Process Excellence in a Quantum World

ChaosIf, like me, you left yesterday’s FCB webinar on continuous IT delivery – which looked at how companies like Google and Amazon are able to achieve hundreds of software releases every day – you too may have been struck to read the headline that the UK bank RBS has now been hit with a $88m regulatory fine (to add to the $196m in compensation and other costs of clearing up) after a simple IT mistake led to a major failure in its retail banking systems.

It’s a paradox – and I‘m seeing them everywhere at the moment.

I’ve talked this month with two organizations, both undergoing significant transformation programmes and both believing that they take process excellence seriously. But, in both cases, all process modelling is project-based. Neither of them have any kind of enterprise platform for process management; neither of them have a persisting, end-to-end visualization of how everything fits together, let alone a governance framework to support effective collaboration on improvements. Both re-invent the process wheel for every project. And both are recovering from major transformation failures.

I talked with another global organization, which has been trying to build an enterprise-wide process repository for more than five years. There’s plenty of process content in their repository, but none of it is approved. The process leader explained that there have been many iterations of each process, all created by the process excellence team. But without executive sponsorship or a governance framework fit for purpose, process ownership and accountabilities remain unclear; so no process has ever been agreed and signed off. And this organization is about to launch a global ERP upgrade.

I’m seeing it as symptoms of a problematic transition from Newtonian thinking to the quantum world of the next generation enterprise, characterized in part by:

Devolved Responsibility. Across every industry, and often quite rapidly, we are morphing command and control hierarchies into team-based structures with devolved responsibilities.

Experimentation. We are shifting from the classic change management paradigm of ‘unfreeze-change-freeze’ towards team-based experimental approaches at the front line, and in real time.

It’s all good – clockwork certainty only goes so far – but I also think that our standard model will continue to have process management at its core – in the sense of a platform that allows end-to-end process to serve as the universal language for the enterprise, enabling effective collaboration and so delivering agility, innovation and continuous improvement, all within a robust governance framework.

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04 Nov 2014   The Art Of Navigating Cross Currents

02 Oct 2014   Process Excellence Is Dead. Long Live Continuous Innovation!

 

The Art Of Navigating Cross Currents

There are two completely contradictory currents running in the corporate zeitgeist. And I know that you know that I would say this – but surely their only resolution, the only way in which they can be effectively interwoven, is through an enterprise-wide platform for process excellence.

The strongest stream – let’s summarise it as ‘Smash the barriers to agility and innovation!’ – is represented by a sparkling piece just out Build a Change Platform, Not a Change Program in which Gary Hamel and Michele Zanini set out a manifesto that re-imagines how business transformation and continuous improvement happens.

Noting that business transformation initiatives have a dismal track record, they argue for a fundamentally different approach that is ‘activist-led’ rather than ‘top-down’; ‘organic’ rather than ‘managed’; and leverages “social technologies that make large-scale collaboration easy and effective”:

“What’s needed is a real-time, socially constructed approach to change, so that the leader’s job isn’t to design a change program but to build a change platform—one that allows anyone to initiate change, recruit confederates, suggest solutions, and launch experiments.”

I won’t rehearse it further here. It’s well-argued and, as with almost everything MIX, well worth reading. [Though Lean practitioners may groan as they read it because so much of the authors’ prescription on fostering engagement is what Lean has been saying, and often demonstrating at the gemba, for decades…]

Anyway, this heady and revolutionary tidal stream is running in almost direct conflict with a powerful current flowing from the C Suite, which we might summarise as ‘Risk management matters more than ever!’.

The new COSO risk management framework, just as an example, makes clear that all business risks at all levels need to be appropriately identified, communicated and managed – in real time. And the new SEC guidance on disclosure makes it less routine and more judgemental (ie requiring nuance and context). With reputational risks growing all the time – in CSR and supply chain, and in global tax integrity, for instance – and with the sanctions that executives face when compliance and risk management are deficient, these concerns are non-trivial.

There is a way to reconcile heart and head, to have the best of both. It’s the fundamental enabler – an enterprise-wide process management platform which is intuitive enough to support people doing real work, while at the same time rich enough with metadata and features to support effective collaboration within a robust governance framework.

The MIX is a brilliant generator of new ideas on alternative ways of managing organizations. Leaderless and activist-led organizations are useful experiments in enabling more effective collaboration in a constantly disrupted world. But there’s value too in hierarchy and structure. As Herminia Ibarra points out (in another context) in today’s FT, “Google’s famous experiment in manager-free organisation was not only shortlived, but paved the way for a talent management system designed to rely more on procedure than instinct”. Every organization needs to be constantly learning by doing.

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Process? Just Don’t Make Me Think

iStock_000016521178LargeThere’s an emerging mindset that’s set to transform ‘business process management’, adding significantly to its value and sustainability.

Right now, adoption is the hidden problem. People put a lot of time and energy into working collaboratively with the stakeholders to build great processes. They link them with documents and metrics and systems. They wrap it all within a governance framework and launch it. Everyone is delighted. But come back a year later and it is, too often, in a slow decline. Creating a sustainable platform for continuous process improvement is surprisingly difficult.

Process tool vendors have responded by developing the user interface (UI) for their tools, adding personalization, collaborative features and neat links to other systems, for instance. Which might be a complete solution – if process users spent most of their time using the process tool. But they don’t of course. Most process users are working within a rich and complex information landscape, often using many systems every day. For them, process-related information is just another drop in the informocean.

The new mindset is process UX design. It’s bringing the ideas of web designers – the philosophy of Steve Krug’s Don’t Make Me Think – into the design and delivery of process-related information, recognizing that it may be one small (but vital) part of the user’s world. The objective is to deliver, at the point of need, the right information, in the right context and the right format– in the simplest possible way.

Leaders have always focussed on the voice of the customer; helping the user to find their needle in the haystack with as few clicks as possible.

The difference now is that there’s a growing recognition of the benefits of a more structured approach in developing an optimized UX. And it’s not just about defining typical users and their journeys to and through the content. Gamification and the leveraging of big data to deliver personalized, real-time analytic insights are also driving the development of the process UX.

As Sameer Patel noted recently, the goal is to create a UX that conforms to how *you* want to work:

“The distinction between systems of record, transactions and engagement is over. It’s really one. Going forward, it’s about how we design the experience around each end user’s work patterns.”

The old world of process content being pushed to process users by process mappers on behalf of process owners – all that is gone. The new world is about delivering the right process information, in the right context and format, at the user’s point of need, by:

optimizing the process UX, through smart UIs and intelligent integration with other systems

leveraging gamification, collaboration, analytics and devices (smartphones, tablets and wearables)

prizing simplicity (for the reasons SAP’s Reuven Gorsht summarises neatly here).

… and doing it all in a way that fosters engagement in continuous improvement.

There’s a huge upside to this shift in thinking. ‘Business process management’ becomes far more mainstream, valuable and sustainable. And more fun.  It’s about understanding and responding to the entire needs of the process consumer, and within a much wider collaborative framework.

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How To Buy The Right Process Tool

iStock_000022235512MediumSo, you’re buying a process tool.  Not a workflow or automation system. Just a plain old process tool to serve as an enterprise-wide standard for process capture, design and deployment.

Your functional heads have agreed that cross-silo perspectives matter, and that there’s no sense in everyone using their own tools and standards.  In a corporate ‘Aha!’ moment, it’s now understood that to improve, to innovate, to become more agile – and to manage risk and compliance at pace – the organization needs visibility and ownership of its end-to-end processes, and within an integrated and holistic operating model.

So now it’s time to procure the right tool. How difficult can that be??

In practice, it’s fiendish. Frequently the whole exercise fails. The strategic choice may never get fully or properly implemented. Often the pain of adopting the chosen tool means that the procurement exercise is revisited within two or three years.  And sometimes the decision just gets stalled for years as the stakeholders can’t agree.

It’s easy to get heads nodding at the idea that there’s huge benefits in adopting visual process as the universal business language across an enterprise. And that there’s exponentially more value when process management provides a common operational platform, a backbone for the business, a collaborative space where process owners and stakeholders collaborate on improvement and innovation within a single unified governance framework. [Which needs far more than a tool, of course. It’s about a creating a culture of learning and collaboration at pace. But still, adopting the right tool is a critical part of it…]

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Scaling Up Excellence, The Toyota Way

Scaling Up Excellence The Toyota WaySo – if Scaling Up Excellence is a manual about how to create a ‘relentless restlessness’ that drives customer-centric innovation, where does that leave The Toyota Way? Do Sutton and Rao’s prescriptions ‘supercede’ The Toyota Way? What does Sutton and Rao’s analysis tell us about the continued validity of what has become effectively the gold standard in operational excellence?

There are clearly differences in scope. The Toyota Way is a complete philosophical system. It is structured, prescriptive and sometimes rigid; but its impact in engaging people, in nurturing their creativity and commitment to deliver continuous customer-centric innovation, has been awesome. Organizations the world over are proudly attempting to replicate it.

Scaling Up Excellence, on the other hand, does not attempt to define any kind of closed-loop system.  It is a distillation of the evidence about how best to promote operational excellence in the real world, shaped into a set of tools, tricks and mantras for ‘fighting the ground war’ that is the pursuit of continuous improvement. And it has a broader canvas too, taking in education, anti-bullying initiatives, creative industries and start-ups, for instance.

But there is a huge overlap. Much of the evidence presented in Scaling Up Excellence can be seen as a ringing endorsement for The Toyota Way. Both Stanford academics, Sutton and Rao pursued their quest with open minds, spoke to a lot of people and were led by the evidence. But their conclusions about how best to scale excellence closely mirror The Toyota Way: Continue reading

BPM-D Launch

Value-Driven BPMThe European launch of the latest version of Peter Franz and Mathias Kirchmer’s BPM-D framework in London yesterday had an intriguing warm-up before the jazz and canapes: a client executive workshop. Compressed from two days to an afternoon, it was pretty intense but well received. You have to wish them well because they are trying to do something important: to “change the conversation about Business Process Management (BPM)”.

Their start point, their mantra, is value-driven BPM. So everyone involved should be able to articulate how any BPM initiative links to the value drivers of the organization.  Which sounds blindingly obvious but, as we all know, it’s often not the case.  As a Big 4 consultant in the workshop put it: “So many times organizations say: ‘OK, so we’ve built our process repository. Now what?'”.

Peter’s example at this point – it’s in the book he co-authored with Mathias while they were both senior execs at Accenture – was a consumer goods company which created 600 high-quality process models describing its entire business. But only one person had accessed it in a month. It’s far from unusual. The most jaw-dropping I ever heard was a Telco process leader’s remark at a BPM conference that the enterprise repository which his 40-strong team had created was known internally as ‘the world’s largest write-only repository’.

So BPM-D provides coaching for BPM practitioners on how they can make their work far more valuable to their organization. Not just by focussing on adding strategic value but also in the way which they work more effectively with sponsors and stakeholders.  The D in BPM-D (it stands for Discipline) translates this into tools and techniques to make it happen step-by-step, from high-level BPM Capability Assessment exercises, through methods for surfacing the issues and ensuring alignment in the trade-offs over process variants, to assessment criteria for a BPM Centre of Excellence.

The BPM-D thesis is that value-driven BPM will emerge as a pillar in creating the Next Generation Enterprise. BPM, done properly, they are arguing, is headed for the C-Suite. It’s the capability ‘to move good ideas into action faster and at lower risk’.  I think they’re on the right track – and yesterday’s PEX interview with the newly-appointed Chief Process Officer at Xerox is surely a straw in the wind.

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Scaling Up Excellence

How’s your process excellence initiative going? Frustration and confusion everywhere, pummelled by unpredictable and unpleasant events, the stench of failure in the air?  So far so good, then. That’s according to Robert Sutton and Huggy Rao, Stanford professors whose research convinces them that ‘organizations that scale well are filled with people who talk and act as if they are in the middle of a manageable mess’.

Scaling is fraught with risks and uncertainties. Even the best leaders and teams recognise that muddling through can be inevitable, sometimes for months, while searching for the best way forward. Scaling stars have grit. ‘It’s not simply a marathon. It’s like running a long race where you don’t know the right path, often what seems like the right path turns out to be the wrong one, and you don’t know how long the race will last, where or how it will end, or where the finish line is located’.

It’s refreshingly candid advice, and Scaling Up Excellence is full of it.  On a seven year journey that started with a Stanford management education program on ‘Customer-Focused Innovation’, Sutton and Rao set out to explore The Problem of More:

“Executives could always point to pockets in their organizations where people were doing a great job of uncovering and meeting customer needs. There was always some excellence – there just wasn’t enough of it. What drove them crazy, kept them up at night, and devoured their weekdays was the difficulty of spreading that excellence to more people and more places. They also emphasized that the Problem of More (which they often called “scaling” or “scaling up”) wasn’t limited to building customer-focused organizations; it was a barrier to spreading excellence of every stripe.”

Scaling Up Excellence is a thoughtful, easy-to-read and intensely practical book about successful business transformation and innovation: how to start it, lead it, nurture it and sustain it. Continue reading