Activating Process-Based Management
In this column I'd like to provide you with a foolproof framework and implementation plan that is certain to positively engage senior executives and guarantee the delivery of sustained organization performance improvement. That's what I'd like to do.
What I will actually do is explain how I think process-based management works and how it can be activated and sustained. Sadly, there are no magic answers. But this is not guesswork. There is proof of life. You can make your version of this work. Others have been down this path before you and not only survived but thrived.
Framing process-based management
Process-based management is a management philosophy that acknowledges the reality that we create, accumulate, and deliver value to our customers and other stakeholders through collaboration across the organization. And that is the only way this can happen.
The traditional management focus is up and down the organization chart meaning that, too often, the way we deliver value (goods, services, experiences) to customers, i.e., end-to-end across the organizational functions, is not actively managed.
We manage the parts separately and hope they all come together nicely both for us and our customers, and for the many other stakeholders such as regulators, suppliers, agents, shareholders, etc.
No strategy statement ever says "We hope it all works out OK" but in practice that too often seems to be the operating mode. Hope is not a strategy; optimism is not a plan.
So how do we activate process-based management? How do we bring it to a happy, long, and fulfilling life?
Obstacles — real and imagined
Before we discuss the activators, it is useful to be clear about the obstacles we need to overcome. Of course, these will vary between organizations, but I see some common themes and we can summarize them in these five categories:
- Lack of understanding
- No compelling reason
- World Peace problem
- Fear of the unknown
- We tried that before …
The simplest reason is absent or faulty knowledge about what process-based management means. This is understandable as there is so much published material, often contradictory and confusing, about business processes and their management.
To have worth in an organization, process-based management needs a clear, widely-agreed, and pragmatic definition of both its theory and the practice, along with practical and actionable plans.
Knowledge alone will not be enough. There needs to be a compelling reason.
Organizations don't make change easily. The gravitational pull of the status quo is strong. It is also true that organizations can change, and many successfully make significant transformations.
Organizations, and their managers and staff, need to clearly understand the compelling reasons for embarking on the process journey. Each organization will have its own set of drivers for change. With that touchstone firmly set, change is possible.
Sometimes it just seems too hard, even if the idea is compelling. I call this the world peace problem. We all agree it would be a good, indeed great, thing, but we don't know what we can do about it. It seems too complicated, too hard, too impossible!
A low-risk, incremental rollout strategy is required. The 'big bang' approach will be hard to sell and even harder to achieve.
It's no surprise that key decision-makers will have a healthy fear of the unknown. Process-based management is different. It reimagines the way we think about organizations; it challenges comfortable (even if suboptimal) practices.
Clarity of vision, purpose, and plan are required along with implementation, development, and change plans that maintain an acceptable risk profile.
"We tried that before and it didn't work" reflects a common pragmatic obstacle. Over the years many process-related projects have been poorly designed and executed and they have left more scars than valued benefits. There is an understandable residual resistance that must be overcome.
That reluctance can be overcome through a well-explained, risk-controlled, incremental approach that sustains and develops commitment through success. Success breeds success.
So those are some common obstacles. Let's look now at how we can deal with them and successfully activate process-based management.
Activators — simple and effective
A simple and proven approach to the design, implementation, and ongoing operation of process-based management is shown in Figure 1.
Figure 1. Activating Process-Based Management
I have covered the details of the many related topics in my books, videos, and other columns. The high-level descriptions below show how the pieces fit together to form a coherent approach. This high-level view is often missing in process management and improvement, having been sacrificed to an urgent desire to get to the details quickly and deliver some sort of process improvement, even if the improvement is superficial and unvalued.
Strategy — Promises — Architecture
This first of three sections of Figure 1 (the top third of the diagram) deals with an organization's complete set of business processes and creates the process architecture.
We start with the organization's strategy.
Every organization produces goods, services, or experiences through collaboration across its functions or business units. Somebody determines there is a need, others do the design, someone builds it, someone else sells it, yet others install and maintain. This is a cross-functional business process, and it is the only way products and services are delivered in every organization; the only way strategy is executed.
A process architecture identifies those processes and their hierarchical relationships.
In discovering and documenting a process architecture we begin by identifying promises made in the strategy. The high-level processes provide the link to the realization of those promises. [Pro Tip: find the verbs in the vision, mission, or other strategy statement, and they will lead you to the promises made to stakeholders.]
It's possible to do some form of the steps below without an overall process architecture, but why would you do that? Documenting the first levels of a process architecture (top-down) takes just a few weeks and gives structure to all the other process management and improvement work.
Start with strategy; find the promises made; document the processes that deliver on those promises.
In this first section we dealt with all an organization's processes. In the remaining two sections we deal with one process at a time.
But which process?
This question cannot be avoided. Choices must be made. There are at least hundreds of processes in play, thousands if we dig down deeper into the process hierarchy. We can't actively manage them all, not even badly. The good news is that we don't have to. Most organizations can identify 20–30 high-impact processes, the ones that must perform well.
Don't overthink this. The important thing is to start, so pick a process and get on with it! Keep in mind that when a process achieves a steady state condition of predictable and acceptable performance the management load is quite small (until a change occurs or is required).
Objectives — PKPIs — Targets
The middle section of Figure 1 is about understanding and defining the process performance that is required by stakeholders.
So, the immediate question is "Who are the stakeholders?" Who cares? Who gives something to, or gets something from, the process? How do they assess good performance?
What is the minimum set of measures that would usefully and genuinely track all those performance requirements? These are the process KPIs — and they will likely be quite different to the 'functional' KPIs because they are seeking to measure different things.
PKPIs need targets. Set real and achievable targets. I'm wary of 100% achievement and zero-defect targets. We should set targets that we intend to achieve. Remember that "zero defects" means that the average performance level is perfection. It's not impossible, and sometimes is necessary, but are you sure you're up for that? Processes must be designed to achieve the required level of performance.
Targets can be changed anytime and should be reviewed often.
So, for a process under active management we now know, in quite some detail, what level of performance we want to achieve, why it is important, and how we will measure that achievement.
Gap — Impact — Change
Are we meeting our targets? Could we do better? Does it matter?
In this lower section of Figure 1 we are now, perhaps, in more familiar territory, but there is a difference. We now know more about why we are here because of the work we have done on the overall process architecture and the mindful setting of PKPIs and targets.
We arrive with a clear understanding of the target performance profile and how it is important to our key stakeholders.
Collect the performance data for each PKPI/target. Plot the dots on a Process Behavior Chart (see my column and my video). Is the process predictable? Is the predictable level of process performance acceptable?
If there is a performance gap, does it have enough impact to worry about? How much impact? On whom? How much should be invested to fix the problem? What is the return on investment? Just because there is a process performance gap doesn't mean that it can, or should, be fixed now. Maybe later, maybe never. Lots of process improvement projects are themselves examples of the waste we seek to eliminate because improvements are defined but never implemented because there isn't enough pain, urgency, budget, … impact.
There may also be an opportunity gap. Just because all the PKPI targets are being achieved doesn't mean that the process cannot be improved. Perhaps there is some new technology, a new operating mode, a physical or people change to improve efficiency, or some other innovation that will, perhaps radically, improve process performance. It's always about opportunities AND problems.
We've arrived at a point where we have made a careful, mindful analysis of process performance anomalies and ideas based on a sound understanding of what key stakeholders want from the process. If process performance was predictably acceptable, then move on, that's great news. Don't waste time fixing 'problems' or chasing 'opportunities' that nobody cares enough about. Read about the wonderful PBC tool to see how we can find signals in the noise.
Activating process-based management
Process-based management is a continuous cycle, driven by a well-defined target performance profile, shaped by continuous performance analysis, and enhanced by diligent idea management, all leading to a solid business case for valued change.
It's not just about isolated process-improvement projects, as useful as they may be. It's about creating an environment of efficient continuous management that enables evidence-based prioritization of analysis and targeted application of scarce resources to effect optimal change.
When we activate process-based management we take the idea of genuine continuous improvement seriously.
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