You know those guys with the clipboards and checklists? Those annoying folks who drone on about compliance and procedure? Those sticklers who find reasons why things can’t be done? Every large institution has them. They are the process nerds. And within many companies, a tribal war is raging between these nerds and everyone else. But the world’s best organizations are calling a truce: They are learning how to turn the potentially destructive power of process and procedure to everyone’s benefit.
How did the war start, and why is it important? It began with Frederick W. Taylor, the founder of scientific management who died 100 years ago. He transformed the world with the idea of the “one best way.” Mostly looking at individual workers, he figured out that standardization and optimization of work processes could lead to astonishing improvement in productivity. Over the last century, this idea of the standard procedure has taken hold not just for the work of the individual laborer but also for complex processes that span global businesses. Standardizing has become part of the DNA of large organizations to address such issues as safety and probity as well as efficiency. Specialists began to wrest the design of work from the workers.
The ability of the new technocrats to control organizations was, however, pretty limited. Reliant on paper charts and physical manuals, their control over how people actually behaved was relatively loose. Then came the new frontline: enterprise-wide computer systems. Over the last 25 years, organizations’ processes have become increasingly tied to complex IT systems that specify each step of a task. The nerds’ power was sharply amplified: Massive investments required the centralized engineering of business processes, putting all the control in the hands of a cohort of experts. Steadily growing out from its origins in manufacturing, the standardization of process and workflow moved to virtually all industries and sectors. In the face of the resulting massive improvements in productivity and service, dissenters who pointed out high profile failures and dysfunctional systems had little impact.
In recent years, the war has entered a new phase: In the wake of all those financial scandals, governments around the world have imposed increased requirements for standardized central control. Michael Power of the London School of Economics describes the resulting explosion of bureaucracy as “the risk management of everything.”
But here’s the problem for operations: Standardized processes that work are great. But if the folks at the head office get it wrong, then operations around the world can be locked into systematic dysfunction. To see the dynamics of this, here are two stories.
A bank. A few months ago I opened a new account at a well-known UK bank at a brick-and-mortar branch. For many years, we’ve all understood that opening a new account requires a pile of personal identification for security clearance; identity theft and money laundering are big deals. You need photo ID, utility bills, details of your employer, and so on. So I lugged along a briefcase of paperwork and a wallet stuffed with cards. The teller was a model of charm and efficiency as she clicked through the questions on her screen. After 10 minutes, voilà! I signed some documents and had a new bank account.
But as she gave me the paperwork and the passbook, I paused. “You don’t seem to have checked that I am who I said I am?” I said. I had told her my address, age, and employer, but at no stage had she asked for any of the paperwork I’d brought along. The only thing I’d handed over was a check for the initial deposit (made out to me from someone else). The teller looked puzzled for a moment and then explained, “No, you’ve been checked. The computer did it!” She explained that the bank was using a newish system that could “run the check in real time.” It became clear that what had happened was that the system had run a credit check on the person I was claiming to be; but the process had not questioned if I was actually that person. All the information I’d provided would be pretty easy for anyone to find out. I spelled out the problem to the teller. She summoned a colleague. After a quick discussion, they declared that they’d followed all the steps of the procedure, but they’d be happy to look at my photo ID if it made me feel better. I thanked them and left.
Back at my office, I did a bit of digging and found that the use of the light-touch credit check had been introduced across this bank quite recently to speed up customer service, especially for people taking out loans. As I thought about what had happened, I began to guess that the process had been rolled out across different products: this was a problem of process design and not sloppy execution at the branch. So I wrote to the CEO and explained what had happened. I said I wasn’t complaining and was just pointing out a flaw in the system.
I got a series of letters from the bank saying that the matter was being investigated, ending with a letter from the complaints department. “We understand that you didn’t make a complaint,” it said, “but because this looked serious, we thought we’d treat it as a complaint anyway. And we can’t uphold your complaint, because the staff in the branch were correctly following our procedures… .”
What’s happened here is actually pretty serious: If criminals can open a bank account in someone else’s name, then all sorts of bad stuff can happen. The nerds at the bank’s headquarters process had got it wrong, and the problem with their new process must have been missed. But even when alerted to the problem, the bank seemed to find it difficult to address the problem; the people handling the complaint are only empowered to see if a process was followed, not if the process is flawed. The lessons are two-fold: No one at the branch seemed to have any ownership of the process, and (maybe) the process nerds at the center were too distant from the action to see the problems with what they’d designed.
Medicine. A few years back, drawing on an increasing body of evidence, the World Health Organization endorsed the use of a pre/post-surgical checklist. You may have read about this in Atul Gawande’s best-selling The Checklist Manifesto. The idea is that before and after any surgical procedure, the doctors and nurses run through a basic checklist of really simple questions, including obvious things like “do we know each other’s names?” and “what antibiotics are being used?” Various investigations showed the extraordinary power of the checklist in helping avoid medical errors and improving patient safety. In nearly all U.S. and UK hospitals, use of the checklist has become mandatory.
But when my colleagues and I assessed the compliance with the checklist in UK hospitals, we found some interesting things going on. Although the checklist was nearly always used, it was often done badly: Sometimes bits were missed, sometimes not everyone in the operating could hear when the questions were read out, and sometimes the audit box (“we’ve done the checklist”) was ticked in advance of it actually being done. We discovered that the key issue was that surgical teams often 1) felt that the checklist was a procedure that didn’t quite fit with the details of their particular activity, and 2) saw it as a top-down imposition that was more about symbolic box-ticking than improving safety. However, by giving surgical teams the opportunity to customize the procedure — tweaking it to make it work for them — we found that real compliance improved dramatically. The key to making the global standard effective was to ensure engagement by the people who had to implement it.
Engage and empower. Both of these stories hold lessons for operations now and in the future. They echo lessons we’ve already been taught by Deming and Toyota and which apply to both manufacturing and knowledge work. If process management means cumbersome bureaucracy devised by distant experts, disaster awaits. But organizations that get their central nerds to engage consistently with the people who do the work, then process problems can come to the surface quickly and be tackled head on. Even better, empower workers at all levels to participate in process design and experimentation — to connect with their inner nerd. Process thinking becomes a part of everyone’s job.
The guys with the clipboards are an easy target for mockery and disdain, but there are great opportunities buried in those flowcharts and manuals. There’s no arguing with the onward march of process. The challenge is to bring the nerds back to the front line and to make process design a distributed activity. Only then can we get systems that work properly and intelligent compliance.
Thirty-five years ago, it would have been absurd to imagine that IT skills would become so widely spread in organizations. Only a handful of visionaries understood that we’d all be walking around with hyper-connected supercomputers in our pockets. We all do things today that only a few years back were the domain of the expert. The same kind of revolution in process thinking lies ahead.
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