Foundations

Berg on Holmes on Homes

2010-05-06T06:15:00.000-07:00

Ok, I admit it. I’m an HGTV junkie. You all know what I mean. It’s time to come clean.

There is one show in particular that has, well, inspired me. Perhaps you’ve seen it, too? It’s called Holmes on Homes, and it follows the travails of hapless homeowners who’ve been duped by disreputable contractors and are left holding a pile of worthless work in progress. Mike Holmes and his crew come in like the cavalry to sift through the shoddy, typically half-done project to reveal inadequate or improper work that usually has to be ripped out and redone. In Mike’s words, “I can’t leave it. I gotta fix it.” Why? Without a solid foundation upon which to build that new kitchen, a finished basement or the backyard deck the homeowners always wanted, the final product will be inferior, no matter how nice it may look on the outside.

If any of this is resonating with any of you, well, good. Because there’s no stretch in drawing a parallel between the vignettes I so enjoy watching on Holmes on Homes and the many, many inferior attempts at building the supporting infrastructure for so many companies. Stories of failed implementations running into the tens of millions of dollars (or more) are legendary. The reasons for failure are many, but at their core exists a universal theme: in their zeal to get the project done, the project team forgot, was unable – or decided not – to do the hard work of creating a solid foundation.

It is in that spirit that I reintroduce this blog, formerly “BPM Insights,” as “Foundations.” Over the coming months, we’ll share with you our own stories of success and failure, and introduce many of the fundamental tools and methods required to build a strong foundation for any operational initiative.

The Process of Change

2010-03-22T07:00:00.000-07:00

“It is not the strongest of the species that survive, nor the most intelligent, but the ones most responsive to change.”

- Charles Darwin

Whatever side of the argument you’re on, well, that’s irrelevant. What we have all witnessed as a nation is the process of change on a massive scale. We saw how deeply entrenched people can get when guided by the power of their beliefs. Good or bad, right or wrong, momentous or catastrophic, we probably won’t know for years to come. But we do know this: politicians, notoriously protective of their turf, unwilling to upset the status quo for fear of losing their positions, set aside their political motives and voted their consciences to enact the largest social reform measure in half a century.

As President Obama said, “This is what change looks like.” It’s not pretty, it can be incredibly difficult, but the only way any society – or organization – can advance is by making the tough decisions that are not always the most popular to serve a greater good.

Effective Meetings

2009-11-23T06:53:00.000-08:00

It’s always a good idea to revisit some fundamental management principles to keep ourselves focused and productive. And what part of our day is more time consuming than the seemingly endless barrage of meetings and conference calls that beckon us? One of the most productive meetings I’ve ever been involved with was led by Ken Ciancimino, the then-Executive Director of the Trump Organization. Our little IT-company had a proposal for Mr. Trump, and he was kind enough to have one of his senior executives listen. Entering the meeting room precisely at the designated time, Mr. Ciancimino explained: “Here’s how we do meetings here. I want to know who, what, where, when, how and why. And then we’re done. Fair enough?” Without the need for any further explanation, we knew exactly what to present. He made it abundantly clear that time was money, and gave us a simple, universally understood outline to ensure we covered all the bases he needed covered to report back. We were in and out in less than 30 minutes. A colleague from Trump’s IT group followed up the next day with a 4-page technical questionnaire. Efficiency defined. Wow.

Through my involvement in a few hundred meetings at dozens of client companies over the past several years, it’s become evident that the lessons learned on that day in Trump Tower are lost on most – and that some simple guidelines might yield some real benefit. Here’s my take on good meetings; feel free to share your own ideas and experiences:

Start on time. How many meetings are scheduled to start at a specific time, yet the meeting organizer wants to “wait a few more minutes” for one or two late arrivals? This punishes and frustrates the folks who were on time. The latecomers can catch up, or be briefed after the meeting by one of their colleagues.
Always have an agenda. Provide meeting participants with a meeting agenda in advance of the meeting, providing enough time for preparation. Not providing an agenda almost guarantees a meandering discussion.
Facilitate. If you call a meeting and provide an agenda, then lead the meeting. State the agenda at the outset. Keep one eye on the agenda, and the other on the clock. Be mindful of other people’s time and keep the conversation moving. Resist the temptation to deliver speeches or to proselytize, and make certain anyone who wants to be heard is heard.
Set the default meeting duration to 30 minutes. It seems the “default” time for any meeting is one hour. Setting the default time to 30 minutes adds a little “creative tension” to the meeting and inhibits the empty chatter that fills far too many meetings.
Keep the group size manageable. Trying to facilitate a meeting of more than 10 or so participants is like (to use an overused metaphor) trying to herd cats. Keep the group relatively small and focused.
Have take-aways. Once the agenda has been covered, ensure there are specific actions defined and assigned. Gain acknowledgement that the person to whom something is assigned is “owned” by them, and have them offer a definitive date and time by which the activity will be completed.
Stop on time. Do not overrun the allotted time. Use the last minute or two to summarize what’s been accomplished and who is responsible for what. If, with a few minutes remaining, it does not appear that the agenda will be covered, schedule a second meeting.

These are common sense ideas that will pay great dividends to those who take them to heart. As process improvement consultants, we’re constantly looking for ways to increase productive capacity and reduce waste. As one of the major consumers of our time, meetings demand solid discipline and the application of good practices.

Business Process Maturity

2009-02-26T12:10:00.000-08:00

The Object Management Group recently published version 1.0 of their Business Process Maturity Model (BPMM), available for download at www.omg.org. Modeled on the familiar Capability Maturity Model Integration (CMMI), the BPMM describes five levels of process maturity from Initial through Innovating. A quick review of the table of contents should be enlightening to most executives. For example, is your organization paying attention to organizational process leadership? Monitoring and control? Sourcing management? Competency development? Improvement planning? Organizational performance alignment? How? Are your processes documented? Do you have adequate activity definitions and job descriptions? Training materials?

Traversing the five maturity levels is no easy task. Like everything else, however, it’s important to take stock of where you are now (Level 1?), where you want to be (Level 5), examine the gap between and develop a plan of action. Process maturity levels include:

1. Initial. There are no specific objectives. Success in these organizations depends on the competence and heroics of the people in the organization and not on the use of proven processes.

2. Managed. The objective is to create a management foundation within each work unit or project.

3. Standardized. The objective is to establish and use a common organizational process infrastructure and associate process assets to achieve consistency in how work is performed to provide the organization’s products and services.

4. Predictable. The objective is to manage and exploit the capability of the organizational process infrastructure and associated process assets to achieve predictable results with controlled variation.

5. Innovating. The objective is to continuously improve the organization’s processes and the resulting products and services through defect and problem intervention, continuous capability, and planned innovative improvements.

You might begin by understanding where your organization fits into this model – taking an honest assessment is the first step. For a deeper dive into the model, I encourage you to visit www.omg.org and download the entire BPMM version 1.0 document.

Taking Stock

2008-11-17T13:52:00.000-08:00

If you’re in operations management, when was the last time you reviewed your organizational processes? Really dug in and analyzed the nuts and bolts of the work that’s being done? Activities, and the steps required to fulfill them, are rife with redundancy, rework and opportunities for error. Talking to staff members about frustrations they might face in their approach to the work they do often reveals inconsistency in work processes – the great enemy of quality outputs. Just taking the time to model processes can reveal multiple opportunities for improvement. The first step is to simply get organized.

One method we use in our practice to help our clients organize their improvement efforts is Process Mastering. The Process Master is a list of critical organizational processes we assemble to examine the suppliers, inputs, activities, outputs, consumers and measures for each. We create the Process Master by working directly with our clients’ management teams to identify critical “moments of truth” in operational processes that introduce opportunities for error, cause delay and enable other process challenges that drive up costs and destroy productivity.

It takes very little time to create, yet provides an extraordinary launching pad for all future process improvement efforts.

Michael Hammer, Process Pioneer

2008-09-05T06:44:00.000-07:00

I learned with sadness this morning that Michael Hammer, who, together with James Champy, set off a process improvement revolution with their seminal Reengineering the Corporation, has died. While I did not know Dr. Hammer personally, his family, friends and colleagues should know that he inspired a generation of process professionals - and set in motion the careers of an army of consultants who have undoubtedly helped thousands of companies realize greater value from their operations.

Having left pieces of himself in countless organizations that have benefited from his ideas, Dr. Hammer leaves an enduring legacy, a little slice of immortality.

Business Process Management Summit

2008-07-10T14:58:00.000-07:00

The fine folks at IQPC are taking a different tack in a forthcoming Business Process Management Summit being held in Las Vegas later this year.

The BPM community is clearly waking up to the notion that the business side of BPM – something I like to rant about – is pretty important. They have an excellent lineup of sessions, including an ARIS master class where simulation runs and results will be discussed. The emphasis, however, seems to be a refreshing shift to the “softer” aspects of BPM, with sessions on business process change, business process ownership, building a business case for BPM and aligning process innovations with business objectives – all music to my ears. They also have a fine group of speakers, including Bennu Group’s Terry Schurter and others from JP Morgan Chase, Liberty Mutual, Microsoft, NASA, Intel, Wachovia, Harley Davidson, Boeing and Merck. Definitely worth checking out. The event is being held at the Venetian Resort Hotel October 27 – 30th. Visit here for more information. (I understand they're even offering a $500 discount if you register before August 1.)

Vendors Are People, Too

2008-07-01T06:56:00.000-07:00

We go to great lengths to ensure our employees are happy and productive. We design comfortable workspaces, provide break rooms, paid time off – even if just for “personal” reasons – enroll them in training and educational programs and reward them for a job well done with a periodic bonus. We do this to keep them focused, as we all know the hunt for talent is grueling at best, and when we find that rare gem of a top-rate employee, we bend over backwards to keep them on the team.

Why, then, do we treat vendors like second class citizens? We often go through great lengths to sell the vendor to the organization, but once we win over our colleagues and hire the vendor, we often fail miserably at keeping them happy and focused. Worse, we typically don’t give vendors an incentive for jobs well done, rather, our lawyers structure agreements that penalize for jobs poorly done. We aren’t taking the time to understand their needs or what motivates them as individuals, rather, we’re concerned with covering our own rear ends and think nothing of hanging a vendor out to dry when the going gets tough. We pay them, they owe us – quite a bit like late nineteenth century factory foremen dealing with their workers.

In my work evaluating system implementations for some very large companies, the vendor-client relationship often seems to be a contentious one, starting out with great promise but disintegrating into a blame-fest. Why is this so?

From my perspective, it’s the easy way out, a path of least resistance. Remarkable that some companies would rather scrap hundreds of thousands or millions of dollars and abort a bad project with a bad vendor than take the time to rehabilitate it provided the vendor gets the blame. To be sure, sometimes this is the right decision. But who’s to blame, really?

Selecting the right vendor is, of course, critically important to project success. We’re often so dazzled by demos that we forget to run the vendor through the proper paces. We also fail to indoctrinate the vendor into our way of doing things. Rather, we see vendors forcing their way onto the client without considering the client’s culture or the available skills of its employees. So the first step to good vendor relations is – surprise, surprise – selecting a good one in the first place.

Next, provide incentives for vendors rather than penalties. Would you think for a second of fining an employee for a late project, of actually taking money from their pocket? Probably not, unless your last name is Machiavelli. You may give them little or no bonus; you may fire them. But I’m sure you wouldn’t actually take money from them.

We make considerable investments in outside products and services and, as the world continues to flatten and we focus on our core businesses to remain competitive, there will be a greater need to better manage vendor relationships. Start to think of them a bit more like you think of your employees, and you’ll soon see the same enthusiasm, diligence and attention to detail you so value in your best employees.

The First Law of Holes

2007-12-05T06:31:00.000-08:00

You’ve all heard of the First Law of Holes, no?

So many of us find ourselves in a position of overwhelm, faced with tremendous pressures as the work we’re charged with doing each day piles up. It seems never ending – a vicious cycle – like Sisyphus, we toil all day, all week, all month, all year only to have the work pile up on us again and again and again.

Well, the first thing we need is a little perspective. The fact that any of us have any work to do at all is a good thing. It keeps our minds occupied, roofs over our heads and food on our tables.

Next, we need to examine why the work piles up. (I’ve written before about people being so “busy” all the time.) Take this example: you wake up in the morning, grab your robe, pour yourself a cup of coffee and read the paper. You next jump into the shower, get dressed and head to the office. A typical morning in a typical humdrum life. How a person approaches even those very simple, natural, daily events, however, can profoundly influence their state of overwhelm.

Consider Dave, a busy lawyer, married with two young children who routinely puts in 60 hour work weeks. Here’s how his day goes:

Dave wakes up at 6:00 am, puts on his robe, pours coffee, adds the contents of a sugar packet and leaves the empty packet on the counter, takes out a spoon, stirs the coffee and leaves the spoon on the counter. He drinks his coffee and leaves the cup on the table in front of the TV. He next heads to the shower, leaves his robe and nightclothes on the floor, jumps in, scrubs himself, towels himself off and gets dressed. Let’s stop there.

Steve, an accountant, also married with two kids, wakes up at 6:00 am, pours coffee, adds sugar, takes out a spoon, stirs the coffee and places the spoon in the dishwasher and trashes the empty packet. He drinks his coffee and places the empty cup in the dishwasher as well. He heads to the shower, puts his robe on the door hook, places his clothes in the hamper, etc.

At the end of each week, Dave has accumulated 7 spoons and coffee cups, a mess of sugar and coffee remnants (that have attracted ants), a pile of clothes on the floor and an angry wife. In essence, he has created work for himself; he now must deal with several new tasks at the end of each week: cleaning up the morning dishes from the week, throwing out the empty sugar packets, wiping up the mess he's left, spraying to get rid of the ants that have gathered and sorting his piles of clothing for the hamper, which all told add an extra 20 minutes of work each week to his already busy schedule (not to mention the potential for a good half-hour argument with his significant other). Steve, on the other hand, has created no work for himself. He’s ready to do the laundry and he presses “start” on the dishwasher. Steve has an extra 20 minutes at the end of each week simply by approaching his morning activities in a different way. While this may sound trivial, it is these little accumulations of additional time brought about by certain approaches to work that cause bottlenecks. Multiply Dave’s extra 20 minutes per week to clean up each of the little messes he’s made over the course of a year – at home and at work – and the numbers become staggering. In fact, Steve could easily wind up with an “extra” week or two of productive time at the end of each year. Dave feels overwhelmed; Steve does not, yet Steve seems to get more work done. How is this possible?

Take this idea a step further and think about a modest-sized company with 400 employees, 200 of whom are Daves and 200 of whom are Steves. At the end of each year, the Steves will collectively have, conservatively speaking, 200 “extra” weeks of productive time, or 3.8 years! If the average employee costs the company $75,000 per year in salary and benefits, The Steves will contribute an extra $285,000 to the company’s bottom line – enough to add nearly 4 new employees – simply by approaching their work in a more efficient way.

In performing his daily tasks, Dave contributes to a mounting pile of work, while Steve does not. Each day, Dave digs his hole a little deeper. And the First Law of Holes? Stop digging.

Sales, Schmales

2007-11-06T10:12:00.000-08:00

"Organizations operate under tremendous competitive pressure to improve the customer experience while cutting costs and increasing efficiency."

Nothing like stating the obvious, eh?

This phrase, taken from one vendor's sales literature, might just as well have come from a hundred others'. First off, the insinuation - that my business is not competitive - might be seen as offensive by some. The piece continues to pronounce that the offered product is a "complete solution" (will it even do my laundry?) that promises "best in class integration" (without knowing anything about my current technology?) that includes "superior design tools" (superior to what?).

Why do so many vendors out there posit the same regurgitated pablum? Why are there so many lists of customer "benefits" that include bullet points like: "reduce costs", "improve efficiency", "get to market faster", etc.? Are there really that many decision makers out there that read this stuff and run to dial the phone?

Look, folks, the field is crowded out there. The key to competition is differentiation. Daring to be different. But that, too, gets taken to the extreme. Take the all-black, shaved-head-and-goatee look of the dot com era, for example. Everyone was so busy daring to be different, that they became just like everyone else (evidenced by a walk down West Broadway in SoHo circa 1999).

To be sure, I use as much jargon as the next person. But there comes a point where the meaning behind the words is lost, reduced to saying the words for the words' own sake. If you're selling me a means to obtain a "sustainable competitive advantage", you had better know a lot more about my business and my industry than you already do.

One of the more indelible aphorisms I recall from my early years in business is this one: "Great salespeople do not sell; they create in their prospects the desire to buy." The way to accomplish this? Listen. Listen some more. Listen even more.

Then respond, thoughtfully.

Perpetual Optimism

2007-08-08T07:41:00.000-07:00

“Perpetual optimism is a force multiplier.”

These words of Colin Powell’s should resonate throughout all organizations. Pessimists insist that cautious approaches to work provide safety and security, when nothing could be further from the truth. Pessimistic approaches to business processes include not fixing them because “they ain’t broke.” Nonsense.

Your competitors are out there brainstorming to come up with new ways to tackle problems you may have not even considered – and then pulling the trigger to launch new, innovative, even exciting ways to get work done. This optimistic approach means those who are working toward more effective, efficient and agile operations tackle each problem as an opportunity to remake their organizations, instead of stumbling blocks to be avoided. Pessimists shrink from their responsibility to push the envelope; optimists grow world-class companies.

Oh, Verizon...

2007-07-16T12:56:00.000-07:00

Have you ever tried to get a service disconnected? Of course you have. Here’s a funny story to which we can all relate.

Recently, I contacted Verizon to disconnect a landline I was barely using a few days in advance of a move. I dutifully called the toll free number handily printed on the first page on my monthly bill. Naturally, I got the usual succession of ring-transfer-ring-recorded message which asked me, in order to expedite my call, to enter my telephone number, area code first, which I did, was told (in a computer-generated voice) “one moment please” and was then sent on a second round of ring- transfer-on hold music when finally, about seven minutes into the call, a live person picked up.

“Thank you for calling Verizon. Can you please provide your phone number with the area code first?”

“Ok,” I thought to myself. “I’ll be pleasant, even though I already entered that information in order to expedite the call.”

“Three-one-oh, five-five-five, one-two-three-four”

“And can you please verify your address,” asked the customer service rep on the other end of the phone.

“Sure,” I continued, “it’s...” and proceeded to give my address.

“How may I help you today?” inquired the courteous person from Verizon.

“I’d like to disconnect my service,” I offered.

“I’m sorry sir,” the rep interjected. “I’ll have to transfer you to disconnection. One moment please...”

And so began another cycle of ring-transfer-ring...

After another three or four minutes, another rep picked up the call.

“Thank you for calling Verizon. May I have your phone number with the area code first, please...”

“Sure,” I began, “It’s five-five-five...” etc.

“And for security purposes, can I ask you to please verify your address?” the rep requested, which I, again, did.

“I’m sorry sir, but your account is with a different division of Verizon, called Verizon Avenue. I can transfer you if you like,” the rep said, apologetically.

“Yes, please transfer me,” I replied, now a little agitated.

And so began another cycle of ring-transfer-ring...

And after yet another three or four minutes, another rep answered the call:

“Thank you for calling Verizon. May I have your phone number with the area code first, please...”

“Sure,” I began, “It’s five-five-five...,” etc.

“And for security purposes, can I ask you to please verify your address?” the rep requested, which I, again, did.

“I’m sorry sir, but I’ll need to transfer you to a different department. One moment please...”

And so began yet another cycle of ring-transfer-ring...

And after yet another five minutes or so, another rep answered the call:

“Thank you for calling Verizon. May I have your phone number with the area code first, please...”

“Sure,” I stammered, sputtering spittle as I spoke. “It’s five-five-five...,” etc., now seriously agitated.

“And for security purposes can I ask you to please verify your address?” the rep requested, which I, again, did.

“And how may I help you today Mr. Berg?”

“I’d like to disconnect my service...” I offered, again.

The rep continued, “May I ask why?”

“I’m moving. I’ll no longer need the service,” I replied.

“Well, we’re very sorry you’re choosing to leave us. May I ask where you’re moving to?” The rep inquired.

“I really don’t see the point – “

“Well, sir, we like to keep track of our customers. You have no obligation to provide that information, though we may need to send a final bill,” the rep replied.

“I’ve left a forwarding address. My mail will get to me,” I offered, irritated but remaining composed.

And after roughly ten more minutes of questions and responses and mother’s maiden names and being placed on hold while something or other got checked, I was given a confirmation number, an order was placed to disconnect my landline. Finally.

So, wow. What a lesson in what not to do to your customers, even when they’re about to be ex-customers. To disconnect one residential landline, four representatives of Verizon were involved through three separate transfers (four if you include the initial queuing to get the first rep on the phone) over approximately a thirty minute period. Yes, I realize the human factor in trying to keep me as customer, in trying to find out to where I was moving, but the bad press and bad will generated must supersede any potential benefit, no?

Now, suppose, just suppose, I could have logged onto their website, entered information to verify my identity (perhaps like my bank or brokerage or credit card companies do, which seems to be secure enough for them) and requested that my service be disconnected.

Imagine a world like that.

Why Change Is So Hard

2007-05-30T13:36:00.001-07:00

Einstein said we have one important decision to make in our lives, and that is to decide for ourselves whether we live in a friendly or a hostile universe. Our competition-laden lives are so burdened with proving ourselves that the friendly universe we’d all love to be a part of is all too elusive. And that process of proving is about feeling a sense of value – that we’re contributing to something larger than ourselves. This is all very Maslowian, of course; we’re humans, after all, and we all need some form of periodic validation.

So along comes the BPM expert with her “should be” process models that fly in the face of the “as is” state and, naturally, there’s instant defensiveness and insecurity on the part of those who designed the existing processes. In one fell swoop, their good work is undone, their sense of value shattered. This is no joke; it lies at the very heart of managing change.

Perhaps you’ve seen the movie Office Space. In it, a meeting with “The Bobs” – a pair of management consultants named Robert – was a dreaded goodness-of-fit test with the company. In my own work, I experience the very same apprehension when I interview staff (it can’t help that my first name is Robert, either). The fear is apparent; the nervous questions almost always precede the interview:

“Is everything ok?”

“Am I in trouble?”

“Is my job safe?”

It’s almost heartbreaking to listen as the interviewees’ fears rear their ugly heads. My job is to put them at ease, to reassure them that what management intends to do is simply refine, improve, better meet the competition. Rarely, I remark, do people lose their jobs over my recommendations. Truth is, sometimes they do. As such, there’s a need to balance the intimacy that facilitates good information gathering during discovery periods with the cool detachment of a professional whose charge it is to remain objective. The trick is to be understanding, to realize that questioning the way someone performs their work will often come across as threatening, undermining that fragile sense of value we all crave. Resistance to change is often a direct product of someone feeling threatened, less valuable, expendable.

The point of all this? There is a decidedly human side to business process management that far outweighs the technical or mechanical aspects. An old friend, a venture capitalist in Seattle who holds a PhD in Physics from Yale and an MBA from Wharton told me not long ago that his education was important, but he would have been far better served in his dealings with business owners and the staffs they employ with a psychology degree. All of the technical know-how in the world pales in comparison to the finesse of someone who understands human motivation, the “people part” of process. That’s why change is so hard.

"Busy"

2007-05-23T15:37:00.001-07:00

That’s the standard reply these days from just about anyone to whom I pose the question, “How are you doing?” Back when I worked on Wall Street, when cell phones were rare and a blackberry was something you ate, the response was “Great!” or “Fantastic!” Today, the responder inevitably puts their head down and shakes it in disbelief as if to underscore the pile of work they’re facing while they pronounce, “Busy,” usually with a hint of resignation and a small sigh for effect. This seems to be a universal reply: This morning, at the grocery store, a customer in front of me asked the cashier how she was doing. “Busy” was her reply. There were three of us in line as she “busily” dragged goods across the scanner and “busily” watched as the customer swiped her credit card for payment. Busy, indeed.

Cut to a typical morning at the airport, where lately I’ve been spending a lot of mornings, as my travel schedule tends to keep me airborne. Near the gate, there are usually several well-dressed gentlemen talking on a cell phone, typing diligently into a blackberry or working on a laptop (or, most often, some combination of the three), grabbing those precious minutes between Group 1 and Group 4 boarding to respond to an email or add that important column to a spreadsheet or follow up with someone at the office to ensure that proposal went out. Wow. Are more deals getting done? The now ubiquitous blinking blue lights on the half-ounce Bluetooth earpiece screams of the diligence and dedication of the world-weary working warrior that, even when he’s not working, he’s working, always ready to take that call in an instant, always ready to get the deal done, always available, anytime, any place, to serve you better, to be the best he can be, to excel and beat his competition.

Then why, pray tell, can I rarely get someone on the phone on the first try? Why am I almost always sent into voicemail when I call someone at the office? Where is the friendly greeting of years gone by that asked me, politely, to where I would like my call directed? Here’s my theory: we busy ourselves with nothing. We busy ourselves to feel as if we’re being productive. We create “work” where none exists. We are victims of the information economy, struggling to shift our focus from the piecemeal workaday processes that used to yield definitive deliverables you could put your arms around, to the now amorphous intangibles that characterize the product for which so many of us are being paid. Contemplate this: If I sit and think about a client’s business challenge for five hours while staring at the Pacific Ocean, am I being less productive than attempting the same great feat while juggling my cell phone, blackberry and laptop? In which scenario will the client gain more value? What is worth more to the client? Me multitasking, and after two weeks finally squeezing out enough time to consider and respond thoughtfully to the client’s issues, or spending a half-day staring out to sea, contemplating possible solutions based on twenty-plus years of experience and a whole lot of formal education and heading back to the office to write them down? Both deliverables yield the same revenue for the firm. Ironically, the one that is delivered faster, with far more dedicated thought on my part, is the one that might lead the uninformed observer to conclude I was being lazy and unproductive, while my harried counterpart, delivering late, piecing together bits of thoughts over a far longer period of time, is assumed to be the “busy” person who appears to be hardworking.

Think about that. And think about how your own processes would be impacted by a shift in thinking that reflects true productivity, rather than perceived diligence. Confusing activity with accomplishment is a fundamental challenge to good business process management practices.

A Look in the Mirror

2007-05-11T10:23:00.001-07:00

Man, have I heard some horror stories lately – deadlines missed, functionality incomplete, millions thrown away. Sure we’ve all heard about similar situations and all know we need to apply the discipline of project management and develop a thorough understanding of user requirements to minimize the chance of failure. But perhaps it’s time for some folks to take a hard look at themselves, to see whether they – and not their vendors or vendors’ technology – are entirely to blame for the failures of certain systems implementations.

This is all of course old news to the tech savvy out there, but my mission, with this blog and in general, is to communicate to those who are not terribly tech savvy that there are reasons for frameworks, disciplined approaches, software development lifecycles and other forms of best practice. The cynicism most have toward many of these methodologies is no doubt a function of the misuse or misapplication of them that resulted in a bad experience. To be sure, one vendor I know of promotes the use of Agile development methods in their deployment of enterprise-class systems involving complex insurance operational processes that involve offshore development teams and multiple integrations with third party systems. To me, using an Agile framework for such a project is non sequitur – the remoteness of the development team alone sort of mandates the creation of fairly detailed requirements documents – a mandate that directly contravenes the Agile philosophy.

The lesson? Get to know more about these frameworks and insist that your vendors use them properly. Make an inquiry into vendor methodology a major part of your RFP process, and insist that contending systems vendors provide vivid descriptions of the approach to the project they propose to undertake. Further, make sure your own organization is prepared for the change that’s associated with adopting a vendor’s framework, and remains committed to the approach. Sometimes, a good look in the mirror goes a long way.

Enterprise Visibility (Cheap)

2007-04-13T13:27:00.000-07:00

A foundational element of good management, whether you call it business process management or not, is visibility. So much of our time is spent "in the weeds" - deep in the minutia, that we lose sight of the big picture. Keeping a constant eye on key metrics means first identifying and understanding what those key metrics are (and why they're important) and devising a means to constantly monitor them.

The challenge with this is that enterprise-class business intelligence systems tend be pricy and require the commitment of some already-strained IT resources. The absence of the time, money or simply the desire to implement such a system should not be an impediment, however. Use of a spreadsheet is sufficient. By creating a dashboard comprising a collection of pie charts that represent key performance indicators, taking a screen shot and publishing it on a web page using an "img src=" tag, you can provide process visibility to anyone interested via the web. Further, if you want to provide drill-down, the screen shot you use can easily be turned into an image map using simple HTML tags - you specify the upper left and lower right hand coordinates to define the clickable area of the map and the page or document to which clicking will direct users. By using an “href” tag to link the map coordinates to a project schedule, live spreadsheet or other source, users can drill down to far more detailed information. In addition, policy statements, project charters, contact lists and other process or project-related information can easily be made available. Concerned about who might be able to access the info? At the low end of security, there are many simple javascript applets that enable you to password-protect the dashboard page with no programming required. For a little more robust security, you can use a Flash page for log in info. If greater security is called for, you might have to enlist your IT department for a few minutes. Most of these scripts are available for free online.

If you want to splurge, for a modest sum you can buy Business Objects’ Crystal Xcelsius product and bring your presentations to life. For those of you unfamiliar with it, Crystal Xcelsius ties into a simple spreadsheet (or other data source) and allows you to quickly create interactive dashboards and render them as HTML pages, Flash pages or PDFs. It’s a very inexpensive way to deliver enterprise visibility into critical projects and processes. Don’t succumb to deer-in-the-headlights syndrome out of fear of the time or expense involved. Providing visibility is critical to maintaining support from senior management, gaining buy-in and literally keeping everyone on the same page, and here’s a very inexpensive way to provide it.

Too Busy to Plan?

2007-04-05T09:03:00.000-07:00

Lots of time since my last post, having been on the road and working with clients. 12,000 miles in two weeks - surely not a record, but a decent amount of air miles nonetheless. And during my travels there was apparent at one particular engagement a resistence to good project planning. Remarkable. A one-year project, now in month twenty, is off the rails. The client is unhappy. The vendor defensive. The implementation in a sort of controlled chaos. The prescription, after a week of solid assessment (staff interviews, documentation reviews, product demos, etc.)? Add a little discipline to the process of delivering this very complicated product. The response? We're too busy to plan!

This blows my mind, really. We all know the definition of insanity is to continue to do the same thing over and over again and expect a different result each time. Now there's a classic example.

Cut to a recent dinner with prospective clients (let's call them Tom and Fred) contemplating hiring a new systems vendor. "Why do you want to change vendors?" I asked, genuinely interested in what motivates companies to become so frustrated they're willing to scrap millions of dollars of investment, only to spend millions more for a replacement. "It takes four months, literally, to get anything modified in the system," was the response. Again, the issue is poor planning, poor execution and an abject lack of discipline. "We were encouraged with the speed at which they began the project," remarked Tom, "but then the thing just fell apart." Heard that one before? I have.

Cynics abound in the world of technology. The challenge is the knowledge held by the technical elite is often so obscure and difficult to grasp, that the businesspeople who have to work with the systems they create almost completely defer. Add the unbridled arrogance of a talented technologist and you get a recipe for disaster. That's not to say they're all bad; the Alistair Cockburns and Suzanne and James Robertsons of the world - probably the world's foremost authorities on requirements gathering (from a very practical perspective) - give us all hope. Those who subscribe to their methodologies - and no, not verbatim, as that's entirely impractical - but those who understand the value a framework, a proven approach to attacking complex systems implementations, brings to such projects, have a decided advantage.

My advice to the client at dinner? "I'd rather you get a little frustrated with the slowness of implementation up front given the thoroughness of the planning and requirements gathering processes, than be downright angry after months of missed deadlines." Speed at the beginning of the project might be encouraging, but it could also be a warning sign for things to come.

The Folly of Over-Zealousness

2007-03-05T10:39:00.000-08:00

We know Six Sigma has wide applications – and great successes – in the service sector. Six Sigma is no fad; it is a comprehensive collection of tools and techniques that have evolved over many years to comprise the best known way to reduce variation from processes and products, and, as a result, drive customer satisfaction.

But have you seen the Six Sigma Body of Knowledge? My own Six Sigma training involved 40 hours in the classroom over 12 weeks, 125 hours of online training and more than 100 hours of self-directed study and project work. How many of us have that extra 265+ hours to become certified? It took many weeknights and weekends as I immersed myself in ANOVA and Design of Experiments, Statistical Process Control, Quality Function Deployment, Failure Mode Effects Analysis, probability theory and hypothesis testing. By the time the exam came around I was a basket case, dreaming of Goodness-of-Fit tests and fractional factorials. There is an intense commitment required for any single person to undertake the level of study required to embrace the entirety of the Six Sigma BOK. Multiply that singular effort by a department full of staff, and you get controlled chaos at best, anarchy at worst.

In reality we’ll most likely use just a part of the BOK in our daily work. As a management consultant working exclusively in the insurance industry, I find little use for the repeatability and reproducibility studies used to determine the precision and accuracy of gauges. Nor are the Mohs hardness scale, optical comparators or eddy current testing likely to find their way into my consultant’s bag of tricks. The point? A better approach to teaching process improvement skills is to start small, with a few big-picture ideas, and then drill down into ever-more complex techniques until the desired results are attainable. Throwing everything at staff all at once, in some sort of one-size-fits-all approach to skills development is bad form. Further, by doing so you’ll see many pairs of eyes rolling as a once-familiar grade school mantra begins to resurface: “When are we ever going to use this...?”

Outsourcing Insurance Operations

2007-03-01T14:25:00.001-08:00

No doubt you’re well aware of an increasing trend to re-deploy certain insurance operations using outsourcing vendors. Customer support functions, including claims handling, general policy inquiries and many back office processes are being relegated to these service providers, allowing insurers to focus on what they do best: create new products, market them and drive new premium. The evolution of (and consequent cost reductions afforded by) telecommunications and the increasing sophistication of supply-chain management has made it far easier for a company to implement an outsourcing strategy – regardless of whether the provider is in Bayonne or Bangalore. This “first generation” outsourcing has been going on for many, many years, though it only recently gained widespread attention as jobs began shifting overseas. The point of this article is not to advocate offshoring, rather to provide some insight on new outsourcing models that mark the continuing progress of supply chain management, all facilitated by better, faster and cheaper communications and compounded by the experiences of years gone by.

That next generation of outsourcing – the “second generation” – encroaches on more highly-skilled domains, and, as such, is not without its critics. However, the economies an insurance company can derive by intelligently supplementing existing internal operations with a vendor who operates with greater efficiency surely validates the strategy – especially in an industry where small gains in net margin amount to substantially increased income.

Take for example the state filings process. Traditionally an internal function, over the past several years more insurers have begun realizing that professional service firms focused exclusively on managing the filing process for multiple insurers simply have evolved better procedures, greater efficiencies and, as a result, more cost-effective operations. Further, the market cycles that betray the insurance industry are more easily weathered, as the inevitable force reductions that accompany softening markets can be addressed simply by scaling back the outsourcing vendor’s services.

Product research is another great example. Imagine the tedium of collecting rate filings from fifty states, digitizing and indexing them for easy access and archiving them all in a massive searchable database. Better, access an existing database from a vendor who manages the continuous updating and maintenance and provides access on a pay-per-use basis.

Finally, there’s technology selection. The process of identifying the appropriate vendor for a major systems overhaul is daunting. The selection process alone can take a year or more; implementation can take several years more. Between the requests for information, requests for proposal, product demonstrations, requirements gathering, project management, training and ongoing support, systems implementations – especially those for critical processes like policy issuance or claims handling – weigh heavily on an organization. Bringing in a firm that has deep knowledge of leading vendors’ systems and the processes they enable can shave months or years from the process.

Outsourcing insurance operations support can help insurers focus on what they do best, concentrating their efforts on the premium generation and customer-facing processes that separate competitors. Outsourcing makes sense; outsourcing judiciously, with an understanding of those areas most suitable for it, makes profit.

That Sound!

2007-02-19T17:02:00.000-08:00

For those of you who are fans of old movies, few are as well done as The Glenn Miller Story (1953) with James Stewart and June Allyson. Not only are Louis Armstrong and Gene Krupa featured, there are some great examples to follow. Yeah, yeah, what does this have to do with business process management? I suppose my curse is seeing the relevance of BPM in just about everything. So I’ll elucidate:

First off, Glenn (played by Stewart) sets an objective and goes for it. This is perhaps best exemplified by a favorite scene of mine, a scene in which, after two years of no contact, he calls up a former flame (Helen Berger, played by Allyson) in Denver and asks her to meet him in New York after getting a steady job for the first time. “But Glenn, it’s been two years! I’m engaged” protests Helen. These words would make most men slink away, humiliated. Not Miller. As legend has it, and as the movie aptly portrays, his response is, “Nonsense! Now there’s a train leaving Denver...”

Wow! Here is a man committed. Nothing was going to stop him and the realization of his goal. Helen, of course, showed up in New York three days later, on the very train Miller suggested, with Glenn chivalrously waiting to greet her trackside at Grand Central. He envisioned. He planned. He executed. And this is just the setup.

His music was legendary. Different. His band had a unique sound, a differentiating quality not known before he invented it. As the story goes, that unique quality – that sound – was something for which he searched for years. He knew it was there. He knew there had to be something unique about his offering, lest he be relegated to the heap of also-rans playing ballrooms and dime dances. He didn’t know exactly what it was, he couldn’t precisely articulate it, but he knew he had to find That Sound.

Years of struggle, of promises and pawnshops, of dance band sideman jobs and pit orchestra engagements came to a climax one day during a rehearsal for a new opening engagement in Boston. His lead trumpet – the traditional lead instrument in a 1940s dance band – smacked his mouthpiece into his lip and cut it wide open. Opening night at a new venue, and his star player was incapacitated. Now what?

Turns out it was a happy accident. With a sudden flash of insight – and to the consternation and utter confusion of everyone around him – Glenn had one of the band’s clarinetists take the lead part. And there it was. That sound. The curtain was drawn. The music began. And the crowd roared.

The pursuit of a vision, unabated, that thoroughly differentiated one band from the others, much the same way innovative operations differentiate one business process from all the others. What makes greatness is the relentless pursuit of a vision. All others be damned!

Sixty-five years later, his music is still some of the most recognizable in the world. Wouldn’t it be something if our business leaders, too, so relentlessly pursued their visions? If they were so consumed with a passion for what they believed was a better way, a superior product or a greater value that they would devote their lives to its fruition? That’s the Vision Thing so desperately lacking from so many of today’s enterprises. That’s the Vision Thing that drives business process management and the very idea of continuous improvement that underlies it. General Electric. Microsoft. Google. Southwest Airlines. Progressive Insurance. You can count the passionate ones on one or two hands. Want a real competitive advantage? Get inspired!

Meeting for the Sake of Meeting

2007-02-08T11:16:00.001-08:00

How many of us suffer through weekly status meetings, update meetings, meetings about what meetings we should be having? A perfect example of confusing activity with accomplishment is the meeting for meeting’s sake. What I mean by that (if it’s not already clear) is when a scheduled meeting is held simply because it’s a regularly scheduled meeting. These can be colossal wastes of time and talent. A related result of these meetings for participants is a feeling of being busy, of working when, in fact, no real work is getting done. Activity without accomplishment.

Status meetings in particular are dinosaurs, since today’s management information and business intelligence platforms provide great visibility and negate the need for many of these inane get-togethers. BPM systems provide incredibly granular information about specific activities, individual performance, process outputs, etc. The foundations of BPM (the discipline, not the technology) call for clearly established objectives, uniform workflow, extensive documentation – all components of any well-managed organization. The vision is established, the methodology is instilled, the marching orders are given and the troops go to work. The application of management best practices is anathema to meeting after meeting after meeting to establish policies or get status reports.

To be sure, sometimes we need to have meetings, and sometimes we need to have many. I’ve shepherded wayward projects by calling for sunrise (first thing in the morning) and sunset (last thing at night) meetings to establish with a given team what will be accomplished today, and what was accomplished today. These meetings, however, are designed to be temporary interventions to get derailed projects back on track.

Look at your calendar and see how many pre-scheduled meetings there are. Think about what really gets accomplished at each of them. Think about how attending these meetings takes you out of flow, as your day-to-day activities are interrupted and getting back into the groove wastes another hour of your day.

To be a real competitor, the principles of good management must rule. Meetings for the sake of meeting suck the life right out of your workforce and your business. Meet when you must, set an agenda, distribute to all participants at least an hour before the meeting, provide some sort of value or learning and always, always, have take aways for everyone at the table.

Culture Counts

2007-01-30T16:22:00.000-08:00

I’ve written a little bit on this in the past, though recent experience causes me to revisit the topic. When working with clients, the part of my introductory presentation at which executives’ eyes inevitably glaze over is when I begin to speak about culture. “Who cares about culture – we need to fix our processes!” is the non-verbal transmission I tend to get from their often puzzled looks.

Culture has everything to do with process performance. It’s the glue that binds people in their pursuit of common goals. Talented people who are bad cultural fits with an organization are more disruptive than productive. Mediocre performers who are overtly aligned with the culture in which they work are worth investing in. The difficult question company leadership must ask and answer with brutal honesty when evaluating employees and their impact on process performance is “Are you with us or not?” If not, politely show them the door.

That said, cultures come in all shapes and sizes, and are popularly and conveniently described as being characterized by collaboration, cultivation, control or competence. To be sure, no single organization will fit neatly into one category, however it is more often than not the case that an organization is demonstrably dominant in one over the others.

A collaboration culture can be described by the terms synergy, equality, unity and involvement. Participants in a collaboration culture are driven by the need for affiliation.

A cultivation culture can be described by the terms growth, development, commitment, creativity, purpose and subjectivity. Participants are driven by a need to realize potential.

A control culture is best described by the terms certainty, systemization, objectivity, stability, standardization and predictability. Participants are driven by the need for power and security.

A competence culture exhibits professionalism, meritocracy, continuous improvement, accuracy and autonomy. Its participants are driven by the need for achievement.

Understanding the dominant culture type of an organization is a critical underpinning of any process improvement initiative. Just as individual motivations need to be understood in order to reinforce good work habits, the culture in which workers operate needs to be understood as it bears significant influence over the means by which they are collectively motivated to fulfill the larger goals of the organization.

Food Foibles

2007-01-21T10:27:00.000-08:00

The deli display case was overstuffed with the day’s bounty, ready for the masses to descend as lunchtime approached: Grilled salmon on focaccia, roasted peppers, gourmet meatloaf – a veritable feast for the eyes. The bread bins, off to the right in the corner, were well-stocked with just about every type of bread and roll you could imagine. My usual request, a tuna on white bread with tomato, wouldn’t do today. The delicacies beckoned, and so I thought I’d go for the grilled chicken breast, beautifully stacked on a plate in the display case, dripping with barbeque sauce. I dutifully took a number from the dispenser and waited impatiently to give the woman behind the counter my order.

“Number six!” came the call, and like some lucky lottery winner I waved my ticket in the air to indicate that I was next. “I’ll have the barbequed chicken breast on a roll with tomato, please,” I declared, mouth watering. “And can you heat up the chicken, please?”

“Excuse me?” asked the woman behind the counter quizzically, a departure from her usual welcoming wave and big smile. “The chicken, here,” I said, motioning toward the stack of chicken breasts labeled $3.99 each. “I’ll have one of those on a poppy seed roll with tomato, please.”

“I don’t think we can do that, sir. Let me ask,” said the woman, heading through the double swinging doors to the kitchen as she spoke, quickly returning with three of her colleagues. “This gentleman here, he wants the chicken breasts, on a roll. Can we do that?” she asked, furrowing her brow as she cocked her head toward her apparent supervisor and the two other counterpersons who had caucused to discuss my lunch. “I don’t think so,” said the supervisor, who then asked me, somewhat incredulously, “What exactly do you want?”

“The chicken breasts, the barbequed ones, here,” I said, pointing. “On a roll with tomato.”

“Oh, yeah, we can’t do that, sir. You’ll have to buy the chicken breast and pay for a sandwich. So it’s $3.99 for the chicken breast, and $5.99 for a sandwich.”

“So it’ll cost me ten dollars for the sandwich I want? Why don’t I just buy a roll for fifty cents, and a chicken breast for $3.99, then?”

“Well, you could do that, too. That’s your choice,” replied the supervisor.

“But you won’t make it for me?” I asked, in as nice a way as possible. “No sir, not unless you want to pay for the chicken and a sandwich.”

“OK, thanks,” I said, now running late, having spent the past ten minutes negotiating.

I had the lady behind the counter wrap me up one barbequed chicken cutlet, walked over to the bread bin, grabbed a roll and made my way to the checkout. Total, $4.49.

What’s the process management lesson here?

First off, had they sold me the sandwich in the first place, I would have been out of there in five minutes instead of fifteen. Several workers were sidetracked for several minutes trying to figure out how to placate me but were unable to. Lots of wasted time.

Second, the sandwich would have cost $5.99, which I would have gladly paid. Instead, the store got just $4.49 from me – 25% less than they could have easily realized. Lost revenue.

Third, the woman behind the counter was not properly empowered to make a simple decision, and as a result had to escalate the “issue” to a supervisor who conferred with several other workers who, to the chagrin of others waiting during this busy lunch period, were unable to perform any other work. Bottleneck.

Finally, they failed to satisfy their customer. My needs were secondary to the “rules,” which in this case were unnecessarily constraining, and as such I’ll think twice about going back there. Poor customer service.

Wasted time (i.e., added expense), lost revenue, a process bottleneck and a dissatisfied customer, all the result of a poor process. Multiply that by the number of customers similarly frustrated by similar "issues" during any given day, week, month, year and well, you get the idea.

I headed back to the office, threw the chicken into the microwave in the break room, placed it on the roll, and got back to work. And it was delicious.

The Value of Horizontal Expertise

2007-01-16T15:24:00.000-08:00

There seems to be an increasing emphasis on the importance of specialists – those people who’ve toiled for years in a particular industry, who know it inside and out, who have deep domain knowledge in some very specific areas of operations. Vertical expertise rules, experts abound. Technological advances only add fuel to the fire, as new applications require ever-greater levels of learning and understanding as they perform increasingly specific functions. In the insurance world, actuaries develop pricing models, underwriters determine who’s insurable, agents drive premium dollars, claims adjusters evaluate losses and all of these functions work together like some megalithic machine, often to the chagrin of the insured. Of course, each “discipline” has its evangelists, and there’s an ongoing fight for dominance, each “expert” convinced that his or her area of expertise is the single most critical link in the insurance value chain. Therein lies the benefit – and challenge – of intensive horizontal expertise; the pieces are best put together through the work of a generalist.

By that I mean someone with a solid enough understanding of the various disciplines that comprise insurance operations (i.e., ”breadth of knowledge”), but a much deeper understanding of (a) how to extract efficiencies from each area of operations; (b) how to manage the lateral organization, or the “white space” on the org chart; and (c) how to get all of those pieces functioning well together. This horizontal expertise is often overlooked, yet it’s the manager who’s charged with these coordinating efforts who is most like the orchestra conductor, a leader reading from a common score that presents the individual parts of the various players that, taken individually, might amount to nothing more than a few sour notes played in odd time.

To be sure, the successful orchestra conductor has almost always mastered at least one instrument and usually has a grasp of – and often the ability to play well – many others. Likewise, the effective executive who assembles and manages groups of individuals engaged in disparate but related functions has often excelled in one area, but understands well all of the working parts of the organization, from sales and marketing, to product development, operations, and administration – not to mention the finer points of motivation, team building and many other “soft” skills.

During his tenure as CEO of GE, Jack Welch was the quintessential generalist. He was masterful in his management of not only the multiple functions that make up an organization, but of multiple lines of business in far-flung regions of the world, from chemicals to jet engines, from television sets to refrigerators, in the Americas, in Europe, in Asia. Welch earned a doctorate in chemical engineering, but his real genius came through when he was given the opportunity to conduct the orchestra. His vertical expertise earned him about $80,000 a year in 2007 dollars; his horizontal expertise made him a billionaire.

The Culture Code

2007-01-10T15:41:00.000-08:00

I recently read with interest a new book, The Culture Code, by Clotaire Rapaille. Dr. Rapaille, a cultural anthropolgist, is at least partly responsible for several major marketing breakthroughs, helping to rejuvenate struggling product lines with innovative marketing angles. His approach to discovering the tastes of a particular market segment is most unusual. Rather than utilizing the typical “focus group” approach – where samples of prospective consumers review and opine on their experiences with or impressions of a particular product – Rapaille applies some real science. He uses “triune brain theory” – where study participants are led through three one-hour sessions, each dealing with a different “third” of the brain. The first session deals with purely logical impressions, and thus involves the cerebral cortex. Impressions on this level are generally practical, though, according to Dr. Rapaille, not by themselves good predictors of a product’s success. The next hour-long session deals with the emotions attached to the product or service, involving the brain’s limbic system. Impressions using techniques to access this part of the brain are apparently poor predictors as well. Rather, it’s the third part of the brain, the “reptilian” brain, that governs instincts imprinted (usually) at a very young age and provides what Rapaille terms the “code” for a particular product or service. Uncover that code and – voila! – you have the key to marketing a product or service. One example given was the marketing of Jeep in America. Working with a study group, his discovered the “code” for Jeep to Americans was “horse” – as there was a strong instinctive association between Jeeps and riding free in the West. One small modification to the Jeep – changing the square headlights to round (since horses have round eyes) – and product sales soared. Sounds crazy. But 50 of the Fortune 100 rely heavily on this man (and pay him handsomely) to help them to identify the “hot buttons” that drive sales. So, you must be thinking, what does this have to do with business process management?

Rapaille’s approach is simply a sophisticated change management technique. When dealing with consumer products, by unlocking the “code,” product modifications can be made to reflect that code and, more often than not, product sales respond favorably; consumers react (i.e., change their behavior) by purchasing the product. Similarly, since it's incumbent upon anyone undertaking a BPM initiative to foster change among those who are asked to participate, uncovering the key to their baser motivations - the "code" for "selling" a particular change initiative - should prove useful. Why? Years-long work habits (read: imprints) often have to be undone. New technologies have to be mastered. Roles are frequently re-assigned and responsibilities shift as policies have to be re-written to reflect the new approach to work. The central challenge is selling the idea to those who must embrace the new way.

Applying Rapaille’s logic (and experience), one would do well to try to discover the “code” that amplifies process participants’ enthusiasm for embracing change. Traditional approaches to change management range from enticement (“if you do this you’ll be rewarded”) to threat (“if you don’t do this you’ll be fired”). The “three brain” approach of Dr. Rapaille provides a subtlety that eliminates the need to continually escalate change efforts and obviates the need for finesse in understanding those things that truly motivate a workforce.

Where to begin? The logical (“we’ll save money using this approach and you’ll get a bigger bonus”) and emotional arguments (“I know you’re good enough to do this and it’ll be a real feather in your cap when you get it done”) are typical but do often seem to fall short. Perhaps adding a third component, an instinctive one (promoting survival, freedom, connectedness, significance, etc.) is what will ultimately provide the key to consistently successful change initiatives.

BPM and Root Cause Analysis

2007-01-07T20:31:00.000-08:00

Those of you familiar with root cause analysis – one the many tools in the Six Sigma arsenal – know about “4Ms and an E.” The four Ms, Manpower, Machine, Methods and Metrics, and the E – Environment – represent the “bones” on the “fish” when using the principal tool of root cause analysis, the “fishbone” or Ishikawa diagram.

A Traditional Fishbone or Ishikawa Diagram Used for Root Cause Analysis

Rather than be overwhelmed by the many possible sources of error, slowness, cost overruns or other problems in a process, root cause analysis helps us to home in on specific areas of concern by placing possible problems into manageable categories. Each major “bone” of the fish can then be further broken down into more specific categories until, at last, the root cause(s) of a particular problem are discovered.

The design of Perr&Knight’s BPM process context fits nicely into this model, as each of the process influences (see my post from November 7, 2006, The Big Picture for more information) map perfectly with the major bones of the “fish”:

Methods maps to Workflow
Machine maps to Systems
Metrics maps to Metrics
Manpower maps to Personnel
Environment maps to Environment

The last “bone” of the fish in the BPM model, Governance, is simply an additional source to be analyzed.

The Perr&Knight BPM Process Context Mapped to a Root Cause Diagram

To give you an idea of the power of this type of analysis, we can deal with each influence in turn:

Workflow issues can be a result of too many handoffs, too much rework, redundancy, excessive delays or other non-value-adding activities.
Systems may be outdated, non-user-friendly or not integrated.
Metrics may be absent entirely, conflicting, misaligned or not properly communicated.
Governance (i.e., policies) might be arbitrary, constraining, inflexible or archaic.
Personnel might suffer from a lack of proper hiring techniques, training or compensation programs.
Environment might impede process effectiveness and efficiency due to economic factors, market factors, workspace (physical facilities) or the organizational structure.

Naturally, these do not represent an exhaustive list of possible process issues when examining a process. However, by organizing the analysis in this manner, it’s evident that getting to the bottom of the issues most impacting a process is far more structured, and the probability of uncovering the root causes far greater.

The Framework Dilemma

2007-01-03T18:43:00.000-08:00

Reading the literature on process management and performance improvement, one discovers a plethora of frameworks that purport to be the best known way to approach a process improvement initiative. The rigor of Six Sigma’s ubiquitous Define, Measure, Analyze, Improve, Control framework is complemented by the Define, Measure, Analyze, Design, Validate framework of DFSS (Design for Six Sigma). The good folks at TouchPoint have us traverse a rigorous set of phases called Organization Strategy, Process Architecture, Launch Pad, Understand, Innovate, People, Develop, Implement, Realize Value and Sustainable Performance. [1] The Business Process Management Group has their 8 Omega Framework (Discovery, Analysis, Design, Validate, Integrate, Implement, Control, Improve) and Rummler-Brache has given us Assess, Define, Develop, Deploy and Sustain. Not to be overlooked is the entirely relevant McKinsey 7S framework (Strategy, Structure, Systems, Skills, Shared Values, Staff and Style).

And that’s just a taste! Perr&Knight, of course, offers its own methodology (which I promote heavily) as do countless other consultancies. Is there a best method?

The answer: yes, there is! All of these frameworks have an underlying great grandfather in the work of W. Edwards Deming. His Plan, Do, Check, Act [2] methodology provided the foundation for all of these frameworks. Each new manifestation of this simple idea (we need to first plan, then implement, then evaluate, and then take action based on that evaluation) is the core principle underlying any process improvement initiative. A good BPM practitioner will understand the history – the source of the knowledge and the path of its evolution. History provides a foundation for genuine understanding, and the ability to trace the path of a discipline to its roots is the mark of thoroughness and expertise. Knowing the basic, underlying principles helps cut through the clutter as the critical idea, lost in a cacophony of competing frameworks, leaps out at you, regardless of the specific framework you’re determined to embrace.
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[1] Their recent book, Business Process Management: Practical Guidelines to Successful Implementations authored by Lead Consultants John Jeston and Johan Nelis is an impressive body of work, and I’d say essential reading for anyone truly interested in BPM.

[2] While Deming is widely credited with the PDCA cycle, he actually called it “PDSA” for Plan, Do, Study, Act. While this came to be known as the “Deming Cycle,” it was actually a derivative of Walter Shewhart’s Plan, Do, See framework from the 1920s.

Tech Must Not Rule, Part 2

2006-12-29T06:23:00.000-08:00

Further to my last post, I thought I’d illustrate the inadequacy of a technology-driven approach to BPM initiatives. I recently read a “process selection methodology” provided by a leading BPMS vendor. The methodology provides a step-by-step guide for choosing candidate processes for BPM.

The first aspect of the methodology that struck me as wrongheaded was that a process lacking structure – i.e., an ad hoc process that lacked rules – was not a good candidate for BPM. In my opinion, a lack of structure is a major reason for a BPM initiative. Ad hoc processes should be documented and codified such that they become repeatable and reliable. This was clearly a technologist’s point of view – a technologist who is probably often frustrated by attempts to apply technologies to solve problems before the problems have been addressed using the appropriate management skills.

The next aspect of the methodology that was troublesome was the notion that “BPM is not suitable for concurrent collaboration.” This is a terrible premise. Generally speaking, work takes place individually but within groups (pooled interdependence), serially (sequential interdependence), or back and forth between individuals and teams (reciprocal interdependence). Pooled interdependence is coordinated through the application of standards. Sequential interdependence is coordinated using a combination of standards and rules. Reciprocal interdependence is coordinated through a combination of standards, rules and mutual adjustment. In the eyes of this vendor, only sequential interdependence can be dealt with effectively using BPM? That idea is simply a non-starter. It’s tantamount to saying a car works better going forward, so car transmissions should be built without reverse gears. To be effective, BPM must address all types of work.

Another questionable idea promoted by this vendor: that processes that include participants who are unwilling (i.e., stubborn) or unable (i.e., unskilled) to change in order to improve the process are not good candidates for BPM. In fact, process improvement is always accompanied by change, and change management skills are a critical ingredient in any BPM initiative. Again, I see a technologist’s viewpoint – someone uninitiated in the ways of motivation, management and leadership who would love – in some utopian technosphere – to be able to add the magic dust of BPM and have everyone fall in line due to the technology’s obvious superiority. This is precisely why so many technical projects fail.

And the hits keep on coming. Next was the notion that processes that have poorly defined roles and responsibilities for participants were not good candidates for BPM. It is, in fact, a main objective of BPM to properly define roles and responsibilities, hire appropriately, provide adequate training and reward the participants in the process for acting in a manner that reflects those roles and responsibilities.

The last straw (as if they’re weren’t enough already) was the idea that the failure of automation to reduce cycle times, costs, quality, etc. reduces the viability of a process for inclusion in a BPM initiative. BPM is not automation. Automation is but one method of improving process efficiency, effectiveness and agility. The process is run by people, and as such the inadequacy of automation in improving a process should never deter a BPM initiative.

All of these reasons support the argument that technologists must not rule the day when it comes to BPM. It is the perfect world sought by many in the technical community – while a noble pursuit – that is so elusive, that establishes unrealistic expectations and underlies many of the IT failures we’ve seen through the years. BPM is a management discipline, a discipline that embodies all of the many tools and practices that define excellence in workflow, measurement, analysis, governance, human resources, organizational structure, management, leadership and yes, technology.

Technology Must Not Rule

2006-12-28T09:57:00.000-08:00

Much of the recent literature on BPM centers on the enabling technology. A wonderful thing, this BPM technology, but not the point of Business Process Management per se; BPM is not BPM technology.

My clients want an easily implemented, cost-effective way to move work through a process, including the forms, related documents, decisions, approvals and all associated tasks for all involved. Sometimes a BPMS provides the solution: Log in, see what’s on today’s to do list, see what’s coming up, perform the work, fill out the forms, automatically notify the interested parties that my work (at a particular process step) is complete and report on it. But the Business Process Management part of that set of activities is technology-neutral. Technology enables, but even the best technology absent good management leads to failure. As such, genuine Business Process Management expertise must precede BPM technology – the foundations of good process design, execution and reporting must be in place prior to introducing BPM technology (or ECM, ERP, SOA or just about any technology for that matter).

This approach promotes the strong cooperation needed between the business user and the technical implementer for this or any other technology to propagate. The worst-case fate of BPM technology is that it becomes the glue between a chaotic ensemble of poorly functioning components in order to squeeze a modicum of efficiency out of old investments, and then gets relegated to the trash heap of promising applications that never caught on. No disrespect intended at all (BPM technology is serious genius in action), but if BPM is dominated by a technical elite, the ultimate community of end-users (i.e., business users) will balk. The business user and professional manager must come to the fore and participate in the debate.

“We must make things as simple as possible, not simpler,” said Einstein. The idea is a brilliant one; let’s maintain the elegance of the invention by preserving the beauty of its simplicity, so we businesspeople can easily communicate to our staffs the benefits of enduring the discomfort that always accompanies changing the way they approach their work – no matter how sophisticated the technology.

The Standardization Paradox

2006-12-22T15:37:00.000-08:00

Like me, you've no doubt read countless documents, white papers, books, articles, product briefs, blogs and message boards that tout the promise of BPM. Surely, there's a race for dominance, a contest of wills between competing technologies and standards and a succession of frameworks that represent a “best practice.” The challenge with all this banter is that the inevitable “winner” of this debate will only intensify the very thing BPM promises to eradicate: the need for standardization. Businesspeople like the fact that the guts of the system are hidden under the hood, they like that they can manipulate data elements in a graphical environment, that they can draw their process maps with little stick figures and email icons, and really couldn’t care less what technology is driving the end result. The standard is irrelevant (to them). Or perhaps more accurately, the BPMS they happen to be using superimposes an ad hoc standard on their specific environment.

At their most fundamental level, BPMS technologies enable the knitting together of multiple, disparate systems – across activities, processes, functions, departments and organizations – such that a logical workflow can be managed without excessive manual handoffs into and out of all those separate environments. The wonder inherent in this is that the technology is not only perfectly suited, but consciously designed to be standards-agnostic. A “standard” with which a collection of systems has to comply wrecks the obvious benefit of a BPMS. The value would evaporate, as the formerly disparate systems are readily integrated. Maybe that's where this is all headed. Maybe that's good. (Maybe that's what SOA is all about?)

But there’s another consequence of the adoption of a standard: The need for standardization is rooted deeply in the psyches (and egos) of the technical elite. Their work is astounding – the bodies of knowledge to which they contribute, the codification of ideas to create comprehensive methodologies – is to be applauded. We (business and tech folk alike) are, taken together, one communal brain assembling a massive compendium of knowledge and information, based on the collective experience of thousands of professionals who together represent perhaps tens of millions of hours of learning and work experience. The output is impressive, useful and necessary. But should one idea dominate? If all process maps had to be BPMN compliant and translated into BPEL, would the world really be a better place? Whatever happened to UML? BPML? I know, BPML is so 2004.

The paradoxical point of all this is that it's the competition for being the standard-bearer that accelerates the growth of the discipline, while the attainment of a bona fide standard may mark the inevitable slowing of progress. Standards typically prevail locally - within an industry or geographical area - and/or ephemerally - until some disruptive technology comes along. To achieve their aim, BPMS standards need only prevail organizationally - between and among the stakeholders of a given process within a given organization.

Innovation vs. Leadership

2006-12-18T16:21:00.000-08:00

You’ve no doubt read widely about the importance of innovation in gaining strategic advantage, that the advent of “disruptive technologies” is what creates giants of industry. Our BPM practice philosophy at Perr&Knight, however, is based on the idea that competitive advantage is best achieved by adopting a continuous improvement framework – a framework that does not require the innovative breakthroughs that characterize disruptive technologies to be effective.

Surely, "disruptive" innovations are the mark of many strong competitors. But these innovations, over time, become widely adopted, and the competitive advantage they once provided erodes. And so must begin another cycle, and another innovation to maintain the competitive advantage. The problem is that true breakthroughs are few and far between, require much trial and error and are insatiable consumers of research and development funds.

Continuous improvement, driven by thought leadership, is what makes great competitors.

The good news is that the cycle works equally well with a far more mundane approach, where operational excellence is a product of a discipline, consistently applied – and of thought leadership – rather than reliance on multiple, innovative, strategic breakthroughs. While breakthroughs can be wonderful catapults, it is in the maintenance of market leadership – not innovativeness – on which competitors must focus.

The world is riddled with stories of innovative companies that lost their leadership positions. IBM, Sony, Apple – all delivered innovative, breakthrough products (the PC, Betamax, the Macintosh) and enjoyed the number one spot only to see it evaporate in an onslaught of aggressive competition. All three have regained their composure, though each pursued a rebirth using very different strategies: IBM had to completely remake itself and shift its focus to professional services and acquisitions; Sony became a mark of quality rather than genuine innovation; and Apple dominated the “cool” category in computing and now virtually owns the personal audioplayer market (once dominated by the Sony Walkman) by improving upon earlier innovations. ("Breakthrough" MP3 technology used to be dominated by Creative Labs.)

Cycles of innovation and cycles of leadership certainly overlap, though it’s the commitment to continuous improvement driven by process discipline that seems to be the best marker of consistent market leadership.

Too Many Cooks?

2006-12-13T09:45:00.000-08:00

This morning I headed to the local bagel shop for my daily breakfast. This is typically a frustrating affair, as the toasted bagel and orange juice I order often takes five, ten or even fifteen minutes to be delivered. Worse, I noticed the variance in delivery times of my order had absolutely nothing to do with the volume of customers in the store at any given time, and there were usually five people “working” behind the counter – a chaotic ensemble of poorly trained, ill-managed, customer-averse ne’er do wells. IMHO.

But today was different. Today, there were three workers in the entire store, and no obvious reduction in the number of customers. I walked up to the counter and within seconds was asked for my order. I shuffled to the left toward the register, and right on queue came a second worker who grabbed me an orange juice and rang up my order. Markedly absent was the usual slip of paper that included my order, formerly filled out by one of the workers and handed to me for presentation to the cashier. Instead, the order was taken and the work begun as soon as I finished my request. I was out of there, toasted bagel and all, in less than three minutes. Same number of customers, fewer workers, no paperwork, less waiting time. Why?

Today’s experience illustrated the benefits of good management, and the folly of knee-jerk attempts to fix broken processes. Many times throughout my career I’ve seen ill-prepared managers try to deal with volume increases by adding staff, rather than taking a hard look at the process and the training, motivation and workflow associated with it. The “throw more bodies at the problem” approach always fails: overhead is increased and the process actually slows down. Yet, this is the way most inexperienced or under-skilled managers deal with expansion. The paperwork (i.e., order slip), no longer needed, had undoubtedly been added previously to better differentiate the work among so many hands.

The next time you’re in a similar situation, take note of the process the people are following. There’s a lot information there; unfortunately, many times you get a lesson in what not to do. Today’s experience was heartening – let’s hope the good experience continues, if only for the sake of my impatient stomach.

If You Want Something Done...

2006-12-11T16:45:00.000-08:00

Back in junior high and high school, I had the good fortune of having at least one remarkable teacher – everyone should be so lucky. To say Andy Blackett was eccentric is an understatement. He’d regale his students with fantastic stories of foreign wars and exotic wives, wore his pants two inches too short and became insanely animated when he taught, and so was able to generate enthusiasm among his students over the most mundane of subjects. His trademark clear-heeled shoes and West Indian lilt kept everyone riveted during class, his excitement always palpable. He loved what he did.

Way back in the late 70s I was a sophomore struggling to adjust to life at the high school while working roughly 40 hours per week at a bakery. The sense of overwhelm was incredible: the household chores, the homework assignments, the extra-curricular activities, the attempts at a social life and the full-time job were incredibly taxing. How could I possibly do all that, have a successful high school career, get into college and get ahead in life? Instinctively, I turned to Mr. Blackett.

He provided me with my very first “Master Plan” – six sheets of yellow, legal-sized paper taped together to form a huge poster of sorts, on which I listed all the days of the week, my school, after-school and work commitments and every chore I had to accomplish – accompanied by these words of wisdom: “If you want something done, Mr. Berg, (yes, he’d call me Mr. Berg, even as a student), give it to a busy man.” At once I had an epiphany: Once the work is organized, there’s clarity; once there’s clarity, you can prioritize and go about getting the work done. Surely I was busy, but the work, organized in this way, melted away, and I began to excel in my schoolwork, excel in my extracurricular activities, get my chores done and work after school and on weekends to have more spending money than any of my friends. And I started to date the prettiest girl in school, having wooed her away from the captain of our high school football team with a whole lot of song lyrics and poetry. True story. The feeling of overwhelm went away, the work got done and I realized it was all in the process – the way you went about attacking those commitments and obligations had everything to do with how effective and efficient you were at fulfilling them.

Mr. Blackett died tragically more than ten years ago, a victim of amyotrophic lateral sclerosis, or Lou Gehrig’s Disease, still only in his 50s. But he died universally respected, adored and honored with just about every award and accolade with which a school teacher could be bestowed. Among his mourners were two other former students, Bob Costas and Rosie O'Donnell, who also learned powerful lessons from this great man.

Today I was reading about Vivek Paul, Wipro’s former vice chairman and CEO, and was reminded once again of Mr. Blackett’s words and the lesson that I’ve carried around for nearly thirty years. Sridhar Mitta, one of Paul’s colleagues at EnThink (a company in which Wipro had invested), was previously head of Wipro’s global R&D function, and so was intimately familiar with the company and its methods. Mitta was amazed that Paul, a busy senior executive at an extremely fast-growing company, was always at hand when needed, and had plenty of time for customers, too.

“How do you have so much time?” Mitta asked, astounded that Paul was so available, especially given that his predecessor at Wipro routinely worked 17-hour days.

Paul, the epitome of a busy man who got things done, had a quick answer which should be a lesson for us all: “It’s all in the process.”

The next time someone tells you they have no time, or they’re too busy, or swamped, or overwhelmed to get something done, you might remind them of this story, and the man that took a $150 million blip and made it a $1.9 billion global powerhouse, or the teacher that left us well before his time, yet still managed to influence generations of students, and continues to do so more than a decade after his death. And they had time.

BPM and Outsourcing

2006-12-06T16:36:00.000-08:00

A recent survey by EquaTerra [1] highlighted an important aspect of outsourcing: that most of the time, an outsourcing initiative is accompanied by a process improvement initiative.

Survey respondents fell into one of four categories:

They transformed their internal processes prior to implementing an outsourcing strategy;
They transformed their internal processes after implementing an outsourcing strategy;
They outsourced and adopted a continuous improvement framework;
They outsourced and maintained internal operations as-is.

Approaches to BPO

Not surprisingly, some 83% of respondents undertook some form of process improvement initiative along with their outsourcing strategy. Couple this with the notion that most outsourcing strategies are undertaken to save money (70% of respondents in a recent Deloitte Consulting survey) or to gain best practices (57% from the same survey), and you have an extremely compelling reason to marry any outsourcing initiative with a solid BPM effort.

Why Companies Outsource [2]

Surely, an outsourcing strategy absent a BPM effort will reduce the efficacy of the outsourcing initiative. You’ll note that many of my writings beg management to always consider the cultural aspects of the organization in which they're operating, and those with which they're collaborating when outsourcing – an aspect that’s all too often overlooked. Applying process management best practices around an outsourcing strategy provides a lethal dose of competitive curare. Those companies that execute correctly will surely claim leadership positions, if they haven’t already.
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[1] EquaTerra’s 1Q 2006 Pulse Survey

[2] Deloitte Consulting

Employees' Number One Concern: Priorities

2006-12-04T17:12:00.000-08:00

It’s that time of year again. We look back on the year and see what we’ve accomplished. Some of us have amassed proud track records over the year, some of us have been left reeling, having accomplished little. So what separates those who get things done from those who do not? And what does all this have to do with BPM?

Turns out, it has everything to do with BPM. An organization that encourages process thinking is focused on defining objectives, aligning processes with customer needs and providing rewards commensurate with each employee’s contribution. An organization that embraces BPM will find many employees happily logging their accomplishments at year end, content knowing that the work they did contributed to something larger than their own personal ambitions.

By providing a comprehensive framework for the design and documentation of critical processes, BPM eliminates the overwhelm that often accompanies less organized efforts. The paradox of a disciplined process framework is that it actually frees employees up to work creatively toward well-defined pursuits. It enables an organization to be less bureaucratic due to the very nature of the discipline it involves. It’s analogous to the classically trained rock musician that cranks out hit after hit. The basics are there and followed religiously; the good music is but a creative layering atop known “best practices” – whether chord progressions or workflow, it really doesn’t matter much. The resulting good work is purely a function of the solid foundational principles, consistently applied and continuously-improved.

The foundations of BPM make clear employee priorities, thus providing a perfect canvas on which to express individual talents in a manner consistent with the larger goals of the organization. How can you use BPM to get your own employees’ priorities well-defined and widely communicated? Ask me.

Structure Follows Strategy?

2006-11-29T11:15:00.000-08:00

Those three simple title words have sparked much debate over many years, as the converse, the idea that strategy follows structure, has been promoted as valid as well. So which is it?

To be sure, the structure of an organization influences the efficiency, effectiveness and agility of its operations. Too many levels to the hierarchy and the good ideas of the folks in the trenches – who can with authority opine on the processes in which they’re engaged – are muffled, if not entirely lost. Too flat an organization, and you have controlled chaos at best, anarchy at worst. (Note that structure is part of the organizational context in which we view processes, a component of “environment”.)

An organization with multiple, highly autonomous functional divisions might have a tough time bringing together multi-discipline project teams for new product launches. On the other hand, an organization that adopts a pure matrix form, where ad hoc teams are assembled for specific projects, might be ill-suited for the demands of highly repetitive processes delivering uniform outputs. The divisionalized structure may have come about as a result of the need to have highly specialized functional units that rarely collaborate (e.g., a property & casualty division, a life and health division, etc.), and best characterizes larger organizations that have, with time, required self-contained divisions to address the unique needs of a certain customer base. The matrix form might come about as a matter of necessity to facilitate growth in a younger, smaller organization, one that is perhaps more focused than its divisionalized counterpart (e.g., personal auto insurance only) and working to create a niche for itself. These cases support the notion that, indeed, structure follows strategy.

But another perspective turns this idea on its head: the notion that strategy follows structure, too, is valid, when you contemplate those organizations that take “inventory” of their available resources and respond by introducing new products or breaking into new markets as a consequence of such availability, and the structure in which they operate. In this instance, strategy follows structure.

So which is correct? What factors influence the “direction” of the title statement?

Process-Centered vs. Process Thinking

2006-11-20T12:43:00.000-08:00

There’s naturally a ton of hype surrounding BPM, and I’m proud to be among its staunchest promoters both within my organization and among our clientele. There’s seems to be a disconnect, however, regarding what the implications are for the adoption of BPM, and I think it’s important to draw a distinction here. The greatest pushback against BPM initiatives is the idea that its adoption requires wholesale changes in every aspect of the organization. But change, to be effective, should take place incrementally, with a process-focus being embraced over time as a series of small successes add up to validate the BPM approach. This evolution requires staff to become process thinkers, seeing processes in their organizational context and paying attention to the influences that make or break excellent processes. (Excellent processes being those that are efficient, effective and agile.) (See, for example, my entry, The Big Picture from November 7, 2006.) This is purely an educational endeavor, and the establishment of well-defined and widely communicated organizational goals, uniform process frameworks and aligned compensation creates the foundation for an organization of process thinkers.

A process-centered organization, however, is an entirely different thing. A process-centered organization has organized around processes; that is, processes have primacy in the design of the organization. This means that process owners have much authority, responsibility and accountability for the conduct and output of the processes they supervise. Truly an organizational form, a process-centered organization may not, in fact, be the best choice for organizational design. Other design choices, including organizing around customers (e.g., large corporate customers, individual consumers), geography (e.g., Northeast, Southwest, etc.), functions (e.g., sales, production, research, finance, etc.), products and services (e.g., consumer products, commercial products, etc.), or projects (i.e., a matrix structure) are just as valid as organizing around processes. The choice of organizational design, however, depends heavily on a number of factors, including the industry in which the organization operates, the type (professional, skilled, semi-skilled) and number (small, large, huge) of employees, the age of the organization, the markets it serves, and other factors. To be sure, a process-centered organization will encourage process thinking, however, any one of the other generic organizational designs stands to benefit greatly from a coterie of employees who are process thinkers as well.

The Hard Work of Excellence

2006-11-16T21:58:00.000-08:00

If I have one personal mandate, one overarching goal rooted deeply in a personal philosophy, it’s to make this BPM stuff manageable, understandable and accessible to the decision makers – those C-level executives – who are wrestling with how and why to take on a BPM initiative. The average executive who dares delve into the world of business process management is bound to be overwhelmed. The preponderance of professional associations, vendors, consultancies and “standards” is enough to make anyone’s head spin. The poor soul who’s charged with figuring out the best way to attack a BPM initiative in addition to their day job is in for a rude awakening; the tangle of choices is made more exasperating by having to suffer the wrath of all those in the organization who are “experts” at their own work processes and reticent to change anything. Overwhelm. Change resistance. Why bother?

There’s a simple answer: because this stuff works. The benefits are truly astonishing. The success rates, in terms of sheer ROI, have been mind-boggling. But the major reason is that some forward-looking companies are taking the time to learn, to embrace the new, to accept the inevitable change that accompanies any wholesale improvement effort and doing the hard work to achieve. The technologies are there, ready to go, out of the box. The army of consultants available, knowledgeable and able to enable truly superior process environments using modeling tools and simulation environments and process design and execution products that make far easier the job of joining disparate systems, neatly knitting them together to enable an efficient workflow, regardless of the underlying technologies. All that’s missing is an educated audience, a cadre of senior executives ready to take on the new in an effort to remain competitive. And so, friends, it’s my job, and that of my peers, to make available to those good people at the helm who toil daily to manage and motivate, to produce products and capture markets, to increase revenue and decrease costs, a facile means to accomplish just that, to remain competitive, by making this BPM thing accessible, by alleviating the stress and strain of treading through an endless sea of choices.

Faced with the seemingly unending maze of systems and their competing technologies, competing standards, competing professional organizations and competing opinions of those who promote them, the decision-making environment has become more hostile than ever. There is no clear path. There is no right answer. There is, however, light at the end of the tunnel, and there is a strong motive for taking on this challenge, for doing the hard work to remain a competitor.

“We choose to go to the moon not because it’s easy, but because it’s hard.” Those words from JFK some 45 years ago inspired perhaps the single greatest engineering feat of all time. How much more market share do we have to lose to foreign competition before we realize the call of a new generation of leaders – leaders who do the hard work because they choose to, because they have to. Not because it’s easy, but because it’s hard.

The Laws of Process Optimization

2006-11-14T21:20:00.000-08:00

Two major ideas should drive process improvement efforts, two ideas that, taken together, form a core philosophy that underlies effective improvement initiatives. As such, they might well be thought of as “Laws” of process optimization, inasmuch as those who accept these as fact – as fundamental principles behind their improvement programs – will enjoy far greater success for their efforts. Conversely, those who ignore them or fail to recognize them as important foundational principles will more often than not fail in their quest for operational excellence.

The First Law of Process Optimization is also commonly known as the first law of ecology; that is, that everything is connected to everything else. This notion has been variously attributed, sometimes to Lenin, other times to Goethe; I’m sure some other folks have grabbed credit as well. But the idea is a strong one and one that is too often overlooked when attacking process improvement efforts. A quick read of some earlier entries in this blog will reveal that I believe wholeheartedly in this concept, and that the very idea is carried throughout the methodology I employ in my process improvement engagements. (See, for example, my entry, The Big Picture from November 7, 2006.)

The next idea, the Second Law of Process Optimization, is a simple engineering tenet: that a collection of local optima do not yield a global optimum. This, of course, is related to the First Law when one considers that the global process environment (e.g., the enterprise) comprises a web of local processes and process environments (e.g., divisions, departments or other business units).

These Laws support the contention that process improvement efforts are best accomplished by taking a top-down approach, where strategic imperatives quantified by specific, measurable, well documented and widely communicated objectives, are the light guiding improvement efforts, and like all roads leading to Rome, all processes lead to the fulfillment of organizational objectives.

The Criticality of Operational Excellence

2006-11-13T11:28:00.000-08:00

The line between business and IT continues to blur as new technologies provide increasing support for business users to design, modify and even implement some critical systems. Business operations and technology are deeply interdependent, and an alignment of IT with organizational goals has become the new Holy Grail of business performance enablement.

Business culture has traditionally undervalued operations as an unglamorous necessity. The allure of dealmaking and the excitement of new technology deployment have all but trumped operations as a strategic imperative. Worse, while “continuous process improvement” has been overused to the point of now being a cliché, it’s remarkable how few companies actually practice it.

The design of the organization, as well as workflow optimization, technology selection, key performance indicators, policy development and hiring, training and compensation practices sit squarely in the domain of operations, creating the context in which technology deployments take place (i.e., the domain of the CIO) and real organizational value is built and maintained (i.e., the domain of the CFO). The commoditization of so many products and services has created a new mandate for operational excellence – low cost operations that drive pricing flexibility requires some real attention to internal cost reduction. “In this environment,” writes process improvement guru Michael Hammer, “the only way to grow is to take market share from competitors by running rings around them: by operating at lower costs that can be turned into lower prices and by providing extraordinary levels of quality and service. In other words, the game must now be played on the field of operations.”[1]

You best believe tomorrow's leaders will be those with exemplary operations. Traversing the path to excellence means constant attention to key performance indicators, ever-raising the bar and leaving competitors in the dust.
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[1] Hammer, M. (2004, April). Deep change: How operational Innovation can transform your company. Harvard Business Review.

An Important Idea

2006-11-08T17:35:00.000-08:00

When designing (or re-designing) processes, you might find that individuals often insist that their way of performing a set of tasks is the best way. Having systematized their workflow over the course of months or years, you’ll uncover all kinds of process innovations that personalize the workflow to accommodate individual preferences. This is perhaps the biggest single impediment to process improvement initiatives: the idea that an individual’s performance of certain activities related to a process, no matter how evolved, documented or automated, most effectively contributes to the efficiency and effectiveness of the process as a whole. Likewise, the “perfection” of individual processes within an organization does not guarantee the organization as a whole is operating perfectly. Said another way, a set of local optima do not produce a global optimum.

This idea is terribly counterintuitive to the average process participant. Having meticulously tended to the tasks with which they are daily charged, how can an apparent step backwards in the conduct of their workflow contribute positively to the betterment of the organization?

The seemingly intractable integration issues that plague enterprise system deployments are firmly rooted in precisely this notion. Autonomous work units yield incompatible methods and inconsistent data structures that simply do not mesh. Bringing them together is plausible, but only with substantial effort that is made only more distasteful by the compromises (i.e., changes to an individual’s “best” known way of doing things) required to fulfill the larger objectives of the organization.

Real leadership is called for to overcome this quagmire. Only a strong vision, widely communicated and reinforced with the appropriate acknowledgments (e.g., aligned compensation) will bring staff together to work in lock-step, purposefully marching toward the fulfillment of objectives larger than their individual interests.

The Big Picture

2006-11-07T16:33:00.000-08:00

To be effective, process improvement efforts must consider processes in their proper organizational context and, as such, consider not just the workflow and systems that typify traditional process audits, but include assessments of the metrics, governance, personnel and environment that impact the process as well. Further, an organization's mission, vision, values and culture can have a profound influence on any change initiative. As such, they, too, should be considered.

The diagram below illustrates this point and is the "logo" for process improvement engagements we undertake at Perr&Knight.

Workflow, or the sequence of activities that yield a particular result within the organization, should be mapped in an effort to deconstruct the process. This initial process analysis seeks to identify excessive handoffs, sources of error, causes of delay and rework and other impediments to efficient process flow.

Systems are an increasingly critical consideration when improving processes. The intensity of information flows and criticality of document management in insurance operations is a big concern. Which systems are currently in place to support the process? How are they supported? Are they integrated? What innovations should you be aware of?

Metrics – those numbers management so diligently monitors to indicate whether the company is on the right track – provide important guidelines for process improvement objectives. An insurance company focused on being a low-cost provider to its customers will have a different take on key metrics than one that is committed to super-servicing theirs. Some will watch the top line – pushing for growth in premiums as a prime objective – while others might emphasize cost savings, operational efficiency and better margins. Those metrics that are given the most weight will have a significant influence on the direction of process improvement initiatives.

Governance also impacts improvement efforts. Many processes suffer inefficiencies due to statutory imperatives. There’s not much you can do about those, and they must, of course, be considered when designing an improvement initiative. Internal policies, however, are often malleable, and as such should be looked at with an open mind to see if any are unnecessarily constraining. Policies, rules and regulations all exert influence on process effectiveness and efficiency.

Personnel functions are also major enablers of excellent processes. Good hiring practices facilitate the identification of process thinkers from any pool of available resources. A thorough, methodical approach to training will ensure a level of uniformity in the way work gets done, and in organizations that embrace continuous process improvement, that uniform way is a best practice. Further, how are employees being compensated or otherwise rewarded for working in a manner consistent with the larger goals of the organization? All good work begins with the quality of the people who are charged with performing it. The quality of those who perform the work is enhanced through good, selective hiring practices, well thought-out, formal training and rewards that are solidly aligned with corporate objectives.

Environment must be considered as well. Internal factors, such as the corporate structure and physical facilities, as well as external factors, including target markets and the economic factors that influence them, will all play a hand in shaping processes. The deliverable from this audit includes basic floor plans and organizational charts and discussions of the facilities, markets and economic factors impacting the process.

Taking a holistic approach to the enterprise greatly increases the efficacy of the program and typically yields in far greater improvement, better departmental integration and enthusiastic support for organizational change initiatives.

Top-Down Design: Process Abstraction

2006-11-03T11:19:00.000-08:00

Just what is abstraction and why is it important in process improvement initiatives?

Many improvement efforts fail because the vox populi has too much influence on the design strategy. Organizations are not democratic institutions; for all of the freedoms it affords, democracy is an inefficient means of delivering a specific set of objectives. Imagine if an Army field commander put a vote to the troops in his charge whether they should head over a hill and into enemy fire? Top-down thinking is what compels strategic plans. The abstraction is the common framework that accommodates the majority of cases and should be designed first. Exceptions are dealt with afterwards.

For processes, this abstraction is represented by the familiar "supplier, input, process, output, customer" (SIPOC) diagrams used in Six Sigma initiatives. Any process can be comfortably fit into this abstract model. Beyond that is where the real design challenges begin as you get increasingly granular to accommodate the nuances of each function, department or individual. To alleviate those challenges, start with big picture thinking that brings consensus to the high-level abstract process that accommodates 80% of cases.

Further, always maintain the integrity of the data related to the process, whether it’s customer data, activity-related data, or any other. This means maintaining a central data store from which all functions derive the data that populate various process steps.

The wrong approach is to build from the ground up at a granular level, attempting to address the needs of individuals before defining the abstraction. Top-down process design promotes consistency as a solid foundation is developed to address the vast majority of process cases. Bottom-up design breeds chaos and results in the need for all kinds of "spaghetti code" to integrate independently developed disparate systems.

Baselining Improvement Efforts: PML

2006-11-02T16:59:00.000-08:00

Organizations need a standard form of baseline for process improvement efforts. Kevin McCormack has written extensively about process maturity (see his book written with W.C Johnson, Business Process Orientation: Gaining the E-Business Competitive Advantage from St. Lucie Press, 2001). Other models, including SEI’s CMM designations and IPS Associates’ project management maturity model are also excellent tools for assessing organizational excellence in a particular discipline.

Processes, of course, are the core functional components of an organization’s operations. Given that operational excellence is a key competitive differentiator (e.g., Amazon for online order entry, Dell for inventory control, Progressive for insurance claims management, etc.), having a good handle on where your processes stand (“as-is”) is critical for effective improvement efforts necessary to get them to where they should be.

So I propose here a process maturity model of my own, in order to form a more perfect definition of the state of processes – and by axiom the state of operations – in a particular organization. The numbers following each process maturity level (PML) provide a means to quantify the process state, a baseline for process improvement initiatives. The goal of any such initiative is, of course, to elevate the organization to PML5. The maturity levels are:

PML1: Ad hoc. Organizations at PML1 allow staff to undertake key operational processes almost indiscriminately. The value of documented procedures and uniformity in workflow is not understood. (1.0 – 2.0)

PML2: Mapped. Organizations at PML2 have mapped and documented their processes and associated procedures, however, have not established metrics or attempted to respect the interdependencies of cross-functional processes. (2.0 – 4.0)

PML3: Modeled. In addition to complying with PML2 criteria, organizations at PML3 have established base metrics for each activity step in their processes, including average cycle times and error rates, and have created extensive process documentation, business rules and procedural manuals. Organizations at this maturity level understand the benefits of process uniformity. (4.0 – 6.0)

PML4: Integrated. In addition to complying with PML3 criteria, organizations at PML4 have established clearly-defined interactions between and among parallel and serial processes, regardless of function, department or deliverable. In addition, process improvements are undertaken in a holistic manner that respects the entire organization. Organizations at this maturity level effectively manage the “white space” on their organizational charts. (6.0 – 8.0)

PML5: Aligned. In addition to complying with PML4 criteria, organizations at PML5 understand the relationship of their processes to customer satisfaction, strategic success criteria, employees and employee rewards. Organizations at this highest process maturity level enjoy a workforce that works purposefully, in a uniform manner, toward the fulfillment of the organization’s overall objectives. (8.0 – 10.0)

Where does your organization fit in this model?

The Tech Factor

2006-10-28T23:08:00.000-07:00

SOA. ERP. EAI. ECM. BPM. BPM again. Yep. There are two BPMs – Business Process Management, and Business Performance Management. C’mon already! Really, what is it we, all process professionals, are trying to accomplish?

There are still two “sides of the aisle” so to speak in the process improvement community. There’s the IT side, and then there’s the business side. The advent of object oriented technology and the development of modeling protocols like UML some 15 – 20 years ago by pioneers like Phillippe Kruchten and Grady Booch swung the door wide open for businesspeople with relatively light technical backgrounds (like myself) to develop application diagrams that were readily discernable by programmers. The current proliferation of Business Process Management Suites with their design environments, automated conversion to BPEL and instant enterprise deployment has all but obliterated the business – IT divide. You don’t have to be Nostradamus to predict with certainty where this is all going: the technical elite are being pushed way into the shadows as they create ever more simple means to develop in intuitive, graphical design environments. The need to understand the rigors of a procedural programming language is being relegated to the development of technologies that make that code all but invisible. Consequently, the IT function is becoming more macro-focused, and the bewildering array of acronyms is being adopted and interpreted by the business class.

It reminds me of 1995 or so when everyone wanted Java-based web applications. They didn’t know why, exactly, but they wanted them. I remember running a small web shop in New York at that time, and getting calls from people who asked, “Do you guys do Java?” No kidding. Five years ago it was ERP. Then EAI. These days it’s SOA and BPM. You wanna know something? It’s all the same thing: An attempt to standardize enterprise architecture by creating universal abstractions that can be extended for specific applications depending upon the enterprise. That’s right, certain basic, redundant elements of the enterprise system are encapsulated into archetypal forms so they can be utilized throughout the enterprise with minor modification (i.e., they’re polymorphic).

Hmmm. Abstraction? Extensibility? Encapsulation? Polymorphism? That sounds a whole lot like object oriented technology, no? And as we come full circle we genuinely believe we’re innovating, when really all we’re doing is evolving – a natural, logical progression using now ancient ideas but applied in a brilliant way.

So let’s stop with the acronyms. We all want the same thing.

Just Ask Jack

2006-10-26T15:41:00.000-07:00

Jack Welch famously guided GE through the single greatest increase in shareholder value – some $400 billion during his 20-year tenure – in the history of corporate America. When he took the helm as CEO in 1981, one of his first mandates was to layoff a huge number of people and redirect funds – $7 million in fact – toward the refurbishment of GE’s educational center and the attraction of top-level educators from major business schools. The move was extremely controversial; Jack was branded the meanest boss in America as the population at large could not understand why he’d sacrifice huge numbers of his workforce in exchange for a “nicety” like a corporate education center.

Throughout his reign as CEO, Jack continued the tradition by unceremoniously terminating the bottom 10% of his workforce. Ever the careful gardener, he and his managers diligently pruned the corporate ranks so that the cream rose to the top. And what of those at the top? The top 20% of employees were treated especially well. There was plenty of incentive to be great at what you did at GE under Jack Welch. Welch believed that a smarter workforce meant a more effective workforce. Today, being admitted to any of GE’s management programs means you’re on the fast track to the top. It’s no longer a “nicety” for advancement, it’s a necessity.

Jack epitomized leadership and vision. Though his early decisions were very unpopular – the terminations, the education center, and the divestiture of many of the businesses his predecessor worked hard to build or acquire (the only acceptable market position for any GE business was number 1 or number 2; all others would go) – there was a method to his madness. It took raw guts, courage and a belief that he was right to make the moves he made when he made them. The results, of course, speak for themselves.

Jack’s success at GE had much to do with frameworks designed around continuous process improvement. Improvement initiatives spanning decades included management innovations such as Work-Out, TQM and, today, Six Sigma. In turn, these methodologies became the GE Way, and those who broke ranks and dissented were swiftly shown the door. Embracing a “Way” of your own, committing to it and encouraging the rank-and-file to educate themselves in that Way is at the root of all excellent operations. Just ask Jack.

The Real Process Improvement Dilemma

2006-10-25T16:07:00.000-07:00

Sure, there's an increasing array of enabling technology - technology that promises to help us to refine the way we do our work, that promsies to make more effiicient the day-to-day drudgery of even the most mundane workflow. The Real Dilemma is, however, not rooted in the lack of inventive ideas and innovative systems, rather in the one major obstacle that no amount of technology seems to be able to overcome: human nature.

In my experience, those challenges deemed most problematic in the past - namely vendor selection, systems integration and data migration - are quickly evaporating as the line between IT and business blurs and point and click design interfaces relegate previously difficult implementation steps to the domain of the generalist. What does this mean? You no longer need a PhD in computer science to design a viable process management environment; common sense will do.

The Real Dilemma in Process Improvement is change management. Want to improve your processes? Start by mastering your understanding of human nature.