As business leaders, we continually look for ways to create better results. Much of our effort is spent exploring cause and effects and trying to unlock the secret of how our actions, and the actions of our people, link to commercial performance.
But the holy grail in business is not one-time or occasional success. Great companies sustain positive results. And the key to this is hidden in their discipline to executing the right processes.
Business Process Management
Business Process Management (BPM) as a management topic has its roots in the industrial revolution. At that time a large proportion of the labour force in the developed world shifted from agriculture and craft employment to manufacturing. Productivity increases were achieved in these environments as the work of production was segmented into small, discrete activities that could be studied and optimized.
This so called study of work led to dozens of other approaches for process improvement from time-and-motion studies in the early and mid 20th century to more recent work in quality systems (Total Quality Management or TQM), Toyota Production System (TPS), Lean Manufacturing, Just-in-Time (JIT), Statistical Process Control (SPC) and various other sub-disciplines (and other three letter acronyms).
Further, BPM approaches have been successfully applied in non-manufacturing environments as well. Pure service businesses and public service agencies have demonstrated that use of BPM processes can lead to significantly improved performance.
Keeping it simple
The domain of BPM can seem complex. For business leaders of small and mid-sized companies, it’s important to approach process management with careful consideration of effort and return. Taking a simplified approach to thinking about processes can have some quick wins.
In “Great By Choice”, author Jim Collins introduces the word “recipe” as an analogy to processes in business. Like a recipe used in the kitchen, processes require ingredients (resources and inputs) and have a set of steps to follow that produce a repeatable result.
Collins discovered in his research that great companies all have SMaC Recipes:
A SMaC recipe is a set of durable operating practices that create a replicable and consistent success formula. The word “SMaC” stands for Specific, Methodical, and Consistent.
In an organizational setting it is important to recognize processes are repeated. This would distinguish processes from projects which are a series of actions bringing about a one-time result. Executing a strategic priority is a project, while generating new sales (repeatedly) is a process for most companies.
All companies have process hierarchies that ultimately deliver value to customers. At the highest level processes can be broadly defined – the process for constructing a home, the process for finding oil, or the process for delivering a package across the country would be examples of high level processes for an organization.
At the other end of the level-of-detail spectrum are processes which are lower in the hierarchy. For instance, the process for acquiring a building permit to build a house would be subordinate in the hierarchy to the process for constructing a house. This can be called a ‘sub-process’.
Again using our simple recipe in the kitchen analogy, the process for making breakfast includes sub-processes for (1) toasting the bread, (2) frying the bacon, (3) cooking the eggs, and (4) cleanup. This simple example illustrates a couple of things about processes:
- Sub-process 1, 2, and 3 are generally independent with separate ingredients and steps. However, for a good outcome the completion timing of each should be synchronised.
- Sub-processes 2 and 3 are independent unless they use the same frying pan (resource).
- Sub-process 4 is the successor in time of the other sub-processes.
In his book “Mastering the Rockefeller Habits”, Verne Harnish provides a great starting point for thinking about the top of the process hierarchy for any company. He suggests there are three broadly defined process groups:
- Find and retain customers
- Marketing and Sales processes
- Make or buy products or deliver a service
- Operations processes
- Keep good records
- Administrative processes
Simply mapping processes in hierarchical form can be a great way of identifying which processes are at work in your company, and how processes are interrelated. It is also the starting point for improvement.
Quick process analysis
The hierarchy exercise described above allows for some initial analysis to take place that will identify areas of improvement and action:
For each process in the hierarchy, ask the questions:
- Is this process executed consistently…
- by different people in the company?
- at different locations or by different teams in the firm?
- at different times?
- Is this process documented? Should it be?
- How often does the result of this process require rework or create errors? How successful is this process at delivering what it needs to?
- Do we even have a quality measure (or KPI) for this process?
- What waste (materials, time, money) is generated by this process?
- Do we even need this process? Could we achieve the result another way?
- Does the process cost justify the value?
- What limits how quickly this process occurs? Could it be done faster?
- Should/could this process be outsourced?
The answers to these questions for each key process in your business will highlight areas of deficiency and suggest areas of improvement. Actions can then be taken to adjust or improve those specific processes.
A focus on process thinking, even in this simplified way, will deliver better outcomes not just occasionally, but repeatably.
Do you know someone who’s could benefit from better process management? Share this post with them!
Article by: Tim O’Connor