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

Why Process Excellence Is Headed For The Board Room

Business process management (BPM) may have experienced a lost decade. But there are still powerful reasons for thinking that process excellence is headed for the CXO agenda.

Five factors are driving convergence towards a realisation of the strategic benefits of a joined-up and intelligent approach to process management.

1. The Drive For Agility

The pace of change, across all industries and regions, is now so intense and disruptive that every organization is constantly re-inventing itself. Agility is precious. Even banks are ‘approaching their Spotify moment’, according to the CEO of one of the largest, Standard Chartered.

2. The Enveloping Demands of Compliance

Increasingly, organizations have to provide immediate reassurance to regulators, customers, analysts and investors not just about financial controls (including new compliance requirements such as AML, KYC, FCPA and FATCA)  and product quality – that is the traditional concerns – but also about every other area of their business such as working conditions across their global supply chains, their environmental impact and their tax haven status. The penalties for non-compliance – and consequences in reputational damage – can be huge. And organizations are increasingly judged by their compliance to the spirit as much as the letter of the law. The Head of Enforcement at the UK’s Financial Conduct Authority warned a risk and compliance conference earlier this year that: “If your culture is constantly pushing up to the line, then when you cross the line, which you will inevitably do, we will come down on you like a ton of bricks”.

3. The Need for IT Alignment

There’s very little left that doesn’t involve IT (in its broadest sense).  Virtually every aspect of most organizations’ operations relies upon systems. Even departmental performance improvement projects usually have an IT component.  IT has never been more critical. Change and systems are inextricable. And yet, so often there is a dysfunctional gulf between IT and the business. A McKinsey study in association with the University of Oxford reported last year that “half of all large IT projects massively blow their budgets. On average, large IT projects run 45% over budget while delivering 56% less value than predicted. Software projects run the highest risk of cost and schedule overruns.”

4. The Value of Transparency

In an increasingly technological society, we are in danger of building more and more complex and tightly-coupled systems and organizations, naturally vulnerable to what Charles Perrow termed catastrophic Normal Accidents.  Most organizations already struggle with complexity; but it’s set to grow as organizations become more automated, more social and collaborative, and more virtualized (blending outsourced products and services from multiple suppliers). So transparency – through process visualization – is precious. It is the key to simplification and standardization and, for those on the frontline, better task support.  It also helps to identify and manage risks. One example is the shift under way in Life Sciences, from document-based Standard Operating Procedures (SOPs) to visual process-based perspectives which boost productivity – they enable everyone to see far more clearly what they need to do, and how it fits with what others do – and foster innovation by making it easier to get involved in process improvement..

5. The Lean Sigma Re-Boot

Both Six Sigma and Lean rose rapidly, peaked (remember when MBBs had the world at their feet?) – and have since waned. Other improvement methodologies had their day too. Hot this season is Operational Excellence.  Whatever we eventually call it, there’s a process of integration under way. We’re moving towards smarter approaches to performance improvement, reflecting the learning that any performance improvement initiative will be more successful and more sustainable in operating environments where processes are being managed effectively.

Which is why process excellence will be on every Board’s agenda. You can’t do all this – you can’t do any of these well – without paying proper attention to process. What Brad Power termed process attention deficit disorder may have been the norm for many organizations in the past.  It’s been hugely inefficient but went largely unremarked because it was business as usual.

Looking ahead, we can see that the organizations that will succeed in the future will be intelligent, capable of learning rapidly and responding effectively.  The risks are now so high, the pace so fast, the opportunities so big, but also so fleeting, and tension between agility and compliance so acute, that BPM in its widest sense – that is, process excellence – is set to become the strategic and enterprise-wide concern that it should have been all along.

Process is the language that enables that high quality collaboration; process management is the collaborative and governance framework that underpins it; and process excellence is the culture that defines it.

How to succeed in this emerging new world?  Where does it leave the software vendors? And what are the methodologies that will define how we do this? These are some of the questions I would like to explore in my third and final post.

Penguins, Guillemots and Swimlanes

istock_000020691496small - editIn a workshop with a Life Sciences organization looking for a process platform to transform its approach to knowledge management, and the inevitable question comes up:  “We use swimlanes sometimes anyway – so what’s wrong with BPMN?”.

We gave, I think, a convincing response. Next time though I’m going to try drawing an analogy with wings.

Both penguins and guillemots have wings. But only guillemots fly.  According to a recent study, it’s an example of an evolutionary trade-off. A wing can’t be efficient for both flying and swimming.  Optimising wings for diving leads to unsustainably high energy costs for flight.

So penguins evolved wings that leave them waddling across land but can take them to depths of 1,800 feet in search of food; whereas guillemots fly but can dive only to 300 feet. Their wings serve different purposes.

It’s the same of course with the language of process.

Business Process Model and Notation (BPMN) is a process language optimized for automation.  It is high value from an IT perspective. With BPMN swimlanes, pools, complexity and precision, an organization can dive very deep.

Universal Process Notation (UPN) is optimized for operational excellence. It’s a process language designed to enable effective collaboration across the enterprise on innovation, transformation and continuous improvement. It’s UPN’s simplicity – from the user’s perspective – that enables an organization to fly.

The organization running this workshop wants to shift from a document-based to a process-based approach in search of agility and efficiency. They want a new way of working that will better support their front-line people, engage them in continuous improvement, enable stakeholders to automate and outsource where appropriate, and deliver a new customer experience.  That is flying not diving.

Once they have identified automation opportunities, BPMN can come into play – for the IT team at least – in the design and implementation of systems that are scoped to support the end-to-end business processes (that are defined and maintained using UPN).

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Why 48% Of Cost Reduction Initiatives Fail

Almost half of all cost reduction initiatives fail – and that’s despite enterprises scaling back their cost-cutting ambitions – as Deloitte’s 2013 Cost Improvement Survey reports:

“[Despite lower targets…] executive respondents have reported a higher failure rate for their cost initiatives. In 2008, the failure rate was 14%. In 2010, it was 37%. And in 2012, the failure rate climbed to 48%, meaning that nearly half of all cost initiatives now fail to achieve their goals.”

One root cause – possibly the root cause – must be that most organizations don’t have an enterprise process management platform. So they:

  • don’t have a comprehensive and joined-up perspective on their operations
  • don’t have a framework for effective collaboration on the design and implementation of change
  • can’t fully leverage the power of process visualization to simplify
  • can’t easily break down silos and engage their people in continuous improvement
  • are locked into project-thinking, and so down-playing longer-term sustainability.

It’s a diagnosis that’s borne out by the survey respondents:

“The biggest barriers to effective cost reduction cited by respondents are “lack of understanding” about the need for cost reduction (74%), and “erosion of savings” (73%) resulting from cost improvements that are not feasible or sustainable.

Survey respondents indicated that their companies are attempting to overcome the barriers by focusing more attention on change management (52%), clearly defining goals and objectives (41%), and communication (32%).”

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A Simplification Bandwagon Begins To Roll

iStock_000000213421MediumIs business simplification at last moving up the strategic agenda?

In recent discussions with three global organizations,  it’s the senior people who are arguing forcefully for simplicity. Admittedly,  all three are in Life Sciences but my hunch is that it’s a wider quest.

As one CxO put it:

“The world in which [this organization] operates is already complex. It is set to get far more complicated in the next three to five years as we work more collaboratively with clients, partners and service providers. There are going to be far more opportunities to do the wrong thing at the wrong time with the wrong person. Our risks are increasing rapidly. “

She went on to identify one of the root causes:

“At the moment, we deal with complexity by hiding it.  We bury it deep down in inpenetrable SOPs.  We need to expose that complexity. It’s the first step in simplifying our business – and engaging our people.”

Seems to me that she’s right on both counts.  Complexity has to be exposed before it can be reduced (and the direction of travel there is, of course, from a document-defined world to a process-based mindset that leverages the power of visualization).

It’s not just that people can’t contribute to a better way of doing things (or even do their current jobs well) if they don’t understand the big picture – though that is clearly true.

The strategic headlines here are about risk. People working in complex, fast-moving and perilous conditions – firefighters and surgeons, for instance – are drilled in situational awareness.  They are taught never to lose sight of the big picture.

Arguably, global businesses are becoming far more complex, fast-moving and perilous than surgery or firefighting. They require the orchestration of large numbers of people, spread across all regions of the world, and collaborating across organizational boundaries and functional silos. Situational awareness matters more than ever, which is why business simplification looks set to become the zeitgeist.

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© Text Michael Gammage 2013

Future BPM – The Enterprise Platform

iStock_000023250571SmallI’ve argued previously that sustainable success in complex global enterprises depends upon effective collaboration, and that process is the language that best enables it. I’ve also argued that BPMN is out of the running as a universal business language, and proposed three questions we should ask in assessing alternatives.

The right language is vitally necessary but it’s not sufficient. Traditionally, we say it needs to be supported by a tool. I want to make the case here that the real value comes when it is supported a process management platform.

Tool, platform – what’s the difference?

Here’s ten ways we can know an enterprise process management platform when we see one:

  1. It is the single source of truth. It goes beyond defining what we do and how we do it. It defines as well roles, responsibilities and accountability.
  2. It integrates processes with documents, systems, metrics and training to deliver content that is personalised, intuitive and valuable to every desktop and mobile device.
  3. It makes it easy for users to feed back improvement ideas to process owners and stakeholders, to get engaged in continuous improvement.
  4. It recognizes the need for variants and seamlessly manages them behind the scenes. It allows global processes to be designed and managed in English (for instance) but displayed to the user in their chosen language. It manages the ongoing optimization of the variants to a global process necessary to meet local requirements.
  5. It is the framework for performance management. It integrates processes with metrics and analytics. It overlays processes with metadata, hidden to most users, with analytical features and reporting that allow process stakeholders and Op Ex and Lean Sigma teams to collaborate on change. It underpins every CxO dashboard.
  6. It is the framework for change management. Recognizing that almost every proposed change has ripples, with implications for other groups across and outside of the enterprise, all business change is managed through it.
  7. It bridges the IT:Business divide. It engages business and IT in a rich ongoing dialogue.
  8. It is the enterprise QMS. It enables risks, controls and compliance to be embedded and managed within the end-to-end operational processes.
  9. It provides all this within one unified governance framework that is robust enough to meet every compliance requirement yet also automated and intuitive enough to be easy to use.
  10. It is a chameleon. It can be stand-alone, or it can invisibly and intelligently integrate with other collaboration and social platforms, and any other systems, as required.

An enterprise BPM platform of this kind provides direct line of sight between strategy and reality. It links the operating model directly with the operational processes. It reduces the risk in every business transformation, from acquisition integration to major IT programmes. It embeds a culture of continuous innovation and sustainable improvement. And the Chief Risk Officer sleeps easier at night.

The stakes are high. This is an enormously valuable prize. There’s a race on to deliver it. Exciting times.

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© Text Michael Gammage 2013