed to support the work done and to use as input into the next
facilitation work session.
There were a number of notable items specific to JMI that came out of the
first work session. First, the group identified changes that support the
achievement of the projects objectives.
These changes to the VADS can be quantified in terms of the contribution
made (see Figure 6-16).
In addition, the new WFL2 supports the preliminary goals identified by the
group.
Figure 6-16 - Contribution of VADS to Project Objectives
Contribution of VADS to Project Objectives
VADS Name: Sales Orders on Account
Project Objective
Proposed Improvement
Value of Contribution
PO1 - Reduce order processing time

Modify the order entry process so it
(entry through shipping) from 5 to 2 days. automatically approves orders for
customers with sufficient available credit
lines and non-delinquent balances.
These approved orders will be
electronically transferred directly to the
warehouse. This will allow credit-worthy
orders to bypass the Credit department.
Additionally, this will allow the credit
department to focus its attention on
problem orders. See Change Concepts.
This change will allow JMI to ship orders

that pass the automated credit check
within 24 work hours from the point the
order was received. In most cases, this
will be the next working day. This should
apply to 90% of all orders processed.
This will also save over $3,000 in labor a
day or over $750,000 a year.
PO2 - Increase sales by $40 million a

year by keeping lost sales due to stock
shortages to less than 2 per day.

automatically reserves inventory for the
quantity ordered. This will ensure that the
system accurately reflects the impact of
open orders on the inventory and will
reduce inadvertent overselling without
supporting backorders.
This change is expected to reduce the

number of lost sales from 12 per day to
6 per day. Based on the current average
sale of $9,450, this improvement should
contribute about $56,700 a day or about
$18 million a year toward the $40 million
goal.
PO4 - Become an industry leader by

increasing sales order volume by 30 per
day.
Same as PO2.
This change reduces the number of

orders needed to meet the objective to
24 per day.
The knowledge workers also identified other VADS that might need to be
included in the project. Specifically, these VADS relate to other ways of
selling product and all ways that inventory can be modified in the normal
course of business. A review of these new VADS might identify additional
ways to achieve the projects objectives.
104
Overall, in the span of a 2 hour work session, the knowledge workers

tentatively identified ways to dramatically reduce delivery times, increase
sales by $18 million a year and save over $1 million in labor.
How realistic are these types of achievements? Can a 2 hour meeting ever
be expected to achieve an increase in sales of $18 million? Perhaps not
always, but certainly often. At a major utility company in California, the
existing payroll VADS created a weekly discrepancy of about $3 million
between pay checks and time sheets. In the course of one day, the flaws in the
process were identified and solutions conceptualized. In another instance, the
very first 2 hour work session on streamlining of a time and attendance
function targeted over $1 million a year in lost monies in payroll just from
correcting ongoing overpayments to employees. In another instance, the
knowledge workers participating in a marketing project conceived a way (by
the end of the second work session) to improve customer service and drive
more business while reducing direct marketing costs by $5 million a year.
Although million dollar ideas cannot be guaranteed out of any given work
session, the results are usually dramatic.
The key point to remember is that the work sessions produce impressive
results because they are framed in the context of clear objectives, strong
executive-level support and the involvement of appropriate knowledge
workers.
105
NOTES
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
106
Conducting Post Diagnostic

Work Sessions Basic Diagnostics
After each facilitation work session, the core project team uses the models
and other information developed to conduct a post-diagnostic work session.
Each diagnostic work session should be done within 24 hours of the
facilitation work session. The goal of the diagnostic work session is to:
Test the completeness of the models developed,
Ensure that the proposed VADS are aligned with the projects
objectives,
Estimate the time and cost to implement improvements, and
Prepare for subsequent facilitation work sessions or presentations.
Since there are only three facilitation work sessions, there are only three
diagnostic work sessions. Each diagnostic work session can last from a few
hours to as many as 12 hours. Typical sessions last about four hours.
The first diagnostic work session is comprised of the following seven major
activities:
Formalize the models into usable working papers,
Test the models for integrity and completeness,
Develop a skeleton of part 2 of the change analysis,
Test alignments (objectives to workflows, workflows to object
Transformations, etc.),
Test and refine VADS for stimulus triggers and potential failures,
Update models and prepare for distribution, and
Develop questions and issues for the next facilitation work session.
At the second diagnostic work session, the team focuses on the following:
Finalizing working papers, and
Summarizing improvement recommendations.
107
At the third and final diagnostic work session, the team produces the
following results:
Finalized improvement recommendations,
Finalized and organized working papers,
Developed VADS level implementation work plans, and
Developed VADS level implementation cost estimates.
Each of the areas outlined above should be completed in their relative
sequence. However, based on the actual progress made in the facilitation
work sessions, some of the tasks in the first diagnostic work session may need
to be moved to the second session.
The case study will present how to perform each of these diagnostic work
sessions for the Sales on Account VADS.
Diagnostic Work Session #1

The team brings its knowledge of the facilitation session and the data it
collected on the flip charts to the first diagnostic work session. The flip chart
data consists of:
Change Analysis (CA) - Where opportunities for improvement exist
(current situations) and what those improvements might look like
(preliminary goals),
Level 1 Workflow (WFL1) - The workgroups, information and
communications needed to complete a VADS cycle,
Existing Level 2 Workflow (EWFL2) - The existing phases, procedures
and object transformations needed to complete a VADS cycle,
Current Situations correlated to the EWFL1 - First proof of correctness
that verifies that the opportunities for improvement relate to the VADS
being reviewed,
Proposed Level 2 Workflow (PWFL2) - The proposed phases,
procedures and object transformations needed to complete a VADS
cycle,
Preliminary Goals correlated to the PWFL2 - Second proof of
correctness that verifies that the project objectives and proposed
improvements are achieved through the proposed VADS.
108
The challenge facing the team is to transform the data off the flip charts and
out of their heads and into usable working papers that can be reviewed and
tested.
Summarizing the Work Session and Knowledge

Gained
The data needs to be written up on two working papers. The first is a Work
Session Summary form. The Work Session Summary provides:
A brief description of the work sessions goal,
The names of those in attendance,
A brief description of the discussions that took place,
The teams observations about the session,
The action items agreed to,; and
The date and time of the next work session.
This summary should be a page or two in length.
Figure 7-1 is an example of what the Work Session Summary might look like
for the first work session.
Figure 7-1- Work Session Knowledge Summary Example
Work Session Summary

VADS NAME: Sales on Account - Session # 1
FACILITATOR: Michael Wood
REFERENCE: WSS - SA01

MONITOR: Roger Thompson
SESSION LOCATION AND DATE: Main Conference Room - July 7, 1997, 10:00 a.m.
Goal of Session:
The goal of the session was to develop the change analysis and workflow
models needed to identify improvements to the Sales on Account VADS
that support achieving the projects objectives.
Knowledge Workers
Present:
Daryl Sims (order desk), Susan Thomas (Credit department), Tom Drake
(warehouse), Bobby Multz (Billing) and Melinda Johnson (MIS - Application
Manager)
Discussion:
Participation was slow at first, but by the second change analysis item the
dialogued was free flowing.
Everyone appeared genuinely excited about the changes identified. Good
team.
Team Observation:
Will need to expand group to include software vendor.
Action Items:
Daryl will bring samples of order forms to the team before the next session.
Susan will provide copies of the credit review and approval procedures.
Bobby will supply samples of reports used in tracking billing and collection
efforts. Melinda will bring Sam Trent, vendors analyst, to support
discussions about system changes.
Next Work Session:
Main conference room - July 14, 1997, 10 a.m.
109
The next working paper is a Knowledge Summary. The Knowledge

Summary contains any information the team believes is important that is not
represented on the flip charts. Think of it as a running journal of the teams
understanding of the organizations needs in the context of the project. The
goal is to keep the team conscious of its knowledge gains throughout the
process. This short documentation process helps reinforce those gains.
Figure 7-2 provides an example of a Knowledge Summary from the first
session.
Figure 7-2 - Knowledge Summary Example
Knowledge Summary
REFERENCE: KNS - SA01

SESSION LOCATION & DATE: Main Conference Room - July 7, 1997 -- 10:00 a.m.
#
1
OBSERVATION
It appears that there are additional VADS that transform the
inventory object. Need to discuss with management to determine if
the scope of the project should be expanded to include these
VADS.
STATUS
In order to compress the projects time frame, may want to consider

having two teams working in tandem. This would require some
additional time for cross-team debriefing. Maybe let each team do
each other's diagnostic work sessions. This would keep everyone
up to date and informed.
Diagnostic Step # 1 - Formalizing the Change

Analysis
Next, the team needs to formalize the models from the flip charts onto letter
size paper. To start this process the team should tape the flip charts onto the
workroom walls so they are easy to reference. Each model should be
transferred to a format that can be easily distributed. This can be done by
drawing the models using templates and paper or by entering the data into a
PC (preferred).
Formalizing the change analysis requires transferring the change analysis data
from the flip chart and onto a change analysis form. This form can be created
using any word processor or spreadsheet.
Figure 7-3 provides a sample of the form layout.
110
The heading of the change analysis consists of the VADS Name and a
Change Analysis (CA) Reference. The reference is a unique identification
given to a specific VADS. For instance, in the JMI case study, the reference
for the Sales on Account VADS might be SOA. Given this identification for
the VADS, the CA reference would appear as CA-SOA. This would read
Change Analysis for the Sales on Account.
Figure 7-3 - Change Analysis Form Layout
CHANGE ANALYSIS
VADS Name: ___________________________________
Current Situation
E WFL2
Ref.
Reference: CA-__________
Preliminary Goal
P WFL2
Ref.
There are five columns on the change analysis form.

Change Analysis Number (#)
This is the sequence number of a specific change analysis item. Combined
with the change analysis reference, it creates a unique index (i.e., CA-SOA-1
would represent the first change analysis item for the Sales on Account
VADS).
Current Situation
This column contains the text from the flip chart for each current situation.
Existing Level 2 Workflow Reference (EWFL2 Ref.)
This column contains the coordinates from the existing Level 2 Workflow
where the current situation occurs. For example, in the JMI case study, the
second change analysis item (S2) occurs on the Sales on Account EWFL2 at
the procedure order desk identifies customer and enters order via order entry
screen. On this workflow, this would be E WFL2-SOA-A2 (phase A
procedure 2). On the second current situation item on the change analysis, the
reference SOA-A2 would be placed in the E WFL2 Ref. column in order to
cross-reference the workflow to the change analysis.
Preliminary Goal
111
This column contains the text from the flip chart for the preliminary goal.
Proposed Level 2 Workflow Reference (PWFL2 Ref.)
This column contains the coordinates from the Proposed Level 2 Workflow
where the preliminary goal occurs. In the case study, the second change
analysis items preliminary goal (PG2) occurs at PWFL2-SOA-A4 (phase A
procedure 4 - Upon completion of the order, the system reserves the
inventory being ordered. To cross-reference this goal to the change
analysis, the coordinates SOA-A4 would be placed in the P WFL2 Ref.
column.
Each change analysis item should be posted to the Change Analysis form.
The corresponding workflow model references can be posted to the form at
either this time or after the data has been transferred from the flip charts.
As each situation and goal are posted to the form, care should be taken to
construct complete and meaningful sentences. Any abbreviations should be
replaced with complete words.
Once the change analysis has been transferred to the form, the team should
test the statements against the change analysis rules. The team should verify
that each situation clearly states:
What happens?
Why does it happen?
How much does it cost?
What makes it undesirable?
Who is impacted (loses value) because of it happening?
When the situation falls short in providing this data, the team should prepare a
question for the next work session. If the question will require some research
to answer, the team will want to provide the knowledge workers with the
question prior to the next work session.
The same process is done for each preliminary goal. Each goal should be
tested to ensure that it clearly states:
What should happen?
When it should happen?
What would have to change for it to happen?
Why it is better than the way it is done now?
112
How much it will save?

When the preliminary goal does not pass the diagnostic test, the team should
formulate questions for the knowledge workers to research and answer.
Remember, that the questions developed should be written in a professional
yet inconclusive or presumptive manner, the same way they were constructed
during the project scope-setting work sessions with management.
A review of a few change analysis items from the case study will help
illustrate this process.
At the end of the first facilitation work session, the following change analysis
was produced (Figure 7-4).
Figure 7-4 - Change Analysis After First Work Session
Change Analysis
Current Situation
1

through Credit.
Too Long = more than 45 minutes from
the time the Credit Manager receives the
order from the order desk until the time
the order is released to the warehouse
for shipping.
until the next business day. This results
in poor customer service.
Preliminary Goal
The ability to process work orders directly to
the warehouse where the customers available
and his outstanding balance is current.
This would require a change to our order
processing system.
Specifically, it would require the system
to automatically check the order for
credit-related data and route it to the
appropriate location (credit department or
warehouse).
113
Change Analysis
Preliminary Goal
Current Situation
2
Inventory is often over sold resulting in

service and/or canceled orders.
The ability to reserve inventory at the

time the order is taken.
This happens because the inventory

is not reserved at the time the order
is taken.
This would make the inventory

records more accurate and would
insure that the stock would be there
when the warehouse picks it.
About 12 to 18 orders are lost a day

due to inaccurate inventory.
This would increase sales by about

$ 57,000 a day.
Change Analysis
Current Situation
3

approved by the credit department.
Preliminary Goal
limit at the time they place an order.
This sometimes results in the

customer being sold products
beyond what their credit limit
supports.
This would allow the order desk to

catch potential credit limit problems
before the order is taken and a
delivery date promised.
When this happens, it is

embarrassing for the customer and
exposes the company to a potential
bad debt.
This would improve customer

service and reduce bad debts.
114
After transferring the data from the flip charts to the Change Analysis form,
the above items would appear as illustrated in Figure 7-5.
Figure 7-5 - Change Analysis on Form
CHANGE ANALYSIS
VADS Name: Sales on Account
#
1
Reference: CA-SOA
Current Situation
EWFL2
Ref.
PWFL2
Ref.
Preliminary Goal

through Credit. Too Long = more than 45
minutes from the time the Credit Manager
receives the order from the order desk untill
the time the order is released to the
warehouse for shipping.
The ability to process work orders directly to

the warehouse when the customers available
and their outstanding balance is current. This
would require a change to our order
processing system.

received after 2 p.m. cannot be shipped until
the next business day. This results in poor
customer service. This would require a
change to our order processing system.
Specifically, it would require the system to

automatically check the order for creditrelated data and route it to the appropriate
location (credit department or warehouse).
Inventory is often over-sold resulting in missed

delivery dates, poor customer service and / or
canceled orders. This happens because the
inventory is not reserved at the time the order
is taken.
The ability to reserve inventory at the time the

order is taken. This would make the inventory
records more accurate and would insure that
the stock would be there when the warehouse
went to ship it.
About 12 to 18 orders are lost a day due to

inaccurate inventory.
This would increase sales by about $57,000 a

day.
The customers credit limit is not updated in

the computer until the sales order is approved
by the credit department. This sometimes
results in the customer being sold products
beyond what their credit limit can support.
The ability to update the customer's credit limit

at the time they place an order. This would
allow the order desk to catch potential credit
limit problems before the order is taken and a
delivery date promised.
When this happens, it is a source of

embarrassment for the customer and exposes
the company to a potential bad debt.

reduce bad debts.
115
Next, each current situation and corresponding preliminary goal needs to be

tested for completeness. This is done by reviewing each item for its
compliance with the change analysis rules.
The first item is CA-SOA-1 (Sales on Account Change Analysis #1).
To test the current situation, simply apply each test to the statement as
follows:
T EST #1 - W HAT
HAPPENS ?
Each current situation must clearly state what is occurring in the process.
This provides an important context for understanding how the situation relates
to the VADS as a whole. Equally important is the need to state the What is
happening portion of the statement in clear and measurable terms. This
means defining any adjectives or vague phrases. Words and phrases like
sometimes, too slow, rarely, too much, inefficient, etc., need to be defined by
statements that can be measured.
Remember that one persons sometimes could be another
persons frequently.
From the first Change Analysis statement, it can be seen that the length of
time it takes to move an order through the Credit department is greater than 45
minutes. Remember that the what must not be vague. This means any
adjectives or subjective phrases must be augmented with definitions that are
measurable. In this case, too long is defined as taking more than 45
minutes. The statement passes test #1.
T EST # 2 - W HY
DOES IT
H APPEN ?
Once the what is clearly understood, the context of the current situation can
be enhanced by including a sentence or two on why the situation happens.
Understanding why helps pave the way toward developing ideas on how to
improve the situation.
Why does it take more than 45 minutes for orders to be processed through the
Credit department? The current situation statement does not address the
question of why. During the facilitation work session, the Credit Manager
felt that the number of steps needed to approve an order, coupled with the
limited staff, was the cause of the bottleneck. The statement needs to be
updated to reflect this why information. This might be stated as follows:
This occurs because of the volume of orders (greater than 150 a
day), coupled with the number of steps that are taken to review and
approve credit and complete the order.
116
Notice that the language is brief and in no way politically charged. Avoid
including statements in the Change Analysis that might alienate or polarize
individuals or work groups.
T EST #3 - H OW
MUCH DO ES IT COST ?
Part of understanding the critical nature of a situation is to understand its cost.

There are two types of cost. The first is the calculable cost based on the data
provided. The second is the opportunity cost inherent in the current process.
Opportunity costs cannot be easily calculated. They result by choosing to do
something one way versus another. Once a choice is made, its cost may be
more or less than a different way. For example, one might choose to buy a car
with good gas mileage at the expense of comfort. What is the cost of that
comfort? How might being more comfortable improve alertness and help
avoid accidents? This is very difficult to calculate without extensive research.
In the case study, the cost of an order to be processed by the Credit
department can be calculated by multiplying the cost per hour and the number
of hours spent. Using an average hourly cost of $30 and 45 minutes for
completion, each order cost about $22.50 to process through the Credit
department. Another calculation can be made to determine the number of
people needed to process orders though the Credit department each day. This
calculation is derived by multiplying the time it takes to approve an order (45
minutes) and the number of orders per day (150). This provides the total
minutes per day required to approve orders (6,750). Dividing the total
minutes by 60 provides the total hours required to approve orders each day
(112.5). Finally, dividing the total hours by the number of hours a person
works each day (8) provides the number of people it takes to approve orders
each day (14.06). Therefore, it takes 14 to 15 staff people to support the
credit approval process. This equates to about $3,360 to $3,600 a day.
The opportunity cost is represented by the lost business that might occur due
to the time it takes to process orders relative to the competition. While this
cost may be even larger than the labor cost, there is not sufficient data
available to make a reliable calculation. The first cost should be included in
statement # 1 as follows:
Based on an average wage of $30 an hour and 45 minutes of
processing time, the cost to approve a sales order is $22.50.
Given a volume of 150 orders a day, it requires about 14 Credit
staff to keep up with the volume. The average daily cost to process
orders through credit is about $3,375 a day (22.50 X 150).
117
Again, the better the information about the current way of doing business
results in a better context for understanding a current situation statement.
T EST #4 - W HAT
MAKES IT UNDESIR ABLE ?
Virtually any time a person or group of people identifies a desire to change, it

is because they believe that their situation can be improved. Generally, when
a persons situation reflects his or her ideal state, change is rarely desired.
The current situation on the Change Analysis represents a condition that the
knowledge workers believe can be improved. By being listed on the Change
Analysis, it is implied that each current situation is, in some way, undesirable.
The key is to identify specifically what is undesirable about the situation from
the knowledge workers point of view.
In the case study, there is an objective to ship orders within 24 hours of
receipt. The delay in the credit approval process impacts this objective. The
worst impact comes on orders received after 2 p.m. since this means that the
opportunity is lost for shipping the order on the same day it was received.
The second undesirable aspect of the situation is its cost. If the time to
approve an order were reduced, then the cost would correspondingly be
reduced. This would allow the Credit department to review more orders or
service the current order volume with fewer staff. The current statement
adequately addresses Test #4. This portion of the current situation could read
as follows:
Given the objective to ship orders within 24 hours of receipt,
reducing the time required to process orders through the credit
department supports this objective and improves customer service
levels.
T EST #5 - W HO
HAPPENING ?
IS IMPACTED ( LOSES VALUE ) BECAUSE OF IT
Every current situation statement has some negative impact on one or more
stakeholders. By its nature it represents an opportunity to improve the level of
value provided to stakeholders. Again, while implied, it should be made
specifically clear. This helps everyone understand how improving the current
situation will help the company achieve better alignment between its VADS
and stakeholder needs. It builds a shared awareness and perspective that
focuses the organization in the right direction.
In the case study, two stakeholders are negatively impacted by the current
situation. The first are the customers. They have to wait longer than is
perceived necessary to receive the products ordered. The second are the
118
owners. They appear to be paying more than they should in order to have an
order processed through the Credit department. This portion of situation
could be changed to read:
Reducing the time it takes to approve orders will also reduce the
cost of order processing thus providing value to JMIs owners.
The first current situation can be updated to reflect the results of the above
diagnostic effort. This new statement will reflect a more context rich and
measurable situation. Based on the original statement and the above
diagnostics, current situation #1 would read as follows:
Too Long = more than 45 minutes from the time the Credit
Manager receives the order from the order desk until the time the
order is released to the warehouse for shipping.
This is bad because it means that orders received after 2 p.m.
cannot be shipped until the next business day. This results in poor
customer service.
This occurs due to the volume of orders (greater than 150 a day)
coupled with the number of steps that are taken to review and
approve credit and complete the order. Based on an average wage
of $30 an hour and 45 minutes of processing time, the cost to
approve a sales order is $22.50. Given a volume of 150 orders a
day, it requires about 14 Credit staff people to keep up with the
volume. The average daily cost to process orders through Credit is
about $3,375 a day.
reducing the time required to process orders through the credit
department supports this objective and improves customer service
levels.
cost of order processing thus providing value to JMIs owners.
The only questions left unanswered in the above situation relate to how much
customer service levels can be improved and how much cost saving can be
achieved. The answers to these questions will depend on the preliminary
goal.
Current situations and preliminary goals should be diagnosed in their related
pairs. This means that first the current situation is diagnosed and then the
corresponding preliminary goal. Like the current situation, the preliminary
119
goal is tested against a number of criteria. The criteria take the form of six
tests that can be applied against the statement. The tests are as follows:
What should happen?
When it should happen?
Why it is better than the way it is done now?
How much it will save?
By applying each of these tests to the preliminary goal, the team can assure
that the goal presents a complete concept.
The preliminary goal that corresponds to current situation #1 from the case
study reads:
The ability to process work orders directly to the warehouse when
the customers available credit line is greater than the order
amount and their outstanding balance is current.
This would require a change to our order processing system.
Specifically, it would require the system to automatically check the
order for credit-related data and route it to the appropriate
location (Credit department or warehouse).
The following illustrates the diagnostic process for preliminary goal 1
(SOA1).
T EST #1 - W HAT
SHOULD HAPPEN ?
Each goal must clearly state what should happen in the new process. This part
of the statement should begin with the phrase The ability to. This
phrasing produces a future view of the process and helps contrast it from the
way the process is currently done.
The first sentence of the preliminary goal should be outcome focused and
state what is to be achieved. In the above preliminary goal, the first sentence
presents a vision of a future state. In this state, customers with the proper
credit limit and outstanding accounts receivable balance status will have their
orders automatically approved and directly printed in the warehouse by the
order processing system (bypassing the Credit department).
There is no need to modify this portion of the preliminary goal.
120
T EST #2 - W HEN
IT SHOULD HAPPEN ?
Once the what should happen is established, the preliminary goal is tested
for how well it communicates when the process should happen. Again, the
goal is to provide a statement that has a rich context and is self-explanatory.
The when will also help provide insights as to any stimulus trigger and
response time requirements that might be critical to the new process.
In the case study, one might reasonably argue that the when is implied in
the goal statement. However, the when is not explicitly expressed in that
statement. When should the orders that clear the automatic credit check be
transmitted to the warehouse? To avoid confusion, it is best to be explicit
about when the event should occur. The goal should be updated to reflect its
when aspect. To do this, the team could add another sentence to the
statement or modify the existing wording. The following would satisfy the
when test:
Immediately upon the order desk completing the entry of the order,
the system would credit check the order and electronically route
it directly to the warehouse (approved) or the Credit department
(denied) for the appropriate action. Testing and routing of an
order should take less than one minute.
Notice that the above sentence clearly states the timing expectations related to
the new process. For orders that pass the automatic credit check, the order
would begin printing in the warehouse in less than a minute. This represents
at least a 44-minute improvement over the current process.
T EST #3 - W HAT
WOULD H AVE TO CH ANGE FOR IT TO HAPPE N ?
The next test focuses on the change that needs to occur in order to achieve the
preliminary goal. This portion of the statement provides insight into any
major modification to procedures, policies or systems that would need to take
place in order to support the new process. This will help the team in sizing
and costing the implementation effort later.
Change Analysis SOA1 identifies a requirement to change the order
processing system to support the automatic credit checking process. Are there
any other major changes needed? One change the team might identify at this
point could relate to the idea of printing orders directly to the warehouse and
Credit department. Currently, orders are manually forwarded to the
warehouse. Under the new time and labor saving approach, orders would be
electronically transmitted. This would require each location to have the
proper printers and the electronic communications needed to support the new
environment. If these details would not have a major impact on the
121
implementation effort (time, logistics or money), then they would not need to
be included in the goal statement. If this represented a major impact, then
they should be referenced. An appropriate treatment of the these items could
be accomplished by replacing the sentence referencing the system change
with the following:
This would require a change to the order processing system to
support the automatic credit checking process and related
electronic transmission of orders to the warehouse and Credit
department.
In the above statement, the requirement has been referenced without
elaboration.
The key is to identify important change requirements, not to define them.
T EST #4 - W HY
IT IS BETTER THAN THE WAY IT IS DO NE N OW ?
At this point, the preliminary goal describes what the goal is, when the
process occurs and what the change requirements are. So what makes this
way of doing things better than the current approach? This is what the team
will test next. It is important to make this distinction in every preliminary
goal. What may be intuitively obvious to some may be clear as mud to
others.
The case study statement does not state why the preliminary goal is better than
the current situation. So, what is better about it? To answer this, the team
needs to review the current situation and project objectives. The current
situation identifies what was bad about it. The preliminary goal must resolve
what is bad about the current credit approval process. Additionally, the
goal may support project objectives.
The current situation contains the following:
This is bad because it means that orders received after 2 p.m.
cannot be shipped until the next business day. This results in poor
customer service.
reducing the time required to process orders through credit
supports this objective and improves customer service levels.
cost of order processing, thus providing value to JMIs owners.
The above statement clearly conveys why the current credit approval process
is bad. The new process would eliminate delays for orders passing the credit
check. The immediate printing of orders in the warehouse would help support
the project objective by reducing the time it takes to process an order from the
122
order desk through shipping. The preliminary goal needs to be updated to

reflect this.
The following would be appropriate:
This is good because it reduces the overall order processing time by
at least 44 minutes for each order that passes the automatic credit
check, and it directly supports the project objective to ship orders
within 24 hours of receipt.
Making these types of direct correlation between goals and project objectives
will help management and the knowledge workers understand why a
particular change has merit.
T EST #5 - H OW
MUCH IT WILL SAVE ?
Improving processes usually has associated savings. These savings typically

take the form of cost reductions, increases in revenues, or both. The best way
to express savings is in terms of its relationship to the related cost. This can
be expressed best by what is known as ROI (return on investment). A simple
form of ROI is calculated by dividing the savings by the cost to achieve it. If
the savings will span multiple years, then the result would need to be divided
by those years to arrive at an annual return. The formula becomes more
complex if the concept of Net Present Value is introduced. An example of a
simple ROI calculation can be seen in a savings account. If a person deposits
$750 in an account and receives $53 interest in one year, the ROI would be
53/750 or about 7.1 percent. Similarly, if an improvement to a process would
cost $60,000 to implement and the resulting savings would be $35,000 a year
for the next five years, then the ROI would be calculated as follows:
(35,000 x 5)/60,000 or 290 percent for the five-year period, or 58
percent a year.
The ROI provides management with a common measurement for evaluating
alternative uses of capital and resources. Many companies have an ROI
threshold. This means that for any investment to be considered it must
provide a minimum ROI. Where possible, preliminary goals should state an
estimated ROI. If one portion of the formula is not available, then what is
known should be presented. Providing cost and/or savings information adds
context to the goal and helps the reader evaluate its merit.
In the case study, the current situation stated that the average daily cost to
process orders through the Credit department (ignoring the cost of temporary
help) is currently $3,375 or about $22.50 per order. What is not known is the
number of orders that would pass the automated credit check process
presented in the preliminary goal. This information could be easily
123
determined in a number of ways. Past orders could be sampled to determine

what percent were credit worthy at the time of order. This percentage could
be applied to the average orders processed per day to arrive at an estimate.
Another way to estimate the number of orders that would pass the automated
credit check would be to track how many new orders would pass the test for
the next few weeks. In either case, this task would be given back to the
knowledge workers to perform. The task could be given before the second
work session or at the work session. Once the data was known, it would be
added to the preliminary goal statement. A good way to ensure that this data
makes it to the statement is to create a proforma statement, leaving a blank
line for the value to be inserted later.
Assuming the data is obtained, the question of the cost to achieve these
savings is still unknown. It would be reasonable to assume that the changes to
be made to the order processing system will cost something. What will be the
cost to modify the system to perform the automated credit check? What will
be the cost to set up electronic communications to the warehouse and the
Credit department? How much will the added printers cost? What other costs
are implied by the preliminary goal?
It is doubtful that this information can be known with any real precision
during this phase of the project. However, rough order of magnitude (ROM)
costs could probably be developed. When dealing with ROM costs, it is
important to provide a range in which the cost will most likely fall. The
associated ROI can be provided in a range that mirrors the high and low
estimate of the cost. Since the major cost element in the preliminary goal is
system oriented, the team could request that a knowledge worker from the
MIS department join the core group to participate in the project. The MIS
representative could be requested to develop a ROM for the cost of the
changes identified, along with a margin of uncertainty, so that a range of costs
could be developed. Again, the preliminary goal could be written to provide a
space to drop in the values once known.
With the savings and related ROM cost, the ROI of this preliminary goal
could be easily calculated. For the purposes of the case study, assume the
following:
The average number of orders that would clear Credit under the
proposed automated credit check process would be 137.
The cost to change the order processing system is estimated to be about
$180,000 (30 percent margin of certainty).
The cost of a new printer for the warehouse and Credit department is
about $2,000.
124
The cost to run new cable to the warehouse and Credit department is
about $3,000.
Given the data, the annual savings created from the new process would be
about $739,000 (137 orders per day X $22.50 an order X 240 workdays). The
cost would range from $180,000 to $600,000 ($180,000 as a base and
$180,000/30 percent as a maximum plus $5,000 for printers and cables).
Accordingly, the first year ROI would range from 22 percent to 300 percent
(Savings divided by 605,000 and 185,000 respectively). Clearly, this ROI
would be impressive to any management group.
Based on the above data, this portion of the preliminary goal could read as
follows:
It is estimated that approximately 91 percent (137 orders per day)
of the orders received would clear this credit checking process.
Based on the current cost of $22.50 per order to perform a credit
check, this improvement would result in five year savings of over $3
million ($739,000 X 5 minus $605,000). The cost to modify the
order processing system and to implement the new process is
estimated between $185,000 and $605,000. The expected ROI in
the first year should range from 22 percent to 300 percent
depending on the actual implementation costs.
This data will be summarized to an overall project ROI schedule and included
in the final report to management.
T EST #6 - W HO
WILL BENEFIT ( GAIN VALUE )?
The next diagnostic to be performed on the preliminary goal is to determine if

the stakeholders who will gain value from the new process are explicitly
identified. Again, it is often easy to infer a beneficiary, but it is safer to
identify them explicitly and the related value they gain.
In the case study, the current situation identified the customer and the owners
as the stakeholders who lost value because of the current credit approval
process. It is reasonable to assume that these same stakeholders would gain
value under the proposed change. The customers benefit because they would
receive their orders sooner than they do now. The owners gain substantial
value saving about $740,000 a year based on an investment of $605,000.
Additionally, the Credit department gains value because it would be able to
focus only on orders that need their specific talents.
This final part of the preliminary goal might read as follows:
125
The above savings would benefit the company by providing a net

savings of about $140,000 the first year and $740,000 a year
thereafter. The customer would benefit from this change because
they would receive delivery up to 24 hours sooner. With the
reduced number of orders flowing to the Credit department, the
department can focus its full attention on problem orders and avoid
adding new staff in the future. (This is in line with the companys
objective to keep staffing levels at 7,500.)
Figure 7-6 provides an example of how SOA-1 would appear based on the
above diagnostics.
126
Figure 7-6- Change Analysis
CHANGE ANALYSIS
VADS Name: Sales
on Account
Reference: CA-SOA
E WFL2
Ref.
P WFL2
Ref.
Current Situation

Too Long = more than 45 minutes from the time the Credit
Manager receives the order from the order desk till the
time the order is released to the warehouse for shipping.

warehouse when the customers available credit line is
greater than the order amount and their outstanding
balance is current.
This is bad because it means that orders received after 2

p.m. cannot be shipped until the next business day. This
results in poor customer service. This is bad because it
means that orders received after 2pm cannot be shipped
until the next business day. This results in poor customer
service.
This would require a change to the order processing

system to support the automatic credit checking process
and related electronic transmission of orders to the
warehouse and Credit department.
This occurs due to the volume of orders (greater than 150

a day) coupled with the number of steps that are taken to
review and approve credit and complete the order.
Based on an average wage of $30 and hour and 45
minutes of processing time, the cost to approve a sales
order is $22.50. Given a volume of 150 orders a day, it
requires about 14 Credit staff to keep up with the volume.
The average daily cost to process orders through Credit
is about $3,375 a day.
Immediately upon the order desk completing the entry of

the order, the system would credit check the order and
electronically route it directly to the warehouse (approved)
or the Credit department (denied) for the appropriate
action. Testing and routing of an order should take under
one minute to occur. This is good because it reduces the
overall order processing time by at least 44 minutes for
orders that pass the automatic credit check and it directly
supporting the project objective to ship orders within 24
hours of receipt.
Given the objective to ship orders within 24 hours of

receipt, reducing the time required to process orders
through credit supports this objective and improves
customer service levels. Reducing the time it takes to
approve orders will also reduce the cost of order
processing providing value to JMI's owners.
It is estimated that approximately 91% (137 per day) of

the orders received would clear this credit checking
process. Based on the current cost of $22.50 to credit
check an order, this improvement would result in five year
savings of over $3 million (739,000 X 5 - 605,000). The
cost to modify the order processing system and to
implement the new process is estimated between
$185,000 and $605,000. The expected return on
investment in the first year should range from 22% to
300% depending on the actual implementation costs
Preliminary Goal
The above savings would benefit the company by

providing a net savings of about $140,000 the first year
and $740,000 a year thereafter. The customer would
benefit from this change in that they would receive up to
24 hours sooner. With the reduced number of orders
flowing to the Credit department, the department can
focus its full attention on problem orders and avoid adding
new staff in the future. This is in line with the companys
objective keep staffing levels at 7,500.
127
SOA-A2
SOA-A4
In turn, each Change Analysis item would be tested and updated. Take a
moment to conduct the diagnostic tests on SOA-2 and SOA-3. Be sure to ask
the following questions during the testing process.
SOA-2 Current Situation
What is the cost of the lost orders?
In addition to the cost, what is the impact on customer service
levels?
How does this impact JMIs ability to achieve its objectives?
SOA-2 Preliminary Goal
What changes would need to be made to the order processing
system?
How would this affect the procedures of the order desk?
What will it cost to implement these changes?
What is the ROI on this change?
How will this change benefit JMI and its customers?
SOA-3 Current Situation
Why isnt the customers credit limit updated at the time the
order is taken?
How often are customers sold products that exceed their credit
limits?
How much is this costing?
Besides the customer and JMI, what employee groups are
impacted?
SOA-3 Preliminary Goal
What changes would need to take place in the order process to
support the automated update to the customers credit limit?
How much would this change cost and what is the ROI?
How does this change support the JMIs objectives?
What other stakeholders would benefit?
Review
The team has completed its diagnostics on the Change Analysis. For each
Change Analysis situation and goal, the team conducted a series of specific
128
tests. Because of those tests, the Change Analysis was improved for
understanding and measurability.
As a team becomes familiar with the diagnostic criteria, the Change Analysis
becomes more robust during the facilitation work sessions. In addition, the
speed at which the diagnostics are performed improves. A typical Change
Analysis item should only take about 10 to 20 minutes to diagnose and
update. The update will be in either a complete or a proforma format.
Remember: a proforma format is when the text leaves blank areas for
insertion of specific values.
Diagnostic Step # 2 - Formalizing the Level 1

Workflow
After the Change Analysis has been formalized and tested, the teams
attention turns to the Level 1 Workflow model.
The first step in formalizing the model is to post it from the flip charts onto
the WFL1 form. Figure 7-7 provides a sample of a blank WFL1 form. The
model contains the following information:
VADS Name: A description of what VADS the model represents
Reference: Provides a unique identification to the model
Assumption: The assumptions used that create the scenario on which
the model is based
Model: The area that contains the actual WFL1 diagram
# & Steps: A short description of each line in the model that identifies
each process group and describes what information is being shared
between them. The # field contains the number that corresponds to the
line number on the model.
129
Figure 7-7 - Level 1 Workflow
Level 1 Workflow
VADS Name: ________________________________________________
Reference: WFL1-_______
Assumption:_________________________________________
MODEL
Steps
Once the model has been posted to the WFL1 form, the team can test the
model for its integrity. There are several rules that are applied to ensure that
the model is properly tested. The first set of rules relates to the proper
completion of the form. The second set of rules relates to the model diagram.
Throughout the diagnostic
process, the team will make several decisions. If the item being tested passes
the test, then the team continues the process. If the item fails the test, and the
team has the knowledge to correct the deficiency, then they do so and
continue the process. Otherwise, the team develops a question for the
knowledge workers that will be addressed at the next facilitation work
session.
130
T ESTING
THE
F O RM
FOR
C OMPLETENESS
Testing the WFL1 form for completeness takes only a few minutes. The team
quickly reviews the following:
The VADS name should correspond to the VADS name used on the
Change Analysis.
The reference should be the same used on the Change Analysis. The
only difference is the model indicator. On the Change Analysis, the
reference started with CA-. On the Level 1 Workflow, the reference
starts with WFL1The assumption line should clearly indicate the assumptions on which
the model is based. Assumptions provide a context for reading the
model. They eliminate the need for any conditional or branch logic on
the model (if, then, else). The assumptions indicate the circumstances
under which the model holds true.
The model area should contain an accurate copy of the diagram per the
flip chart. It will be tested for its completeness and integrity after the
form has been tested.
The step area (# & Step columns) should contain a text version of the
model. Each communication line on the model should be referenced in
the # column. Adjacent to the #, a brief sentence or two should
describe the communication being shared between the process groups
involved. This allows the reader to review the model without needing
to trace each numbered line on the diagram.
Figure 7-8 presents the WFL1 model as it should appear after posting it from
the flip chart to the model form.
131
Figure 7-8 - Completed WFL1

Level 1 Workflow
Reference: WFL1-SOA
Assumption: Sales orders on account when the customer's credit limit is good, inventory is available and the customer pays on time.
Model
Steps
1.
Customer calls an order into the

Sales Order Desk.
2.
Sales Order Desk enters the order

into the Sales Order System.
3.
Sales Order System prints a

Rough Order at the Sales Order
Desk.
4.
Sales Order Desk forwards the

Rough Order to the Credit
Department for approval.
5.
Credit Department reviews

Customer's Credit status in the
Sales Order System and approves
the order
6.
Credit Department forwards the

Approved Order to the Warehouse
7.
Warehouse ships the order and

forwards the order to Billing
8.
Billing finalizes the Shipped Order

in Sales Order System and prints
invoice
9.
Billing mails Invoice to Customer
10.
Customer remits payment to Billing
11.
Billing posts Customer's payment

in Sales Order System
1 - Customer Calls in Order Sales Order Desk
- Shipped Order -
- Finalize Order
& Print Invoice -
Sales Order
System
Billing
- Post Payment 11
Copy of Invoice
to Product
Analysis Group
dit
re
sC
iew
ev
- Ord
er
Billiin for
g-
-R
Order for Approval
10
3
- Ro
ugh
Ord
er -
Payme
nt
- Mail Invo
ice -
- Ente
rs O
rder
-
Customer
6
Warehouse
T ESTING
- Approved Order -
THE
M O DEL
FOR
Credit Department
C OMPLETENESS
AND
I NTEGRITY
The next step in the diagnostic process is to test the actual diagram for its
completeness and integrity. Again, this is done by applying a series of rules
to the model. The rules are intended to help satisfy the team that the model
makes business sense, is complete in terms of the communications that occur
and the boundaries that are explicitly or implicitly present. The rules are
presented below:
Rule #1: The model should be syntactically correct.
Rule #2: The model should have closure (no hanging references and be
properly bounded).
Rule #3: The model should be complete (represents the entire life
cycle of the VADS).
Rule #4: The model should properly reference any inputs or feeds
to/from other VADS.
132
Rule #5: The model should minimize crossing of communication lines

to ensure its ease of reading.
Rule #6: The model should contain only the information needed to
make the
workflow clear and understandable, no more and
no less.
Rule #7: Each process group, file or data store should only appear on
the model once.
Rule #8: Each communication line should be properly labeled with its
sequence number, the object being communicated with its related
status.
A PPLYING
THE
R ULES
TO TH E
C ASE S TUDY WFL1
Rule #1: The Model should be syntactically correct.

As presented earlier, the Level 1 Workflow has a group of symbols that are
associated with it. These symbols represent the syntax of the model. A
review of the WFL1s syntax components is provided below.
The WFL1 model has a very limited syntax, which allows it to be complete
yet simple to understand. Figure 7-9 lists the components of the Level 1
Workflow model.
The team should review the model to verify that it correctly uses the WFL1
symbols to describe the workflow.
A review of the case studys WFL1-SOA model does not reveal any errors in
the use of the model syntax. WFL1-SOA passes Rule # 1.
133
Figure 7-9 - Level 1 Workflow Model Syntax

Symbol
Process Group
File or Data Store
Description
The oval or circle represents a work or process

group that participates in the VADS. This group
represents one or more people who perform a
specific set of procedures on a VADS. This
group can be a sub-organization within the
organization (division, department, specific job
title or specific work area). The group can also
represent outside organizations or people
(customers, vendors, government, etc.). An icon
can be substituted for this symbol. However, if
icons are used they should be consistent through
out all models.
The rectangle represents a file, data store or
system. This object can be a file cabinet, ledger
card, a computer system or any other non-human
repository for storing information. An icon can
be substituted for this symbol. However, if icons
are used they should be consistent throughout all
models
134
Symbol
Scope Constraint Boundary
To WFL1 - 2.1
From WFL1 - 1.4
Description
The arc represents a constraint or boundary. It

denotes an intentional limitation in the scope of
the model. The text behind the arc is used to
clarify the scope limitation. For instance, in a
sales VADS, the model may not reflect how the
customer decided to place an order. If this
information was not going to be reflected in the
VADS, a scope constraint boundary would be
placed on the edge of the customer process
group to reflect the scope limitation.
The T represents a link between two models.
This linkage can be inbound (feeding this model)
or outbound (feeding another model.) The
direction of the connection is indicated by the
arrow. Arrows pointing toward the top of the
T are outbound. Arrows pointing away from
the T are inbound. The text at the end of the
T identifies the model being referenced.
Outbound / Inbound Ts
Symbol
Text of what is being transferred
Interaction or Conversation
Description
The arrow and associated numbered text

represents the transfer of data between two
process groups or a process group and a data
store. The arrow points in the direction of the
information movement. A two-headed arrow
represents an interaction such as a conversation
or interface with a system. The number
represents the sequence in which the
communication takes place in context to the
entire model. When the transfer is between two
process groups, or from a system to a process
group, it represents both information and
stimulus trigger (an indication that action is
needed).
135
Rule #2: The model should have closure (no hanging references and
properly bounded.)
Every WFL1 model has a beginning and an end. Every process group, file or
data store should have at least one input and one output. When this does not
exist, the model does not have closure. The team should review the model
and test each process group, file and data store for inputs and outputs.
When a process group, file or data store has an input without a corresponding
output, the following options apply:
An output (communication line) can be added to the model to correct
the deficiency.
An outbound T can be added to the model to connect it to another
model. Be sure to update the model being referenced with the proper
inbound T.
A scope constraint boundary can be added to the model to indicate that
the output is not relevant to the VADS. The reason for this lack of
relevancy should be footnoted on the model.
A clarifying question can be drafted and presented to the knowledge
workers before or during the next facilitation work session.
The same rules apply when there are outputs with no associated inputs.
An input (communication line) can be added to the model to correct the
deficiency.
An inbound T can be added to the model to connect it to another
model. Be sure to update the model being referenced with the proper
outbound T.
A scope constraint boundary can be added to the model to indicate that
the input is not relevant to the VADS. The reason for this lack of
relevancy should be footnoted on the model.
A clarifying question can be drafted and presented to the knowledge
workers before or during the next facilitation work session.
In reviewing the case study model, there are two areas where closure can be
questioned.
The first item can be seen at the start of the model. Notice that the
customer starts the process by calling the sales order desk. What
is the input into this action? How does the customer know to
place the call? What is the stimulus trigger?
136
There are a couple of possibilities that can be pursued at this point.

The model could be updated with an input (customer receives brochure,
reads ad, etc.).
The model could be bounded to indicate that it is not relevant to the
VADS to know the stimulus trigger that motivated the customer to
place an order.
If the first possibility were pursued, the model needs to be expanded to
include a reference from one or more marketing VADS. Since these VADS
are not in the scope of the project, the scope would need to be increased
accordingly if they are to be reviewed.
If the second possibility is pursued, the model would have a constraint
boundary placed at the left side of the customer process group. This does not
indicate that it is not important for JMI to understand what motivates
customers to buy product. It merely denotes that such information is not
needed to understand the sales order process.
In actual practice, the team would consult with the knowledge workers and
management to determine what course of action should be taken.
In order to maintain the case studys simplicity, the second possibility will be
used.
The second item is found at the end of Step 11 in the model, Billing posts
payment to the sales order system (figure 7-8). What does the sales order
system do with the data? Are there any outputs from the system that uses this
data?
Again, there are a couple of possibilities. The first is that the model could be
expanded to include references to VADS that are fed by sales data (marketing,
advertising, business planning, etc.). As before, adding these references
implies an increase in scope and needs to be approved by management.
Notice that the potential missing feed at the beginning of the model is
logically related to the missing output at the end of the model. In a companywide review, the feeds into and out of the model would be included. They
represent a larger cause and effect process and would provide the basis for a
strategic view of the marketing-to-sales-to-marketing continuum. The second
possibility would be to place a scope constraint on the model. Again, in order
to maintain the simplicity of the case study, the model will be bounded with a
scope constraint.
137
Rule #3: The model should be complete (represents the entire life cycle of
the VADS).
Every VADS has a beginning (where the primary object is created) and an end
(where the primary object no longer transforms). This beginning-to-end
process represents the life cycle of a primary object. The VADS must
represent this cycle for it to be complete. The team needs to identify the
primary object of the VADS and verify that it is indeed created at the start of
the VADS and is completed at the end of the VADS.
In the case study, the primary object is the sales order. Its creation begins
when the customer places the call to the sales order desk. It moves through
various stages (open, approved, shipped/billed, and paid). The recording of
the payment in Step 11 signals the end of the cycle. In reviewing the case
study model, the team concluded that it accurately reflects an entire VADS
cycle and is therefore complete.
Rule #4: The model should properly reference any inputs or feeds to/from
other VADS.
Although a model may be complete in terms of accurately reflecting the life
cycle of the primary object, it sometimes has information feeding into and out
of it from other VADS. For instance, if the product data from the Sales on
Account VADS fed a Product Mix/Marketing Analysis VADS, then an
outbound T referencing that VADS would be placed on the model to reflect
the communication of that data. Since the information being communicated
does not influence the life cycle of the order, it is not part of the Sales on
Account VADS. It is merely a by-product. This can be proven by eliminating
the communication from the model and then testing the model for complete
transformation. If the model is still complete, then the communication is not
critical to the VADS cycle. If the model breaks down, then the
communication is critical.
In the case study, if the invoice is never sent from billing to the customer,
payment cannot happen. The model breaks down. Therefore, the step of
invoicing the customer is critical to the VADS. Assume the model indicated
that Billing sends a copy of the invoice to the product analysis group for
inclusion in a product-mix-analysis process. Would elimination of this step
affect the accuracy of the model? The answer is no. Whether Billing notifies
the product analysis group or not will not affect the invoice being sent to the
customer or the customer paying the invoice. Therefore, if the model did
reflect the communication to the product analysis group, it needs to be
referenced as an Outbound T. The team can expand the scope of work to
138
include the product analysis process or place a boundary constraint at the top
of the T (figure 7-10).
Figure 7-10 - Outbound T
Outbound "T" Example
Billing
Copy of
Invoice to the
Product
Analysis
Group
Rule #5: The model should minimize crossing of communication lines to

ensure its ease of reading.
Model hygiene, although not a technical issue, is important. Each model
within HELIX is specifically designed for easy reading. The easier and less
intimidating a diagram, the more likely the reader will understand it. The
WFL1 is no exception. Drawn correctly, the model is compact and easy to
navigate. The reader does not have to be concerned with the syntax or
symbols used. Ideally, the model should not have any crossed lines. The eye
should flow easily from process group to process group by following the
numbered communication lines. When these lines cross, the model becomes
cluttered and difficult to review. When this happens, the ability to read the
model is impaired. People will look at it but not read it. Since the model is
meant to be a device that enhances communication and understanding,
anything that distracts the reader is counter productive.
Even so, some models are complex enough that it becomes mathematically
impossible not to cross lines. This occurs when one process group, file or
data store is trapped inside communication lines. One way this happens is
when there are six process groups, files or data stores that exchange data from
one to the other. In other words, the six groups share at least nine
communications between them. The key is to minimize these occurrences and
keep the model as simple to read as possible. For example, a file that is only
139
referenced might be eliminated from the WFL1 model and reflected as a

procedure in the WFL2.
Figure 7-11 reflects a comparison between a complex and simplified WFL1
model.
Rule #6: The model should contain only the information needed to make
the workflow clear and understandable, no more and no less.
Like all HELIX models, the goal of the Level 1 Workflow model is twofold.
First, the WFL1 must be accurate. However, accuracy should not be confused
with preciseness. To be accurate, the WFL1 needs to reflect all the critical
communications required to complete a VADS cycle. The model depicts the
information objects that are shared between process groups, data stores and
files. It does not provide insight about how the information is prepared or
manipulated (i.e. what each process group does with the information
internally). Therefore, like all models, the WFL1 is a simplified
representation of a larger reality.
The second goal of the model is for it to be easy to read and understand. If it
is cluttered with too much detail, it becomes intimidating to the reader. To be
useful, the model must be easy to read. If the WFL1 model begins to look too
complex, it can be simplified by first removing all references to files,
especially files that represent archives and are not critical to the completion of
the workflow cycle. Next, communications that are sequentially dependent
and go back and forth between the same two process groups can be replaced
with a single line that has arrows on both ends. This type of line indicates an
interaction. Figure 7-11 illustrates two versions of a portion of a WFL1
model. Both are correct. Both are equivalent to each other. The difference is
that the second one is less complicated and easier to read.
140
Figure 7-11 - Comparison of Complex versus Simplified WFL1 Model
CORRECT BUT COMPLEX
C A LL TO O RDER D ESK
2
C USTOMER
Q UOTES PRICE
O RDER D ESK
3
PLA CE O RDER
O RDER
HISTORY
FILE
EN
P
O
R
DE
R
O
C ORRECT A ND SIMPLE
1
C USTOMER
PLACE ORDER
O RDER D ESK
Keeping the WFL1 easy to read will enhance its power and potential to be
understood.
In the case study example, the WFL1 appears compact and easy to read. No
further refinements are necessary.
Rule #7: Each Process Group, File or Data Store should only appear once
on the model.
141
As a WFL1 becomes complex, some are tempted to duplicate a reference

(show the same item twice) to a process group, file or data store. This is
typically done to avoid crossing lines. However, this should never be done.
By referencing each process group only once, the ability to see bottlenecks in
the workflow is greatly enhanced. Segregation of duty issues can easily be
identified by depicting a process group only once per model. If a process
group has many lines pointing to and from it, a bottleneck could be present in
the process. Depending on the information being communicated, it could
indicate segregation of duty issues or a breakdown of internal controls.
When process groups are duplicated within a model, it can mask
fragmentation of the process (too many steps and people).
Duplicating the same data store or file on the model makes it look complex
and can mislead the reader to think that there are more systems and files in
place than really exist.
Maintaining a single occurrence of a process group or data store on the WFL1
model makes it easier to discover improvement opportunities while
maintaining its ease of understanding.
The case study WFL1 demonstrates adherence to this rule.
sequence number, the object being communicated and its related status.
The WFL1 must be syntactically correct. The model reflects a series of
sequentially dependent and/or parallel events that transform a primary object
from its original form through its final transformation. As the object
transforms, it changes its characteristics or status. These elements of the
workflow must be properly referenced on the WFL1. The place to make these
references is on the communication lines. Each line should be labeled with
the number indicating which step it represents in the sequence of the VADS
process. If there are parallel steps in the process (two actions not sequentially
dependent that must be completed before the next sequentially dependent
step), they should be given the same sequence number.
The object being moved should also be referenced. This reference should
include the name of the object and its status or action being taken. This will
help to make the model easy to understand and aid in the development of the
WFL2 model.
Figure 7-12 shows a correct and incorrect example of labeled communication
lines.
142
The first example illustrates a correctly labeled communication line. The line
contains a sequence number (6), the object (the order), and the status of the
object (approved). This communication between the Credit department and
the warehouse reads The Credit department sends an approved order to the
warehouse.
The second example lacks a sequential reference point. Combined with other
such communication lines on a model, the reader would not be able to
determine the order in which the events are occurring. The example is also
missing the status of the order as it moves from the Credit department to the
warehouse. This absence of context diminishes the readers ability to
understand the workflow.
Figure 7-12 - Labeling of Communication Lines
Correctly Labeled Communication Line
Warehouse
Approved Order .
Credit Department
Incorrectly Labeled Communication Line
Warehouse
Order .
Credit Department
The case study model (figure 7-8) provides additional illustrations of properly
labeled communication lines.
R EVIEW - S UMMARIZING
FOR C OMPLETENESS
THE
8 R ULES
FOR
T ESTING
THE
WFL1
After applying all the rules to the case study model WFL1-SOA, the following
changes would have been made.
Rule #1: The model should be syntactically correct.
WFL1-SOA was found syntactically correct. No changes were
required.
143
Rule #2: The model should have closure (no hanging references
properly bounded.)
WFL1-SOA was found to need closure in two areas: at the beginning and at
the end of the VADS process. In reviewing the model, there was nothing to
indicate what caused the customer to place a call to JMI. Likewise, there was
nothing to indicate what happens to the payment data once it is posted to the
order processing system.
To maintain the simplicity of the case study, it was decided to place constraint
boundaries on the model: the first at the left-hand side of the customer process
group and the second at the right-hand side of the system data store. These
constraints indicate that the project team will not explore what triggered the
customer to place an order or how information about paid orders is utilized.
Rule #3: The model should be complete (represents the entire life cycle
of the VADS).
WFL1-SOA accurately reflects the complete life cycle of a sales order within
JMI when the customers credit is good and the inventory is in stock. There
are no changes required to the model based on rule # 3. However, during the
failure analysis process (Diagnostic Step #8 - Refining VADS for Potential
Failures) the assumptions framing the WFL1 will be challenged. The team
will examine what happens to a sales order when the customers credit is
insufficient or there is not enough inventory available to fill the order. For
each of these possibilities, alternative process scenarios will be developed and
modeled at either the WFL1 or WFL2 level.
Rule #4: The model should properly reference any inputs or feeds to and
from other VADS.
Through the diagnostic process, it was determined that Billing sends a copy of
the invoice to the Product Analysis Group. Since this was not an integral step
in the completion of the sales cycle, it was referenced as a bounded outbound
T. This means that it is beyond the scope of the project to understand what
the Product Analysis Group does with this information.
These scope constraints do not suggest that the area being limited is not
important. It simply means that the current project will not focus on making
improvements to those areas.
Rule #5: The model should minimize crossing of communication lines to
ensure its ease of reading.
WFL1-SOA reflects a clean model with no crossed lines.
144
Rule #6: The model should contain only the information needed to make
the workflow clear and understandable, no more and no less.
WFL1-SOA is compact and easy to read and requires no changes related to
rule #6.
Rule #7: Each Process Group, File or Data Store should only appear on
the model once.
WFL1-SOA does not duplicate any process groups, files or data stores. It
adheres to rule #7.
sequence number, the object being communicated and its
related status.
WFL1-SOA contains properly labeled communication lines and satisfies rule
#8.
Figure 7-13 illustrates WFL1-SOA after the changes were applied as a result
of the rule 2 and 4 diagnostics.
145
Figure 7-13 - WFL1 After Application of Diagnostic Rules

Level 1 Workflow
Reference: WFL1-SOA
Assumption: Sales Orders on Account when the Customer's Credit limit is Good, Inventory is Available and Customer Pays on Time.
Model
Steps
1 - Customer Calls in Order -
Sales Order
System
Billing
- Post Payment -
11
Copy of Invoice
to Product
Analysis Group
dit
re
- Ord
er
Billiin for
g-
sC
iew
ev
-R
Order for Approval
8
- Finalize Order
& Print Invoice -
3
- Ro
ugh
Ord
er -
- Ent
ers
- Mail Invo
ice -
Payme
nt
10
- Shipped Order -
Sales Order Desk

Orde
r-
Customer
1.

Sales Order Desk.
2.

into the Sales Order System.
3.

Desk.
4.

5.

the order
6.

Approved Order to the
Warehouse.
7.

forwards the order to Billing.
8.

invoice.
9.
Billing mails Invoice to Customer.
10.
Customer remits payment to

Billing.
11.

in Sales Order System.
6
Warehouse
- Approved Order -
Credit Department
146
Diagnostic Step # 3 - Formalizing the Level 2

Workflow
After completing the diagnostics on the WFL1, the team turns its attention to
the Level 2 Workflow (WFL2). As in the WFL1, the first step is to move the
model from the flip chart onto the proper form. However, there are two Level
2 Workflows: the existing WFL2 and the proposed WFL2. Each will be taken
in sequence and formalized.
The WFL2 form consists of two sections. Section 1 is the header area and
section 2 is the body of the form. The header area consists of the:
VADS name (same as WFL1);
VADS reference (same as WFL1);
VADS cycles per year (how many times a VADS cycle is done each
year);
VADS estimated annual cost (cost per cycle X cycles per year); and,
VADS assumption (same as WFL1).
The body of the form includes the following areas:
Beginning Status - The beginning status appears at the top of each
column of the model. It indicates the status of the primary object
before the subsequent procedures take place.
Procedures - The procedures appear beneath the beginning status. The
procedures area lists the actions that must occur in order to move the
object to the ending status. These procedures reflect all the information
communication steps found in the WFL1 model plus the critical actions
taken within each of the process groups.
Ending Status - The ending status appears next on the model. It
reflects the status of the primary object of the VADS after the
procedures have taken place. The ending status becomes the beginning
status of the next phase on the model.
Lapsed Time - The lapsed time is the time (days, hours or minutes) it
takes from the start of a VADS through its completion. When
contrasted to the subsequent level of effort needed to complete the
phase, it can help the team to spot workflow bottlenecks and
improvement opportunities.
Level of Effort - The level of effort represents the actual labor needed
to perform the procedures of the VADS phase. This can also be
147
expressed in any unit of time. Multiplied by the cost per hour of the
people performing the actions allows the team to estimate the cost to
complete one cycle of the VADS.
Figure 7-14 illustrates a blank Level 2 Workflow model format.
Once the model has been posted to the WFL2 form, the team can test the
model for its integrity. There are several rules that are applied to ensure
that the model is properly tested. The first set of rules relates to the proper
completion of the form. The second set of rules relates to the model itself.
Throughout the testing process, the team will make several decisions. If
the item being tested passes the diagnostic, then the team continues the
process. If the item fails the diagnostic, and the team has the knowledge to
correct the deficiency, they do so and then continue the process.
Otherwise, the team develops a question for the knowledge-workers which
will be addressed before or at the next facilitation work session.
Figure 7-14 - Blank WFL2 Form
Level 2 Workflow
VADS Name: ________________________ VADS Reference: WFL2 - ______________
VADS Cycles per Year: _________________ VADS Estimated Annual Cost: ___________
Beg.
Status
Assumptions (from WFL1): ___________________________________________________

Phase A
Phase B
Phase C
P
R
O
C
E
D
U
R
Effort
Lapsed End
Time Status
E
S
T ESTING
THE
F O RM
FOR
C OMPLETENESS
Testing the WFL2 form for completeness takes only a few minutes. The team
quickly reviews the following:
148
The VADS Name should correspond to the VADS name used on the
WFL1.
The VADS Reference should be the same used on the WFL1. The
only difference is the model indicator. On the Level 1 Workflow, the
reference started with WFL1-. On the Level 2 Workflow, the reference
starts with EWFL2-. The E means existing. Since there is an
existing as well as proposed PWFL2, the distinction needs to be
made.
The VADS Cycles per Year should contain the estimated number of
times the workflow process is repeated annually.
The VADS Estimated Annual Cost should be the result of
multiplying the VADS Cycles per year times the estimated cost to
perform a single VADS cycle.
The Assumption should be the same used on the WFL1.
The body of the model should be an accurate depiction of the flip chart
model. Any abbreviations or cryptic data should be clarified.
The cycles per year and annual cost data is currently unknown to the team and
will need to be collected in a subsequent facilitation work session.
Figure 7-15 depicts a Level 2 Workflow model after posting it to the WFL2
form.
149
Figure 7-15 - Posted WFL2 form

Existing Level 2 Workflow
VADS Reference: EWFL2 - SOA1

VADS Cycles per Year: 40,000
VADS Estimated Annual Cost:
Assumption [from WFL1]: Sales orders on account when the customer's credit is good,
$4.8 million
Beg. Status
Inventory is available and the customer pays on time.
P
R
O
C
E
D
U
R
E
Phase A
Phase B
Phase C
Phase D
Phase E

approval

shipping

desk with an order.

the order desk.

from Credit.

warehouse.




screen.
limit.
Lapsed
End Status
Time
quantities shipped.


outstanding A/R.



mails to customer.
Effort
the order form.
stamps it "approved" and forwards

order to Billing.

billing.
posts the payment.

approval

shipping
5 minutes
2 days
1 day
2 hours
45 days
5 minutes
45 minutes
1 hour
10 minutes
10 minutes
150
T ESTING
THE
M O DEL
FOR
C OMPLETENESS
AND
I NTEGRITY
The next step in the diagnostic process is to test the actual model for its
completeness and integrity. Again, this is done by applying a series of rules to the
model. The rules are intended to help the team satisfy itself that the model makes
business sense and is complete in terms of its phases, procedures and object
transformations. The rules for this diagnostic test are presented below:
related WFL1 model and the process group actions needed to
transform the primary object of the VADS from its current status to its
new status.
Rule 3: Each phase must contain only one transformation to the primary
object.
Rule 4: Each phase must contain at least one input, process and output
related to the primary object.
Rule 5: Each phase must identify secondary objects (and any transformations
taking place on them) within the VADS cycles phase.
Rule 6: Each phase must contain estimates for the lapsed time and actual
level of effort needed to complete the phase.
A PPLYING
THE
R ULES
TO TH E
C ASE S TUDY
Rule 1: Each phase must be sequentially dependent on the

successful
A simple diagnostic can be performed to test the sequential dependence of each

phase to the last phase. This diagnostic theoretically eliminates the procedures
performed in the prior phase and determines if the process can logically continue.
If the process stops, then a dependency exists. For example, if the customer never
places an order, it stands to reason that no order would be generated and therefore
no order could be sent to the Credit department for approval. The previous phase
only needs to have one procedure in place to make the test valid. Typically, the
procedure that creates the phase dependency is the one that transforms the primary
object to a new status. However, this is only generally true. Many times it is a
physical event. For instance, in Phase A of the WFL2, the last procedure is to print
the rough order and send it to the Credit department for approval. If this event does
151
not occur, the process stops. It was not a transformation event, but it did represent
the result of a prior transformation procedure.
What happens when none of the procedures in a particular phase needs to be
completed in order for the VADS cycle to continue? As unlikely as this is, it could
occur. In such cases, the team needs to formulate a question that can be asked
during the next facilitation work session. The question seeks to explore why the
procedures are necessary to the workflow. Typically, if this occurred, it would
indicate that there are non-value-adding procedures being performed. These
procedures should not arbitrarily be eliminated. Each should be explored in terms
of their appropriateness in this VADS and for their potential appropriateness in
other VADS. If after this exploration they are found not to add value, they should
be eliminated from the proposed Level 2 Workflow.
The team can systematically test the existing Level 2 Workflow for the phase
dependencies. On examination, each phase in the existing WFL2 passes Rule 1.
related WFL1 model and the process group actions needed to transform the
primary object of the VADS from its current status to its next status.
Since the WFL2 is an expansion of the WFL1 model, it must, at minimum, contain
the same amount of information. This means it must reflect the same steps
contained in the WFL1. The procedure section of the model can be tested to ensure
this rule holds true. Each procedure on the EWFL2 either is derived from a
communication line on the WFL1 or is an explanation of what actions the process
group performed in order to prepare for a subsequent communication. Often, a
procedure can satisfy both aspects. That is it can represent a preparation process
and a communication. For example, in phase A of the WFL2, the first two
procedures describe the process of the customer calling the order desk with an order
and the order desks subsequent entry of the order into the system. This could have
been represented in one procedure that might have read:
The customer calls the order desk with an order and the order desk
enters it into the system.
Although it would be okay to combine the actions together, it is not advised. As a
general rule of thumb, it is best to have only one thought per procedure. Keeping
procedures to single thoughts makes the model easier to read and understand. The
exception to this is when the number of procedures in a phase makes it cluttered and
overly complicated. When this occurs, consider consolidating the procedures. Be
careful not to consolidate in a way that results in the model losing meaning.
In the case study, a proper example of consolidation of procedures can be seen in
phase B, procedure 4. It reads:
152
Credit approves the order on the system, stamps it approved and

forwards it to the warehouse for shipping.
This could have been broken up into multiple procedures, but it most likely would
not have added any value to the model in terms of making it more complete or
easier to understand. If procedure 4 had been broken up into multiple procedures, it
might have read as follows:
Credit approves the order on the system.
Credit stamps the order approved.
Credit sends the order to the warehouse for shipping.
Many times the choice is more a matter of style and not related to the quality or
substance of the model. When in doubt, add the extra procedures.
Testing the case study model for compliance to Rule 2 provides the following
results:
Phase A: To comply with Rule 2, phase A must contain the following actions from
the WFL1:
Customer placing an order with the sales order desk,
Sales order desk entering the order into the sales order system, and
Sales order desk forwarding the order to the Credit department.
Procedures 1, 2 and 4 accomplish this.
The second half of Rule 2 requires phase A to contain the actions taken by the
process groups that transform the primary object of the VADS from its current
status to its next. As previously discussed, the primary object of the VADS is the
order. In procedure 2, the order is entered into the sales order system. The act of
entering the order creates it. At the point of the orders creation, it is transformed
from a desire to order to an order pending approval. The confirmation of
inventory availability and ship dates with the customer in procedure 3 provides
closure to the object transformation process.
Phase A satisfies Rule 2. It reflects the communications from the WFL1 and
provides the procedures necessary to transform the order (the primary object) from
an intent to an order pending approval.
The remaining phases also comply to Rule 2 as follows.
Phase B reflects the communications between the Credit department, the system
and the warehouse. It reflects the transformation of the order status from pending
to approved.
153
Phase C reflects the communication to Billing and the customer. It reflects the
transformation of the order from a status of pending to shipped or billable.
Phase D reflects the communications between billing, the customer and the system.
Procedure 3 shows the transformation of the order from the status of billable to
billed.
Finally, phase E reflects the communications between the customer, Billing and the
system needed to transform the order to the status of paid. Overall, the WFL2
complies with Rule 2.
If the model fails Rule 2, then it is flawed. Failing the first part of Rule 2 can be
corrected by the team simply inserting the missing communication from WFL1 into
the correct phase in the right sequence on the WFL2. If the team cannot determine
where the missing communication goes, it can note the discrepancy and resolve it at
the next facilitation work session.
If the second part of Rule 2 is violated, then the model is functionally incorrect. It
could be that the phases do not represent true transformation of the primary object
from one state to the next. It could also indicate that the workflow as represented
will not work. This means that the procedures, when followed, will not produce the
workflows intended outcome. For instance, if phase D did not include procedure
3, where the order is turned into an invoice within the system, then the customer
could not be billed, and consequently, would most likely never remit payment for
the products shipped to them. The fact that the model indicates the phase changed
does not mean the procedures will result in the successful completion of the phase.
The procedures and phases must be synchronized. When a synchronization
problem occurs, the team can note the discrepancy and resolve it at the next
Rule 3: Each phase must contain only one transformation to the primary object.
By definition, a phase consists of the procedures necessary to transform the primary
object to a new state as well as the communications and actions needed to set the
next stimulus trigger in action for the next process group. If the primary object
transforms more than once in a single phase, then it needs to be broken up into
multiple phases. Remember that an object is transformed when it moves from one
state to the next (i.e., its characteristics change). When an order transforms from an
order pending approval to an approved order, the way the organization treats it is
different. The act of approving the order tells the organization that it is okay to ship
the related products to the customer. Before the order was approved, it was not
okay to ship the product. The order changed and so did the way the organization
treated it.
154
In each phase of the WFL2, the team needs to ensure that the order (the primary
object) is transformed once and only once. The transformation must coincide with
the change that moves the phase from its beginning status its ending status.
When more than one transformation to the primary object occurs in a single-phase,
two situations may have occurred. First, one of the transformations could be
incorrect, meaning the transformation procedure never takes place or does not result
in actually transforming the object. Second, the phase may need to be split into
multiple phases, one for each transformation. Again, the knowledge workers are
the best source of information for resolving the issue. Discrepancies should be
noted and presented at the next facilitation work session.
Reviewing the WFL2 presented in the case study shows that each phase does indeed
contain only one transformation to the primary object (the order) as follows:
Phase A - The order is transformed from a status of desired to openpending approval
Phase B - The order is transformed from open-pending approval to
approved
Phase C - The order is transformed from approved to shipped or
billable
Phase D - The order is transformed from shipped to billed
Phase E - The order is transformed from billed to paid
The WFL2 passes rule 3.
Rule 4: Each phase must contain at least one input, process and output related to
the primary object.
In order for an object to transform there must be: 1) an input of new information
about the object; 2) a process that transforms the object; and, 3) an output that
communicates the objects new state to the organization. Without these three
components, an object cannot be successfully transformed. The WFL2 needs to be
reviewed to ensure that each phase contains these three transformation components.
When one of the components is missing, it indicates that the model is incorrect and
the model will not execute properly. The purpose of the existing WFL2 is to reflect
what actually happens in the workplace. Since JMI actually takes, approves, ships
and is paid for orders, the model must logically do the same. Without an input,
process and output to the order, the model cannot execute and will not correctly
reflect the way JMI does business. If the model is found to be missing any one of
the components, it needs to be corrected. The best place to make this correction is
in the facilitation work sessions. The team should not guess at what the inputs,
155
processes or outputs are. It should simply note the discrepancy and present it to the
knowledge workers for resolution.
The only exception to Rule 4 is when the work process being reviewed is so
severely flawed that it does not function. This is extremely rare. It is more likely
that a VADS is working very inefficiently, breaks down from time to time or has
many flaws related to the transformation of secondary objects.
One case in point comes from a company that was experiencing very large
shortfalls in inventory and a reduction in sales. The company managed its records
manually and sent all the paper work related to orders to the warehouse for
shipping. This meant that no supporting copies were maintained. From time to
time, the warehouse would ship the order but lose the paper work, thus losing all
record of the sale. This resulted in the order being shipped but never being billed.
Thus, the inventory was physically reduced with no corresponding invoice being
sent to the customer. This type of breakdown in the VADS cycle is more likely to
occur than a VADS that, by design, does not work at all.
In reviewing the phases in the case study, the following inputs, processes and
outputs can be identified for each phase:
Phase A Input = Customer calling the order desk
Process = Order desk entering the order into the sales order system
Output = Printing the order and sending it to credit
Phase B Input = Order from sales order desk
Process = Review of customers credit and accounts receivable
status
Output = Order updated in the sales order system and stamped
APPROVED
Phase C Input = Approved order from Credit
Process = Shipping of order to customer
Output = Shipped order (paper work) sent to Billing for invoicing
Phase D Input = Billable order received from the warehouse
Process = Updating the order on the system and creating the invoice
Output = Printing and mailing the invoice to the customer
156
Phase E Input = Receipt of payment from the customer

Process = Posting payment to the system
Output = Updated invoice to reflect payment
The WFL2 passes rule 4.
Rule 5: Each phase must identify secondary objects and any transformations
taking place on them within the VADS cycles phases.
Once the WFL2 has been tested for compliance with the WFL1 and proper
transformations of the primary object confirmed, the team can turn its attention to
the secondary objects that are being transformed. Typically, issues, inefficiencies
and data corruption that occur in VADS relate to breakdowns in the maintenance of
secondary objects. When transformations of secondary objects are not properly
tracked, communications and processes tend to breakdown. However, these
breakdowns do not necessarily manifest themselves in the current cycle of the
VADS. Instead, there is often a long-term cause and effect that adversely impacts
future VADS cycles and other VADS.
At best, the concepts related to the transformation of objects is abstract. Gaining an
understanding of primary object transformation is somewhat straightforward
because it is easily observed within the VADS changing status. The cause and
effect of not properly transforming an order from approved to shipped to billed to
paid is obvious. But what about the cause and effect of not maintaining accurate
data on inventory transformations, or customer, vendor, and employee
transformations. Failure to maintain accurate information on the status of
secondary objects within an organization can have huge impacts on productivity,
profitability and competitive positions.
An actual case will help illustrate this impact on an organization when VADS do
not properly track changes to the status of secondary objects. In the early 1980s, a
large California-based utility was experiencing tremendous difficulties with its
payroll processes. The centralized systems, practices and procedures set in place
over a decade before were failing to manage and track changes (transformations) to
the employees status. The volume of employees had overwhelmed the current
VADS ability to capture time and process payroll checks. The company could not
compile employee time card information fast enough to make the payroll each
week. The company reacted to the problem with a knee-jerk remedy that used
three-week old time data that was adjusted for changes that occurred between week
two and three. It became impossible for employees to determine if they were being
properly paid. Of course, this disturbed the employees, which in turn created severe
morale problems.
157
The company found that this approach exacerbated the payroll process problems,
and estimated it was losing about $3 million a week in payroll. The pressures of
reconciling and constantly adjusting the employees payroll data affected the
overall employee record-keeping process. The status of employees (a secondary
object in the payroll processing VADS) became corrupt. One vice president, in his
frustration to know who and how many people worked for him, called a staff
meeting for everyone in his department. He was amazed to learn that there were
about 200 people too many on the payroll (i.e., more people being paid than were
actually employed). All this happened because the organization did not know the
impact that would be experienced when transformations to secondary objects were
not properly factored into any modifications to VADS workflow cycles.
In the case study, the change analysis alludes to several issues related to the proper
tracking of transformations to secondary objects. The accuracy of the customers
credit limit and inventory available for sale are two areas that the knowledge
workers had identified as needing improvement. A review of the EWFL2 (figure 715) reveals that there are several flaws in the current VADS related to the tracking
and maintenance of transformations to the secondary objects (customers and
inventory).
In phase A, procedure 2, the order is entered into the system. New orders commit
inventory to a customer. Therefore, the amount of inventory available for sale
should be equal to the inventory available before the order less the quantity of
inventory being ordered. This change in the level of inventory available for sale
represents a transformation to the inventory object. However, the current workflow
does not capture this change to inventory. A physical event has occurred that
changes an object that is not reflected in the information being maintained.
While this error will not affect the ability to ship the order in this cycle, it will
impact the next cycle. Since inventory is now overstated, the next time a customer
places an order for the overstated item, the order desk will be led to falsely believe
that there is sufficient inventory available to satisfy the customers need. The
impact of this error will not be known until the warehouse goes to pick the order
and finds that there is not enough inventory on the shelf. CA-SOA-2 on the change
analysis identified this situation (figure 7-19).
The next anomaly in phase A relates to the change that occurs to the customer
object that is not captured. When the customer places the order, it is logical that
their available credit limit is reduced. However, the order processing system is not
updated to reflect this until the Credit department approves the order. Although this
flaw eventually gets resolved in phase B, it creates various complications that effect
customer service levels. In CA-SOA-3, the knowledge workers indicated that this
timing flaw in the workflow can result in taking an order that the customer does not
have the credit available to support. Once this credit limit shortfall is discovered,
158
the customer has to be informed. This causes needless embarrassment and the
potential loss of a customer (figure 7-19).
The case study provides two excellent examples of workflow anomalies caused by
failure to capture transformations to secondary objects at the time the
transformation logically and physically takes place. The team needs to ensure that
the proposed WFL2 resolves these anomalies.
Rule 6: Each phase must contain estimates for the lapsed time and actual level of
effort needed to complete the phase.
At the bottom of the WFL2 form are two rows for posting the lapsed time as well as
the level of effort required to complete each phase of a VADS cycle. Lapsed
time indicates the amount of time that passes between the moment the first
procedure in a phase is started until the last procedure in a phase is completed.
Level of Effort indicates how much labor was expended during the lapsed time to
complete the procedures. By contrasting the two numbers, potential bottlenecks can
be identified in the VADS cycle.
When the lapsed time is greater than the level of effort, a bottleneck could exist.
Although a large difference does not indicate why the bottleneck exists, it does
provide the stimulus trigger needed to get more information from the knowledge
workers. Often, the change analysis will provide additional information about the
potential bottleneck. Other times, the team will need to obtain more information
about the bottleneck at a subsequent facilitation work session.
The goal is to have the proposed VADS be as streamlined as possible by
having as little difference as possible (zero being perfect) between the
lapsed time and level of effort needed to complete a phase within a
VADS cycle.
The team needs to verify that estimates have been posted to each phase. This data
is supplied by the knowledge workers during or after the facilitation work sessions.
In the first work session, the knowledge workers provided estimates for each phase
of a VADS cycle. By reviewing the differences between the lapsed times and levels
of effort, the following potential bottlenecks can be identified:
Phase A - The estimated difference is zero.
Phase B - The estimated difference is about two days. Here, a potential bottleneck is
apparent. Reviewing change analysis CA-SOA-1 indicates that there is indeed a
bottleneck caused by the time it takes for the Credit department to review an
order for credit approval. The team needs to understand why this delay occurs
and, working with the knowledge workers, develop a proposed change to the
workflow that resolves the bottleneck. In the case of phase B, the bottleneck is
volume and velocity driven. Orders enter the Credit department for approval
159
faster than orders can be approved. The result is that orders for approval start
piling up. The knowledge workers believe that the solution is to have the system
perform credit checks at the time the order is entered, and thus reduce the
number of orders needing Credit department review (figure 7-19 CA-SOA-1s
preliminary goal).
Phase C - The estimated difference is about 23 hours. Here, there is no information on the
change analysis to indicate why it takes so long to go from picking an order to
shipping it when there is only about 1 hour of effort involved. The team will need
to explore this possible bottleneck and potential improvements to the process at
the next facilitation work session.
Phase D - Although estimated difference is about 1 hour and 50 minutes and pales by
comparison to the two days found in phase B and the 23 hours found in phase C,
the difference is large enough to investigate at the next facilitation work session.
Phase E - Here, the estimated difference is almost 45 days. At first glance, this would appear
to be a huge bottleneck in the process. However, the context of this phase
indicates that an external entity to JMI, the customer, is the cause of the delay.
Specifically, the 45 days represents the average time it takes a customer to remit
payment to JMI once they receive an invoice. While this may not represent a
bottleneck, it may represent an opportunity to improve JMIs cash flow. At the
next facilitation work session, the team will want to explore the benefits of
reducing the time it takes customers to pay their invoices.
Review
Based on applying the above rules to the Existing WFL2, the team would document
issues and questions to be addressed at the next facilitation work session. Specific
to the case study, the issues and questions to be addressed are:
Rule # 1 - No Questions
Rule # 5 - The team needs to verify with the knowledge workers that the
anomalies in phase A related to the transformation of the inventory
(not reducing the quantity available for sale) and customer (not
reducing the credit limit) objects are resolved by the preliminary
goals found in CA-SOA-2 and CA-SOA-3 of the change analysis.
The team must also demonstrate as to where these preliminary goals
are achieved in the proposed WFL2.
Rule # 6 - The team needs to present the potential bottlenecks, indicated by
the large differences in the lapsed time vs. level of effort values
on the WFL2, as follows:
Phase A - none
160
Phase B - The team needs to verify that the preliminary goal found
in CA-SOA-1 will resolve the credit-approval bottleneck.
Phase C - The team needs to determine why it takes about 23 hours
to move an order between the Credit department and the warehouse
and then ensure that the proposed WFL2 resolves this delay
appropriately.
Phase D - The team needs to explore if any improvement can be
made to the time it takes to generate invoices for
shipped orders.
Phase E - The team needs to explore if there are any
opportunities available to JMI for improving on the 45
days it takes to collect an invoiced order. If opportunities
exist, the team must identify what the improvement is,
both in terms of the specific number
of days it should
take to collect an invoiced order and the improvement
that this reduction in days would provide JMI.
At this point, it is clear that the work done in the first facilitation work session,
although appearing complete, has spawned new questions and issues for discussion
at the next work session with the knowledge workers.
Diagnostic Step #4 - Mapping the Change Analysis to the

WFL2 Model
During the first facilitation work session, the change analysis coordinates were
posted to the existing and proposed WFL2 models. If this had not already been
done, the team would then complete this task at the second facilitation work
session. Since it was done, however, the next step is to update the formal working
papers with this information. On the flip chart versions of the WFL2 models, the
change analysis numbers that corresponded to the phases and procedures of the
model were posted directly on the WFL2. Additionally, the projects objectives
were also posted. While this is appropriate for the work session version of the
WFL2 models, keeping the references on the model may clutter it and make it
difficult to read. If the WFL2 models can be maintained with the coordinates
referenced on them, that is fine. However, diagnostic step #4 will reverse the
references. Instead of posting the CA coordinates on to the WFL2 models, the team
will instead post the WFL2 coordinates on to the CA form. The team will also cast
the project objectives into a format that supports the posting of the WFL2
coordinates. This new form will have a reference of PO for Project Objectives.
Accordingly, each Project Objective item on the WFL2 models will be referenced
sequentially (PO-O1, PO-02, etc. - figures 7-16 and 7-17).
161
The change analysis form has two columns that reference the WFL2 model. In the
first column, the team will post the existing WFL2 references. In the second
column, the team will post the proposed WFL2 references. Since the column
headings indicate which WFL2 model is being referenced, it is only necessary to
post the model ID, phase and procedure references into each column (i.e., SOA-A3
= Sales on Account - Phase A - Procedure 3).
These references are posted to the CA to provide the reader with an index into the
WFL2 models so they can readily see where the current situations and preliminary
goals manifest themselves in each workflow. It is a critical proof of correctness that
each CA reference be addressed on each of the WFL2s. It also makes it very easy
to navigate through the documentation. If mapping does not exist, the team must
review and resolve the inconsistency with the knowledge workers at the next
To demonstrate the process, Phase A of both the existing and proposed WFL2 will
be reviewed. The mapping of phases B, C, D and E will be presented in the final
illustration of a fully-mapped change analysis to the WFL2s although not reviewed
in detail.
M APPING
THE
EWFL2
TO THE
C HANGE A NALYSIS
Phase A of the EWFL2 with the CA coordinates posted on it appears in Figure 716.
162
Figure 7-16 - CA Coordinates Posted to EWFL2
Beg.
Status
Phase A
P
R
A customer wanting to order

product PO1
desk with an order.

S2
PO2
screen.
E
D
U
R
E

PO4
End Status

approval
Lapsed
Time
5 minutes
Effort
5 minutes
Phase A of the PWFL2 with the CA coordinates posted on it appears in figure 7-17.
163
Figure 7-17 - CA Coordinates Posted to PWFL2

Beg.
Status
Phase A
1
P
R
O
C
E
D
U
R
The customer calls the order

desk with an order.
Order Entry Process
Order desk identifies the
PG1
Balance review.
For each item ordered, the order
E
S
PO4
Upon completion of the order, the

PO2
End
Status
PG3
Lapsed
Time
PG2
5 minutes
Effort
PG1
5 minutes
PO1
The projects objectives and the change analysis #2 for the Sales on Account VADS
are presented in Figure 7-18.
164
Figure 7-18 - Existing and Proposed WFL2 Models to CA and Project Objectives
Project Objectives
#
EWFL2
Ref.
Project Objectives
Improve our customer service and beat the competition by

reducing the time it takes to process an order from the order
desk through shipping from 5 days to 2 days.
Increase our sales by over $40 million a year by keeping lost

sales due to stock shortages to less than 2 a day.
Improve our collections by identifying when a customer has a

3-day change in their paying habits.
Become the industry sales leader by increasing our sales

volume by 30 orders a day.
PWFL2
Ref.
Change Analysis
#
Current Situation
EWFL2
Ref.
Preliminary Goal
Inventory is often oversold, resulting in

The ability to reserve inventory at the

time the order is taken.
This happens because the inventory is

not reserved at the time the order is
taken. About 12 to 18 orders a day are
lost due to inaccurate inventory levels
shown on the computer.
This would make the inventory records

more accurate and would ensure that
the stock would be available when the
warehouse went to ship it.
PWFL2
Ref.
This would increase sales by about

$57,000 a day.
In the columns provided, the team posts the WFL2 references associated to the PO
and the CA. On the flip chart version of the Existing WFL2 in phase A, procedure
2, there are three references to the PO and CA. The first reference is CA-S2. This
refers to CA-SOA-02. The team would accordingly post the reference SOA-A2
coordinate (the EWFL2) to the change analysis adjacent to SOA-02.
At the top of the phase in the Beginning Status box, the project objective PO1 is
referenced. This reference indicates that the project objective relates to the phase in
general and cannot be correlated with any specific procedure. On the project
objective form, the team would post SOA-A. This refers to EWFL2 SOA phase A.
165
The team would continue this process until all the items on the EWFL2 were posted
to the project objectives and change analysis forms. The team would then repeat
the process for the proposed WFL2, posting these coordinates to the PWFL2 Ref.
column on the PO and CA forms.
Figure 7-19 illustrates updated project objectives and change analysis forms after
posting of the CA and PO coordinates.
Figure 7-19 - Updated Change Analysis and Project Objectives
VAD Name: Sales on Account
#
Project Objectives
EWFL2
Ref.
PWFL2
Ref.

reducing the time it takes to process an order (order desk
through shipping) from 5 days to 2 days.
SOA-A
SOA-A
Increase our sales by over $40 million a year by keeping lost

sales due to stock shortages to less than 2 a day.
SOA-A2
SOA-A4
Improve our collections by identifying when a customer has

a 3-day change in their paying habits.

SOA-A2
SOA-A3
166
Change Analysis
#
1
Current Situation
Reference: CA-SOA
EWFL2
Ref.
Preliminary Goal

receives the order from the order desk until
The ability to process work orders directly

to the warehouse when the customers
available credit line is greater than the
order amount and their outstanding
balance is current.

until the next business day. This results in
poor customer service.
This would require a change to the order

processing system to support the
automatic credit checking process and
related electronic transmission of orders to
the warehouse and Credit department.
This occurs due to the volume of orders

(greater than 150 a day) coupled with the
number of steps that are taken to review
and approve credit and complete the order.
Based on an average wage of $30 and
hour and 45 minute of processing time the
cost to approve a sales order is $22.50.
Given a volume of 150 orders a day, it
requires about 14 Credit staff to keep up
with the volume. The average daily cost to
process orders through Credit is about
$3,375 a day.
Immediately upon the order desk

completing the entry of the order, the
system would credit check the order and
electronically route it directly to the
warehouse (approved) or the Credit
department (denied) for the appropriate
action. Testing and routing of an order
should take under one minute to occur.
This is good because it reduces the overall
order processing time by at least 44
minutes for orders that pass the automatic
credit check, directly supporting the project
objective to ship orders within 24 hours of
receipt.
It is estimated that approximately 91% (137
per day) of the orders received would clear
this credit checking process. Based on the
current cost of $22.50 to credit check an
order, this improvement would result in five
year savings of over $3 million (739,000 X
5 - 605,000). The cost to modify the order
processing system and to implement the
new process is estimated between
$185,000 and $605,000. The expected
return on investment in the first year should
range from 22% to 300% depending on the
actual implementation costs.
Given the objective to ship orders within 24

hours of receipt, reducing the time required
to process orders through credit supports
this objective and improves customer
service levels. Reducing the time it takes
to approve orders will also reduce the cost
of order processing providing value to
JMI's owners.
PWFL2
Ref.
SOA-A2
SOA-A4
The above savings would benefit the

company by providing a net savings of
about $140,000 the first year and $740,000
a year thereafter. The customers would
benefit from this change because they
would receive their order up to 24 hours
sooner. With the reduced number of
orders flowing to the Credit department,
the department can focus its full attention
on problem orders and avoid adding new
staff in the future. This is in line with the
companys objective keep staffing levels at
7,500.
167
Change Analysis
#
2
Reference: CA-SOA
Current Situation
Inventory is often oversold, resulting in slipped delivery dates, poor

customer service and/or canceled orders.
EWFL2 Ref.
SOA-A2
Preliminary Goal
The ability to reserve inventory at the time the order is taken.
This happens because the inventory is not reserved at the time the order is
taken.
This would make inventory records more accurate and would insure that
the stock would be there when the warehouse went to pick it.
About 12 to 18 orders a day are lost due to inaccurate inventory on the

computer.
This would increase sales by about $ 57,000 a day.
The customers credit limit is not updated in the computer until the sales
order is approved by Credit.
The ability to update the customers credit limit at the time they place an
order.
This sometimes results in the customer being sold products beyond what
their credit limit supports.
This would allow the order desk to catch potential credit limit problems
before the order is taken and a delivery date promised.
When this happens, it is a source of embarrassment for the customer and

exposes the company to a potential bad debt.
This would improve customer service and reduce bad debts.
P FL2 Ref.
SOA-A4
SOA-A4
When completed, every project objective and change analysis item should contain a
reference to the WFL2s. If there are missing references, then the team will need to
note the inconsistency and present the item for resolution to the knowledge workers
at the next facilitation work session. Assuming that there were no more phases to
post in the above example, the team would observe that PO3, the current situation
portion of CA-SOA-1 and CA-SOA-3 are missing references to the WFL2s. The
team would point this out to the knowledge workers and collaborate with them on
resolving the inconsistency.
Remember that the change analysis and project objectives must
correlate to their associated VADS.
If this does not occur, the information is not aligned. This indicates an error in the
models and, therefore, an error in the shared understanding of the team and the
knowledge workers of how the VADS currently functions and how it should
function.
Notice that project objective PO3, which states Improve our collections by
identifying when a customer has a 3-day change in their paying habits, has no
reference points posted to it. This means that the Sales on Account VADS does not
address collection of past due orders. If this is correct, then one of three things
must happen:
The scope of the project could be expanded to include the collection process,
168
The scope could be reduced, eliminating PO3 from the projects objectives,
The VADS could be updated to indicate at what point in the workflow a
change in payment habits could occur and when it would be discernible by
the organization.
In the VADS, there are several places where a change in paying habits could
be detected. In the existing WFL2, a change in paying habits occurs when a
payment is not received. This relates to SOA-E2 (customer sends payment).
JMI could become aware of this at the time the Credit department reviews the
customers next order. However, this could be weeks, months or longer.
Therefore, it appears that there is no timely way to monitor changes in
payment habits in the existing environment.
In the proposed WFL2, there is a natural place in the flow to discover
changes in payment habits. When a payment is posted, the system could flag
a customer that has a three day change in their payment habit and the proper
sales and collections staff could be notified. Additionally, since the system is
keeping track of every customers outstanding invoices, a nightly analysis
could be run to report customers that have outstanding invoices that have
aged three or more days longer than the average time they pay. If this
approach was adopted, then a footnote would need to be added to the PWFL2
in phase D indicating that a nightly report would identify customers with
changes in payment habits.
Additionally, a new VADS would need to be added to the scope of the
project. This VADS would reflect the process of reviewing the report,
contacting the customer and getting their payment habits back to an
acceptable level. This VADS could be developed at subsequent facilitation
work sessions.
At this point, the team would add this issue to the list of items to be reviewed
at the next facilitation work session.
Review
The mapping of the project objectives and change analysis items to the Level
2 Workflow Models provides the team with a proof of correctness that
correlates the work completed to date.
Through this mapping process, the team can quickly identify new VADS that
need to be added to the project. In addition, they can identify issues and
questions for the next facilitation work session.
The documentation generated during this diagnostic provides the team the
ability to demonstrate their understanding of where and how the goals and
objectives are achieved in the proposed Level 2 Workflow.
169
NOTES
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
________________________________________________________
170
Conducting Post Diagnostic Work

Sessions Advanced Diagnostics
Chapter 7 presented the basic diagnostic steps that are performed on the models
generated during facilitation work sessions. Chapter 8 will focus on four advanced
diagnostics. These diagnostics will help you to:
1. Define achievable goals based on the preliminary goals identified in the
change analysis,
2. Test the models developed for alignment to the nine essential alignment
factors,
3. Develop new breakthrough process concepts and alternatives,
4. Identify the stimulus triggers and actions needed to drive each proposed
VADS process and
5. Identify and resolve potential process failures in each proposed VADS
process.
Each advanced diagnostic builds from one to the other. Therefore, it is important to
do the diagnostics in sequence.
D IAGNOSTIC S TEP 5 - E XPANDING
THE
C HANGE A NALYSIS
The next step in the diagnostic work session is to review the preliminary goals and
project objectives for their ability to be achieved in actual practice. To do this
feasibility analysis, each goal and objective needs to be tested in terms of the:
1. Uncontrollable variables and
2. Imposed limitations and constraints affecting their achievement.
Every goal and objective has a set of key variables that impact their feasibility.
These variables fall into the following categories: Controllable, Uncontrollable,
and Imposed Limitations and Constraints. Controllable variables are those that
the organization has domain over (i.e. procedures, working hours, priorities, etc.).
Uncontrollable variables are those that the organization has little or no domain over
(i.e. government regulations, weather, etc.). In general, the achievement of a goal
or objective is inversely proportional to the number of uncontrollable variables
present. For each uncontrollable variable encountered, it is important to assess its
171
associated risk factor and impact on the goal or objective for when it does not
behave in the manner desired.
Imposed limitations and constraints are artificial boundaries that the organization
has created for a given goal or objective. They differ from an uncontrollable
variable in that they are negotiable. This means the organization could change its
mind and set new boundaries for imposed factors if it so desired.
While there are many variables and factors that could be considered, the team is
only interested in those that would influence the pursuit or the achievement of the
projects goals and objectives.
An example will help to illustrate this point.
Assume someone wants to take a trip from New York to Florida for a vacation of
sun and fun. What are the key variables that come into play regarding this
vacation? To understand the KEY VARIABLES, the expectations of those
taking the vacation must be identified. Assume the vacationers have the following
expectations:
1. Florida will be sunny and warm (about 80 degrees),
2. This will be a vacation (i.e. no work),
3. The trip down will take less than three hours and cost about $300 each,
4. The trip will last four days and start on April 5 and
5. The hotel will cost under $75 day.
Given these expectations, the following factors appear to be important:
1. Weather (Uncontrollable),
2. Type of trip (Controllable and an imposed limitation and constraint),
3. Travel time (Somewhat uncontrollable and may not represent an imposed
limitation and constraint),
4. Cost (Controllable and an imposed limitation and constraint) and
5. Length of stay (Controllable and an imposed limitation and constraint).
To what extent can the vacationer control the weather? Obviously, the answer is
not at all. However, the probability that the whether will be sunny and warm in
Florida in April is pretty good. So while the weather cannot be controlled, it can
reasonably be predicted. If the vacationers were to assess the impact of weather on
their vacation, they might consider the following questions:
1. What if rain is predicted for the week of April 5? Would the trip still be
made?
172
2. What if the forecast is for sunny and warm and it rains anyway? Will the trip
be cut short?
The risk of rain occurring all day long for four days in April is remote. However, it
can happen. The vacationers need to assess the risk of rain relative to making the
trip. The vacationers also need to create a plan for what to do if it does rain (stay
there or return home).
To what extent can the vacationers decide to take work along on their vacation?
Here, the amount of control they have is substantial. They can increase that control
by not leaving a telephone number or address where they can be reached. The
variable associated with not having to work on vacation is controllable and does not
need more analysis. It represents an imposed limitation and constraint that does not
pose an obstacle to the trip.
What about the time of travel and the associated cost of the trip? How much
control does the vacationer have over the time it takes to go from New York to
Florida or the related costs? Again, the predictability is high. But what can go
wrong? What are the risks associated with this expectation not being met? If it
takes more than three hours to get to Florida, will the vacationers still make the
trip? Probably yes. Although the flight could be delayed, it would not affect the
decision to go.
What about the cost? If the airfare is $800 and the hotel $100 a night, would the
vacationers still go? What could happen to make the cost increase? How much
control over that increase is there? What happens if the vacationers miss their
flight? What is the probability of that happening, and what can be done to reduce
that risk? Here, variables are both uncontrollable and imposed. If the cost goes up,
the vacation may not be affordable. However, this cost constraint is an imposed
limitation and not necessarily cast in stone. Controlling cost is certainly easier than
controlling the weather.
These types of questions help the team to explore the Gotchas that could
influence the pursuit or achievement of any particular goal or objective.
In summary, the following steps should be followed when assessing the controllable
versus uncontrollable variables and the imposed limitations and constraints
associated with any particular goal or objective:
1. Review the preliminary goal or project objective.
2. Identify the explicit and implicit expectations associated with the goal or
objective.
3. Identify the variables that could negatively affect the pursuit or achievement
of the goal or objective.
4. Assess the level of control that the organization has over those variables.
173
5. Identify if the variables are being imposed by the organization or are, in fact,
uncontrollable in their nature.
6. For uncontrollable variables, identify their impact on success as well as the
actions that would be taken if the variables behaviors were not in accordance
with the organizations expectations.
7. For imposed limitations and constraints, evaluate the latitude or flexibility the
organization or knowledge workers have to change the boundaries being
imposed.
Based on the results of the above seven items, determine if the goal or objective is
realistic. If it is not realistic, determine how it should be changed to be realistic.
The process typically requires the team to brainstorm for each preliminary goal and
project objective. When significant issues are raised, the team will need to review
their analysis with the knowledge workers and/or management in order to seek a
resolution. This would be done in subsequent facilitation work sessions.
Usually, very few goals and objectives need modification. However, this portion of
the diagnostic effort provides the insights needed to quantify risk and make
informed decisions.
At this point, the question might arise: Why do this now? Why not do this at the
same time the change analysis is done?. The answer is this: it could be done either
way. However, there is a better chance of understanding the implications of a goal
or objective when it is done in context to the mapped workflows. Pursuing part 2 of
the change analysis too soon can result in exploring far more variables than needed
to assess the risk of failure related to achieving a particular goal or objective.
Applying part 2 of the Change Analysis to the case study

The same process that was demonstrated in the above vacation example needs to be
followed by the team for the four project objectives and three preliminary goals of
the project.
Figure 8-1 provides a sample of the CA2 form used to record the results of this
portion of the diagnostics process.
The best approach is to do the diagnostic using a white board or flip chart and then
post the result to the form. Brainstorming and forms do not necessarily mix.
Therefore, the team is better off to work first in a more unstructured medium and,
once satisfied with the result, post it to the form.
174
Figure 8-1 - Part 2 of the Change Analysis

Change Analysis - Part 2
VADS Name: _____________________________________
Project Objective or
Preliminary Goal
Risk Variables
VADS Reference: CA2 - ____________
Uncontrollable
Aspects
Imposed Limitations
& Constraints
Realistic Objectives
& Goals
For the sake of brevity, only the first preliminary goal will be reviewed. The
concepts and skills needed to complete part 2 of the change analysis can receive
ample coverage by walking through a single item.
The first preliminary goal (CA-SOA1) states:
The ability to process work orders directly to the warehouse when the
customers available credit line is greater than the order amount and their
outstanding balance is current. This would require a change to our order
processing system. Specifically, it would require the system to automatically
check the order for credit-related data and route it to the appropriate location
(Credit department or warehouse).
Part 2 of the change analysis can be completed by applying the following diagnostic
process:
1. R EVIEW
TH E PRELIMINAR Y GO ALS AND PROJECT O BJECTIVES .
Reading the statement aloud often improves group comprehension. As a group, be

sure to discuss interpretations of the statements meaning. When in doubt, review
the statement with the appropriate knowledge workers.
2. I DENTIFY
THE EXPLICIT AND IMPLICIT EXPECTA TIONS ASSOCIATED

WITH THE GOAL OR OBJECTIVE .
Explicit expectations are those items that are clearly stated in the goal. They are
identified by reviewing what the goal is achieving. What are the explicit
expectations in the above goal statement?
First is the ability to either process work orders to the warehouse (when the
customers credit is good) or the Credit department (when the customers credit
fails the automatic check).
Next is the expectation that the order processing system can be changed to perform
automatic credit checks.
175
Last is the expectation that the warehouse can support a printer for printing the
orders routed to it.
What, if any, are the implied expectations? These are expectations that are not
specifically listed in the statement but are deducible with a little reasoning.
The team knows that the overall goal is to speed up the VADS cycle by being able
to bypass the Credit department via an automated credit check process. Therefore,
it would stand to reason that the new process would be faster than the old one. This
means that a creditworthy order would need to get to the warehouse faster than if
the order was routed through the Credit department. How much faster is the
question yet to be answered. Looking at the lapsed-time area of phase A on the
PWFL2, it is expected that the order will move from the order desk to the
warehouse in about 5 minutes.
Identifying implied expectations require dialogue, introspection and a little
detective work. It requires the team to consider the goal in the context of the VADS
and what the underlying benefits to be achieved are. Typically, it is the failure to
satisfy implied expectations that results in failure to achieve goals and satisfy
expectations.
3. I DENTIFY
THE VARIABLE S THAT COULD NEGATIVELY AFF ECT THE

PURSUIT OR ACHIEVEME NT OF THE G OAL OR O BJECTIVE .
Variables need to be evaluated both in terms of their potential impact on pursuing

the goal as well as their impact on the goal of delivering what was planned. A
variable is considered to have a negative impact on the pursuit of a goal if it could
derail or hinder the implementation effort or impact goal achievement after
implementation. Think of it this way. Two risks are present when someone jumps
over a crevasse. The first risk relates to the effort, the jumping process. If the jump
is too short, the person falls and the effort fails. The second risk relates to
discovering that the other side of the crevasse does not provide the benefits
expected (i.e. the operation was a success but the patient died). Each variable needs
to be evaluated from both perspectives.
What are the risk variables associated with trying to automatically credit check an
order, route and print it to either the warehouse or the Credit department within 5
minutes?
Here, the variables are feasibility, cost and time. By asking questions about these
factors, the team can assess the amount of risk associated with trying to change the
system to accommodate the proposed changes. A few questions that might be
asked include the following:
1. Can the system be changed to perform this new function?
2. Can the cost of the change be accurately estimated?
176
3. How much will the change cost?

4. Is that cost worth the benefits to be derived (i.e. what is the ROI)?
5. How long will the change take to implement?
6. Can the warehouse support a printer?
7. What will it cost to put the printer in the warehouse?
Finally, what are the risk variables associated with implementing the change only to
have it fall short of the desired goal? Here, the variables are efficiency, reliability
and speed. The following types of questions can help the team determine the risks
associated with post-implementation results:
1. Can this new process perform within the 5-minute expectation?
2. Will the new credit check process really be as reliable as the Credit
departments current credit check process?
3. Will the routing process be reliable?
Once these types of questions have been answered, the team will have a reasonably
accurate assessment of the overall risks associated with a preliminary goal.
4. A SSESS
THE LEVEL OF C ONTROL THAT THE ORGA NIZATIO N HAS

OVER THOSE VARIABLES .
The team needs to assess the level of control the organization has over each of the
variables identified (feasibility, cost, time, efficiency, reliability and speed). This is
done by answering the aforementioned questions.
Consider the first questions that relate to the feasibility, cost and the time needed to
change the order processing system to perform automatic credit checks. How much
control can the organization exert over assessing the technical feasibility of the
change? Assuming the organization owns the systems and has access to the
program source code, the answer is virtually 100 percent. What about the cost of
the change? Here the control issue is a little fuzzier. While the organization can
control the level of effort put into estimating the cost of the change, what level of
control do they have over what the cost will actually be? History demonstrates that
technology projects, like their construction counterparts, tend to cost more than
original estimates. This would indicate that the organization can only hope that its
estimates reflect reality. Therefore, the risk associated with controlling the cost of
the change should be explored and communicated to management. Estimate ranges
usually provide more latitude than fixed numbers. The best estimates are based on
estimating each component of the effort separately and then adding an overhead
factor for project management, administration and coordination.
177
Time poses a similar challenge. How long will it take to effect the changes? The
organization can influence the time aspect of the change based on how much
resource it is willing to commit. However, it still takes nine months to have a baby,
no matter how many midwives are around to help. Again, the best the organization
can hope for is to develop time estimates that reflect the relative target for
completing the effort.
What control does the organization have over the success of the goal, assuming the
goal is feasible, properly funded, and given adequate time to be achieved? Can the
speed issue be controlled? Can reliability be guaranteed? Here the organization has
a great deal of control. Given the relatively simple nature of the process and
technologies being deployed, it is likely that speed and reliability will not be an
issue. However, what if the current system is slow to begin with? If the underlying
computer equipment is old and outdated, what will it cost to upgrade it to ensure
that it can process orders fast enough?
This process of peeling back the onion to gain insights into the subtle risks,
hidden costs and requirements associated with each goal of the project will allow
the team and the organization to avoid setting unrealistic goals. Additionally, this
process will help the organization prepare plans, budgets and time lines that are
more realistic for achieving those goals.
5. I DENTIFY
IF THE VARIA BLE IS BEING IMPOSED BY THE

ORGANIZATIO N OR IS , IN FACT , UNCONTROLLABLE IN IT S NATURE .
Of the variables identified (feasibility, cost, time, efficiency, reliability, and speed)
which ones have imposed limitations on them? Remember that an imposed
limitation is a boundary placed on a situation that can be changed by the
organization if it so wills. For instance, what if it is discovered that the new process
will take 8 minutes instead of 5 minutes. Can the organization change its mind as to
whether or not 8 minutes is acceptable? Of course. Is 8 minutes enough of an
improvement over 45 minutes? Absolutely. Therefore, when assessing the impact
of imposed limitations, the team needs to evaluate those limitations both in light of
the natural business requirements as well as how they contrast to the current
situation. Imposed limitations are often negotiable and can be modified, if
appropriate. At this point, the team merely needs to identify problematic limitations
for discussion at the next facilitation work session.
Figure 8-2 provides a example of the updates presented above to part 2 of the
change analysis.
178
Figure 8-2 - Updated Part 2 of Change Analysis

Risk Variable
Uncontrollable Aspects
Imposed Limitation Aspects
Feasibility of changing the order

processing system to perform
automatic credit checks and routing
to the warehouse or Credit.
Availability of source code. Quality

of program design. Quality of
database design.
Amount of money & time JMI is

willing to spend to assess the
feasibility.
Cost and time needed to implement

the changes.
Quality of program design. Quality

of database design.
Amount of money & time JMI is

willing to spend to achieve the
changes. Quality of talent JMI is
willing to assign to the effort.
Efficiency of changes once

implemented.

of database design.
JMIs definition of what efficient is.
Reliability of the changes once

implemented.

of database design.
Quality of the changes made.

Quality of the equipment used to
support the change. Accuracy of the
credit data maintained.
Speed of the changes once

implemented.

of data base design.
5-minute goal set for the process to

check and route the order.
6. F OR
UNCONTROLLABLE VARIA BLES , IDENTIFY THE IMPACT ON

SUCCESS AND THE ACTI ONS THAT WOULD BE TA KEN IF THE VARIABLES
DID NOT BEHAVE IN AC CO RDANCE WITH THE EX PECTATIONS .
The uncontrollable variables associated with changing the system to perform

automatic credit checks and routing are:
1. Availability of program source code,
2. Quality of program design and
3. Quality of database design.
If the program source code is no longer available, the changes would be impossible
to implement against the current system. JMIs only choices at that point would be
to either abandon the goal or replace the current system.
Assuming the source code is available, what is the quality of the design? If the
design of the code is extremely poor, JMI might find it easier to replace the order
entry module with a well-designed one. This may increase the cost of the effort, as
well as the time to achieve it, beyond its value to the company. The team needs to
inspect the source code or design documentation to determine how much it will cost
to change or replace that code. They then need to contrast those costs with the
benefits expected from the changes.
179
The team needs to perform the same type of analysis on the quality of the database
design. If the quality of the database design will not support the changes needed,
then it may be easier to redesign or even replace the system. Again, these costs
need to be placed in context to the benefits that the change will provide to JMI.
The team needs to expand its efforts to incorporate an assessment of the physical
systems to be changed and the cost of those changes in terms of repair or
replacement. This will most likely require the team to use knowledgeable MIS staff
or external experts (vendors or consultants) to perform the assessment.
The team should never discount the complexity associated with changing
information systems. Even if technical staff are part of the team, it should be sure
that any representations of the feasibility to modify an existing system are
supported with professional research and documentation.
Technical staff are notorious for underestimating the level of effort needed to
change or build systems. Their guesstimates are often low by a factor of 10.
Insist on formal estimates, not guesstimates.
7. F OR
IMPOSED LIMITATIO NS AND CO NSTRAINTS , EVALUATE THE

LATITUDE OR FLEXIBIL ITY THE ORGANIZATION OR K NOWLEDGE
WORKERS H AVE RELATED TO CHANGING THE BOUN DARIES BEING
IMPOSED .
Several limitations are imposed rather than uncontrollable in the above example.
These limitations relate to the amount of time and money JMI is willing to invest,
and the quality of talent and technology JMI is willing to commit to achieve the
changes identified. The final aspect of imposed limitations is the expectation that
the transaction speed will go from 45 minutes to 5 minutes. Again, the cost, time,
quality of talent and technology JMI is willing to deploy is relative to the benefits to
be derived. Therefore, the team will need to perform and provide management with
a cost/benefit analysis. The 5-minute expectation may be negotiable within limits.
If the teams assessment indicates that 5 minutes is not realistic, then it will need to
provide management with an alternative as part of the cost/benefit analysis.
8. D ETERMINE
IF THE GOAL O R OBJECTIVE IS REAL ISTIC AND , IF NOT ,

HOW IT SHOULD BE CHA NGED TO BE REALISTIC ?
Assuming the above diagnostics did not reveal any material issues, the team could
use the original preliminary goal as the realistic goal. They may want to include a
brief cost/benefit statement for the goal. If for some reason the preliminary goal is
judged unrealistic, the team will need to present an alternative that is shown to be
achievable and cost effective. The team should not impose its interpretation (means
test) of what is affordable or too expensive. Instead, the team should ask
180
management for some return on investment guidelines and frame changes to the
preliminary goal in that context.
Figure 8-3 illustrates a completed part 2 of the change analysis for the above
example (PG1).
Figure 8-3 - Completed Part 2 of the Change Analysis
PG
1
Preliminary Goal
The ability to process
work orders directly to
the warehouse when
the customer's
available credit line is
greater than the order
amount and their
outstanding balance
is current. This would
require a change to
our order processing
system. Specifically,
it would require the
system to
automatically check
the order for creditrelated data and route
it to the appropriate
location (credit
department or
warehouse).
VADS Reference: CA2 -SOA
Risk Variables
Feasibility of
changing the
processing system to
perform automatic
credit checks and
routing to the
warehouse or Credit.
Cost and time
needed to implement
the change.
Uncontrollable
Aspects
Availability of source
code. Quality of
program design.
Quality of database
design.
Quality of program
design. Quality of
database design.
Efficiency of changes
once implemented.
Reliability of changes
once implemented.
Speed of the
changes once
implemented.
Imposed Limitations Realistic Objectives

& Constraints
& Goals
Amount of money and The ability to process
time JMI is willing to
spend to assess the
the warehouse when
feasibility.
the customer's
amount and their
Amount of money and outstanding balance
is current. This would
require a change to
spend to achieve the
changes. Quality of
talent JMI is willing to
assign to the effort.
system to
automatically check
JMI's definition of
the order for creditwhat is efficient.
related data and route
Quality of the
location (credit
changes made.
department or
Quality of the
warehouse).
equipment used to
support the change.
Accuracy of the credit
data.
5 minute goal set for
the process to check
and rout the order.
Review
Part 2 of the change analysis provides assurances that the project objectives and
preliminary goals established are realistic and achievable given the uncontrollable
variables and company-imposed limitations and constraints. Where the goals or
objectives are not realistic, the analysis provides the team with a framework for
proposing alternatives to management that can be achieved.
D IAGNOSTIC S TEP 6 - T ESTING
THE
A LIGNMENTS
Earlier in the case study, the first Alignment Worksheet was completed. This
worksheet is presented in Figure 8-4 for purposes of review.
181
This matrix linked the projects objectives to JMIs vision, business objectives and
stakeholder needs. The change analysis links the projects objectives to the VADS.
By linking the projects objectives to both the vision through stakeholder needs and
to the Value-added Deliver Systems, the team can assure itself that the VADS are
aligned with JMIs vision, business objectives and stakeholder needs. However,
this information needs to be summarized at a higher level to make it more digestible
and easy to understand.
Figure 8-4- Alignment Matrix
Project Objective
Improve our
customer service
and beat the
competition by
reducing the time it
takes to process an
order from the order
desk through
shipping from 5
days to 2 days.
Supports
Vision
Plan
Better sales &
Supports 20%
service levels
growth objective
improves industry
leadership
position.
Customers
Improved service
levels.
Value-added to
Owners
Better service
levels improves
sales.
Employees
Reduced
frustration and
customer
complaints.
Increase our sales

by over $40 million
a year by keeping
lost sales due to
stock shortages to
less than 2 a day.
Increased sales
makes JMI more
attractive to
investors.
Supports 20%
Growth objective.
Improves cash
position.
Improved service
levels.
Better service
levels improves
sales.
Reduced
frustration and
customer
complaints.
Improve our
collections by
identifying when a
customer has a 3day change in their
paying habits.
Better sales &

service levels
improves industry
leadership
position.
Supports cash flow

objective and
reduces bad
debts.
Avoids
embarrassing bad
debt situations.
Improves value of
company.
Moves them closer

to ownership.
The VADS Summary provides a high-level overview of each VADS reviewed in

the project. It summarizes the business purpose of the VADS, which workgroups
are involved in the process, what outcomes are expected and who the stakeholders
are that will benefit from achieving those outcomes.
Based on the models developed to date and the subsequent diagnostics, the VADS
Summary can be quickly completed. The VADS Summary becomes the lead
document in the documentation package for the VADS. Figure 8-5 presents a
sample of a blank VADS Summary form.
182
Figure 8-5 - VADS Summary
VADS SUMMARY
VADS NAME: __________________________________
VADS REF.: VS_____
VOLUME AND COST

Cycles Per Year
Cost Per Cycle
Total Annual Cost
Outcome
Benefit
PURPOSE OF VADS
VALUE-ADDED OUTCOMES
Stakeholder
PROCESS GROUPS
PRIMARY OBJECT: __________________________________________

SECONDARY OBJECTS:
The information found on the VADS Summary is defined as follows:

VADS Name: The name given to the process. In terms of the case study, the
VADS Name is Sales on Account.
VADS Ref.: The unique index given to the VADS. The VS is the standard prefix
given to all VADS Summaries. The subsequent portion of the index refers to the
VADS itself. VS-SOA is the index given to the VADS Summary for Sales on
Account.
Volume and Cost: This section contains information pertaining to the total
estimated annual cost associated to a specific VADS.
183
Cycles Per Year: This is the number of times the primary object of the VADS is
processed through the VADS phases annually. In the case of JMI, this number
represents the number of Sales on Account JMI makes a year (about 39,000).
Cost Per Cycle: This is the total labor and material costs expended on completing a
single VADS cycle. It can be computed by multiplying the labor hours per cycle
by the related labor costs. If there are materials consumed as part of the cycle, then
those costs need to be included in the cost per cycle number. Material costs are
consumable items that are not included in the cost of sales. In the JMI example, a
consumable cost would be the paper used in the printing of the order. The
inventory used would not be part of this cost since it has a revenue component
directly related to it. In the JMI WFL2 model, the overall labor cost per hour was
estimated to be about $30. The total labor needed to process a sales order through
the VADS cycle was estimated to be about four hours. Multiplying these two
factors together results in a total labor cost per cycle of about $120. Assume that in
the JMI example, the cost of the consumables used in the VADS is negligible.
Total Annual Cost: The total annual cost is computed by multiplying the total
cycles per year times the total cost per cycle. This represents the cost of
performing the VADS on an annual basis. The benefits derived from the VADS
(profit, ROI, etc.) should exceed the total annual cost figure. This benefit may not
always be money-based. However, nonmonetary benefits need to be examined
closely for their validity. In the case study, JMI makes about 39,000 sales annually
(150 sales per day times 5 days a week times 52 weeks) with a processing cost of
about $120 per sale. Therefore, the cost to JMI to perform the Sales on Account
VADS is about $4,680,000 a year (120 x 39,000).
Remember that this cost does not include the overhead of the JMI facility associated
with the process. This number could be loaded with this related overhead if the
team desired. This would be a valid process if JMI were considering a major
change to its facility as part of its overall strategic direction. For example, if JMI
were considering a redesign of its warehousing facilities,
the cost to maintain and manage the existing warehouse would need to be factored
into the total annual cost.
Purpose of VADS: The purpose of the VADS needs to be explicitly stated on the
VADS Summary form. The purpose should be stated in terms of why the VADS is
important. This statement should be kept simple and to the point.
To complete this section of the VADS Summary for JMI, the following question
needs to be answered.
184
Why does JMI engage in selling product to customers on account?

The answer might be stated as follows:
Selling product to customers on account is JMIs primary means of
generating revenue. It comprises over 90 percent of its overall business. The
purpose of the Sales on Account VADS is to provide JMIs customers with
the product they need at competitive prices and terms while providing JMI
with an appropriate profit.
Value-added Outcomes: The Value-added Outcomes section is comprised of
three columns: Stakeholder, Outcome and Benefit.
1. Stakeholder: The stakeholder column contains the name of the stakeholder
group that receives value from the VADS. Typically, this group consists of
customers, owners, employees and community. The reference should be as
specific as possible. For example, if the community is the benefactor of the
VADS, then the specific community organization(s) or group(s) should be
referenced. Likewise, if employees are the ones receiving value from the
VADS, then the specific group of employees should be referenced, if
appropriate.
2. Outcome: The outcome column contains the result the VADS produces that
adds value to stakeholders. For instance, if the VADS is payroll processing,
then one of the stakeholders is the employee and the outcome is a payroll
check.
3. Benefit: The benefit column contains a short explanation of why the
outcome produced by the VADS adds value to the stakeholder in question.
Using the same payroll example above, the benefit column would explain
why the production of a payroll check adds value to the receiving employee.
In this example, it is obvious why an employee benefits from the receipt of a
paycheck. However, the benefit column should be completed. In this
example, the benefit might read: Compensation for services provided.
4. Process Groups: Process Groups contains a list of all the process groups
found on the WFL1 model of the VADS.
Primary Object: Primary Object contains the name of the primary object of the
VADS. Remember, the primary object is the main focus of the VADS. In a sales
VADS, it is the order. In a payroll VADS, it is the payment to the employee.
Secondary Objects: Secondary Objects contain a list of every secondary object
that is transformed during a VADS cycle. Secondary objects are those items (like
inventory, customers and employees) that have changes to their status because of
185
the transformations that take place to the primary object as it moves through a
VADS cycle.
Figure 8-6 contains an example of a completed VADS for the JMIs sales order on
account.
186
Figure 8-6 Example of Completed VADS Summary
VADS SUMMARY
VADS NAME: Sales on Account
VADS REF.: VS-SOA
VOLUME AND COST

Cycles Per Year
Cost Per Cycle
Total Annual Cost
39,000
$120
$4,680,000
PURPOSE OF VADS
Selling product to customers on account is JMIs primary means of generating revenue. It comprises over
90% of its overall business. The purpose of the Sales on Account VADS is to provide JMIs customers with
the products they need at competitive prices and terms while providing JMI with an appropriate profit.
Stakeholder
Outcome
Benefit
Customer
Ordered Product(s)
Supports their need
Owner
Sold Product
Increased profitability
Credit Department
Billing
PROCESS GROUPS
Sales Order Desk
Warehouse/Shipping
PRIMARY OBJECT: SALES ORDER
SECONDARY OBJECTS:
Inventory
Customers
Review
At this point in the diagnostic effort, the team has confirmed that the VADS in
question is properly aligned with higher-level factors (vision, business objectives,
stakeholder needs and project objectives). There are lower-level factors that have
not yet been confirmed in terms of their relative alignment. Specifically, these are:
1. Workgroups to Information being Shared and Moved
2. Stimulus Triggers to Workgroup Actions
3. Sequence of Processes to Actions Taken
4. Process Failures to VADS Impediment
5. Information Movement to Object Transformation
6. Object Transformation to Value-added
187
The level 1 and 2 workflows provide confirmation that some of the above factors
are properly aligned. The Level 1 Workflow depicts the workgroups participating
in the VADS and the information being shared and moved through the process. By
its nature, the WFL1 must do this in order to be complete. The Level 2 Workflow
provides proof that there is alignment between the sequence of the processes being
performed and the actions taken to complete those processes. Again, this proof is
one of the primary functions of the model.
However, where are the stimulus triggers - those that cue a workgroup to take
action - explicitly documented? What failures (breakdowns) can impede the VADS
cycle from successful completion? How does each transformation of the VADS
objects (primary and secondary) add value to the overall process? The team needs
to perform additional diagnostics to prove that these alignment factors have been
adequately considered and related issues resolved.
D IAGNOSTIC S TEP #7 - S TIMULUS T RIGGERS /A CTIO N A NALYSIS
Within a VADS, stimulus triggers are the cues that inform knowledge workers to
take action. Typically, these actions result in the transformation of the primary
VADS object from one status to another.
Identifying and understanding the stimulus triggers and the resulting actions that
drive a VADS provides a framework for developing breakthrough improvement
concepts that improve value and reduce process failures. Because the diagnostic
process is structured to build on itself, the team can systematically increase the
depth of their understanding of the VADS intricacies without becoming confused
or lost in details.
During diagnostic step #7, the team explores the VADS at a very detailed level with
clarity and ease. At this level, the team answers a series of important questions
designed to challenge and spark their creative, problem-solving skills.
The project team needs to understand what each stimulus trigger is and how it
manifests itself within the VADS cycle. Many times, a large variance in the time it
takes to move through a VADS phase and the actual level of effort needed is from
poorly defined stimulus triggers. For example, if memos placed in the in-basket
require attention within 2 hours, but the in-basket is only reviewed every 3 hours, a
breakdown occurs in the stimulus trigger that would cue the memo recipient to act.
The mere appearance of the memo in the in-basket is not a sufficient stimulus
trigger to ensure timely action.
For each stimulus trigger/action identified in the VADS, the team along with the
knowledge workers and management, needs to develop answers to the following
questions:
188
1. What is the expected response time between the stimulus trigger occurring
and action being taken?
2. What is the action to be taken?
3. How will the performance against the response time expectation be tracked,
measured and communicated?
4. What is the maximum amount of time that will be allowed to pass before the
process will be considered to be in failure mode?
5. Where in the VADS will a failure be detected?
6. What stimulus trigger will communicate that a process is in a failure mode?
Once these questions have been answered the team can update the VADS model to
reflect any additional information about stimulus trigger/action sequences.
Additionally, the team can develop versions of the VADS to reflect a VADS cycle
that goes into failure mode in each phase.
In the JMI sales order VADS, each time the sales order is moved between process
groups there needs to be a stimulus trigger in place. This stimulus trigger must
ensure that the receiving process group knows the sales order has been received and
is in need of action within the time frame expectations presented on the proposed
Level 2 Workflow. To perform this diagnostic, the project team uses the proposed
Level 2 Workflow Model and the Stimulus Trigger Diagnostic Form (Figure 8-7).
189
Figure 8-7 - Stimulus Trigger Diagnostic Form

STIMULUS TRIGGER DIAGNOSTIC FORM
VADS NAME: __________________________________
VADS Phase
Process Group
VADS REF.: VS_____

Stimulus Trigger
Action and Timing
Starting at the top of phase A on the WFL2 the team identifies the stimulus trigger
that appears to activate the phase. The team posts that trigger to the diagnostic form
and then provides a short narrative of the triggering process and how it ensures that
the proper procedures are taken in a timely manner.
Working through phase A and B of the case studys proposed WFL2 will help
illustrate this process. Figure 8-8 presents phases A and B of the PWFL2.
190
Beg. Status
Figure 8-8 - Phase A and B of PWFL2 Model
2
P
R
O
C
E
D
U
R
E

shipping

desk with an order.
Order Entry Process
P G1
balance review.
P O4
Warehouse receives order via

printer.
Warehouse picks order and

the order form.
Warehouse packages and

Warehouse sends shipped

order to billing.

P G2
P G1
P G3
P O2

shipping
P O1
Lapsed
Time
Phase B
5 minutes
1 day
Effort
End Status
Phase A
5 minutes
1 hour
P O1
Phase A - Customer waiting to order product

The sales order process begins with a customer placing a call to the sales order
desk. The stimulus trigger is the ringing of the telephone. The action is the sales
order desk person answering the telephone. Reviewing each of the six questions
will assist the team in completing the Stimulus Trigger Diagnostic Form.
Question 1 - What is the response time expectation between the stimulus trigger
occurring and action being taken?
Even though the stimulus trigger/action sequence is obvious in this first example,
there needs to be a service standard in place to explicitly establish the maximum
number of times the telephone should ring before it is answered. If there is already
a service standard in place, then the team should obtain a copy and append it to the
191
form. If no service standard exists, the team should discuss the expectation that
exists with the sales order staff and with management.
Question 2 - What is the action to be taken?
In this example, answering the telephone is the action that needs to take place.
Question 3 - How will the performance against the response time expectation be
tracked, measured and communicated?
If people are to be held accountable for achieving results within a specified
standard, then their performance against that standard needs to be communicated to
them as close to real time as possible. In the case of the sales order desk, the staff is
expected to answer a customer call within a specified number of rings. For this
standard to be effective, a system needs to be in place to track individual
performance, measure that performance against the standard and communicate the
results back to the staff.
The best measurement systems are by-products of the process being measured.
Feedback is most effective when it is given as close to the performance as possible.
Given these two facts, the team explores tying the telephone system into the order
processing system via a call center application. If a solution of this nature turns
out to be economically feasible, then it would be possible to give the sales order
staff real time feedback on their performance (i.e. after every phone call).
Finally, with this type of system in place reward incentives could be implemented
helping to reinforce the importance that JMI places on prompt customer service.
These types of incentives help employees make direct connections between their
actions and adding value to the organizations stakeholders. In this example, the
stakeholders are:
1. The customers who get fast service
2. The owners who profit from booking more orders
3. The sales order staff who profit from performing at or above established
expectation levels
At this point it should be clear that there are major benefits to be realized by
mapping VADS to the stimulus trigger level. In the above example, the
improvements to the process of servicing customer telephone orders via a call
center system resulted in ways to increase the value-added to three important
stakeholder groups.
True alignment is achieved when the performance expectations of an
organization are manifested in the actions people take.
Question 4 - What is the maximum amount of time that will be allowed to pass
before the process will be considered to be in failure mode?
192
What happens when there is a breakdown in the stimulus trigger/action sequence?

As part of the stimulus trigger diagnostic process, the team needs to work with the
knowledge workers to develop procedures to deal with these types of breakdowns.
When real time monitoring systems are in place, the detection of breakdowns can
be quite simple. When such systems are not in place, then breakdowns are harder to
detect and become more costly to resolve.
In JMIs case, the team needs to document the actions that are to occur if the
telephone is not answered within the number of specified rings. The team should
also document how lost calls (potential sales) will be tracked. Assuming a call
center application is in place, calls that exceed the maximum number of rings could
be routed to a supervisor or some form of a call management messaging center. If
the system had a caller identification feature, then lost calls could be identified
down to the customer level.
Without a system in place, JMI might know about the quality of its sales order
desks telephone answering performance only through customer complaints,
customer satisfaction surveys and observation audits. Each of these approaches
does little to provide immediate feedback and fast resolution to performance issues.
Question 5 - Where in the VADS will a failure be detected?
Experience tells us that whatever can go right can go wrong. The project team
needs to review the VADS to determine where a stimulus trigger breakdown will be
detected. There are four places where detection of a breakdown between the
stimulus trigger and action can occur:
1. At the point of breakdown (current VADS cycle, current phase),
2. In the same VADS cycle but different phase,
3. In subsequent VADS cycles and
4. In other VADS cycles (i.e. purchasing).
5. The team needs to consider how and where a breakdown is most efficiently
and economically detected and resolved. As a rule, detecting and resolving
process breakdowns is best done at the point of breakdown.
6. Once the team has identified where stimulus trigger/action failures will be
detected, it must define the procedures needed to resolve the breakdown.
Detection of non-stimulus trigger/action VADS failures will be covered in
more detail in Step 8 - Refining VADS for Potential Failures.
Question 6 - What stimulus trigger will communicate a process that is in failure?
1. Once the team has determined where a stimulus trigger/action failure can be
detected, it must understand the detection mechanism and define procedures
for resolution. The team needs to identify the stimulus trigger/action
193
sequence that will communicate that the VADS is in failure mode. Using the
sales order desk example, the team needs to identify how a failure to answer
a customer telephone call within the expected number of rings will be
communicated in a timely manner to the proper management staff.
2. What if the failure detection/stimulus trigger/action sequence breaks down?
The number of levels of failure detection/resolution processes that need to be
defined is determined by the impact of the failure. For instance, a missed
customer call is not as critical to correct as a failure in the navigation system
on a space shuttle.
3. The team needs to maintain perspective on the cost of resolution when
compared to the cost of failure. Step 8 - Refining VADS for Potential
Failures - will provide more detail on how the team identifies process failures
within a VADS and defines what fail-safe and safeguard procedures are
appropriate.
4. As can be seen from the first example, even simple stimulus trigger/action
sequences need to be understood in terms of the response time between the
stimulus trigger and the appropriate action. Additionally, the failure to act
needs to be understood and processes put in place to minimize the negative
impact on the VADS.
5. In terms of the sales order desk example, the stimulus trigger that
communicates a breakdown in the telephone answering process could be
twofold. Calls that are not answered promptly could be forwarded to a voice
messaging system and flagged as delayed. Lost calls could be captured in
terms of the callers telephone number and reported to a supervisor for
follow-up. The team documents these concepts and presents them at the
second facilitation work session for discussion and review.
P HASE B - A PPROVED
SALES ORDER READY FOR SHIPPING
Phase B of the sales order process begins with the sales order being printed in the
warehouse. The team needs to ask the following question to determine the stimulus
trigger/action issues in phase B:
What is the stimulus trigger in this phase? How will a warehouse person know
a new order has been printed in the warehouse?
Since this is a new procedure in the sales order VADS, the stimulus trigger will
need to be created. Ideally, a stimulus trigger should occur simultaneously to a
natural event in the VADS cycle. In the case of the sales order printing in the
warehouse, the ideal stimulus trigger would be connected to the availability of the
order for picking. For this to happen the printing process would need to include a
method for notifying the warehouse person that the order is ready. This could be
194
done with a bell that sounds when printing occurs or a flashing light or a message
sent to a beeper that is worn by warehouse staff. What is important here is that the
team note the need for the stimulus trigger and to present that need to the
knowledge workers at the next facilitation work session. For sake of discussion,
assume that the team pursues a beeper system concept for notifying the warehouse
staff that a new order is ready for picking.
What is the action to be taken?
When a new order is ready to be printed in the warehouse, the sales order system
would simultaneously send a page to an appropriate warehouse person via a beeper
or paging device. The warehouse person could then go to the system and print the
order.
How will the performance against the response time expectation be tracked,
measured and communicated?
The system could track the time taken to respond to the page. This could be
determined by subtracting the time the page was sent from the time the order was
printed in the warehouse.
Each day or week a performance report could be given to the warehouse staff that
shows their response time against the goals set.
The team would need to update the proposed WFL2 to reflect the above items.
What is the maximum amount of time that will be allowed to pass before the
process will be considered to be in failure mode?
For now, assume that the team recommends that the maximum time that a
warehouse person should take to respond to a page is 30 minutes or less (subject to
approval by the knowledge workers and management). This means that if it took
longer than 30 minutes for an order to be printed from the time a page was sent,
then that event would be considered to be in failure mode. When this happens, the
system could escalate the situation by sending a page to a supervisor for action.
Where in the VADS will a failure be detected?
In this example, a failure in the process would be detected at the point of failure
(within 30 minutes of the order being released to the warehouse by the sales order
desk.) Remember, the best place in a process to detect failures is at the point the
failure occurs. The worst place to detect a failure is in another, seemingly
unrelated, VADS cycle.
What stimulus trigger will communicate a process that is in failure mode?
195
As stated above, the stimulus trigger that communicates that the processing of an
order through the warehouse has broken down would be via an
escalation/notification of a warehouse supervisor via a page or other means. This
escalation process could continue to managers and vice presidents if the failure
persisted. For example, if the supervisor did not resolve the failure within one hour
then another page could be sent to the warehouse manager and another timer set in
motion.
Once the team had defined the stimulus trigger/action process for phase B of the
proposed VADS, they would update the WFL2 model to reflect the process (Figure
8-9). In addition, the team would complete the Stimulus Trigger Diagnostic form
(see Figure 8-10). The team would also write an overview of the concept to support
its reference on the WFL2 model (Figure 8-11).
Beg.
Status
Figure 8-9 Updated Proposed WFL2, Phases A and B
2
P
R
O
C
E
D
U
R
E
Effort
Lapsed End
Time Status
Phase A
Phase B

desk with an order.
Order Entry Process
PG1
balance review.
P O4
"Approved", assigns PIN# and prints it
directly to the warehouse printer.
PG2
PG1
PG3
P O2
Warehouse receives order via

printer and pages the warehouse staff via the
automated paging system.
Warehouse staff retrieves the order and

enters its PIN # into the order processing
system. picks order. The system updates
PG1
P O1
the order to retrieved.
Warehouse staff picks the order and

updates quantities picked on the order form.
Warehouse packages and ships order to

customer.
Warehouse sends shipped

order to Billing.
5 minutes
1 day
5 minutes
P O1
P O1
1 hour
196
Figure 8-10 - Completed Stimulus Trigger Diagnostic Form (phases A & B)

VADS NAME: Sales Orders on Account
VADS Phase
VADS REF.: VS-SOA

Process Group
Stimulus Trigger
Action and Timing

product
Sales Order Desk
Telephone ringing
Answer telephone within 3 rings

shipping
Warehouse
Beep from paging system
Pick up order and update system

with order PIN # within 30 minutes
of page
197
Figure 8-11 - Overview of Warehouse Paging Concept
Overview of Warehouse Paging Concept

Introduction
One of the preliminary goals established by the project participants (the team) was to reduce the time it takes to process an order from its point of entry into the order
processing system to the point it is available for picking in the warehouse. To achieve this goal, the team developed a concept that would print creditworthy orders
directly to the warehouse simultaneously paging a warehouse person that the order is available.
This new process would allow the Credit department to save over $3,000 a day in labor costs. Additionally, the new process would cut the time a typical order takes
to arrive in the warehouse by about two days. This will increase customer service levels and support the company's objective of shipping orders within 24 hours of
receipt.
The Process
The process is as follows:
As sales orders are entered into the system, they would go through an automated credit check. This credit check process would verify that the customer had an
available credit limit sufficient to support the order and was current on any outstanding balances due.
Orders passing this automated credit check would be routed to and printed directly in the warehouse. Simultaneous to the printing process, a warehouse person
would receive a page via a beeper system. The goal would be to have the page responded to within 30 minutes of the printing taking place.
The system would track the response time from page to order pickup and provide daily performance reports to each warehouse staff person and his or her supervisor.
The team recommends that incentives be put in place to reward warehouse staff for performances that consistently exceed the 30 minute goal.
Orders not picked up within 30 minutes would be escalated to the warehouse supervisor for expedition.
Implementation Requirements
In order to implement this new process the following will need to occur:
1. Receive management's approval and supporting budget;
2. Modify the existing order entry process to include an automated credit check function;
3. Cable the warehouse for a printer;
4. Purchase a printer for the warehouse;
5. Acquire a paging (beeper) system and interface it to the order processing system;
6. Train the warehouse staff on the new procedures; and,
7. Test new process and authorize production use.
Cost of Implementation
Low
High
The cost to implement this new process ranges between $ 87,500 to $ 139,750 as follows:
1. Modification of order entry module to include automatic credit checking (assumes outsourcing at $1,000 a day);
2. Cabling of warehouse for printer;
25,000 $
1,500
3. Warehouse printer;
50,000
2,000
500
750
8,000
12,000
5. Interfacing of Paging system to Order Processing system (assumes outsourcing at $1,000 a day);
37,500
55,000
6. Training (two days for each of 25 warehouse staff); and,
12,000
15,000
3,000
5,000
4. Paging system;
7. Testing.
Total $
87,500
139,750
780,000
Return on Investment
Based on the above estimates of savings and costs, this new process will provide the following savings to the company in the first 12 months following
implementation:
Annual savings in Credit department
Cost of implementation
139,750
1st Year Savings

Return on Investment (1st year)
640,250
458.14%
198
Notice that the updated PWFL2 reflects the addition of the paging system in phase
B.
At the second facilitation work session, the project team would present its concepts
to the knowledge workers. The group would collaborate on the merits of the
concept presented. Alternatives to the concept would be discussed and a
recommended course of action would be agreed to.
Review
By the end of diagnostic step #7 the team has ensured that the proposed VADS is
logically sound. Through the models the team can prove that the proposed VADS:
1. Achieves the project objectives and preliminary goals
2. Progresses logically through all its phases
3. Ensures process breakdowns from stimulus trigger/action failures are
properly managed and resolved.
The JMI examples illustrate how the team sometimes develops breakthrough
improvement concepts that often exceed the original value expectations of
management.
D IAGNOSTIC S TEP #8 - R EFINING VADS
FOR
P OTENTIAL F AILURES
Now that the team has developed a clear understanding of how the stimulus
trigger/action sequences affect the VADS, a review of the VADS for other forms of
process breakdowns or failures that can disrupt VADS cycles is needed.
Process failures that occur within a VADS fall into one or more of the following
categories:
1. Failures that impact the current VADS cycle
2. Failures that impact future VADS cycles
3. Failures that impact other VADS cycles.
Typically failures that only affect the current VADS cycle are the easiest to detect
and resolve. However, if the VADS is fatally flawed, then the failure may go
undetected forever. For example, assume a company used a single copy of a sales
order to process orders through the order processing cycle. If that piece of paper
was lost before the cycle was complete, there would be no record of the order
anywhere. Now assume that the order gets lost after it was shipped but before it
was billed. Would the company know this happened? No! If this occurred
frequently enough the company would suffer erosion of its margins and cash flows
to the point that it might study the reasons for its decline. However, until the
199
VADS is fixed, there is nothing to safeguard the company from this event
occurring.
The only effective method for resolving breakdowns in a VADS cycle - those that
impact the performance of that cycle - is to integrate monitoring systems into the
work processes. In the case of JMI, a monitoring function could be integrated into
the order processing system. This function could monitor the transformation of an
order as it went from one phase in the VADS to the next. If the object did not
transform within a specified time period, the order processing system could notify
the appropriate supervisor and corrective action could be taken. In the JMI example
(paging warehouse staff when orders are ready for pickup), the team developed an
escalation process that would notify a supervisor if an order was not printed within
30 minutes of the warehouse person being beeped. This is an example of how a
monitoring system can be integrated into a VADS.
By integrating real-time monitoring systems into VADS, an organization can
eliminate costs related to controls that are externally imposed on a process. With
the right monitoring systems in place, an organization can improve feedback to
employees, avoid service level delays and become more responsive to process
breakdowns.
Failures in a VADS cycle that occur to the primary object can be corrected through
real-time monitoring systems and exception reporting. However, not all failures
that occur in a VADS cycle can be detected and resolved so easily.
Failures in a current VADS cycle that affect future VADS cycles are more difficult
to detect and resolve. These failures are usually associated with a secondary object
not being properly transformed during a VADS cycle. For example, if the
inventory on hand was not reduced for the quantity shipped, then the records would
show more inventory available in the warehouse than actually existed. While this
would not affect the current order, it could affect future orders. Here, the failure
would not be detected until the warehouse went to pick the inventory for a future
order and found that there was not enough available.
Even though all the stimulus trigger/action sequences are completed within the time
frames expected, it is possible for process failures with more long-term, causal
effects to exist within a VADS. This is why the team must spend time to identify
secondary objects and verify that they are being properly transformed in the VADS
cycle.
Failures in a current VADS cycle that affect other VADS cycles are very difficult to
detect. An example of this type of failure is when inventory shortfalls occur due to
erroneous record keeping. In these situations, purchasing may interpret the shortfall
in inventory as increased demand, and may replenish inventory with more units
than appropriate. The result is an increased investment in inventory that is not
supported by true increases in demand. Thus a failure in the sales order VADS
200
cycle to update inventory properly ripples through the organization and affects the
inventory purchasing VADS cycle. Again, this is only prevented by ensuring that
VADS cycles properly transform secondary objects.
Failure analysis provides a systematic method for identifying potential secondary
object transformation failures within a VADS cycle. During the failure analysis
diagnostic process the following questions are answered for each secondary object
within each phase of the Proposed WFL2 model:
1. What is the secondary object(s) being transformed?
2. What procedures transform the secondary object(s)?
3. What are the requirements for transforming the secondary object(s)?
4. What is the outcome (lost value) of the secondary objects failure to
transform (cost, time, service level, etc.)?
5. What are the transformation rules and safeguards needed to ensure that
failure is minimized and quickly resolvable?
6. What is the ROI related to the implementation of the rules and safeguards
identified?
Once these six questions have been answered, the proposed Level 2 Workflow
analysis is updated to reflect any new or changed procedures.
To assist in the diagnostic process, a Failure Analysis Form is used (see Figure 812). The form presents the information needed to summarize the type of failure that
could exist along with the related resolution concept and cost/benefit data.
201
Figure 8-12- Failure Analysis Form
Failure Analysis Form

VADS NAME: ____________________
VADS REF.: FA-____
Where Failure Occurs

VADS Phase:
VADS Procedure:
Object(s) Failing to Transform:
Description of Failure
Where Failure is Realized

VADS Phase:
VADS Procedure:
Description of Failure:
Lost Value Due to Failure

Value Lost
Stakeholder
Cost
Time
Service Level
Other
Total
Resolution Concept
Description:
Implementation Cost:
Labor
Materials
Capital
Total
Labor
Materials
Capital
Total
Annual Ongoing Support Cost:
Time Needed to Implement:
1st Year
3 Years
5 Years
Revenue Generated
Cost Savings
Total Improvement
Implementation Cost
Ongoing Cost
Total Cost
Net Improvement
Return on Investment:
202
A PPLYING
THE
F AILURE A NALYSIS D IAGNOSTIC
TO THE
C ASE S TUDY
To illustrate the failure analysis diagnostic process, Phase C - Shipped sales order
ready for billing and Phase D - Billed sales order pending collection (Figure 813) of the JMI case study will be used.
The process consists of posting the failure analysis form with the information
derived from answering the six questions above and then updating the PWFL2
model to reflect any changes. If major or radical changes to the model are
identified, then a change concept form would also be completed.
Beg. Status
Figure 8-13 - Phase C and D of the Proposed Level 2 Workflow Model

Phase C
Phase D

billing

collection

warehouse.

Billing.

R
O
C
quantities shipped.

posts the payment.
U
R
E

Billing prints the invoice and mails

to customer.
Effort
Lapsed End
Time
Status

collection
2 hours
45 days
10 minutes
10 minutes
203
Question 1 - What is the secondary object being transformed?

The first step in the failure analysis is to identify what secondary objects are being
transformed in each phase of the VADS.
In the above example, there are two secondary objects being transformed in Phase
C, customers and inventory. Only the customer object is being transformed in
Phase D.
Phase C of the PWFL2 represents the billing process within the sales order VADS.
Up to this point in the VADS cycle, the sales order has been received from the
customer and processed through the warehouse (picked and shipped). During phase
C, the sales order will be transformed from a status of shipped to a status of
billed or invoiced. The two secondary objects affected during the billing
process are the customer (person being billed) and the inventory (items being sold).
Phase D contains the collection procedures being proposed. In phase D the sales
order is transformed from a status of billed to a status of collected. Here the
customer is the only secondary object being transformed.
To summarize, there are two secondary objects being transformed in phases C and
D, the customer and the inventory.
Question 2 - What procedures transform the secondary object?
The next step in the failure analysis process is to identify the specific procedures in
each phase that transform each secondary object identified (customer and
inventory). To do this, simply read each procedure and identify those that indicate
that the customer and/or inventory objects are being changed or updated.
As part of the billing process, the customers credit limit will be updated for the
actual value of the order and the inventory will be updated for the actual quantities
shipped (see phase C, procedure 3).
During phase D, the invoice (billed sales order) is paid by the customer (see phase
D, procedure 2). The payment is then posted to the customers account and their
credit limit increased by the payment amount (see phase D, procedure 3 and 4).
Question 3 - What are the requirements for transforming the secondary objects?
Now that the secondary objects and transforming procedures are identified, their
relative transformation requirements can be defined. Transformation requirements
are the rules that, when followed, result in a secondary object changing its state.
For example, in phase D, procedure 2, the customers payment is posted
to their account. In addition to changing the status of the order from billed to
paid, the process of posting the payment should trigger an update to the
customers credit limit (increase) for the value of the payment. The rule can be
204
stated as follows: The customers credit limit should be increased for the value of
payments received (posted).
A failure to increase the credit limit could result in the customers future orders
erroneously being rejected because of insufficient credit. This could result in a lost
order and maybe in a lost customer. It is critical that the VADS include sufficient
safeguards to prevent a breakdown in the payment posting procedure.
Figure 8-14 provides a summary of the Object Transformation Rules for
transforming the customer and inventory objects in phases C and D.
Figure 8-14 Summary of Transformation Rules - customer and inventory objects for
VADS phases C and D
Summary of Secondary Object Transformation Failures
Phas
e#
VADS Phase
VADS REF.: OTR-SOA
Seconda Proc
ry Object . #
Procedure
Rule
Shipped sales
order ready for
billing
Customer
The system updates

inventory, adjusts the
customer credit limit
and creates the
invoice
The customers credit limit

should be increased for the
amount of the original order
and decreased for the value
of the invoice.
Shipped sales
order ready for
billing
Inventory
The system updates

and creates the
invoice
The inventory available for

sale should be increased for
the original quantity reserved
and decreased for the actual
quantity shipped to the
customer. This should be
done for each item shipped.
Billed sales
order pending
collection
Customer
The system updates

the customer's credit
limit and accounts
receivable balance.
The customers credit limit

should be increased for the
value of payments received
(posted).
Impact of Failure
Safeguard
205
Question 4 - What is the outcome (lost value) of the secondary object failing to
transform (cost, time, service level, etc.)?
Not all transformation failures are equal. The cost to develop safeguards in
secondary object failures needs to be considered in terms of the cost of failure when
it occurs. To better understand the level of safeguards needed in any phase of a
VADS, the team needs to define the impact a failure will have on current, future
and other VADS cycle outcomes.
To do this the team walks through the VADS to simulate transformation failures in
the VADS cycle. Predictable, high-impact failures are documented on the Failure
Analysis form. The team also documents the impact on future cycles and other
VADS. High-impact failures are those where the value lost is greater than the
cost to safeguard against that loss. These safeguards should be defined and
integrated into the VADS.
The value lost should be quantified in terms of immediate costs, future costs, lost
time, reduced service levels, etcetera. The more quantifiable the value lost, the
easier it is to assess the need for safeguards.
In the case of JMI an average order is worth $14,963 and an average customer is
worth $119,700 a year, it is critical that this VADS include sufficient safeguards to
prevent a breakdown in the payment-posting procedure.
Figure 8-15 provides an updated summary of the impact of failures in the
transformation of customers and inventory in phases C and D of the Sales on
Account VADS.
206
Figure 8-15 Summary of Secondary Object Transformation Failures - Customer and

Inventory Objects for VADS Phases C and D
Phas
e#
VADS Phase
VADS REF.: OTR-SOA
Seconda Pro
ry Object c. #
Procedure
Rule
Impact of Failure
Failure to decrease
limit would result in a
overstatement of their
credit limit. This
could lead to a bad
debt situation as
future orders are
accepted
erroneously.
Failure to correctly
update inventory for
the actual quantity
shipped would result
in inventory being
misstated. This could
lead to over- or understocking conditions
and could affect
purchasing's actions.
Shipped sales
order ready for
billing
Customer
The system updates

and creates the
invoice.
The customers credit

limit should be
increased for the
amount of the original
order and decreased
for the value of the
invoice.
Shipped sales
order ready for
billing
Inventory
The system updates

and creates the
invoice.
The inventory
available for sale
should be increased
for the original
quantity reserved and
decreased for the
actual quantity
shipped to the
customer. This
should be done for
each item shipped.
Billed sales
order pending
collection
Customer
The system updates

limit and accounts
receivable balance.

limit should be
increased for the
value of payments
received (posted).
Safeguard
Failure to increase the

customer's credit limit
for payments
received could result
in a customer
erroneously failing to
pass the credit check.
This could result in a
lost order or even a
lost customer.
Question 5 - What are the transformation rules and safeguards needed to ensure
that failure is minimized and is quickly resolvable?
Based on the diagnostics done thus far, the team needs to update the transformation
rules with any additional safeguards that have been identified. To do this, the
proposed WFL2 model needs to be recast to show the changes being proposed.
Once this is done, the team can update the Failure Analysis form with the changes.
In practice, questions 1 through 5 are answered at the same time, typically in less
than one hour. The exception to this is when additional research is needed to
establish the cost of the secondary failure and the cost of the safeguard. There is no
207
equation for estimating the time needed for extended research. Estimates in this
area must be done on a case by case basis.
Working through phases C and D of the VADS , the following is an example of
rules and safeguards that could be developed to ensure that process failures are
minimized and quickly resolvable (see Figure 8-16). Safeguards are often
developed with the Knowledge workers during work sessions.
208
Figure 8-16 Completed Summary of Secondary Object Transformation Failures Customer and Inventory Objects for VADS Phases C and D
Phase
#
VADS Phase
VADS REF.: OTR-SOA
Secondary
Object
Proc.
#
Procedure
Rule
Impact of Failure
Safeguard
Shipped sales
order ready for
billing
Customer
The system updates

and creates the
invoice.

limit should be
increased for the
order and decreased
invoice.
Failure to decrease
credit limit. This
could lead to a bad
debt situation as
future orders are
accepted
erroneously.
A procedural failure to
enter the data into the
system or lost
paperwork could
cause the process to
breakdown. A
safeguard should be
implemented to
identify orders that
have been picked up
for shipping but not
invoiced. This
safeguard could take
the form of a daily
status report that lists
orders that have been
in the warehouse for
over 24 hours.
Shipped sales
order ready for
billing
Inventory
The system updates

and creates the
invoice.
The inventory
available for sale
should be increased
for the original
decreased for the
actual quantity
shipped to the
customer. This
should be done for
each item shipped.
the actual quantity
in inventory being
and could affect
Same as above.
Billed sales
order pending
collection
Customer
The system updates

limit and accounts
receivable balance.

limit should be
increased for the
value of payments
received (posted).

for payments
in a customer
lost customer.
enter the payments
into the system would
breakdown. A
safeguard should be
implemented to
have been invoiced
but not collected
within the customer's
paying habit time
period. This
the form of a daily
invoices that have
been paid within the
customer's normal
paying habit time
period.
209
Question 6 - What is the ROI related to the implementation of the rules and
safeguards identified?
Once the safeguards have been identified, the failure analysis forms can be posted.
The last section of the Failure Analysis form contains return on investment (ROI)
information. This section is often completed with the help of the knowledge
workers. Figure 8-17 presents an example of a completed Failure Analysis form for
phase C, procedure 3.
210
Figure 8-17 Completed Failure Analysis Form

VADS REF.: FA-SOA-C3

VADS Phase:
VADS Procedure:
The system updates inventory, adjusts the customer credit limit and creates the invoice.

Customer
Inventory
Failure to decrease the customer's credit limit would result in an overstatement of their credit limit. This could lead to a bad debt
situation as future orders are accepted erroneously.
Failure to correctly update inventory for the actual quantity shipped would result in inventory being misstated. This could lead to over or
under-stocking conditions and could affect purchasing's actions.

VADS Phase:
A - future cycles
VADS Procedure:
2 - Order desk identifies the customer and verifies that their outstanding balance is current via the order entry screen. The system flags
the order as clearing O/S Balance review.
3 - For each item ordered, the system verifies that inventory is available and confirms ship dates.

Customer
Inventory
Due to failures in phase C of a prior VADS cycle, the customer's credit limit is misstated. Additionally, the inventory does not accurately
reflect actual shipment information. This can result in a customer's order being refused because of an understated credit limit or
wrongly accepted because of an overstated credit limit. Since in this mode the inventory is also misstated, the order might be accepted
when there is insufficient product to fill the order. This type of failure can adversely impact customer service levels.

Value Lost
Cost
Stakeholder
Time
Customer - Value of order or

Customer
Owners - Lost revenue Assumes one lost customer a
year.
Total
Service Level
Other
Poor customer service

$119,700
Labor to resolve
Reduced reputation
$119,700
Resolution Concept
Description:
A procedural failure to enter the data into the system or lost paperwork could cause the process to breakdown. A safeguard should be
implemented to identify orders that have been picked up for shipping but not invoiced. This safeguard could take the form of a daily
status report that lists orders that have been in the warehouse for over 24 hours.
Labor
Materials
Capital
Total
$25,000
$25,000
Labor
Materials
Capital
Total
$10,800
$18
$10,818
Review time and paper
2 months
1st Year
3 Years
5 Years
Revenue Generated (assumes 1

lost customer per year)
$119,700
$718,200
$1,795,500
Total Improvement
$119,700
$718,200
$1,795,500
Implementation Cost
$25,000
$25,000
$25,000
Ongoing Cost
Total Cost
$10,818
$32,454
$54,090
$35,818
$57,454
$79,090
$83,882
$660,746
$1,716,410
234.19%
1150.04%
2170.20%
Net Improvement
211
Review
During diagnostic step #8, the project team conducted an analysis of the proposed
Level 2 Workflow Model to identify potential failure scenarios that could prevent
the secondary objects from properly transforming.
The team developed proposed safeguards that could be implemented to minimize
the impact of process failures during a VADS cycle. Each scenario and related ROI
information was posted to a Failure Analysis form.
With the completion of the failure analysis, the team has developed a thorough
understanding of the VADS. Additionally, the team has tested the proposed VADS
for breakdowns and failures to ensure that all primary and secondary objects
transform properly. The proper transformation of VADS objects is important
because these objects comprise the focal points around which people communicate
information within the organization. If the status of these objects is incorrect, then
stimulus triggers can be set in motion that notify people and systems to perform
actions that appear correct but are, in fact, erroneous.
The following illustration will make this point clear. Every car is equipped with
gauges and lights that inform the driver with the status of the engine and other vital
components. One of these status devices is the red engine light. The light serves as
a stimulus trigger to the driver to take immediate action (i.e., pull over and stop the
engine). Ignoring this light could result in costly engine damage. But what if the
light is not working? What if the engine condition that triggers the light occurs, but
the light is burned out? The result would be continued driving until the engine
seized and shut down. In essence, the driver would be taking normal actions
(driving the car) when he should not. To help avoid this scenario, the
manufacturers of cars typically have a start-up diagnostic that checks the status of
its warning systems to ensure they are working properly.
The failure analysis serves to test proposed VADS to ensure that breakdowns in the
normal processing of objects (orders, customers, inventory) are identified and
corrected as close to their point of failure as possible.
Chapter summary
The first diagnostic work session is now complete. The overall session typically
take two staff people from 8 to 15 hours to complete. It is recommended that this
work session be completed within one to two days of the facilitation work session.
During the diagnostic work session, the team used the models developed in the first
facilitation work session and tested them to ensure that they were correct and
complete. Specifically, the team performed the eight diagnostics summarized
below:
212
Summary of Diagnostic Steps performed in the 1st diagnostic work session

Step #
Diagnostic
Purpose
Formalizing the Change

Analysis
Provides specific tests that will ensure that the change analysis is complete and
measurable.
Formalizing the Level 1

Workflow
Provides a set of 8 tests that will ensure that the WFL1 makes sense from a business and
technical point of view.
Formalizing the Level 2

Workflow
Applies 6 rules to the existing WFL2 to ensure that it is correct and complete. Provides the
team with a list of issues and questions to be addressed at the next facilitation work session.
Provides the team with a proof of correctness that the work completed to date correlates.
Mapping the Change

Analysis to the WFL2
Model
Mapping process provides the team with a method to identify new VADS that need to be
added to the project. Provides team with additional issues and questions for the next
The documentation generated during this diagnostic provides the team the ability to
demonstrate their understanding of where and how the goals and objectives are achieved in
the proposed level 2 workflow.
Expanding the Change

Analysis
Part 2 of the change analysis provides assurances that the project objectives and
preliminary goals established are realistic and achievable, given the uncontrollable variables
and organizational imposed limitations and constraints. Where the goals or objectives are
not realistic, the analysis provides the team with a framework for proposing to management
alternatives that can be achieved.
Provides a confirmation that the VADS is properly aligned with higher level factors (vision,
business objectives, stakeholder needs and project objectives).
Testing the Alignments
The level 1 and 2 workflows provide confirmation that some of the lower level alignment
factors are properly aligned. The level 1 workflow depicts the workgroups participating in
the VADS and the information being shared and moved through the process. The level 2
workflow provides proof that there is alignment between the sequence of the processes
being performed and the actions taken to complete those processes.
Provides assurance that the proposed VADS is logically sound. By using the models, the
team can prove that the proposed VADS:
1. Achieves the project objectives and preliminary goals
Stimulus Trigger / Action

Analysis
2. Progresses logically through all its phases

3. Ensures process breakdowns due to stimulus trigger/action failures are properly
managed and resolved.
In most cases, the team develops some breakthrough improvement concepts that often
exceed the original value expectations on management.
Identifies potential failure scenarios that could keep the secondary objects from properly
transforming.
Refining VADS for

Potential Failures
Provides proposed safeguards that could be implemented in order to minimize the impact of
process failures during a VADS cycle. Each scenario and related ROI information was
posted to a Failure Analysis form.
Provides team with a thorough understanding of the VADS. Tests the VADS for
breakdowns and failures to ensure that all primary and secondary objects transform
properly.
To conclude the first diagnostic work session, the team organizes the models,
questions and other documentation that has been created. This documentation is
then distributed to the knowledge workers to help prepare for the next facilitation
work session.
213
The documentation should be organized as follows:

Project Report
1. Executive Summary
2. Findings and Improvement Recommendations
3. Implementation Costs and ROI
4. Implementation Plan
5. Authorization to Proceed
Project Level Information
1. Project Scope and Objectives
2. Project Objectives Alignment Matrix
3. Project Cost and Time Line for Completion
4. Project Work Schedule and Status
5. Project Kick Off and Authorization to Proceed
VADS Level Information
1. VADS Summary
2. Contribution of VADS to Project Objectives
3. Change Analysis part 1
5. Level 1 Workflow Model
6. Existing Level 2 Workflow Model
7. Proposed Level 2 Workflow Model
8. Stimulus Trigger Diagnostic Form
9. Overview of Change Concepts
10.Failure Analysis Form
11.Secondary Object Transformation
Appendix
1. Knowledge Summaries
2. Outstanding Questions and Issues
This outline will be amended as the project progresses.
214
A simple technique for keeping the documentation current is to use a color-coded

scheme as follows:
1. Completed Items white paper
2. Items Pending Knowledge Worker Review yellow paper
3. Sections Not Started red paper
This technique provides a quick and easy way to determine the status of the
documentation. When the documentation contains only items printed on white
paper, it is done. When using this approach, the entire project notebook should be
created using red pages labeled with the forms and models that will eventually
replace them. As documents are created they are placed in the notebook and their
red counterpart removed.
Finally, all documents must be dated to avoid confusion if multiple versions exist.
Figure 8-18 presents the documentation based on the case study models and
diagnostics developed thus far.
215
Figure 8-18 Documentation at End of First Diagnostic Work Session
Project Objectives Alignment Matrix

Supports
Value-added to
Project Objective
Vision
Plan
Customers
Owners
Employees

Better sales and

service levels
improves industry
leadership
position.
Supports 20%
growth
objective.
Improved
service levels.
Better service
levels improves
sales.
Reduced
frustration and
customer
complaints.

than 2 a day.
Increased sales
makes JMI more
attractive to
investors.
Supports 20%
growth
objective.
Improves cash
position.
Improved
service levels.
Better service
levels improves
sales.
Reduced
frustration and
customer
complaints.

identifying when a
habits.
Better sales and

service levels
improves industry
leadership
position.
Supports cash
flow objective
and reduces
bad debts
Avoids
embarrassing
bad debt
situations.
Improves value
of company.
Moves them
closer to
ownership.
Avoids
downsizing.

a day.
Better sales and

service levels
improves industry
leadership
position.
Supports 20%
growth
objective.
Improves cash
position.
Demonstrates
customer
satisfaction
with JMI's
products and
services.
Improves value
of company.
Moves them
closer to
ownership.
Avoids
downsizing.
Project Cost and Time Line for Completion

Project Team
Contract Sales
Facilitation
Session Cost
($35 x 2.5
hours x # of
staff x 3
sessions)
1,838
1,470
1,500
4,800
9,608
Sales on Account
1,313
1,050
1,500
4,800
8,663
New Account Sales
2,100
1,680
1,500
4,800
10,080
Backorder Sales
2,363
1,890
1,500
4,800
10,553
Replenishment
788
630
1,500
4,800
7,718
New Products
1,575
1,260
1,500
4,800
9,135
VADS (6)
Post Session
Costs ($35 x 2
hours x # of
staff x 3
sessions)
Facilitation
Post Diagnostic
Session Cost
Session Cost
($200 x 2.5
Total Cost
($200 x 8 hours
hours x 3
x 3 sessions)
sessions)
Total Base Cost

55,755
8,000
11,151
74,906
23
216
Project Work Schedule and Status

VADS / Task
Sales on Account
Facilitation Work Session Date

and Time
Work Session 1 - Complete
Diagnostic Work Session Date

and Time
Work Session 1 - Complete
Week 2 - Monday - 9 to 11:30 a.m. Week 2 - Monday - 1 to 5 p.m.

Tuesday - All Day
Week 3 - Monday - 9 to 11:30 a.m.
Replenishment
Purchasing
Week 1 - Wednesday - 9 to 11:30

a.m.
a.m.

a.m.
Present Findings & Recommendations to Top

Management
Other Tasks, Date and Time
Week 3 - Monday - 1 to 5 p.m.

Tuesday - All Day
Week 1 - Wednesday - 1 to 5
p.m.
Thursday - All Day
p.m.
Thursday - All Day
p.m.
Thursday - All Day
Week 2 - Wednesday - 15 minute

debriefing with management 11:45 a.m.
Week 4 - Monday & Tuesday Package Results
Week 2 - Friday - 15 minute

debriefing with management 11:45
Week 4 - Wednesday & Thursday Package Results

Week 5 - To Be Announced
217
VADS Summary
VADS SUMMARY
VADS REF.: VS-SOA
VOLUME AND COST

Cycles Per Year
Cost Per Cycle
Total Annual Cost
39,000
$120
$4,680,000
PURPOSE OF VADS
90% of its overall business. The purpose of the Sales on Account VADS is to provide JMIs customers
with the products they need at competitive prices and terms while providing JMI with an appropriate profit.
Stakeholder
Outcome
Benefit
Customer
Ordered Product(s)
Supports their need
Owner
Sold Product
Credit Department
Billing
PROCESS GROUPS
Sales Order Desk
Warehouse/Shipping
SECONDARY OBJECTS:
Inventory
Customers
Project Objectives
Project Objectives
VAD Name: Sales on Account
#
1
Project Objectives
reducing the time it takes to process an order (order desk
through shipping) from 5 days to 2 days.
Increase our sales by over $40 million a year by keeping
lost sales due to stock shortages to less than 2 a day.
Improve our collections by identifying when a customer

has a 3-day change in their paying habits.

EWFL2
Ref.
PWFL2
Ref.
SOA-A
SOA-A
SOA-A2
SOA-A4
SOA-A2
SOA-A3
218

Project Objective
PO1 - Reduce order processing

time (entry through shipping) from 5
to 2 days.

automatically approves orders for
customers with sufficient available
credit lines and non-delinquent
balances. These approved orders
will be electronically transferred
directly to the warehouse. This will
allow credit-worthy orders to bypass
the Credit department. Additionally,
this will allow the credit department
to focus its attention on problem
orders. See Change Concepts.
This change will allow JMI to ship

orders that pass the automated
credit check within 24 work hours
from the point the order was
received. In most cases, this will be
the next working day. This should
apply to 90% of all orders
processed. This will also save over
$3,000 in labor a day or over
$750,000 a year.
PO2 - Increase sales by $40 million

a year by keeping lost sales due to
stock shortages to less than 2 per
day.

automatically reserves inventory for
the quantity ordered. This will
ensure that the system accurately
reflects the impact of open orders
on the inventory and will reduce
inadvertent overselling without
This change is expected to reduce

the number of lost sales from 12 per
day to 6 per day. Based on the
current average sale of $9,450, this
improvement should contribute
about $56,700 a day or about $18
million a year toward the $40 million
goal.

increasing sales order volume by 30
per day.
Same as PO2.

orders needed to meet the objective
to 24 per day.
219
Change Analysis part 1

Change Analysis
#
1
Current Situation
Reference: CA-SOA
EWFL2
Ref.
Preliminary Goal

receives the order from the order desk until
The ability to process work orders directly

to the warehouse when the customers
available credit line is greater than the
order amount and their outstanding
balance is current.

until the next business day. This results in
This would require a change to the order

processing system to support the
automatic credit checking process and
related electronic transmission of orders to
the warehouse and Credit department.
This occurs due to the volume of orders

(greater than 150 a day) coupled with the
number of steps that are taken to review
and approve credit and complete the order.
Based on an average wage of $30 and
hour and 45 minute of processing time the
cost to approve a sales order is $22.50.
Given a volume of 150 orders a day, it
requires about 14 Credit staff to keep up
with the volume. The average daily cost to
process orders through Credit is about
$3,375 a day.
Immediately upon the order desk

completing the entry of the order, the
system would credit check the order and
electronically route it directly to the
warehouse (approved) or the Credit
department (denied) for the appropriate
action. Testing and routing of an order
should take under one minute to occur.
This is good because it reduces the overall
order processing time by at least 44
minutes for orders that pass the automatic
credit check, directly supporting the project
objective to ship orders within 24 hours of
receipt.
It is estimated that approximately 91% (137
per day) of the orders received would clear
this credit checking process. Based on the
current cost of $22.50 to credit check an
order, this improvement would result in five
year savings of over $3 million (739,000 X
5 - 605,000). The cost to modify the order
processing system and to implement the
new process is estimated between
$185,000 and $605,000. The expected
return on investment in the first year should
range from 22% to 300% depending on the
actual implementation costs.
Given the objective to ship orders within 24

hours of receipt, reducing the time required
to process orders through credit supports
this objective and improves customer
service levels. Reducing the time it takes
to approve orders will also reduce the cost
of order processing providing value to
JMI's owners.
PWFL2
Ref.
SOA-A2
SOA-A4
The above savings would benefit the

company by providing a net savings of
about $140,000 the first year and $740,000
a year thereafter. The customers would
benefit from this change because they
would receive their order up to 24 hours
sooner. With the reduced number of
orders flowing to the Credit department,
the department can focus its full attention
on problem orders and avoid adding new
staff in the future. This is in line with the
companys objective keep staffing levels at
7,500.
220
Change Analysis
#
2
Reference: CA-SOA
EWFL2
Ref.
SOA-A2
Current Situation
slipped delivery dates, poor customer
This happens because the inventory is not
reserved at the time the order is taken.
About 12 to 18 orders a day are lost due to

inaccurate inventory on the computer.

approved by Credit.
being sold products beyond what their
credit limit supports.
Preliminary Goal
The ability to reserve inventory at the time
the order is taken.
P FL2
Ref.
SOA-A4
This would make inventory records more

to pick it.
This would increase sales by about $
57,000 a day.
SOA-A4

promised.
reduce bad debts.

embarrassment for the customer and
exposes the company to a potential bad
debt.
Change Analysis part 2

PG
1
Preliminary Goal
the warehouse when
the customer's
amount and their
outstanding balance is
current. This would
require a change to
system to
automatically check
location (credit
department or
warehouse).
Risk Variables
Feasibility of changing
the processing system
to perform automatic
credit checks and
routing to the
Cost and time needed
to implement the
change.
once implemented.
once implemented.
Speed of the changes

once implemented.
Uncontrollable
Aspects
Availability of source
code. Quality of
program design.
Quality of database
design.
Quality of program
design. Quality of
database design.
Imposed Limitations Realistic Objectives &

& Constraints
Goals
Amount of money and The ability to process
spend to assess the
the warehouse when
feasibility.
the customer's
amount and their
Amount of money and outstanding balance is
current. This would
require a change to
changes. Quality of
system to
automatically check
JMI's definition of
the order for creditwhat is efficient.
related data and route
Quality of the changes location (credit
made. Quality of the
department or
equipment used to
warehouse).
support the change.
data.
and rout the order.
221
Level 1 Workflow Model

Level 1 Workflow
VA DS N ame: Sales Orders on Account
R eference: WFL1-SOA
A ssumption: Sales Orders on Account when the Custom er's Credit limit is Good, Inv entory is Available and Customer Pays on Time.
Model
Steps
1.
C us tom er ca lls an o rd er into the

S ale s Or de r D es k.
- Customer Calls in Order
2.
S ale s Or de r D es k en ters the or de r

into the S a le s O rd er S y stem .
Customer
Sales Order Desk
3.
S ale s Or de r S ys tem pr ints a

R ou gh Or de r at th e S ales Or der
rde
D ep artm e nt for app ro va l.
gh
-R
ev
O rd e r f o r A p p r o va l
the o rd er
6.
W ar eho us e.
7.
W ar eho us e s hips th e or der and

for wa rd s the o rde r to B illing .
8.
B illing finaliz es th e S hipp ed Or de r

in S ale s Or de r S ys tem an d pr ints
w
inv o ic e .
s
C
re
Copy of Inv oic e
di
to P roduc t
t-
A nalys is Group
9.
10.
- Approved Order -
B illing m ails In vo ice to C us tom e r.

C us tom er rem its pay m en t to
B illing.
Warehouse
C re dit D ep ar tm e nt fo rw ar ds the
A pp ro ve d Or der to the
ie
- O
rd e r
fo r
B il li
in g
-
S ale s Or de r S ys tem an d ap pro v es
11
C re dit D ep ar tm e nt r ev iew s
C us tom er 's C red it s ta tus in the
S ys tem
- P o st P a ym e n t -
5.
S ales Order
Billing
R ou gh Or de r to th e Cr ed it
-R
ou
- Fin a liz e O rd e
r
& P r in t In v o ic e
-
S ale s Or de r D es k for wa rd s the
Or
P a ym
- M a il I
n vo ic e
10
- S h ip p e d O r d e r -
4.
- En
ter
ent
s O
rd
er -
D es k .
3
Credit Department
11.
B illing po sts Cu stom e r's p ay m en t

in S ale s Or de r S ys tem .
222


Assumption: [from WFL1]: Sales orders on account when the customer's credit is good,
$4.8 million
Beg. Status
P
R
O
C
E
D
U
R
E
S
Phase A
Phase B
Phase C
Phase D
Phase E

PO1

approval
S1
PO1

shipping
PO1

billing

collection

desk with an order.

the order desk.

from Credit.

warehouse.




screen.
S2
PO2

limit.
the order form.
S2

outstanding A/R.




order to Billing.

mails to customer.
PO4
quantities shipped.

billing.
S3
posts the payment.
Effort
Lapsed
End Status
Time
S3
approval

shipping

collection
5 minutes
2 days
1 day
10 minutes
45 days
5 minutes
45 minutes
1 hour
2 hours
10 minutes
223
Proposed Level 2 Workflow

VADS Reference: PWFL2 - SOA1
VADS Estimated Annual Cost: $2 million
Assumption: [from WFL1]: Sales orders on account when the customer's credit is good.
Beg.
Status
Phase A
Phase B
Phase C
Phase D

desk with an order.
Warehouse receives order via printer and

pages the warehouse staff via the automated
paging system.
1
2
Order Entry Process

2

R
O
C
outstanding balance is current

via the order entry screen.
E
D
U
The system flags the order as

clearing O/S balance review.
R
E

available and confirms ship
dates.
PO4
Customer sends payment to billing.

system. picks order. The system
updates the order retrieved.
PG1
Billing retrieves the customer's

invoice from the system and posts

3
PO1
The warehouse staff picks the order and
4
The system updates inventory,

the payment.
4
The system updates the customer's

balance.
Billing prints the invoice and mails to

customer.

customer
Warehouse sends shipped order to Billing.
Upon completion of the order,

the system reserves the
inventory being ordered, sets its
status to "Approved", assigns a
PIN# and sends it directly to the
warehouse for printing.
PG3
Lapsed End
Time Status
Customer receives the invoice.
PG1
Effort
Billing retrieves order from the system
and enters the actual quantities shipped. 3

2
Billing receives order from warehouse.
PO2
PG1
PG2

shipping
5 minutes
5 minutes
PO1
1 day
2 hours
45 days
10 minutes
10 minutes
1 hour
PO1
224
Stimulus Trigger Diagnostic Form

VADS Phase
VADS REF.: VS-SOA

Process Group
Stimulus Trigger
Action and Timing
Sales Order Desk
Telephone ringing
Answer telephone within 3 rings

shipping
Warehouse
Pick up order and update system with

order PIN # within 30 minutes of page
225
Overview of Change Concepts

Introduction
One of the preliminary goals established by the project participants (the team) was to reduce the time it takes to process an order from its point
of entry into the order processing system to the point it is available for picking in the warehouse. To achieve this goal, the team developed a
concept that would print creditworthy orders directly to the warehouse simultaneously paging a warehouse person that the order is available.
This new process would allow the Credit department to save over $3,000 a day in labor costs. Additionally, the new process would cut the time
a typical order takes to arrive in the warehouse by about two days. This will increase customer service levels and support the company's
objective of shipping orders within 24 hours of receipt.
The Process
As sales orders are entered into the system, they would go through an automated credit check. This credit check process would verify that the
customer had an available credit limit sufficient to support the order and was current on any outstanding balances due.
Orders passing this automated credit check would be routed to and printed directly in the warehouse. Simultaneous to the printing process, a
warehouse person would receive a page via a beeper system. The goal would be to have the page responded to within 30 minutes of the
printing taking place.
The system would track the response time from page to order pickup and provide daily performance reports to each warehouse staff person
and his or her supervisor.
The team recommends that incentives be put in place to reward warehouse staff for performances that consistently exceed the 30 minute
goal.
Low
High
1. Modification of order entry module to include automatic credit checking (assumes outsourcing at $1,000 a
day);
25,000
1,500
50,000
2,000
500
750
8,000
12,000
37,500
55,000
12,000
15,000
3,000
5,000
4. Paging system;
7. Testing.
Total $
87,500
139,750
Based on the above estimates of savings and costs, this new process will provide the following savings to the company in the first 12 months
following implementation:
780,000
139,750
1st Year Savings

640,250
458.14%
226


VADS Phase:
VADS Procedure:

Customer
Inventory
Failure to correctly update inventory for the actual quantity shipped would result in inventory being misstated. This could lead to
over or under-stocking conditions and could affect purchasing's actions.

VADS Phase:
A - future cycles
VADS Procedure:
2 - Order desk identifies the customer and verifies that their outstanding balance is current via the order entry screen. The system
flags the order as clearing O/S Balance review.

Customer
Inventory
Due to failures in phase C of a prior VADS cycle, the customer's credit limit is misstated. Additionally, the inventory does not
accurately reflect actual shipment information. This can result in a customer's order being refused because of an understated
credit limit or wrongly accepted because of an overstated credit limit. Since in this mode the inventory is also misstated, the order
might be accepted when there is insufficient product to fill the order. This type of failure can adversely impact customer service
levels.

Value Lost
Cost
Stakeholder
Time

Customer
Service Level
Other

year.
$119,700
Total
$119,700
Labor to resolve
Reduced reputation
Resolution Concept
Description:
A procedural failure to enter the data into the system or lost paperwork could cause the process to breakdown. A safeguard
should be implemented to identify orders that have been picked up for shipping but not invoiced. This safeguard could take the
form of a daily status report that lists orders that have been in the warehouse for over 24 hours.
Labor
Materials
Capital
Total
$25,000
$25,000
Labor
Materials
Capital
Total
$10,800
$18
$10,818
2 months
Revenue Generated (assumes
1 lost customer per year
compounded every year)
Total Improvement
Implementation Cost
Ongoing Cost
Total Cost
Net Improvement
1st Year
3 Years
5 Years
$119,700
$718,200
$1,795,500
$119,700
$718,200
$1,795,500
$25,000
$25,000
$25,000
$10,818
$32,454
$54,090
$35,818
$57,454
$79,090
$83,882
$660,746
$1,716,410
234.19%
1150.04%
2170.20%
227
Secondary Object Transformation

Phase
#
VADS Phase
VADS REF.: OTR-SOA
Secondary
Proc. #
Object
Procedure
Rule
Impact of Failure
Safeguard
Shipped sales
order ready for
billing
Customer
The system updates

and creates the
invoice.

limit should be
increased for the
order and decreased
invoice.
Failure to decrease
credit limit. This could
lead to a bad debt
situation as future
orders are accepted
erroneously.
system or lost paperwork
could cause the process
to breakdown. A
safeguard should be
implemented to identify
picked up for shipping but
not invoiced. This
safeguard could take the
form of a daily status
report that lists orders that
have been in the
warehouse for over 24
hours.
Shipped sales
order ready for
billing
Inventory
The system updates

and creates the
invoice.
The inventory
available for sale
should be increased
for the original
decreased for the
actual quantity
shipped to the
customer. This
should be done for
each item shipped.
the actual quantity
in inventory being
and could affect
Same as above.
Billed sales order Customer

pending
collection
The system updates

limit and accounts
receivable balance.

limit should be
increased for the
value of payments
received (posted).

for payments received
could result in a
customer erroneously
failing to pass the
credit check. This
could result in a lost
order or even a lost
customer.
enter the payments into
the system would cause
the process to breakdown.
A safeguard should be
implemented to identify
invoiced but not collected
paying habit time period.
This safeguard could take
the form of a daily status
report that lists invoices
that have not been paid
normal paying habit time
period.
228
Knowledge Summaries
Knowledge Summary
#
1
OBSERVATION
inventory object. Need to discuss with management to determine
if the scope of the project should be expanded to include these
VADS.
STATUS
In order to compress the projects time frame, may want to

consider having two teams working in tandem. This would
require some additional time for cross-team debriefing. Maybe
let each team do each other's diagnostic work sessions. This
would keep everyone up to date and informed.
Work Session Summaries

Goal of Session:
The goal of the session was to develop the change analysis and workflow models
needed to identify improvements to the Sales on Account VADS that support
achieving the project s objectives.
Knowledge Workers
Present:
Manager)
Discussion:
Everyone appeared genuinely excited about the changes identified. Good team.
Team Observation:
Action Items:
Susan will provide copies of the credit review and approval procedures. Bobby
will supply samples of reports used in tracking billing and collection efforts.
Melinda will bring Sam Trent, vendor s analyst, to support discussions about
system changes.
Next Work Session:
229
In addition to the above documentation, the team developed some questions that
need to be presented at the next facilitation work session. These questions were
generated as a result of the diagnostics performed. Whenever a diagnostic test
failed due to insufficient information, the team would formulate a question
designed to collect that information from the knowledge workers. Below are the
questions developed during the first diagnostic work session.
1. Does a new VADS -one that demonstrates the collection process for
delinquent customers (from a change in paying habit through collection) need to be added to the scope of the project?
2. Are there any ways to reduce the lapsed time in phase B of the proposed
WFL2 from the proposed 1-day given that the level of effort is only 1 hour?
The documentation and questions should be distributed to the knowledge
workers two to three days before the next facilitation work session.
230
Breakthrough Process Improvements

are usually achieved through proper
alignment with Stakeholder needs.
231
Conducting Subsequent Work

Sessions and Presentations
There are two more pairs of facilitation/diagnostic work sessions to conduct

before the project is complete. At the next facilitation work session, the team will
review all the models and documentation prepared to date with the knowledge
workers. Issues and questions will be discussed and the documentation updated to
reflect the agreed upon changes.
At the second diagnostic work session, the team will update the formal
documentation with information gathered at the facilitation work session.
The third facilitation work session will focus on obtaining final approval, from the
knowledge workers, to present the project findings to management. The goal of
the final diagnostic work session will be to package the study, develop a plan for
pursuing the projects recommendations and prepare a final report/presentation to
management.
Facilitation Work Session #2

Ideally the second facilitation work session takes place five to ten days after the
first work session. The goal of the work session is to validate and to reach
consensus on the proposed changes to the VADS being reviewed. This is
accomplished through a review of the expanded change analysis, the proposed
Level 2 Workflow Model and any questions that were developed during the
diagnostic work session.
At this point in the process, the project team has invested more time in the
proposed changes to the VADS than the knowledge workers have. There is a
tendency in some teams to defend the models and change concepts they developed.
Although a sense of ownership is natural, it must be avoided by the project team.
The team must be open to new ideas that evolve as a result of the second
facilitation work session. The team must stay focused on developing improvement
recommendations to management that will achieve the projects objectives and that
are supported and owned by the knowledge workers. To do this, the team must
present the work completed to date in an objective and unbiased manner.
232
Remember, this is a work session that is interactive in nature. It is not a

presentation made to the knowledge workers by the project team.
Conducting the Review

There are two ways to review the models and change concepts that have been
developed. The first is by providing each participant with a paper copy of the
models to work from. While this will work, it lacks impact and often results in a
boring, lackluster session. The second approach is to provide handouts for
reference, but conduct the review using a projection unit, enabling everyone to
view the models in large scale. The best type of projection unit projects the
models directly from a PC onto a screen. To be effective, the projected image
must be readable by all participants. This typically requires an 8 to 12 foot wide
screen. This approach promotes dialogue. Further, any changes to the models can
be made in real-time via the PC. This will accelerate consensus.
An alternative to a PC projection unit is an overhead projector. The drawback to
this approach is that the room must be dark for the image to project well, which
reduces interaction among the participants.
Regardless of the tools used to support the work session, it is important that all the
knowledge workers feel free to participate in the process.
In preparation for the second facilitation work session, the team has distributed the
project workbooks to the knowledge workers and reserved a conference room
outfitted with a PC projection system.
The facilitator begins the work session with a brief review of the projects
objectives, the objective of the session and the agenda. The agenda for the session
would include:
1. Review/revise the updated change analysis
2. Review/revise the proposed WFL2
3. Review/revise the change concept for warehouse paging system
4. Review/revise the stimulus trigger and failure analysis data
5. Resolve open questions and issues
Each area of the review consists of the following steps:
1. Model/document walk-thru
2. Discussion on model/document completeness
233
3. Revisions to the documentation

4. Acceptance of the revised model/documentation by the knowledge workers
Since the models/documentation are integrally linked, any revisions may ripple
through the entire documentation. Additionally, the discussion will probably
require referencing of multiple models at the same time. For example, if a change
is made to the proposed Level 2 Workflow Model, those changes might affect
where a project objectives or change analysis goals are supported. Likewise, if the
change concept is modified, then the PWFL2 model and failure analysis may need
to be updated to reflect the change. Making changes to the entire documentation
during the work session ensures that those changes are complete and achieve their
intended purpose.
Applying the Second Facilitation Work Session to the

Case Study
The warehouse paging concept will be used to illustrate the review/revise/accept
process taking place during the second facilitation work session.
M ODEL / DOCUMENT
WALK - THRU
The walk-thru of the warehouse-paging concept is done by reading the concept to

the group with the PWFL2 displayed on the screen for reference. The facilitator
reads the entire document to the group without interruption. Once the reading is
complete, the facilitator moves on to discuss the concept.
D ISCUSSION
ON MODEL / DO CUMENT COMPLETENES S
During the discussion of the warehouse-paging concept, a number of questions and

ideas were raised by the knowledge workers. This happened as the group began to
brainstorm ways to make the process even more efficient. Below are some of the
questions:
1. How will the system know which warehouse person to page?
2. Why print the order at all? Couldnt the order be downloaded to a hand-held
device?
3. If the order could be downloaded to a hand-held device, why couldnt the
order be downloaded to the inventory picking carts along with the most
efficient route? This would speed up the picking process and allow the
warehouse staff to stay with their carts.
234
As the dialogue progressed, the facilitator posted the ideas to a flip chart for easy
reference and to ensure completeness of communication.
Most change concepts are improved during the second work session. Improvement
ideas tend to build one on the other. The facilitators job is to keep the process
flowing until the group begins to reach consensus. At that point, the facilitator
summarizes the prevailing ideas and fleshes them out by applying the same tests
used when diagnosing the completeness of a preliminary goal.
What should happen?
When should it happen?
Why it is better than other alternatives?
How much will it save?
In the work session, the group agreed that downloading orders to the inventory
picking carts offered the most complete approach to managing sales orders through
the warehouse. The facilitator, using the PC projection system, enters the new
change concept and begins working the group through the above tests. As each
test is completed, the change concept is updated and refined. Once all the tests are
completed and new change concepts are agreed to, the facilitator works with the
group to update any other models and documentation affected.
Figure 9-1 represents the new change concept developed by the group.
235
Figure 9-1 - Overview of Downloading Sales Orders to Picking Carts

Overview of Downloading Sales Orders to Picking Carts
Introduction
One of the preliminary goals established by the project participants (the team) was to reduce the time it takes to process an order from the point of entry into
the order processing system to the point it is available for picking in the warehouse. To achieve this goal, the team developed a concept that would
electronically transmit credit-worthy orders directly to a warehouse picking cart. The cart selected would be the one with the least number of orders pending
picking.
This new process would allow the Credit department to save over $3,000 a day in labor costs. Additionally, the new process would cut the time a typical
order takes to arrive in the warehouse by about two days. This will increase customer service levels and supports the company's objective of shipping orders
within 24 hours of receipt.
The Process
As sales orders are entered into the system, they would go through an automated credit check. This credit check process would verify that the customer had
an available credit limit sufficient to support the order and was current on any outstanding balances due.
Orders passing this automated credit check would be routed to the next available picking cart in the warehouse. The goal would be to have the order picked
within 1 hour of the download taking place.
The system would track the response time from order download to order update for items picked and provide daily performance reports to each warehouse
staff person and supervisor. The system would also allow an orders status to be determined within the warehouse to the item picked level. As each item is
picked, the warehouse person would update the order on the cart system for the actual yardage. Once all the items were picked, the warehouse person would
release the order for billing. A bill of lading would also be printed at the shipping dock and matched to the order when it arrived for packaging and shipping.
Daily, about 4:30 p.m., the billing department would review the billable orders. The orders would then be printed and mailed to the customer.
The team recommends that incentives be put in place to reward warehouse staff for performances that consistently exceed the 1 hour download to pick goal.
Orders not picked within 1 hour would be escalated to the warehouse supervisor for expedition.
In order to implement this new process, the following will need to occur:
1. Receive Management's approval and supporting budget;
3. Cable the warehouse for a bill of lading printer and wireless communications;
4. Purchase and install printer in the warehouse;
5. Purchase and install wireless communications system;
5. Purchase and install on-board computers for picking carts (available from picking cart manufacturer);
Low
High
1. Modification of order entry module to include automatic credit checking (assumes outsourcing at $1,000 a day)
2. Cabling of warehouse for printer and wireless communications
25,000
50,000
25,000
18,000
3. Warehouse printer
500
750
65,000
90,000
120,000
150,000
5. Interfacing of Order Processing system to picking cart on-board computers (assumes outsourcing at $1,000 a day)
85,000
105,000
6. Training (two days for each of 25 warehouse staff)
12,000
15,000
7. Testing
15,000
4. Wireless communications system

5. Picking cart on-board computer systems (20 carts)
Total $
340,500
25,000
$
460,750
Based on the above estimates of savings and costs this new process will provide the following savings to the company in the first 12 months following
implementation:
780,000
460,750
1st Year Savings

319,250
69.29%
236
Notice that the team chose to include a proposed WFL1 model. While not
mandatory, it is often done when major changes to a workflow are being proposed.
Level 1 Workflow
VADS Name: Proposed download system - Sales Orders on Account
Reference : PWFL1-SOA
ASSUMPTIO N: Download to picking cart. Sales order process w hen credit is good, inventory is in stock and
the customer pays on time.
Model
Steps
- C u s to m e r C a l l s i n O r d e r
1.
Sale s O rde r D esk.

S a le s O rd e r D e s k
C u s to m e r
C ustom e r ca lls an o rd er in to the
2.
Sale s O rde r D esk e nters the orde r

in to the Sa les O rd er Syste m .
- S h ip p ed O r de r -
P aym ent
11
Sale s O rde r System a pproves

o rd er an d tran sm its to o n-boa rd
- E n te r s O r d e r -
10
- M a il I n v o ic e -
3.
p icking cart com puter.

4.
Pickin g Ca rt notifies w areh ouse

p erso n th at ord er is re ady to p ick.
5.
W areho use pe rson p icks ord er

a nd up da te s picking cart system .
- R e le a s e
& P rin t I nv
o ic e
s -
B i ll i n g
n
P aym e
- P ost
6.
S a l e s O r d e r S y s te m
7.
ad
of L
O rd e r
ship ping a re a of w areh ouse .

3
8.
O rd er is sh ip pe d to cu stom e r.
9.
Billing relea se s o rde rs fo r invoicing

a nd prints.
10.
Sale s O rde r system up da te s

in ve ntory an d prints bill of la ding in
A p p ro v e d
B ill
in g
O r d e r f o r I n v o ic in g
12
Pickin g Ca rt system tran sm its

o rd er to Sales Order syste m .
t -
Invoices are m ailed to the

custom e r.
W a re h o u s e
O r d e r R e a d y N o ti fi c a ti o n
O n -b o a rd P ic k in g
C a r t C o m p u te r
11.
A c tu a l Y a r d a g e P ic k e d
C ustom e r re m its paym e nt to

Billing.
12.
Billing po sts Cu stom er's p aym en t

in Sale s O rde r System .
R EVISIONS TO TH E DOCU MENTATIO N

The new change concept affects a number of models and documents. The
facilitator starts the revision process by projecting the change analysis onto the
screen. The group is then asked to read the CA and determine if any of the items
needs to be revised to reflect the impact of the new change concept. Once the
change analysis is updated, the facilitator performs the same process for each item
in the documentation. Below is the result of factoring the new change concept
through the documentation (Figures 9-2 and 9-3).
VADS Summary (no change)
Contribution of VADS to Project Objectives (no change)
Project Objectives (no change)
Change Analysis - parts 1 and 2 (no change)
237
Level 1 Workflow Model (no change)

Existing Level 2 Workflow Model (no change)
Proposed Level 2 Workflow Model - Version 1 - Paging concept (no
change)
Change Concept Form (no change)
Failure Analysis Form (no change)
Summary of Object Transformations (no change)
238

VADS Reference: PWFL2 - SOA1-A
VADS Estimated Annual Cost: $1.6 million
Assumption: Download approved sales orders to picking cart. Sales orders on account when the customer's credit is good,
Beg.
Status
inventory is available and the customer pays on time.
Phase A
Phase B
Phase C
Phase D
Approved sales order ready for fulfillment

desk with an order.
Order Entry Process

P
R
O
C
E

D
U
R

E
S
Lapsed End
Time Status
Warehouse person retrieves the sales

order and picks the items displayed.
PG1
PO1
Billing reviews billable order report

releases the orders for invoicing.
The system updates the customer's credit

limit, prints the invoice and sets the order

status to billed.
the payment.
4
3
The warehouse person updates the

arder via the on-board cart computer
with the actual yardage cut.
PG1
3

dates.
PO4
The order is transmitted back to the

order processing system for billing
and inventory update.

status to "Approved" and
transmits order directly to next
available picking cart.
PG2
The order processing system updates

inventory and prints a bill of lading in
shipping. The order is packaged and
shipped to the customer.
PG3
Effort

Warehouse picking cart receives order

and starts warehouse tracking timer.
PO2
PG1

shipping
5 minutes
5 minutes

balance.
PO1
1 day
1 hour
PO1
2 hours
45 days
1 minute
10 minutes
239
Figure 9-3 - Stimulus Trigger Diagnostic Form (add stimulus trigger for cart concept)

VADS Phase
VADS REF.: VS-SOA

Process Group
Stimulus Trigger
Action and Timing

product
Sales Order Desk
Telephone ringing
Answer telephone within 3 rings.

shipping - Paging Scenario
Warehouse
Pick up order and update system

with order PIN # within 30 minutes
of page.
Alert from Cart Computer
Pick order and update cart

computer with yardage cut for
each item. Complete picking
process in 1 hour.

shipping - Download Scenario
Warehouse
A CCEPTANCE
OF THE REV ISED MO DEL / DOCUMENTATION BY THE

KNOWLEDGE WORKERS
Once the documentation has been updated, the facilitator summarizes the changes
made and verifies with the knowledge workers that there is a consensus on all the
proposed changes to the VADS.
When the facilitator made this request to the JMI group, some concerns were
raised about the cost and complexity related to downloading sales orders directly to
the picking carts. The MIS representative was not comfortable with the time and
cost estimates related to the system modifications needed to implement the
concept. Consequently, the group decided that a two-phased implementation
approach should be recommended to management. Phase 1 would consist of the
original paging concept because it could be done quickly and with a high ROI.
Phase 2 would be to implement the picking cart upgrade. The system requirements
and design for Phase 2 would start immediately. Once the design was complete,
the implementation and ongoing support costs would be developed and a final
implementation decision made.
The types of conscious trade-offs represented by the warehouse example are
typical of the outcomes produced by the creative thinking and problem solving that
takes place during the second facilitation work session. The group acts as a team
focused on producing optimum solutions that are consistent with the project
objectives.
240
Diagnostic Work Session #2

Diagnostic work session #2 consists of reviewing the changes and additions made
to the documentation during facilitation work session #2. The tools used in the
facilitation work session will determine the amount of effort that will be made in
the diagnostic work session. If all the changes and additions were made manually,
then they will need to be reviewed and formalized. If the changes and additions
were made directly to the documentation via a PC, then they will only need to be
reviewed and edited.
The review portion of the work session consists of testing each of the models and
documents added or modified for completeness. The review should take under an
hour to complete.
The project team will also complete Knowledge Summary and Work Session
Summary forms for the facilitation work session.
Once the review and update of the documentation is complete, the project team can
update a summary of improvement recommendations for presentation to
management. The summary should consist of a one or two sentence introduction
followed by a list of the recommendations.
Figure 9-4 presents Summary of Improvement Recommendations based on the
case study.
241
Figure 9-4 Summary of Improvement Recommendations

Summary of Improvement Recommendations
Cost to
Implement
Annual
Contribution
Time Frame to
Implement
This improvement will allow JMI to ship orders

that pass the automated credit check within 24
work hours from the point the order was
received. In most cases, this will be the next
working day. This should apply to 90% of all
orders processed. This will also save over
$3,000 in labor a day or over $750,000 a
year.
139,750
750,000
6 months
Phase 2 - Sales Order Download to

Picking Cart - Replace the paging system
with the ability to download sales orders
directly to on-board computers on each
picking cart. This will allow the warehouse
staff to stay with the picking carts and provide
improved tracking of orders that are in the
process of being picked. The system will
also streamline the billing and bill of lading
process. Under this approach, each
warehouse person will be able to ship 8 to 10
orders per day. This represents an
improvement of 2 to 4 orders per warehouse
person per day.
automatically reserves inventory for the
quantity ordered. This will insure that the
system accurately reflects the impact of open
orders on the inventory and will reduce
inadvertent overselling without supporting
backorders.
This improvement will allow JMI to have an

order ready for shipping within 1.5 hours of
receipt in the warehouse. Additionally, this
improvement will increase daily shipping
capacity from 160 orders to about 220
orders. Finally, this improvement will reduce
the time to review an order for invoicing from
5 minutes to under 1 minute, a savings of 10
($250) hours of labor per day or 2,500 hours
a year ($62,500). The total annual savings in
the credit and billing departments is over
$810,000.
460,750
810,000
1 year
This change is expected to reduce the

number of lost sales from 12 per day to 6 per
day. Based on the current average sale of
$9,450, this improvement should contribute
about $56,700 a day or about $18 million a
year toward the $40 million goal.
Included in
phase 1 above
18,000,000
4 months
Same as PO2.
This change reduces the number of orders

needed to meet the objective to 24 per day.
Included in
phase 1 above
Project Objective / CA Goal
PO1 - reduce order processing time (from

entry through shipping) from 5 to 2 days. CASOA1 - the ability to process work orders
directly to the warehouse when the
customer's credit is good. CA-SOA3 - the
ability to update the customer's credit limit at
the time the order is placed.
Phase 1 - Warehouse Paging Concept Modify the order entry process so it

automatically approves orders for customers
with sufficient available credit lines and nondelinquent balances. These approved orders
will be electronically transferred directly to the
warehouse. This will allow credit-worthy
orders to bypass the Credit department.
Additionally, this will allow the Credit
department to focus its attention on problem
PO2 - Increase sales by $40 million a year by

keeping lost sales due to stock shortages to
less than 2 per day.
CA-SOA2 - the
ability to update inventory at the time the order
is taken.

increasing sales order volume by 30 per day.
Total
Value of contribution
600,500
19,560,000
242
The summary of improvement recommendations should provide management with

a complete sense of the improvement concept, costs and contribution for each
recommendation. The summary should never exceed one page per VADS. If
multiple VADS are being recommended for improvement, then an additional
summary should be added that lists all the VADS being improved. Each line on
this level summary should contain the VAD being improved, the project objectives
being supported and the costs, income contribution and time frame for
implementation.
The updated documentation and summary of improvement recommendations
should be distributed to the knowledge workers in advance of the final diagnostic
work session.
Facilitation Work Session #3

Facilitation work session # 3 is the last facilitation session for a VADS. The
sessions consist of:
1. Conducting a final review of the documentation
2. Reviewing the improvement recommendations
3. Developing a rough implementation plan
The final review of the documentation should only take about 10 minutes. The
group goal of the review is to ensure that the set is free of typographical errors and
ready for presentation to management.
The purpose of the improvement recommendations review is to achieve final
consensus among the group. Any disagreements that cannot be resolved at this
point are documented and included in the documentation. Additionally,
disagreements of a material nature are included in the report to management.
Typically, disagreements are presented in the form of options or alternative
viewpoints held. This approach to disclosure of non-consensus items helps ensure
that alternative views are given open and honest treatment.
Developing a rough implementation plan takes up the remainder of the work
session. To perform this task, the facilitator can use a flip chart or a projection unit
to record the plan items. The preferable approach to this is to use a spreadsheet to
record the items in real time via a PC projection unit. This approach provides the
most flexibility in recording and changing the plan as it develops.
The implementation plan can have whatever information the group believes is
appropriate. At a minimum, the plan must include the following:
243
Header
1. VADS Name
2. Proposed Start Date (when the project should start)
3. Proposed End Date (when the project would be complete based on
start date)
4. Total Cost (total capital and outside costs of project)
5. Total Contribution (total increase in revenue and/or decrease in
operating costs project will deliver)
Body (columns)
1. Task group (phase or milestone the task is associated with)
2. Task Sequence (relative order the task to other task becomes task
number)
3. Task Description (action to be taken)
4. Task Type (category of task purchase, training, approval, etc.)
5. Task Leader (who will be accountable for the task completion person
or role)
6. Support Staff (staff that will also work on task persons or positions)
7. Level of Effort (# hours or weeks of labor that will be needed to
complete the task)
8. Lapsed Time (# weeks in which the level of effort will be deployed)
9. Starting Weeks Out (the week the task must start in order to keep the project
on schedule)
10.Ending Weeks Out (the week the task must end relative to the ending week
of the project)
11.Costs (estimate of costs to be incurred in conjunction with the task
which helps establish cash flow requirements)
By using the above plan elements in conjunction with spreadsheet or project
management software, it becomes easy to update the plan for project or task level
changes. In the planning stage, a spreadsheet offers the maximum flexibility in
organizing tasks, as there are no project scheduling rules being imposed by the
software. This leaves the facilitator free to add, delete or move tasks with ease.
Additionally, a formula can be added to the spreadsheet that calculates all the start
244
and end weeks based on the proposed project end date. With this formula in place,
the entire plan can be recast by simply changing the project end date in the header.
The group should try to keep each task to less than 40 hours of effort. In doing
this, there should not be a requirement to track percent complete at the task level.
The implementation plan becomes the foundation for the project plan. The only
items needed to turn the implementation into a project plan are columns for actual
task start date, actual task end date and a column for task status. If the 40-hour rule
is followed, each task will have the following status:
1. Pending Start On Schedule
2. Pending Start Past Due
3. In Process On Schedule
4. In Process Past Due
5. Completed On Schedule
6. Completed Past Due
7. Cancelled
8. On Hold
Figure 9-5 provides a sample of an implementation plan for the improvements to
the sales order process based on the paging system option.
245
Figure 9-5 Sample Implementation Plan

Implementation Plan
VADS Name: Sales on Account - Phase 1 - Sales Order Processing Improvements and Paging System
Proposed Start Date:
October-98
Proposed End Date: September-99
Total Cost:
$139,750
Total Contribution:
$780,000
Weeks from Finish
Task
Seq.
Task Description
Task Type
Task Leader
Support Staff
Level of
Effort
(hours)
Project Initiation
Obtain approval from Management
Approval
Project Manager
Cynthia Mills
0.5
49
48
Project Initiation
Form project team
Proj. Mgmt.
Project Manager
Dept. Heads
48
47
Project Initiation
Project Kickoff
Proj. Mgmt.
Project Manager
Steven Ethridge/Brad
Crenshaw
47
45
Requirements
Review change requirements
Technical
Project Manager
Brad Crenshaw/Team
30
45
39
Requirements
Develop detailed requirements

specifications - Inventory Reserve
Technical
MIS
Team
40
39
36
Requirements

specifications - Auto Credit Check
Technical
MIS
Team
40
36
33
Requirements

specifications - paging system
Technical
MIS
Team
40
Requirements
Review / Revise time and cost

estimates
Proj. Mgmt.
MIS
Project Manager
0.5
33
33
Requirements
Obtain approval for increases over

estimate
Proj. Mgmt.
Project Manager
Steven Ethridge/Brad
Crenshaw
0.5
33
32
Task Group
Lapsed
Time
(weeks)
Start
End
Costs
Design
10
Develop Design Specifications Auto Credit Check
Technical
MIS
Team
40
32
29
Design
11
Develop Design Specifications Inventory Reserve
Technical
MIS
Team
40
29
26
Construction
12
Contract for Programming
Purchase
Brad Crenshaw
Project Manager/Steven
Ethridge
26
24
Construction
13
Programming - sales order

processing module
Technical
Brad Crenshaw
Vendor
400
24
18
50,000
Construction
14
Order paging system
Purchase
Brad Crenshaw
Vendor
0.5
18
18
12,000
Construction
15
Programming - paging system

interface
Technical
Brad Crenshaw
Vendor
440
18
10
55,000
Construction
16
Install paging system
Technical
Brad Crenshaw
Vendor
24
10
Construction
17
Test paging system interface
Testing
Project Manager
Team
24
5,000
Construction
18
Order warehouse printer
Technical
Brad Crenshaw
Vendor
0.5
750
Construction
19
Cable warehouse for printer and

paging system
Technical
Brad Crenshaw
Vendor
24
2,000
Construction
20
Unit testing
Testing
Brad Crenshaw
Vendor/Team
40
Construction
21
User Testing
Testing
Project Manager
Users/Team
40
Implementation
22
Training - Sales order desk
Training
Project Manager
Users/Team
64
0.5
Implementation
23
Training - Warehouse
Training
Project Manager
Users/Team
1,000
0.5
Implementation
24
Implementation
Go Live
Project Manager
Users/Team
32
Project Total
15,000
2,341
139,750
Once the implementation plan is complete, the project team needs to conduct its
final diagnostic work session.
246
Diagnostic work Session # 3

The purpose of the final diagnostic work session is to finalize the documentation
and prepare for the presentation of the projects findings and recommendations to
management.
The project findings and recommendations take the form of a report. The report
should conform to the format and norms used within your organization. At a
minimum, the report should contain the following:
1. Executive Summary (1 page)
2. Findings and Improvement Recommendations (1 to 2 pages)
3. Implementation Costs and ROI (1 page)
4. Implementation Plan (1 page)
5. Authorization to Proceed (1 page)
The Executive Summary should provide a short statement about the projects goals
and objectives, followed by the overall ROI and proposed timetable for
implementation. Ideally, the Executive Summary would be limited to one page.
The Findings and Improvement Recommendations section should consist of a brief
introductory statement followed by the Summary of Improvement
Recommendations (Figure 9-5).
The Implementation Costs and ROI should consists of a schedule of major costs to
be incurred to achieve the ROI stated in the Executive Summary.
The Implementation Plan should consist of a one-page summary of the task groups
by phase (one line per task group) found in each of the phase-level implementation
plans. The detailed implementation plan for each phase is part of the formal
documentation.
Ideally, the Authorization to Proceed is a formal one-page document that
management signs to signify its approval of the project.
The formal report should be only five to six pages long and be professionally
bound. The documentation should serve as an appendix to the report and be
packaged in its own binder.
In support of the formal report, the team should also prepare a formal presentation.
The presentation should consist of two groups of slides (35mm, overhead, PC
projection, etc.). The first set contains the slides that represent a graphical
247
representation of the information contained in the formal report. The second set of
slides should contain excerpts from the documentation. These slides will be used
for reference as questions about processes of change concepts are raised during the
Q&A portion of the presentation. At minimum, this slide set should contain the
following for each VADS:
1. VADS Summary
2. Contribution of VADS to Project Objectives
5. Level 1 Workflow Model
6. Existing Level 2 Workflow Model
7. Proposed Level 2 Workflow Model
8. Stimulus Trigger Diagnostic Forms
9. Overview of Change Concepts
10.Failure Analysis Forms
11.Secondary Object Transformations
The optimum presentation tool to use is the PC projection system. This type of
system, using appropriate presentation software, allows the presenter to move
quickly between slides and to access slides in any order. Additionally, most
presentation systems allow annotation of the slides, allowing the presenter to
capture issues in context to the related documentation.
Presenting the Results to Management

The final task to be completed is to make a formal presentation to management on
the projects findings and recommendations.
The team should rehearse the presentation before giving it to management. The
knowledge workers and project sponsors make an excellent audience for the
rehearsals.
Typically, management evaluates project proposals for the following:
1. Alignment with overall strategic direction
2. Value added to stakeholders
3. ROI
248
4. Cultural impact
5. Viability (is it believable)
6. Timing in context to other projects and activities
During the rehearsals, the audience should be evaluating the presentation for how
well it addresses these six factors.
Once the presentation has been honed, the team is ready to make the presentation
to management.
The formal portion of the presentation should last about 10 to 15 minutes. The
total length of the presentation will be determined on the questions raised by
management.
During the presentation, the team should be open to questions and criticisms. This
is an opportunity to demonstrate the teams overall proficiency from a project and
presentation skills perspective. The presenter needs to be poised and calm. The
recommendations and support work effort should never be defended. The
recommendations should stand on their own merit. If issues should arise, the
presenter should facilitate the process to gain an understanding of managements
concerns. Once issues are defined, the presenter should facilitate possible
resolutions or action plans to gain resolution. This approach will enhance the
presenters credibility and ability to persuade.
Chapter Review
In this chapter, the concepts and steps needed to complete the fieldwork guidelines
for presenting the findings to management were addressed. Specifically, the team
conducted two facilitation work sessions, two diagnostic work sessions and
delivered the projects findings to management.
In the facilitation work sessions, the team reviewed and revised the documentation
with the knowledge workers. Additionally, the team worked with the knowledge
workers to develop a consensus on the improvement recommendations to be
delivered to management.
The supporting diagnostic work sessions provided the team the time needed to
implement revisions into the documentation and to prepare a formal report and
presentation to management.
After rehearsing the presentation with the knowledge worker group, the team
scheduled and presented the projects findings to management. The presentation
249
formally concludes the project. Assuming management authorized the team to

proceed; the next step is to implement the improvement recommendations. To do
this, a new project needs to be initiated.
250
Okay, the hard stuff is over
251
10
Implementing Improvement
Recommendations
The Discovery project is complete. The project team has presented, to upper
management, recommendations that it believes will achieve the project objectives
and contribute to aligning stakeholder expectations to the related VADS. So
now what? How does the team go about implementing the recommendations and
realizing the potential gains? How is change implemented? The following recap
will help to answer these questions.
By the end of the Discovery Project, the organization has:
1. Quantified the benefits to be realized by moving forward with the
recommendations
2. Obtained consensus and buy-in for the desired and workable changes
VADS, policies and procedures
to
3. Designed new VADS that will promote and achieve better alignment
throughout the organization
4. Developed an implementation plan for going forward
In essence, a mini design has been created along with the momentum for
implementing it.
1. What does the team have left to do? At a high level, the following still
needs to be developed:
2. Designs for new and/or changes to existing technology and systems
3. Policies and procedures needed to support the new VADS
4. Training plans and collateral to support the implementation effort
5. Detailed project plans for implementation
6. Tactical plans needed to migrate to the new VADS
252
In short, there is a need for a detailed design with supporting budgetary, tactical,
project and training plans.
It is beyond the scope of this book to address in detail how to accomplish each of
the aforementioned areas. However, it is appropriate to provide an outline on how
the models and documentation that have been developed feed into designing the
systems, policies, procedures and training materials needed for implementation.
Creating System Requirements and Design Specifications

The HELIX Methodology consists of two distinct parts. The first part (the subject
of this book) is called Discovery. The second part is a comprehensive Systems
Development Life Cycle (SDLC) consisting of the following components or
phases:
(c)
1. Requirements Definition
2. Design
3. Construction
4. Implementation
5. Package Evaluation and Selection
6. Prototyping
The documentation produced in a HELIX Discovery project feeds directly into the
requirements definition phase of HELIXs and other SDLC methodologies.
During the requirements definition phase of a project, the processing rules as well
as a sample of each screen and report to be added or changed to the system needs
to be developed. Additionally, a data relationship model needs to be developed as
well as a high-level model of how the data model and processes interact with each
other to produce the systems required results.
The documentation contains the following information needed to begin the
requirements definition process. Figure 10-1 provides an example of how the
documentation produced in a HELIX Discovery project support the requirements
definition phase.
253
Figure 10-1 How HELIX Discovery Project Documentation Support the Requirements
Definition Phase
JMI Example
Description of Support
The Change Analysis identifies any system changes required to support
improvement goals
JMI Ref.
CA-SOA1
The WFL1 model identifies potential data sets required by the system.
These data sets take the form of primary and secondary objects that are
used by the VADS. The relationship of these data sets to each other form
the basis of the data model.
WFL1-SOA
The PWFL2 model identifies each automated process used within a

specific VADS. Additionally, the model identifies the transformations
required to objects (data sets) to maintain the integrity of the process and
the supporting data base.
PWFL2 - SOA
The PWFL2 identifies each point in the VADS cycle where the sales order
processing system is used. Additionally, it identifies what the system
process is and what inputs and outputs are produced. For example, in
phase A, the system identifies an order entry process that results in
reserving inventory for the quantity ordered, reduces the customer's credit
limit for the value of the order, validates the customer's credit worthiness
and transmits the order to the warehouse (or credit) based on the outcome
of the automated credit check.
The Change Concepts (CC) provide a detailed description of any major

changes to workflows and any related technologies.
Paging Concept
The Change Concept describes how a paging system interfaced to the

sales order processing system could be used to expedite the processing
of sales orders. The CC also provides an outline of the implementation
requirements along with an implementation cost estimate.
The Stimulus Trigger Diagnostic Form (STD) provides the rules

needed to transform primary objects to new status' within the VADS and
supporting systems.
STD-SOA
The STD identifies a requirement for the sales order processing system to
assign a PIN# to each order so that the system can begin tracking orders
that have been picked up in the warehouse for picking and shipping.
FA-SOA-C3
The Failure Analysis identifies a requirement for the system to reduce the
inventory for the actual quantities shipped to the customer, adjust the
customer's credit limit for the actual value of the order and to generate an
invoice. Additionally, the FA identifies the need for a daily status report of
all orders that have been in the warehouse for more than 24 hours (same
as OTR-SOA). Finally, the FA provides an estimate of the cost and ROI
related to implementing this report.
OTR-SOA
The summary identifies rules related to how secondary objects must

transform in each phase of a VADS cycle for the system to maintain its
integrity. Potential process failures and safeguard requirements are
outlined to ensure the process and system perform properly. For
example, in phase C, procedure 3 of the SOA VADS, a requirement is
identified to produce a daily status report of all orders that have been in the
warehouse for more than 24 hours.
The Failure Analysis (FA) identifies changes needed in systems to

prevent, detect and resolve process breakdowns in a VADS.
Summary of Secondary Object Transformation Failures (SOTF)

provides rules needed to prevent, detect and resolve process breakdowns
related to properly transforming secondary objects within a VADS.
Description
The preliminary goal states that a change to the order processing system
would need to be made to support the goal of bypassing credit for orders
that were credit worthy. Specifically, the system would need to be
changed to perform a credit check on the customer based on their
available credit limit and currency of their outstanding balances.
Additionally, the system would need to be modified to print sales orders
directly in the warehouse.
The WFL1 identifies the following data sets: Customers, Inventory and
Orders (invoices). By normalizing the relationship of these data sets to
each other, a data model can begin to be developed. The following data
set relationships are discernable from the WFL1. 1) Customers have
many orders. 2) Inventory can link to many orders. Order line items can
only have one associated product.
Formulating/Changing Policies
A change to a VADS often triggers a need to create or change the policies that
govern that VADS. Throughout the documentation, information exists that helps
identify policy-related issues. For example, the project objective to ship sales
orders within 24 hours of receipt could become policy for JMI. JMI might even
build a marketing campaign around the new policy if it presented a significant
distinction within the industry. The goal to pick a sales order within 1 hour of its
transmission to the warehouse could also become a policy for JMI. JMI might
have a policy that requires all sales orders to be reviewed by the Credit department.
254
If so, then that policy would need to be revised in light of the proposed automated
credit-checking system.
There are no equations for identifying what policies need to be created or changed
when VADS change. However, the documentation can serve as a source against
which existing policy can be tested. Part of the requirements definition effort
should be to review existing policy to determine if it adequately supports the new
VADS processes.
Designing/Changing Procedures
Procedural changes always occur when a VADS changes. The WFL2 models
contain a list of the procedures that currently exist and those that are proposed.
Comparing the EWFL2 to the PWFL2 helps identify the procedures that need to be
designed or changed. Part of the requirements definition effort should be to fully
define each procedure contained in the PWFL2 model.
Additionally, the Failure Analysis and Change Concepts should be reviewed for
procedure-related issues.
The outcome of the procedural review is an Operations Procedure Manual. The
development of the manual begins in the requirements definition phase and is
completed during the construction phase of a project. This manual will be
instrumental in creating the training materials needed for the implementation phase
of the project.
Developing Training Materials

One of the most common failure points in implementation efforts is lack of
adequate training. During post-implementation reviews, lack of adequate training
is invariably cited as a root cause of implementation shortfalls. Training, formal
and on-the-job-training (OJT), is a vehicle by which knowledge will be transferred
to employees on how to competently perform their jobs under the new VADS. It is
therefore crucial that adequate time and money are committed for training in every
project plan.
The preparation of the training materials to be used during implementation should
be developed during the construction phase of a project. Training on new work
procedures and systems should always be done in context of the related VADS.
Each training manual should contain an overview of the existing VADS as well as
the new VADS. The WFL1 and WFL2 models can be used to support this
overview.
255
Studying the manuals in the initial training sessions will provide a contrast
between the work procedures and systems currently in place and those that will
soon be implemented. Each module of the training manual and related training
sessions should provide the rationale behind the work procedures and systems.
The companys business objectives, project objectives and change analysis goals
provide the source of information needed to build this portion of the training
manual.
The purpose of the training manual and training sessions is to improve the ability
of the companys employees to competently deliver value to stakeholders via the
new VADS. Part of that competence is reflected in their ability to use informed
judgment and improvise in response to the unforeseen. This can be accomplished
only by providing each employee with the skills to perform their job in context to
why that job is important. Therefore, it is essential that employees involved in
performing a VADS be educated as to how their particular role adds value to the
VADS. This value must be stated in terms of how the outcomes they produce
benefit the companys stakeholders. The alignment matrices, stimulus trigger
analysis and workflow models provide an excellent source of information to
support the knowledge-transfer process needed to successfully implement a
project.
Chapter Summary
Implementing the improvement recommendations generated by HELIX Discovery
projects requires the same level of quality project planning and management as any
major implementation effort. The difference in implementing HELIX Discovery
projects is the amount and quality of project-driving information that is contained
within the documentation produced.
In this chapter, an overview of how the documentation drives the implementation
project was presented. The chapter outlined how documentation supports the
design and development of the systems, policies, procedures and training
components of an implementation project.
256
Form and Function are the Yin and Yang of

Process Improvement.
Balance must be maintained for long-term
success to be realized
257
Closing Comments
This concludes The HELIX Factor II - The Implementers Edition. Thank you
for investing your valuable time to learn more about The HELIX Methodology(c).
I am confident that you will agree that HELIX represents the most comprehensive
approach developed to date for organizations to achieve aligned and lasting
improvements to the processes that deliver value to its stakeholders.
Thanks to HELIX, organizations finally have an approach for turning strategy into
operational reality. As a competent HELIX facilitator and diagnostician, you can
play a significant role in the quality of the value-added outcomes your organization
achieves.
When conducting HELIX Discovery projects, be sure to use this book as a guide
throughout the process. The book will serve as a valuable reference tool.
Finally, I am keenly interested in the results your projects produce. If appropriate,
I would appreciate you sharing those results with me. One of my goals is to
develop a repository of real-life project documentation that can be made
available through The Natural Intelligence Group web site at www.tnigroup.com.
The wider the variety of industries, VADS, and situations addressed in this
repository, the more robust and valuable it will become. This repository will also
provide a forum for people and organizations to share their experiences and issues
related to implementing positive change in organizations. This exchange of ideas
will undoubtedly result in improvements to HELIX and the quality of outcomes
produced by HELIX projects.
258
Contributions to this repository can be sent in the following ways:

Email: mike_wood@msn.com
I look forward to hearing about your success with HELIX and to your
contributions to the repository.
259
Appendix
1. Summary of HELIX Factors

2. Implementers Checklist
3. JMI Case Study Documentation
4. Glossary of Terms
5. Suggested Reading
6. Index
260
Plans without actions?

Who needs them?
261
Summary of HELIX Factors
HELIX integrates seventeen factors that take the form of principles and
organizational alignment concepts. These principles and concepts form HELIXs
philosophical foundation. Through a complete understanding of these factors
comes the judgment needed to address the dynamics present in any organizational
or business process improvement initiative.
The Principle Factors

F ACTOR #1 - T HE P RINCIPLE OF M AKING A D IFFERENCE - W E ALL
MAKE A DIFFERENCE - T HE KIND OF DIFFERENC E WE MAKE IS UP TO
US
We All Make a Difference. The only question is, What kind of difference will we
make? Will we make a positive or negative difference in the lives of people and
organizations with whom we work? Our presence or absence in a situation may
alter the outcome of that situation. Even if we are oblivious to our impact, the
impact is still there. However, making consistently positive differences is a matter
of persistent and conscious intent; we enter situations with the awareness and
desire to add value to the outcome. With this mindset, the chances of success are
increased tenfold.
F ACTOR #2 - T HE P RINCIPLE OF V ALUE - ADDED D ELIVERY S YSTEMS O RGANIZATIONS ARE V ALUE - ADDED D ELIVERY S YSTEMS
HELIX views organizations as Value-added Delivery Systems (VADS). VADS
are the processes that provide specific outcomes each time they are executed. By
definition, these outcomes add value to an organizations stakeholders (Owners,
Employees, Customers, Suppliers, Community, etc.) VADS are end-to-end
processes where people share information and take action that result in the
achievement of a specific outcome.
262
F ACTOR #3 - T HE P RINCIPLE OF D ISCOVERY - D ISCOVERY

TO L EARNING AND I MPROVEMENT
IS
C RITICAL
One of the key concepts promoted by HELIX is the principle of discovery.

Discovery provides the framework for exploring the implications of change in a
nonthreatening way. It allows teams to be creative about solutions and enables
them to develop models for improving processes that can be implemented in a
practical and cost-effective manner.
Discovery is where HELIX begins. During the Discovery phase, the needs of the
business are explored. A contrast between where the organization sees itself today
and how it would like to see itself in the future is developed. This future state is
articulated by management through concrete, action-focused goals. When John F.
Kennedy declared that we would land a man on the moon by the end of the decade
in the early 1960s, he created a compelling vision for the future that was concrete
and extremely focused.
F ACTOR #4 - T HE P RINCIPLE
OF C OLLABORATION
BARRIERS REQUIRES CO LLABORATIO N
- B REAKING
DOWN
In virtually every organization there exists political and communication barriers

that make positive change difficult, if not impossible. In order for VADS to be
improved, these barriers must be neutralized (or at least set aside). Fortunately,
HELIX incorporates techniques that encourage collaboration. In a structured,
collaborative process, barriers are slowly dissolved. People begin to focus on
process, not each other. They become open to explore possibilities. Telling people
they must cooperate, collaborate and get along with each other rarely works. More
often than not, people need to feel free to choose to share and collaborate. When
this happens naturally, true buy-in occurs, not just compliance to the process.
F ACTOR #5 - T HE P RINCIPLE
OF C ONTEXT - B UILDING A CONTEXT FO R

DIALOGUE AND UNDERST ANDING IS ESSENTIAL
To understand the meaning of words and events, each must be viewed in their
situational context. Listening to others or viewing an exchange or set of actions
without regard to their context, diminishes and hinders the ability to interpret
meaning and intent is lost. Words said in jest (a humorous context) are interpreted
differently than those words said in anger. With political correctness the rage du
jour, people are being conditioned to take words and actions both critically and
literally without regard to their context, resulting in more confrontations, hidden
agendas and misaligned expectations.
263
The workflows that make up the VADS in an organization define the context in
which people communicate and share information.
F ACTOR #6 - T HE P RINCIPLE OF C ONDITIONING FOR C HANGE U NCONDITIONED CHANGE CREATES RESISTANCE AND CHAOS .
Change is inevitable. People grow older and, in the process, change. Mountains
change shape and rivers change direction over millions of years. These types of
changes are slow and easy to adjust to. Too much change, done too quickly,
creates upheaval. There can be radical reactions. Mountains can soar or crumble.
Rivers can overflow or dry up. Abrupt or rapid change can throw people,
organizations and systems out of control and into chaos.
The natural response to change is resistance. Resistance to change is not good or
bad; resistance to change is natural.
As one might imagine, people and organizations prefer to stay in a predictable and
stable state. When change occurs to any organism, that organism will make
internal adjustments to keep change to a minimum. It will try to keep a sense of
balance and reject forces that cause stress. Science calls this state homeostasis, the
self-regulating of life processes.
F ACTOR #7 - T HE P RINCIPLE OF C ATHARSIS AND REVELATION C ATHARSIS AND R EVELATION ARE K EYS T O CREATIVE SOLUTIO NS .
Part of the leverage-building process for change requires that people be allowed to
vent their frustrations in a nonthreatening, constructive environment. Allowed to
air their frustrations, people are more able to openly, creatively, and interactively
explore alternatives. HELIXs facilitation process provides the safe haven needed
for process groups to collectively release their frustrations and experience the
revelations that come from creative solution development.
At the beginning of each HELIX work session, participants (knowledge workers)
are facilitated to develop or update a model that lists existing situations that could
be improved and what that improved situation (preliminary goal) would look like.
This model is called a change analysis. The model is a simple, two-column format
that is easy to understand. The beauty of the model is that it allows each
participant to get burning issues off their chest (emotional and functional) while
focusing them to project a more desirable future state. The point to remember is
that the first steps toward getting leverage on change are to release frustration,
build perspective and focus on the future, not the past.
264
With leverage comes the creative tension (a force that pulls us forward) needed to
move forward and achieve desired outcomes.
F ACTOR #8 - T HE P RINCIPLE OF F OCUSED U RGENCY AND M OMENTUM
- F OCUSED U RGENCY IS KEY TO MAI NTAINING MOMENTUM
Urgency is often associated with reacting to what appears to be the most pressing
issue at the time. This is often referred to as the Tyranny of the Urgent. In this
context, urgency is not considered a good thing. However, there is another form of
urgency that helps people and organizations achieve results: focused urgency.
Focused urgency is the process of acting on important goals with deliberate
dispatch. Focused urgency rivets attention on to what is important while screening
out interference and distraction. Through focused urgency, an organization or
person accelerates the pace of their actions until the desired result is achieved.
When an organization sets out to achieve objectives, it is critical that they do so
with focused urgency. In doing so, energy and momentum are maintained. People
see the objective as a serious and passionate pursuit of the organization. Focused
urgency builds shared vision and direction. Virtually every high achiever
instinctively understands the importance of focused urgency. Each knows how to
become single minded in their actions.
Without focused urgency, it is doubtful that any form of a major initiative will
succeed. Organizations that harness the power of focused urgency set the pace for
others to follow. Each action builds on the last. Objectives become rallying
points. There is no confusion or doubt as to the path the group is taking or what
will be accomplished.
Summary
There are 8 factors that form the philosophical foundation of HELIX. HELIX is as
much a philosophy as it is a set of pragmatic tools and techniques for helping
organizations discover ways to improve processes and achieve alignment.
Through the Principle of Making a Difference, an organization can instill a
positive attitude for moving forward.
The Principle of Value-added Delivery Systems helps the organization move
away from viewing itself as a hierarchy to viewing itself as a series of crossfunctional activities that add value to its stakeholders.
The Principle of Discovery liberates the organization to explore and to tap into its
human resources for ways to improve how it adds value to stakeholders.
265
The Principle of Collaboration provides the understanding that breakthrough

learning and growth comes through dialogue and collaboration during periods of
discovery.
The Principle of Context presents how to energize collaborative work efforts by
creating meaningful objectives that are actionable at all levels of the organization.
The Principle of Conditioning for Change provides insights into how people and
organizations react to change. The process of conditioning people and
organizations for successful change is introduced.
The Principle of Catharsis and Revelation explores the human need to vent
before they can let go and move forward and unleash their creativity. It provides a
stable and non-confrontational method of allowing people to experience this
process.
The Principle of Focused Urgency and Momentum presents how an
organization can achieve its objectives without becoming reactive.
The Alignment Factors

F ACTOR #9 - A LIGNMENT
D IRECTION
OF
STAKEHOLDER NEEDS
TO
S TRATEGIC
Aligning stakeholder needs to strategic direction requires that: 1) the organization

knows who its stakeholders are and what they want; 2) the organization has a
consciously developed strategic direction. All organizations have stakeholders and
a direction it pursues. The distinction is whether or not the organization is
consciously aware of either.
Organizations exist to satisfy stakeholder needs for value. Typically, these
stakeholders are:
1. Owners
2. Customers
3. Employees
4. Community
5. Strategic Alliances and Providers
266
Adding value to a stakeholder implies an understanding of that stakeholders

expectations. If an organization does not understand its stakeholders needs, then
it is unlikely that it will align those needs with its strategic direction.
Deploying HELIX at any level increases the chance that people will begin to think
more strategically.
O BJECTIVES
OF
S TRATEGIC D IRECTION
TO
B USINESS
Once a strategic direction has been established (a path that moves the organization
toward a greater fulfillment of stakeholders needs), it needs to align its business
objectives with that direction. In essence, once the company has defined WHO
(stakeholders) it serves and WHERE (strategic direction) it wants to go, it needs to
build a series of WHATS (business objectives) that will get them to the WHERE.
Business objectives should be stated in context of the strategic direction they
support. This way, there can be no doubt why the business objective is important.
Good business objectives are specific enough to leave nothing to
interpretation.
Good objectives contain the criteria for knowing when success has been
achieved and plainly states the challenge.
Real alignment within an organization happens when top management provides a
strategic direction that is supported by business objectives that rally and compel
the workforce to action.
F ACTOR #11 - A LIGNMENT OF B USINESS O BJECTIVES
ADDED D ELIVERY S YSTEMS AND P RO CESS G RO UPS
TO
V ALUE -
Once the business objectives are established they need to be correlated with each
of the VADS that will support them. Value-added Delivery Systems (VADS)
represent processes that provide stakeholders with expected value. They are endto-end work processes that have the conscious intent to provide specific products
and services to the stakeholders of an organization. Examples include:
1. The process of selling (from point of order through delivery and payment) Here the stakeholders are the customer (receiving value for money), and the
owners or stockholders (making a profit on the sale).
2. The process of compensating employees (from beginning of a pay period
through paycheck distribution) - Here the stakeholders are the employee
267
(receiving money for services provided), and the employer (receiving labor
or value for money).
3. The process of divisional business planning (from reviewing the
organizations strategy & business objectives to assessing last years
performance, or developing divisional objectives and action plans to
creating budgets and to getting approval); here, the stakeholders are
everyone connected to the organization (customers, employees, owners,
vendors and community).
4. In each of these examples, the VADS encompasses many transactions and
process groups. HELIX provides a way to align business objectives with
VADS. The HELIX process promotes this alignment both explicitly and
implicitly.
F ACTOR #12 -A LIGNMENT OF V ALUE -A DDED D ELIVERY S YSTEMS AND
P ROCESS G ROUPS TO THE I NFORMATION B EING S HARED & M OVED
Process groups share information among themselves and other process groups.
This information typically relates to completing a portion of a larger effort. When
the sales desk completes and sends the sales order to the Credit department for
approval, they are performing only a small piece of work in the sales process. The
act of sending the order to the Credit department implies that more work will need
to be done before the order can be complete its cycle. The Credit department, in
turn, adds value to the order by approving it and authorizing it for shipment. This
act of sharing information to move work through the organization does not happen
by accident. Aligning and understanding how and why process groups share
information sets the stage for breakthrough process improvements.
F ACTOR #13 -A LIGNMENT OF I NFORMATION B EING S HARED
S TIMULUS T RIGGERS AND P ROCESS G ROUP A CTIONS
TO
Stimulus triggers are the visual, audio, tactile or other sensory cues that let a
person know when to take action. Within the context of HELIX, a stimulus trigger
alerts a knowledge worker that it is time to perform a predetermined set of actions
related to information moving through a specific VADS.
In traditional work environments, stimulus triggers often take the form of
paperwork appearing in front of someone. But stimulus triggers take many forms.
For a hotel front-desk clerk, a stimulus trigger is a guest appearing at the front
desk. The guests mere appearance alerts the clerk to inquire how they can help
the guest. At that point, a key placed on the counter could trigger the actions
268
needed to check the guest out of the hotel. For a firefighter, the sound of a siren
triggers the actions needed to put out a fire.
1. When embarking on an effort to improve VADS-related work processes, it is
important to understand explicitly the stimulus triggers that will occur and
the subsequent actions that are to be taken. It is also important to
understand how fast an action is to be taken once the trigger has occurred.
2. Finally, there needs to be an understanding of the frequency of these
stimulus triggers within a given time frame. In short, stimulus triggers must
be understood in terms of what they are, how fast an action must be taken
and how often they occur.
Understanding stimulus triggers raises the knowledge workers conscious
awareness of what is going on around them in the workplace. They become more
competent in their interpretation of cues. They learn how to focus on stimulus
triggers and disregard distractions. Their perceptual acuity is heightened. In
essence, in a field full of flowers and weeds, they are being trained to recognize the
flowers while not being distracted by the weeds.
S EQUENCE
OF
P ROCESS G ROUP A CTIO NS
TO
P ROCESS
Along with understanding the stimulus triggers that cue people to take action, it is
important for the VADS team to understand the sequence in which these actions
must take place. Rework, inefficiency and failure are often the result of people
taking the right actions in the wrong sequence.
By using the HELIX workflow mapping techniques and correlating these maps
back to the change analysis, action-sequencing errors can be identified and
engineered out of VADS.
T RANSFORMATIO NS
OF
P ROCESS S EQUENCE
TO
VADS O BJECT
To understand where action-sequencing errors exist there needs to be an

understanding of the relationships between process sequence and the concept of
object transformation. In the context of workflows, objects are the core subject
matter being moved through a process. As an object is moved from one process
group to another, it changes, it transforms. This means that it has different
characteristics coming out of the process group than it had going in. These
transformations manifest themselves as changes in the status of the object.
269
One of the keys to designing effective and efficient VADS is to understand how
and when objects transform as they move through a process. Failure to understand
object transformation results in rework, reduced customer service levels,
frustration and costly errors.
THE V ALUE - ADDED
OF
VADS O BJECT T RANSFORMATIO N
TO
As objects transform, they should have a discernible increase in value. This means
that the transformation of an object leads directly to the completion of the current
VADS cycle or positions a future cycle for success.
When engineering VADS, it is imperative that each object being transformed be
tested for the value that transformation has on current and future VADS cycles.
Understanding object transformation in context to adding value to VADS requires
breaking processes down to their most fundamental level.
By streamlining VADS to focus only on the steps needed to transform the primary
and secondary objects, true improvements can be realized. Think of the process of
aligning object transformations as a chiropractor aligning the vertebrae of the spine
to allow the nervous system to function properly. This alignment process tunes a
VADS to operate at peak efficiency.
F ACTOR #17 - A LIGNMENT OF VADS O BJECT T RANSFORMATIO N
P ROCESS F AILURES AND VADS I MPEDIMENTS
TO
For every action that can go right, there is at least one way it can go wrong. There
is little likelihood that a flawless process that involves people can ever be
developed. Chaos theory teaches that there are too many variables to control to
have 100 percent predictability over outcomes.
Part of developing VADS that are watertight requires that we take an honest look
at where they can breakdown. Once the processes, sequences and object
transformations are understood and aligned, it is possible to systematically develop
recovery scenarios for those instances when the VADS breaks down.
Breakdowns occur for many reasons. The key is to develop recovery procedures
for breakdowns that may affect critical objects from properly transforming. This
means that each VADS needs to have integrated, early-warning systems and
failsafe stimulus trigger procedures. This allows people to identify, avoid or
respond to breakdowns as soon as possible.
270
Summary
By systematically applying each of the nine alignment factors, the changes needed
to achieve organizational alignment can be identified, explored and acted on. The
process can be done top down, bottom up or inside out. It really does not matter
where it starts. The key is to know where in the process review is starting, so that
the proper steps are taken.
Achieving organizational alignment is the primary goal of HELIX. As VADS
become aligned with business objectives and strategic direction people will
become more aligned with each other. They will understand their role and how
they, personally, add value to others. Value is optimized for all stakeholders and
the organization prospers.
271
Implementers Checklists
This section provides a set of checklists to assist you with HELIX

projects. The checklists will serve a quick reference and help keep the project
focused and on track.
Management Work Sessions

Met with management to review initial needs and expectations.
1.
2.
3.
4.
5.
Reviewed business plan and objectives for measurability.

Correlated and aligned needs and expectations with business
plan
Prepared questions via flip chart for work session two
Conducted work session two (resolved questions)
Finalized data gathered and project proposal prepared
Formalized flip charts
Formulated the project objectives and scope
Identified Value-added Delivery Systems to be reviewed
Formulated the project plan and cost estimates
Built alignment matrix (Stakeholders to Business
Objectives to Project)
Prepared project proposal
6.
Presented proposal to management
272
Project Kickoff
1.
2.
3.
4.
Identified project participants for each VADS to be reviewed.

Received upper managements commitment to attend project
kickoff session.
Scheduled kickoff session and invited attendees
Conducted kickoff session
Reviewed project scope, objectives and alignment to
business objectives
Received top management endorsement
Facilitation Work Session # 1

1
Scheduled work session with knowledge worker
2. Reviewed project scope, objectives and alignment to business

objectives
3. Developed models (Change Analysis, WFL1, EWFL2)
4, Correlated current situations to EWFL2 model
5. Developed PWFL2 model
6. Correlated preliminary goals to PWFL2 model
7. Assigned data collection tasks to knowledge workers
273
Post Diagnostic Work Session # 1

1
Work Session Summary completed
2.
Knowledge Summary completed
3.
Change Analysis Formalized
4,
Change Analysis Tested

Current Situation
6. Test #1 What is happening?
7. Test # 2 Why does it happen?
8. Test #3 How much does it cost?
9. Test #4 What makes it undesirable?
10.Test #5 Who is impacted (loses value) because of it
happening?
Preliminary Goal
11.Test #1 What should happen?
12.Test #2 When should it happen?
13.Test #3 What would have to change for it to happen?
14.Test #4 Why it is better that the way it is done now?
15.Test #5 How much will it save?
16.Test #6 Who will benefit (gain value)?
5.
Level 1 Workflow (WFL1) Formalized

Form tested for completeness
Model tested for completeness and integrity
17.Rule #1 The model should be syntactically correct.
18.Rule #2 The model should have closure (no hanging
274
references and properly bounded).

19.Rule #3 The model should be complete (represents the
entire life cycle of the VADS).
20.Rule #4 The model should properly reference any
inputs or feeds to/from other VADS.
21.Rule #5 The model should minimize crossing of
communication lines to ensure its ease of reading.
22.Rule #6 The model should contain only the
information needed to make the workflow clear and
understandable.
23.Rule #7 Each process group, file or data store should
appear only once on the model.
24.Rule #8 Each communication line should be properly
labeled with its sequence number, the object being
communicated and its related status.
6.
Diagnostic Step 3 The Level 2 Workflow (WFL2)

Form tested for completeness
Model tested of completeness and integrity
25.Rule 1: Each phase must be sequentially dependent on
the successful completion of the preceding phase.
26.Rule 2: Each phase must reflect all the communication
steps contained in the related WFL1 model and the
process group actions needed to transform the primary
object of the VADS from its current status to its next
status.
27.Rule 3: Each phase must contain only one
transformation to the primary object.
28.Rule 4: Each phase must contain at least one input,
process and output related to the primary object.
29.Rule 5: Each phase must identify secondary objects and
any transformations taking place on them within the
VADS cycles phase.
275
30.Rule 6: Each phase must contain estimates for the lapsed

time and actual level of effort needed to complete the
phase.
31.
7.
Diagnostic Step # 4 Mapped the Change Analysis to the

WFL2 model
Change Analysis mapped
Project Objectives mapped
8.
Diagnostic Step 5 - Change Analysis expanded
9.
Diagnostic Step 6 PWFL2 Model Tested for Alignment

Factors
10.
32.Diagnostic Step 7 Stimulus Triggers /Action Analysis

completed
Question 1 What is the expected response time between
the stimulus trigger occurring and action being taken?
Question 2 What is the action to be taken?
Question 3 How will the performance against the
response time expectation be tracked, measured and
communicated?
Question 4 What is the maximum amount of time that
will be allowed to pass before the process will be
considered to be in failure mode?
Question 5 Where in the VADS will a failure be
detected?
Question 6 What stimulus trigger will communicate a
process that is in failure?
11.
33.Diagnostic Step 8 - VADS refined for potential failures

Question 1 What is the secondary object being
transformed?
Question 2 What procedures transform the secondary
276
object?
Question 3 What are the requirements for transforming
the secondary objects?
Question 4 What is the impact (lost value) of the
secondary object failing to transform (cost, time service
level, etc.)?
Question 5 What are the transformation rules and
safeguards needed to ensure that failure is minimized and
quickly resolvable?
Question 6 What is the cost related to the implementation
of the rules and safeguards identified?

1
34.Change Analysis reviewed, revised and updated.
2.
35.Proposed WFL2 reviewed, revised and updated.
3.
36.Change Concepts reviewed, revised and updated.

.
4,
37.Stimulus Trigger and Failure Analysis data reviewed,

revised and updated.
5. Open questions and issues resolved.

6. Revised models and documentation accepted by knowledge
workers

1
38.Knowledge Summary completed
2.
39.Work Session Summary completed
277
3. Documentation Set updated

4,
40.Improvement Recommendation Summary completed

1
41.Final review of the documentation completed
2.
42.Improvement recommendations reviewed and accepted
3. Rough implementation plan developed

1
43.Recommendations are reviewed to verify:
Alignment with overall strategic direction

Alignment with stakeholders expectations
Appropriate ROI
Cultural impact
Viability (are they are believable?)
Timing in context to other projects and activities

2.
44.Project Report prepared

Executive Summary (1 page)
Findings and Improvement Recommendations (1 to 2
pages)
Implementation Costs and ROI (1 page)
Implementation Plan (1 page)
Authorization to Proceed (1 page)
Implementing Project Recommendati ons

1
45.Tested Recommendations:
Quantified the benefits to be realized by moving
forward with the recommendations
278
Obtained consensus and buy-in for the desired and

workable changes to VADS, policies and procedures.
Designed new VADS that will promote and achieve
better alignment throughout the organization.
Developed an implementation plan for going forward.
2.
46.Implementation Tasks
Designs for new and/or changes to existing technology
and systems.
Policies and procedures needed to support the new
VADS.
Training plans and collateral to support the
implementation effort.
Detailed project plans for implementation
279
JMI Case Study Documentation
Project Level Information

Section 1 - Project Scope & Objectives and Benefits (Figure 3-4)
Section 2 - Scope of Work Performed to Date
Section 3 - Project Cost and Time Line for Completion (Figure 3-3)
Section 4 - Project Work Schedule (Figure 4-1)
Section 5 - Project Kick Off and Authorization to Proceed

Figure 7-19 - Change Analysis and Project Objectives
Figure 7-22 - Part 2 of the Change Analysis
Figure 7-13 - Existing Level 1 Workflow
Figure 8-18 - Existing and Proposed Level 2 Workflow Models
Figure 8-10 - Stimulus Trigger Diagnostic Form (phases A & B)
Figure 8-17 - Failure Analysis Form
Figure 8-16 - Summary of Secondary Object Transformation Failures
customer and inventory objects for VADS phases C and D
Appendix
Figure 7-1 - Work Session Knowledge Summary
Figure 7-2 - Knowledge Summary
280
Section 1 - Project Scope & Objectives and Project Summary
Project Objectives
Supports
Value-added to
Project Objective
Vision
Plan
Customers
Owners
Employees

Better sales and

service levels
improves industry
leadership
position.
Supports 20%
growth
objective.
Improved
service levels.
Better service
levels improves
sales.
Reduced
frustration and
customer
complaints.

than 2 a day.
Increased sales
makes JMI more
attractive to
investors.
Supports 20%
growth
objective.
Improves cash
position.
Improved
service levels.
Better service
levels improves
sales.
Reduced
frustration and
customer
complaints.

identifying when a
habits.
Better sales and

service levels
improves industry
leadership
position.
Supports cash
flow objective
and reduces
bad debts
Avoids
embarrassing
bad debt
situations.
Improves value
of company.
Moves them
closer to
ownership.
Avoids
downsizing.

a day.
Better sales and

service levels
improves industry
leadership
position.
Supports 20%
growth
objective.
Improves cash
position.
Demonstrates
customer
satisfaction
with JMI's
products and
services.
Improves value
of company.
Moves them
closer to
ownership.
Avoids
downsizing.
Section 2 - Scope of Work Performed to Date (describe the effort and outcomes)
281
Section 4 - Project Cost and Time Line for Completion (Figure 3-3)
Project Team
Facilitation
Session Cost
($35 x 2.5
hours x # of
staff x 3
sessions)
Post Session
Costs ($35 x 2
hours x # of
staff x 3
sessions)
Contract Sales
1,838
1,470
1,500
4,800
9,608
Sales on Account
1,313
1,050
1,500
4,800
8,663
New Account Sales
2,100
1,680
1,500
4,800
10,080
Backorder Sales
2,363
1,890
1,500
4,800
10,553
Replenishment
788
630
1,500
4,800
7,718
New Products
1,575
1,260
1,500
4,800
9,135
VADS (6)
Facilitation
Post Diagnostic
Session Cost
Session Cost
($200 x 2.5
Total Cost
($200 x 8 hours
hours x 3
x 3 sessions)
sessions)
Total Base Cost
55,755
8,000
11,151
74,906
23
282
Section 5 - Project Work Schedule (Figure 4-1)

VADS / Task
Sales on Account
Facilitation Work Session Diagnostic Work Session

Other Tasks, Date & Time
Date & Time
Date & Time
11:30 am
5 pm
Tuesday - All Day
11:30 am
5 pm
Tuesday - All Day
Week 3 - Monday - 9
to11:30 am
5 pm
Tuesday - All Day
Replenishment
Purchasing
to 11:30 am
management - 11:45 am
Week 4 - Monday &

Tuesday - Package
Results
to 5 pm
Thursday - All Day
to 11:30 am
to 5 pm
Thursday - All Day
to 11:30 am
to 5 pm
Thursday - All Day
Present Findings &

Recommendations to
Top Management
Week 2 - Friday - 15
management - 11:45
Week 4 - Wednesday &

Thursday - Package
Results
Week 5 - To Be
Announced
Section 6 - Project Kick Off and Authorization to Proceed - Example not

applicable
283

VADS SUMMARY
VADS REF.: VS-SOA
VOLUME AND COST

Cycles Per Year
Cost Per Cycle
Total Annual Cost
39,000
$120
$4,680,000
PURPOSE OF VADS
90% of its overall business. The purpose of the Sales on Account VADS is to provide JMIs customers
with the products they need at competitive prices and terms while providing JMI with an appropriate profit.
Stakeholder
Outcome
Benefit
Customer
Ordered Product(s)
Supports their need
Owner
Sold Product
Credit Department
Billing
PROCESS GROUPS
Sales Order Desk
Warehouse/Shipping
SECONDARY OBJECTS:
Inventory
Customers
284

Project Objective
PO1 - Reduce order processing

time (entry through shipping) from 5
to 2 days.

automatically approves orders for
customers with sufficient available
credit lines and non-delinquent
balances. These approved orders
will be electronically transferred
directly to the warehouse. This will
allow credit-worthy orders to bypass
the Credit department. Additionally,
this will allow the credit department
to focus its attention on problem
This change will allow JMI to ship

orders that pass the automated
credit check within 24 work hours
from the point the order was
received. In most cases, this will be
the next working day. This should
apply to 90% of all orders
processed. This will also save over
$3,000 in labor a day or over
$750,000 a year.
PO2 - Increase sales by $40 million

a year by keeping lost sales due to
stock shortages to less than 2 per
day.

automatically reserves inventory for
the quantity ordered. This will
ensure that the system accurately
reflects the impact of open orders
on the inventory and will reduce
inadvertent overselling without
This change is expected to reduce

the number of lost sales from 12 per
day to 6 per day. Based on the
current average sale of $9,450, this
improvement should contribute
about $56,700 a day or about $18
million a year toward the $40 million
goal.

increasing sales order volume by 30
per day.
Same as PO2.

orders needed to meet the objective
to 24 per day.
285
Figure 7-19 - Change Analysis and Project Objectives
CHANGE ANALYSIS
VADS Name: Sales
on Account
Current Situation
1 It takes too long to process sales orders through Credit.

Too Long = more than 45 minutes from the time the
Credit Manager receives the order from the order desk
till the time the order is released to the warehouse for
shipping.
Reference: CA-SOA
E WFL2
Ref.
P WFL2
Ref.
Preliminary Goal
warehouse when the customers available credit line is
greater than the order amount and their outstanding
balance is current.
This is bad because it means that orders received after

2 p.m. cannot be shipped until the next business day.
This results in poor customer service. This is bad
because it means that orders received after 2pm cannot
be shipped until the next business day. This results in
This would require a change to the order processing

system to support the automatic credit checking process
and related electronic transmission of orders to the
warehouse and Credit department.
This occurs due to the volume of orders (greater than

150 a day) coupled with the number of steps that are
taken to review and approve credit and complete the
order. Based on an average wage of $30 and hour and
45 minutes of processing time, the cost to approve a
sales order is $22.50. Given a volume of 150 orders a
day, it requires about 14 Credit staff to keep up with the
volume. The average daily cost to process orders
through Credit is about $3,375 a day.
Immediately upon the order desk completing the entry of

the order, the system would credit check the order and
electronically route it directly to the warehouse
(approved) or the Credit department (denied) for the
appropriate action. Testing and routing of an order
should take under one minute to occur. This is good
because it reduces the overall order processing time by
at least 44 minutes for orders that pass the automatic
credit check and it directly supporting the project
objective to ship orders within 24 hours of receipt.
Given the objective to ship orders within 24 hours of

receipt, reducing the time required to process orders
through credit supports this objective and improves
customer service levels. Reducing the time it takes to
approve orders will also reduce the cost of order
processing providing value to JMI's owners.
It is estimated that approximately 91% (137 per day) of

the orders received would clear this credit checking
process. Based on the current cost of $22.50 to credit
check an order, this improvement would result in five
year savings of over $3 million (739,000 X 5 - 605,000).
The cost to modify the order processing system and to
implement the new process is estimated between
$185,000 and $605,000. The expected return on
investment in the first year should range from 22% to
300% depending on the actual implementation costs
SOA-A2
SOA-A4
The above savings would benefit the company by

providing a net savings of about $140,000 the first year
and $740,000 a year thereafter. The customer would
benefit from this change in that they would receive up to
24 hours sooner. With the reduced number of orders
flowing to the Credit department, the department can
focus its full attention on problem orders and avoid
adding new staff in the future. This is in line with the
companys objective keep staffing levels at 7,500.
286
Change Analysis
#
2
Current Situation
slipped delivery dates, poor customer
This happens because the inventory is not
reserved at the time the order is taken.
About 12 to 18 orders a day are lost due to

inaccurate inventory on the computer.

approved by Credit.
being sold products beyond what their
credit limit supports.
embarrassment for the customer and
exposes the company to a potential bad
debt.
Reference: CA-SOA
EWFL2
Ref.
SOA-A2
Preliminary Goal
The ability to reserve inventory at the time
the order is taken.
P FL2
Ref.
SOA-A4
This would make inventory records more

to pick it.
This would increase sales by about $
57,000 a day.
SOA-A4

promised.
reduce bad debts.
287
Figure 7-22 - Completed Part 2 of the Change Analysis

PG
1
Preliminary Goal
the warehouse when
the customer's
amount and their
current. This would
require a change to
system to
automatically check
location (credit
department or
warehouse).
Uncontrollable
Aspects
Feasibility of changing Availability of source
the processing system code. Quality of
to perform automatic program design.
credit checks and
Quality of database
routing to the
design.
Imposed Limitations
& Constraints
Amount of money and
spend to assess the
feasibility.
Cost and time needed Quality of program

to implement the
design. Quality of
change.
database design.
Amount of money and

changes. Quality of
once implemented.
JMI's definition of
what is efficient.
once implemented.
Quality of the changes

made. Quality of the
equipment used to
support the change.
data.
Speed of the changes

once implemented.

and rout the order.
Risk Variables
Realistic Objectives &

Goals
the warehouse when
the customer's
amount and their
current. This would
require a change to
system to
automatically check
location (credit
department or
warehouse).
288
Figure 7-13 - WFL1 after application of diagnostic rules

Level 1 Workflow
Reference: WFL1-SOA
Assumption: Sales Orders on Account when the Customer's Credit limit is Good, Inventory is Available and Customer Pays on Time.
Model
Steps
1.

Sales Order Desk.
- Customer Calls in Order
2.

into the Sales Order System .
Customer
Sales Order Desk
3.

4.
r-
t e rs
hO
r de
oug
5.

-R
10

- En
v o ic e - M a il In
P a ym
ent
O rd
er -
Desk.
- S hipped Order -
Sales Order
System
Billing
- P ost P aym ent 11
Warehouse.
7.
8.

invoice.
re
di
t-
Analysis Group
9.
10.
- Approved Order -
Billing mails Invoice to Customer.

Customer rem its payment to
Billing.
Warehouse

forwards the order to Billing.
Copy of Invoice
to Product

Approved Order to the
der
B i l l i fo r
in g
-
6.
ie
- Or
ev
-R
Order for Approval
the order
- Fin aliz e O rd er
& Pr int Inv oice -
Credit Department
11.

in Sales Order System.
289


Assumption: [from WFL1]: Sales orders on account when the customer's credit is good,
$4.8 million
Beg. Status
P
R
O
C
E
D
U
R
E
S
Phase A
Phase B
Phase C
Phase D
Phase E

PO1

approval
S1
PO1

shipping
PO1

billing

collection

desk with an order.

the order desk.

from Credit.

warehouse.




screen.
S2
PO2

limit.
the order form.
S2

outstanding A/R.




order to Billing.

mails to customer.
PO4
quantities shipped.

billing.
S3
posts the payment.
Effort
Lapsed
End Status
Time
S3
approval

shipping

collection
5 minutes
2 days
1 day
10 minutes
45 days
5 minutes
45 minutes
1 hour
2 hours
10 minutes
290
Figure 8-13 continued - Proposed Level 2 Workflow after correlation process

VADS Reference: PWFL2 - SOA1
VADS Cycles per Year:
VADS Estimated Annual Cost: $2 million
42,000
Assumption: [from WFL1]: Sales orders on account when the customer's credit is good.
Beg.
Status
Phase A
Phase B
Phase C
Phase D

desk with an order.
Warehouse receives order via printer and

pages the warehouse staff via the automated
paging system.
1
2
Order Entry Process

2

R
O
C

E
D
U

R
E

dates.
PO4

system. picks order. The system
updates the order retrieved.
PG1


3
PO1
The warehouse staff picks the order and
4
The system updates inventory,

the payment.
4

balance.
Billing prints the invoice and mails to

customer.

customer
Warehouse sends shipped order to Billing.

status to "Approved", assigns a
PIN# and sends it directly to the
warehouse for printing.
PG3
Lapsed End
Time Status
PG1
Effort
Billing retrieves order from the system
and enters the actual quantities shipped. 3

2
Billing receives order from warehouse.
PO2
PG1
PG2

shipping
5 minutes
5 minutes
PO1
1 day
2 hours
45 days
10 minutes
10 minutes
1 hour
PO1
291
Figure 8-10 - Completed Stimulus Trigger Diagnostic Form (phases A & B)

VADS Phase
Process Group
VADS REF.: VS-SOA

Stimulus Trigger
Action and Timing

product
Sales Order Desk
Telephone ringing
Answer telephone within 3

rings
Approved sales order ready

for shipping
Warehouse
Pick up order and update

system with order PIN #
within 30 minutes of page
292

Introduction
One of the preliminary goals established by the project participants (the team) was to reduce the time it takes to process an order from its point of entry into the order
processing system to the point it is available for picking in the warehouse. To achieve this goal, the team developed a concept that would print creditworthy orders
directly to the warehouse simultaneously paging a warehouse person that the order is available.
This new process would allow the Credit department to save over $3,000 a day in labor costs. Additionally, the new process would cut the time a typical order takes
to arrive in the warehouse by about two days. This will increase customer service levels and support the company's objective of shipping orders within 24 hours of
receipt.
The Process
As sales orders are entered into the system, they would go through an automated credit check. This credit check process would verify that the customer had an
available credit limit sufficient to support the order and was current on any outstanding balances due.
Orders passing this automated credit check would be routed to and printed directly in the warehouse. Simultaneous to the printing process, a warehouse person
would receive a page via a beeper system. The goal would be to have the page responded to within 30 minutes of the printing taking place.
The system would track the response time from page to order pickup and provide daily performance reports to each warehouse staff person and his or her supervisor.
The team recommends that incentives be put in place to reward warehouse staff for performances that consistently exceed the 30 minute goal.
Low
High
1. Modification of order entry module to include automatic credit checking (assumes outsourcing at $1,000 a day);
25,000 $
1,500
50,000
2,000
500
750
8,000
12,000
37,500
55,000
12,000
15,000
4. Paging system;
7. Testing.
3,000
Total
5,000
87,500 $
139,750
Based on the above estimates of savings and costs, this new process will provide the following savings to the company in the first 12 months following
implementation:
780,000
139,750
1st Year Savings

640,250
458.14%
Figure 8-17 - Completed Failure Analysis Form
293


VADS Phase:
VADS Procedure:

Customer
Inventory
Failure to correctly update inventory for the actual quantity shipped would result in inventory being misstated. This could lead to over or
under-stocking conditions and could affect purchasing's actions.

VADS Phase:
A - future cycles
VADS Procedure:
2 - Order desk identifies the customer and verifies that their outstanding balance is current via the order entry screen. The system flags
the order as clearing O/S Balance review.

Customer
Inventory
Due to failures in phase C of a prior VADS cycle, the customer's credit limit is misstated. Additionally, the inventory does not accurately
reflect actual shipment information. This can result in a customer's order being refused because of an understated credit limit or
wrongly accepted because of an overstated credit limit. Since in this mode the inventory is also misstated, the order might be accepted
when there is insufficient product to fill the order. This type of failure can adversely impact customer service levels.

Value Lost
Cost
Stakeholder
Time

Customer
year.
Total
Service Level
Other

$119,700
Labor to resolve
Reduced reputation
$119,700
Resolution Concept
Description:
A procedural failure to enter the data into the system or lost paperwork could cause the process to breakdown. A safeguard should be
implemented to identify orders that have been picked up for shipping but not invoiced. This safeguard could take the form of a daily
status report that lists orders that have been in the warehouse for over 24 hours.
Labor
Materials
Capital
Total
$25,000
$25,000
Labor
Materials
Capital
Total
$10,800
$18
$10,818
2 months
1st Year
3 Years
5 Years
Revenue Generated (assumes 1

lost customer per year)
$119,700
$718,200
$1,795,500
Total Improvement
$119,700
$718,200
$1,795,500
Implementation Cost
$25,000
$25,000
$25,000
Ongoing Cost
Total Cost
$10,818
$32,454
$54,090
$35,818
$57,454
$79,090
$83,882
$660,746
$1,716,410
234.19%
1150.04%
2170.20%
Net Improvement
294
Figure 8-16 - Completed Summary of Secondary Object Transformation Failures --customer and inventory objects for VADS phases C and D

Phase
#
VADS Phase
VADS REF.: OTR-SOA
Secondary
Object
Proc.
#
Procedure
Rule
Impact of Failure
Safeguard
Shipped sales
order ready for
billing
Customer
The system updates

and creates the
invoice.

limit should be
increased for the
order and decreased
invoice.
Failure to decrease
credit limit. This
could lead to a bad
debt situation as
future orders are
accepted
erroneously.
system or lost
paperwork could
breakdown. A
safeguard should be
implemented to
have been picked up
for shipping but not
invoiced. This
the form of a daily
in the warehouse for
over 24 hours.
Shipped sales
order ready for
billing
Inventory
The system updates

and creates the
invoice.
The inventory
available for sale
should be increased
for the original
decreased for the
actual quantity
shipped to the
customer. This
should be done for
each item shipped.
the actual quantity
in inventory being
and could affect
Same as above.
Billed sales
order pending
collection
Customer
The system updates

limit and accounts
receivable balance.

limit should be
increased for the
value of payments
received (posted).

for payments
in a customer
lost customer.
enter the payments
into the system would
breakdown. A
safeguard should be
implemented to
have been invoiced
but not collected
paying habit time
period. This
the form of a daily
invoices that have
been paid within the
customer's normal
paying habit time
period.
295
Figure 7-1 - Work Session Knowledge Summary


Goal of Session:
The goal of the session was to develop the change analysis and workflow
models needed to identify improvements to the Sales on Account VADS
that support achieving the projects objectives.
Knowledge Workers
Present:
Manager)
Discussion:
Everyone appeared genuinely excited about the changes identified. Good
team.
Team Observation:
Action Items:
Susan will provide copies of the credit review and approval procedures.
Bobby will supply samples of reports used in tracking billing and collection
efforts. Melinda will bring Sam Trent, vendors analyst, to support
discussions about system changes.
Next Work Session:
296
Figure 7-2 - Knowledge Summary
Knowledge Summary

#
1
OBSERVATION
inventory object. Need to discuss with management to determine if
the scope of the project should be expanded to include these
VADS.
STATUS
In order to compress the projects time frame, may want to consider

having two teams working in tandem. This would require some
additional time for cross-team debriefing. Maybe let each team do
each other's diagnostic work sessions. This would keep everyone
up to date and informed.
297
Always Practice Healthy Detachment

Yet
Engage and Be Passionate
298
Glossary of Terms
Below are key terms used throughout the book. The definitions are provided in
context
to their usage within the book are not to be confused with technical dictionary
descriptions.
A
Alignment: the state in which an organizations intent, ability and outcomes
consistently meet the expectations of its stakeholders.
B
Beginning Status: the status of a Value-added Delivery System before it starts a
normal cycle. The point in time prior to a primary object having any status within
a VADS cycle. Found on the WFL2 model.
C
Change Analysis: a model providing a contrast between a situation in terms of
what is measurably wrong with it and its attributes if it were totally acceptable.
Collaboration: the process of two or more people working together - sharing ideas
and techniques - with the joint intent to achieve a shared vision or outcome.
Consensus: the result of two or more people agreeing on an idea, result or course
of action.
D
Diagnostic Work Session: a group activity in which the information collected at a
facilitation work session is reviewed and tested by the HELIX project team
Discovery: the process of allowing people to pursue a direction without complete
knowledge of what lies ahead, but with the hope and intent that the effort will yield
impressive results for the sponsoring or targeted stakeholders.
299
Downsizing: a concept made popular and used in the 1990s for growing a
competitive advantage through the elimination of employees from the workforce.
The concept was subsequently abandoned by many organizations that realized
simultaneous shrinking and growing were strategically incompatible.
E
Ending Status: the last status a VADS cycle can have. The last status the primary
object of a VADS cycle can have. The point in which the primary object of a
VADS cycle can no longer be changed or transformed. Found on the WFL2
model.
Equilibrium: a condition where the variables involved in a change to an
organization are counterbalanced.
Existing Situation: the first column of a change analysis. A statement that
describes, in measurable terms, what is wrong with a process by addressing why it
is bad, when it happens, to whom it happens, how much it costs, etc.
F
Facilitation: the act of eliciting or drawing out affably, courteously and graciously
without thoughtlessness.
Facilitation Work Session: a group activity in which information is collected
from a group of cross-functional knowledge workers by a facilitator and placed
into various HELIX models.
Failure Analysis: a diagnostic technique used on a Proposed WFL2 to identify,
quantify and resolve potential failures in object transformations.
Focus Group: a team of knowledge workers who have a shared experience on
how a specific VADS works. They work together in facilitation work sessions to
discover ways to improve a VADS in a way that is consistent with the business
objectives of the organization.
Focused Urgency: the process of acting with deliberate dispatch on goals that are
important.
300
H
HELIX: a complete and practical method for aligning strategic direction using the Value-added
Delivery Systems to provide value to stakeholders.
Homeostasis: an organisms natural response toward resisting change and maintaining its
current state of equilibrium.
K
Knowledge Summary: a form completed by a HELIX project team on which
relevant observations from facilitation work sessions are recorded.
Knowledge Worker: a person who has direct experience in the performance of a
set of tasks and procedures contained within a VADS.
L
Lapsed Time: the number of minutes, hours or days that pass during the
performance of a phase within a VADS cycle. Found on the WFL2 model.
Level 1 Workflow Model: a model used to depict the communications and objects
shared between process groups in order to complete a VADS cycle.
Level 2 Workflow Model: a model used to depict the phases, procedures and
object transformations required to successfully complete a VADS cycle.
Level of Effort: the amount of time expended by a person or persons in order to
complete a phase of a VADS cycle. Found on the WFL2 model.
O
Object: a subject or grouping of information that is critical to the processing and
sharing of information throughout a VADS cycle. Typically, objects take the form
of a document or transmission of data.
Object Transformation: the change that occurs to the status of an object as it
moves from one VADS phase to the next.
P
Preliminary Goal: the knowledge workers consensus as to what a situation might
be if it were in a more perfect environment. Provides measurements as to cost,
benefit, time, etc.
301
Primary Object: the focal point of a VADS. The critical subject matter or
information that must be successfully transformed during a VADS cycle in order
for the VADS to be successfully completed.
Procedure: a step found on the WFL2 model depicting a specific action to be
taken in order to transform a primary or secondary object within a VADS cycle.
R
Return on Investment (ROI): the amount of money or other value received over
and above the original amount invested. Usually expressed as a percentage of the
original investment received on an annual basis.
S
Stakeholders: people and organizations that receive or hope to receive value from
an organization. Typically, owners, customers, employees, community and
mission-critical vendors.
Strategic Direction: the path an organization chooses to achieve its vision of a
future organizational state that is superior to the current state.
V
Value-added Delivery Systems, VADS: the cross-functional, end-to-end,
business processes within an organization that are performed on a recurring basis
with the intent of providing one or more stakeholders with a specific, predefined
outcome.
W
WFL1: See Level 1 Workflow Model
WFL2: See Level 2 Workflow Model
Work Session, Facilitation Work Session: a group activity in which information
is collected from a group of cross-functional knowledge workers by a facilitator
and placed into various HELIX models.
Work Session, Diagnostic Work Session: a group activity in which the
information collected at a facilitation work session is reviewed and tested by the
HELIX project team.
302
Suggested Reading and Listening

To enhance the overall learning experience, a list of suggested reading and
listening is provided below. This list consists of books and tapes that influenced
the development of the HELIX Methodology and are highly recommended.
Title
Author
Publisher & ISBN
Frontal Attack
Richard Buskirk
Nightingale-Conant
Getting to Yes
Robert Fischer William Ury
Nightingale-Conant
How to Be a Great Communicator
Nido Qubein
Nightingale-Conant
How to Handle Conflict & Manage Anger
Denis Waitley
Nightingale-Conant - ISBN 0-671-89481-1
How to Work a Room
Susan Roane
Warner Books - ISBN 0-446-39065-8
Jesus, CEO
Laurie Beth Jones
Simon & Schuster Audio - ISBN 0-671-52032-6
Leadership When the Heat s On
Danny Cox
The Audio Partners - ISBN 0-945353-95-2
Leading
Philip B. Crosby
McGraw-Hill - ISBN 0-07-014567-9
Learning to Lead
Jay A. Conger
Josey Bass - ISBN 1-55542-474-0
Lessons in Success and Leadership
Philip Caldwell
Nightingale-Conant
Management of the Absurd
Richard Farson
Simon & Schuster Audio - ISBN 0-671-56907-4
Positioning
Nido Qubein
Nightingale-Conant
Relationship Strategies
Tony Alessandra Ph.D.
Alessandra & Associates
Running Things
Philip B. Crosby
McGraw Hill - ISBN 0-07-014513-X
Skills for Success
Adele Scheele, Ph.D.
Nightingale-Conant
The Holy Bible
King James Version
Thomas Nelson & Sons
The Power of Focused Thinking
Edward de Bono
International Center for Creative Thinking - ISBN 0-9615400-6-0
The Science of Self Discipline
Kerry L. Johnson
Nightingale-Conant
The Screwtape Letters
C.S. Lewis
Audio Lecture - ISBN 0-944993-15-X
The Secrets of Power Persuasion
Roger Dawson
Nightingale-Conant
The Subliminal Winner
Denis Waitley Thomas Budzynski, Ph.D.
Nightingale-Conant
The Tao of Physics
Fritjof Capra
Audio Renaissance Tapes
A Fifth Discipline
Peter Senge
Doubleday - ISBN 0-385-26095-4
The Working Leader
Leonard R. Sayles
The Free Press - ISBN 0-02-927755-8
Winning Through Teamwork
Lawrence M. Miller
Nightingale-Conant
303
And finally, what you have been

waiting for, the Index
304
Index
A
add value, 268, 271, 273, 277
Add Value, 313
alignment, xi, 1, 4, 11, 13, 25, 32, 120, 192,
193, 198, 258, 268, 271, 273, 274, 284
Alignment;, xi, 1, 11, 13, 25, 32, 120, 192,
193, 198, 258, 262, 268, 271, 273, 274,
277, 284
Authorization to Proceed, 33, 220, 253, 284
E
Existing situation, 270
F
Facilitation work session;, 40, 249
Failure Analysis, 146, 207, 209, 210, 216,
218, 239, 240, 283
Focused urgency, 271
Future state, 59, 122, 269, 270
B
business objectives, 11, 74, 96, 187, 192,
306
Business objectives, 273
Business objectives;, 11, 74, 96, 187, 192,
262, 273, 274, 277, 306
C
change analysis, 270, 275
Change Concept Form, 244
collaboration, 269, 272
communication line, 71, 76, 78, 79, 81, 133,
135, 138, 141, 142, 144, 145, 147, 154
community;, xi, 190, 274, 308
Proof of Correctness, 108, 109, 165, 172
D
Diagnostic Work Session, 24, 29, 40, 62, 78,
107, 108, 175, 218, 220, 222, 236, 238,
247, 249, 252, 253, 255
Post Diagnostic Work Session
n, 107
Diagnostic work session # 2, 247
discover, 269, 271, 272
G
Goal;, 7, 9, 12, 16, 17, 19, 22, 23, 36, 40, 43,
45, 51, 58, 59, 60, 61, 62, 94, 95, 96, 97,
99, 103, 107, 109, 110, 112, 113, 114,
117, 121, 122, 123, 124, 125, 126, 127,
131, 142, 162, 163, 164, 175, 176, 177,
178, 179, 180, 181, 182, 184, 185, 238,
241, 249,260, 270, 277
GOOD;, 61
H
HELIX, xi, 268, 269, 271, 274, 275, 277
Homeostasis, 270
I
Implementation Cost Estimates, 108
Implementation Costs and ROI, 220, 253,
284
Implementation plan, 249, 251, 252, 253,
258, 284
Implementation Plan, 220, 253, 284
Implementation Work Plans, 108
inbound T, 138
305
Inertia dollars;, 3, 4, 5, 7
K
Knowledge Summary, 110, 111, 247, 307
knowledge workers, 270, 275
O
Object transformation, 275, 276
Organizational alignment projects;, 4
outbound T, 72, 138, 140, 147
Stakeholders; customers; employees;
owners;, 308
P
positioning dollars, 3
positioning dollars;, 3, 4, 5
Process Groups;, 15, 96, 190
Process improvement;, 4
Project Report, 220
R
Reengineering;, 4
return on investment
ROI, 3, 4, 124, 127, 186
ROI, 4, 5, 6, 7, 33, 73, 124, 125, 126, 127,
130, 181, 189, 207, 216, 218, 246, 253,
284, 308
Return on Investment, 308
rough Order of Magnitude, 126
S
scope constraint boundary, 138
stakeholder, 268, 270, 271, 272, 273, 274,
277
Stimulus Trigger, 20, 69, 76, 78, 81, 87,
107, 122, 139, 156, 162, 193, 194, 195,
196, 197, 198, 199, 200, 201, 205, 206,

218, 239, 246, 262, 274, 275, 276, 283
Stimulus Trigger Diagnostic Form, 194,
195, 196, 201, 203, 220, 231, 246, 254
strategic direction, xi, 273, 277
Strategic direction, 272
Strategic direction;, xi, 1, 9, 10, 11, 17, 254,
272, 273, 277, 307
Summary of Object Transformations, 244
T
The Alignment Factors;, 272
The Principle of Catharsis and Revelation,
272
The Principle of Collaboration, 272
The Principle of Context, 272
The Principle of Discovery, 271
The Principle of Focused Urgency and
Momentum, 272
The Principle of Value-added Delivery
Systems, 271
V
VADS, 268, 269, 270, 273, 274, 275, 276,
277
Value-added Delivery Systems, 96, 268
Value-added Delivery Systems, 271
VADS;, 7, 11, 14, 16, 29, 30, 33, 36, 37, 38,
40, 41, 42, 47, 48, 55, 61, 62, 63, 65, 68,
70, 72, 73, 74, 75, 76, 77, 78, 79, 80, 81,
82, 86, 87, 88, 90, 91, 92, 94, 95, 96, 97,
98, 99, 100, 102, 103, 104, 105, 107, 108,
109, 111, 112, 117, 120, 131, 133, 134,
135, 138, 139, 140, 142, 144, 146, 149,
150, 151, 153, 154, 155, 158, 159, 160,
161, 162, 167, 171, 172, 180, 187, 188,
306
189, 190, 191, 192, 193, 194, 197, 198,

199, 200, 201, 205, 206, 207, 210, 211,
212, 213, 214, 215, 218, 220, 225, 236,
238, 243, 246, 249, 250, 254, 258, 260,
261, 262, 264, 268, 269, 270, 273, 274,
275, 276, 277, 280, 282, 284, 285, 305,
306, 307, 308
Vision;, xi, 12, 13, 14, 15, 19, 25, 26, 27, 32,
34, 122, 187, 192, 269, 271, 305, 308
W
Level 1 Workflow Model, 45, 63, 69, 71,
108, 131, 132, 136, 142, 220, 228, 244,
254, 307, 308
WFL1 Model, 63, 65, 67, 70, 72, 73, 74, 75,
76, 77, 78, 79, 81, 102, 103, 108, 131,
132, 133, 134, 135, 138, 141, 142, 143,
144, 146, 148, 149, 151, 153, 154, 155,
156, 159, 190, 193, 243, 262, 308
Level 2 Workflow Model, 45, 72, 108, 112,
149, 150, 209, 220, 240, 244, 254, 307,
308
WFL2 Model, 72, 73, 74, 75, 76, 77, 78, 81,
86, 87, 88, 89, 90, 91, 92, 94, 95, 97, 98,
99, 100, 102, 103, 104, 108, 109, 112,
113, 142, 145, 146, 149, 150, 151, 153,
154, 156, 157, 158, 159, 161, 162, 163,
164, 165, 168, 169, 171, 172, 189, 195,
201, 202, 207, 213,236, 261, 262, 282,
283, 305, 306, 307, 308
work session, 270
Work Session Summary, 109, 247
Work session;, 11, 13, 16, 17, 18, 19, 20, 25,
26, 29, 32, 33, 34, 38, 40, 41, 42, 43, 44,
45, 47, 48, 49, 50, 51, 52, 54, 55, 60, 61,
62, 63, 65, 68, 70, 72, 74, 76, 86, 92, 95,
97, 99, 102, 103, 104, 105, 107, 108, 109,
113, 114, 117, 125, 131, 132, 138, 150,
151, 154, 156, 157, 158, 162, 163, 164,
165, 171, 172, 178, 183, 199, 200, 205,
218, 220, 236, 238, 239, 240, 241, 246,
247, 249, 255, 270, 305, 306, 307, 308
Working Papers, 62, 107, 109, 164
307
308
309
To learn more about Helix contact

Michael R. Wood at
mike_wood@msn.com
OR
Visit
www.helixmethods.com
310
311

The Helix Factor Ii

Uploaded by

Document Information

Original Title

Copyright

Available Formats

Share this document

Share or Embed Document

Sharing Options

Did you find this document useful?

Is this content inappropriate?

Copyright:

Available Formats

The Helix Factor Ii

Uploaded by

Copyright:

Available Formats

THE HELIX FACTOR II

The key to streamlining your business processes

The Implementers Edition

Copyright 1999 by Michael R. Wood.

IDENTIFYING WINNING PROJECTS ........................................... 3

WELCOME TO JONATHAN, MILLS INC. .................................... 8

KICKING OFF THE PROJECT ...................................................... 35

FACILITATION TOOLS AND TECHNIQUES ............................ 39

CONDUCTING FACILITATION WORK SESSIONS ................. 53

CONDUCTING POST DIAGNOSTIC WORK SESSIONS

CONDUCTING POST DIAGNOSTIC WORK SESSIONS

CONDUCTING SUBSEQUENT WORK SESSIONS AND

10 IMPLEMENTING IMPROVEMENT RECOMMENDATIONS 252

FIGURE 7-12 - LABELING OF COMMUNICATION LINES .......................................................................... 143

FIGURE 7-25 - VADS SUMMARY ........................................................................................................... 280

FIGURE 7-1 - WORK SESSION KNOWLEDGE SUMMARY ........................................................................ 280

FIGURE 7-1 - WORK SESSION KNOWLEDGE SUMMARY ........................................................................ 296

About the Author

As an involved professional, Michael has served on the Board of Directors

From Theory to Execution

Welcome to The HELIX Factor II - The Implementers Guide and Case

Identifying Winning Projects

Assessing Support, Payback and Succe ss

There seems to be an unlimited number of projects an organization can

How Money is Spent

Process improvement, reengineering and organizational alignment projects

The Resistance Factor

squander millions of inertia dollars due to inefficient operations and work

Welcome to Jonathan, Mills Inc.

Introduction to the Case Study

This case study is based on a cross-section of actual projects, so it is very

as an ongoing reference point during the planning, conducting and

Whats Going on at JMI?

concepts presented in The HELIX Factor (see appendix for summary of

Correlate and align the information collected.

Develop a list of questions to help explore and

Correlating and aligning the information collected

Preparing for Management Work Session Two

Flip Chart Question Format

Summary of the Answer

Figure 3-2 - Sample of preformatted question.

Work Session #2 Facilitating, Clarifying and Aligning

How many different ways does JMI sell fabric?

Credit Approved Order

What are the ways JMI can increase or decrease inventory?

Taking it back from

Finalizing the Data Gathered and Proposing the

The summarization of the 22 questions will serve as the documentation of the

P ROJECT S O BJECTIVES & S COPE

projects objective is to discover how those expectations can be satisfied.

Representatives from these groups will work together in cross-functional,

Total Estimated Project Cost

New Account Sales

Report Packaging (40 hours @ $200 a team hour)

Total Base Cost

JMI Staff Participants Cost

Figure 3-3 Level of Effort Estimate

Improve our customer

Better sales and

Increase our sales by over

Supports 20% Improved

Improve our collections by

Better sales and