Right-sizing Support Functions
BCG’s partner and managing director Reinhard Messenboeck continues his Knowlege@Wharton interview.Watch Part 2
The ESF approach is a holistic framework that helps companies achieve true excellence in support functions within the corporate center and beyond. The framework looks at seven input dimensions through output-oriented efficiency and effectiveness lenses to increase the net value-add from active and lean support functions.
These seven dimensions collect the data necessary to achieve excellence in support functions:
In searching for the root cause of poor performance by support functions, management teams should focus their attention on how they have responded to the increased complexity of the business environment. Complexity is a fact of business life. However, by intelligently adapting to complexity, companies can avoid complexity and instead promote simplicity in the form of valued-added support services provided at optimal cost.
Taking a smart approach to managing complexity is crucial to generating competitive advantages. Our Smart Simplicity philosophy is based on the insight that changes to the organizational context determine employees’ goals, resources, and constraints, thus influencing their behaviors. By understanding the relationship between organizational context and employees’ decisions and behaviors, companies can identify how to adjust the context to steer their employees toward better performance and more cost-efficient outcomes.
Along with our proven ESF framework, lean principles, and Smart Simplicity philosophy, BCG developed Exercising for Excellence (X4X), which combines our core analytical tools and methodologies. Along with capability building measures to create a lasting impact, X4X establishes a culture of continuous improvement across the organization.
As one key diagnostic element, BCG’s ESF Web Platform allows for decentralized data capturing through Internet browsers and tablets, as well as access to Web-based cost and efficiency tools and databases, such as an activity-based optimization tool. With this platform, clients gain full use of ESF activity analysis, benchmarking, and customer surveys to create a forward-looking plan for excellence and efficiency.