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Student Workbook
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Acknowledgement
Innovation and Business Industry Skills Council (IBSA) would like to acknowledge
Impact Training and Development for their assistance with the development of this
resource.
Writer: Joanna Hull
Industry reviewer: Neale Pearce
Copyright and Trade Mark Statement
2015 Innovation and Business Industry Skills Council Ltd
All rights reserved. Apart from any use permitted under the Copyright Act 1968, no part of this publication may be
reproduced, stored in a retrieval system, or transmitted, in any form or by any means, electronic, mechanical,
photocopying, or otherwise, without written permission from the publisher, Innovation and Business Industry Skills
Council Ltd (IBSA).
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Use of this work for purposes other than those indicated above, requires the prior written permission of IBSA. Requests
should be addressed to the Product Development Manager, IBSA, Level 11, 176 Wellington Pde, East Melbourne VIC
3002, or email sales@ibsa.org.au.
Innovation and Business Skills Australia, IBSA and the IBSA logo are trademarks of IBSA.
Disclaimer
Care has been taken in the preparation of the material in this document, but, to the extent permitted by law, IBSA and
the original developer do not warrant that any licensing or registration requirements specified in this document are
either complete or up-to-date for your State or Territory or that the information contained in this document is error-free
or fit for any particular purpose. To the extent permitted by law, IBSA and the original developer do not accept any
liability for any damage or loss (including loss of profits, loss of revenue, indirect and consequential loss) incurred by any
person as a result of relying on the information contained in this document.
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The information is provided on the basis that all persons accessing the information contained in this document undertake
responsibility for assessing the relevance and accuracy of its content. If this information appears online, no responsibility
is taken for any information or services which may appear on any linked websites, or other linked information sources,
that are not controlled by IBSA. Use of versions of this document made available online or in other electronic formats is
subject to the applicable terms of use.
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To the extent permitted by law, all implied terms are excluded from the arrangement under which this document is
purchased from IBSA, and, if any term or condition that cannot lawfully be excluded is implied by law into, or deemed to
apply to, that arrangement, then the liability of IBSA, and the purchasers sole remedy, for a breach of the term or condition
is limited, at IBSAs option, to any one of the following, as applicable:
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or
(b)
if the breach relates to services: (i) re-supplying; or (ii) paying the cost of re-supplying, the services.
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(a)
www.ibsa.org.au
ISBN: 978-1-925379-22-8
Stock code: BSBMGT6081W
Table of contents
Introduction ...........................................................................................................................1
Features of the training program ...................................................................................1
Structure of the training program ...................................................................................1
Recommended reading ...................................................................................................1
Section 1 Review Programs, Systems and Processes ....................................................3
What skills will you need? ...............................................................................................3
Monitor and evaluate performance................................................................................4
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Section checklist........................................................................................................... 52
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Student Workbook
Introduction
Introduction
Features of the training program
The key features of this program are:
Student Workbook Self-paced learning activities to help you to understand key
concepts and terms. The Student Workbook is broken down into several sections.
Facilitator-led sessions Challenging and interesting learning activities that can be
completed in the classroom or by distance learning that will help you consolidate
and apply what you have learned in the Student Workbook.
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Assessment Tasks Summative assessments where you can apply your new skills
Innovation & Business Skills Australia has licensed the use of over 200 video vignettes
from the Channel 9 television program, Your Business Success. The videos have been
carefully selected and embedded into relevant learning and assessment resources in
order to assist education providers and students in the learning process.
Each video is accompanied by a learning activity. Videos can be found on IBSAs YouTube
channel at <http://www.youtube.com/ibsachannel>.
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This training program introduces you to the concepts of how to manage innovation and
continuous improvement. Specifically, you will develop skills and knowledge in the
following topic areas:
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Your facilitator may choose to combine or split sessions. For example, in some cases, this
training program may be delivered in two or three sessions, or in others, as many as eight
sessions.
Recommended reading
Some recommended reading for this unit includes:
Bridges, W., 2009, Managing transitions, 3rd edn, Da Capo Press, Philadelphia.
Business.gov, Environmental management systems, Business.gov, viewed August
2015, <http://www.business.gov.au/business-topics/businessplanning/environmental-management/Pages/environmental-managementsystems.aspx>.
Introduction
Student Workbook
Harvard Business School Press, 2009, Innovators toolkit: Ten practical strategies to
help you develop and implement innovation, Harvard Business School Press,
Boston.
Kotter, J., 1996, Leading change, Harvard Business School Press, Boston.
Liker, J., 2004, The Toyota way: Fourteen management principles from the worlds
Massachusetts.
Ruffa, S., 2008, Going lean, Amacom, New York.
Slater, P., 2007, A new strategy for continuous improvement, Industrial Press Inc.,
New York.
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<http://www.toyota.com.au/toyota/company/operations/toyota-productionsystem>.
Please note that any URLs contained in the recommended reading, learning content and
learning activities of this publication were checked for currency during the production
process. Note, however, IBSA cannot vouch for the ongoing currency of URLs.
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Every endeavour has been made to provide a full reference for all web links. Where URLs
are not current we recommend using the reference information provided to search for the
source in your chosen search engine.
Student Workbook
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Paul and Tony are brothers who believed they could create a successful business by
opening a pie shop.
Tony opened his shop in the main street of the local town where he lived. He was
pleased with the performance of his shop. After six months, he had already achieved
the sales he had estimated for the first year of operation. Tonys success continued
and, after five years, Tony was the proud owner of a very successful retail pie outlet
selling an average of 100,000 pies a year. This was well beyond his expectations.
Paul moved two hours away to a coastal town to open his shop. He too was very
pleased with the success of his shop in the first six months and, by the end of his first
year of trade, was exceeding his sales targets. Five years later Paul is still enjoying the
success of his business, selling on average 100,000 pies per year.
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Tonys motto was if it ain't broke dont fix it, while Paul believed in looking at ways to
improve his business. Paul developed a series of performance indicators to track and
evaluate the performance of his store. He found that if he could reduce the production
time of his pies, he could produce more in a day and therefore sell more pies. He
investigated different options and decided to purchase a pie filling mixing machine that
could mix a larger quantity than his current machine and in a much shorter timeframe.
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After installing the machine, Paul is now producing 100 more pies per day. He is so
pleased with his investment as he has now grown his business from selling 100,000
pies per year to in excess of 140,000. Paul is now looking for where to implement his
next business improvement to make the business even more successful.
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Student Workbook
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When you monitor performance you are comparing an organisations actual results
against planned performance.
Common performance measures are:
time
cost
quality
production
sales
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Below are some examples of how these measures are applied in the workplace.
How long does it take to produce a unit?
How long does it take to process an order?
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Time
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Cost
Quality
Student Workbook
Production
Sales
What is the sales result for that product for the month?
What is the sales result for the department for the month?
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What measures does your organisation, or an organisation you are familiar with, use to
monitor performance?
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How effective were these measures in monitoring the performance of the organisation?
Student Workbook
A good monitoring system provides you with the information you need to understand how
well your organisation is performing against targets and what changes are needed to
keep performance on track. It allows you to manage your business proactively rather than
spending your time reacting to and resolving a crisis. This can be a much more productive
and enjoyable way to work!
Step 1:
Decide what you will
monitor.
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Monitoring performance
Step 2:
Determine how you will
measure performance.
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Step 3:
Analyse results.
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expenses
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The first step in monitoring performance is deciding what it is that should be monitored.
To determine this, you should think about what is most important to your organisation.
For example:
quality
sales
customer satisfaction
productivity
employee engagement.
You also need to consider high risk areas that could cause substantial damage to the
organisation if something went wrong these should be included in your monitoring
program.
Student Workbook
Time
Quality
Customer
satisfaction
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Use the internet to research lead and lag indicators and answer the questions below.
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3. How would you use lead and lag indicators to measure performance?
Student Workbook
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Now that you have identified what needs to be monitored and how it will be measured,
you have to analyse the data produced. You will be analysing data to understand what is
actually happening, compared to what should be happening.
Student Workbook
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The organisations strategic goal is to become the number one toy distributor in
Warehouse
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Finance
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Department
Sales
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Buying
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Human
resources
Tony, the Warehouse Manager, knows that to achieve the operational plan goal he has
set; he is going to have to develop and implement strategies to monitor and evaluate
warehouse performance.
Tonys strategy to monitor and evaluate warehouse performance is follows:
Student Workbook
quality
cost
production.
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Time
Quality
Production
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Area
80 minutes
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Time
$200
Quality
10%
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Error rate
Production
Average number of orders
processed per day
Student Workbook
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Step 2: Determine how you will measure performance (at least three measures)
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Measure 3
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Measure 2
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Measure 1
Target performance
Student Workbook
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To this point, we have considered monitoring and evaluation in connection with the
traditional concerns of businesses, namely, performance with respect to some of the
following areas:
expenses
productivity
quality
sales
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Most of these performance areas are economic or financial in nature. The focus on these
areas is not surprising given the imperative for companies to attract and retain
customers, increase profit and generate value for shareholders and investors. Moreover,
directors of companies have a legal obligation under Section 181 of the Corporations Act
2001, for example, to act in the best interest of their company.
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Increasingly, however, businesses are recognising the need to consider the broader
impact of their operations on the community and environment. In addition to traditional
performance areas, businesses now focus on sustainability issues such as waste
reduction and the efficient use of resources.
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Monitoring and reporting on sustainability is associated with the trend towards reporting
transparency and triple bottom line reporting. This type of reporting encompasses
reporting on environmental as well as social and economic measures of performance. 1
The trend towards triple bottom line reporting reveals the recognition of the need to
broaden the traditional notion of stakeholder. Previously, managers and company
directors were only expected to answer to those with direct financial interest in the
business and obey the law.
Group of 100 Incorporated, 2003, Sustainability: a guide to triple bottom line reporting, p. 7, available
online, viewed August 2015, <http://www.greenprof.org/wp-content/uploads/2009/12/Triple-BottomLine.pdf>.
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Student Workbook
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Lets explore the reasons why businesses would want to monitor sustainability, look at
sustainability target setting, and finally, turn to systematic approaches to environmental
management and applicable standards for monitoring and evaluating sustainability.
There are several reasons why companies would want to monitor sustainability. Firstly,
the trend towards transparency and triple bottom line reporting has created a general
expectation on the part of the wider community that companies should report
environmental performance. As discussed previously, failing to meet this expectation
could result in a loss of corporate goodwill in the community and affect company morale.
Conversely, monitoring sustainability and signalling the intention to continuously improve
sustainability practices can build brand image, and motivate employees.
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Secondly, sustainability is not a wholly separate issue from the financial bottom line. A
company with a good environmental record may be able to leverage its reputation through
advertising to increase market share or charge a premium for products and services.
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Additionally, cost savings may result from reducing waste and increasing efficiency. For
example, reducing carbon emissions or reducing the use of materials generated through
carbon-intensive practices, could reduce costs under any future Commonwealth
emissions trading or carbon pricing scheme.
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Moreover, the idea of using resources efficiently and reducing waste is compatible with
existing quality assurance and continuous improvement systems such as lean
manufacturing or total quality management (TQM). This compatibility means that
existing performance improvement systems may be adapted to include sustainability
measures. Including such measures, in turn, may reinforce the existing performance
systems by increasing their relevance to todays workforce.
Student Workbook
Consider the questions for performance indicators suggested by Group of 100 executives
for the purpose of triple bottom line reporting 2:
Does the indicator address stakeholder concerns?
Is the indicator aligned to company strategic objectives?
Will the indicator provide management with useful information to guide
decision-making?
Does the indicator adequately reflect performance?
Does the indicator help stakeholders to compare with competitors?
Does the organisation have the capacity to use and reproduce the data gathered?
What is the risk involved in making the measure open and public?
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As with all performance monitoring, you need to ensure that your objectives and targets
are specific and measureable, so that you can effectively track the progress toward your
target over time. Your targets also need to be achievable, so that you can recognise
milestones and celebrate them.
You then need to create a strategy that outlines performance indicators and targets, your
intended monitoring activities, the opportunity and benefit for the organisation and
relationship other organisational strategic goals, policies, etc.
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Key performance indicators (KPIs) and performance targets are covered in more detail
later in this section on page 32.
Learning activity: Monitoring sustainability
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Note: Refer to the waste management hierarchy in Appendix 1 for ideas on areas in
which to create waste reduction targets.
Group of 100 Incorporated, 2003, Sustainability: a guide to triple bottom line reporting, p. 27, available
online, viewed August 2015, <http://www.greenprof.org/wp-content/uploads/2009/12/Triple-BottomLine.pdf>.
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Student Workbook
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Description
1. Commit to and
develop policy
sustainability improvement.
all stakeholders.
impact or risk.
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2. Plan
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management.
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Sustainability Victoria, 2001, Industry advisor toolkit: environmental management systems: a system for
improving performance, Sustainability Victoria, Melbourne, available online, viewed August 2011,
<http://www.sustainability.vic.gov.au/www/html/1825-publications---i-l.asp>.
Sustainability Victoria, 2001, Industry advisor toolkit: environmental management systems: a system for
improving performance, Sustainability Victoria, Melbourne, available online, viewed August 2011
<http://www.sustainability.vic.gov.au/www/html/1825-publications---i-l.asp>.
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Student Workbook
3. Do
to employees.
Provide required resources.
Monitor and support EMS implementation.
Integrate reporting requirements with other organisation
activities.
Report performance to all levels of employees.
Periodically evaluate systems and management to
4. Check/review
improve EMS.
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5. Act/improve EMS
planning.
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There are many potential benefits to establishing an EMS. Organisations with an effective
environmental management system, particularly one certified as ISO 14001:2004
compliant, could gain the following benefits: 5
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Sustainability Victoria, 2001, Industry advisor toolkit: environmental management systems: a system for
improving performance, Sustainability Victoria, Melbourne, available online, viewed August 2011
<http://www.sustainability.vic.gov.au/www/html/1825-publications---i-l.asp>.
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