9.3. Project Definition and Plan

Step 1: Project Defined. In this step, Larry interviews the vice president of operations. His goal is specifically to define the Critical Business Issue (CBI) that stimulated Larry's assignment. Updating the claims manual is clearly the vice president's preferred solution to some problem. If Larry is to be an effective diagnostician, he will need to understand that problem. During the interview, he learns that the vice president's concern is excessive claim payouts. The average amount that PCI is paying per claim is too high and is negatively affecting the company's margins.

Figure 9.1. The Three Levels Performance Improvement Process.

During Project Definition, Larry will also take these actions:

• Learn the specific financial effect the problem is having on the organization.

• Establish project goals based on the desired payout amount.

• Define the scope of the project.

• Identify his client and define the roles he and other key persons will play in the analysis.

• Reach some conclusions regarding the constraints, odds of success, and value of the project.

Assuming that the project makes sense, and that the Three Levels approach is acceptable to his client, Larry proceeds to Step 2.

Step 2: Project Plan Developed. In this step, Larry plans the events and dates for the project. He is careful to indicate the data and data sources he needs at each of the three levels of analysis.