I believe that the primary focus of every organization should be the understanding, management, and continual improvement of the business processes by which customer value is created, accumulated, and delivered. Not the only focus, of course, but by far the most important. This is the essential message of process-based management and once that message is heard, the need for both process management and process improvement is obvious, urgent, and compelling. Let me explain what I mean by, and why I believe in, the ‘primacy of process`. This Column is deliberately short (if I had been in a hurry I would have written a longer one!) because I would like to find a way to succinctly define the key message of process-based management. Have I achieved that? Please let me know.
Process?
Why “process”? The simple view of a process is that it is a collection of cross-functional activities that transforms one or more inputs into one or more outputs. I also include all of the resources, people, systems, infrastructure, policies, regulations—everything that is required to execute and manage the process. Processes are important because this is how organizations get work done.
Primacy?
Why “prime”? Cross-functional business processes are the only way organizations can deliver value to customers and other stakeholders. By themselves, the separate functional areas of an organization cannot deliver value to external parties. An organization`s resources are managed ‘vertically` via the organization chart. Value is created, accumulated, and delivered ‘horizontally` across the organization chart.
It follows that an organization executes its strategic intent via its business processes. The sequence from strategy to execution is shown in the breakout box, From Strategy to Execution.
The only way an organization is able to exchange value with its customers and the way in which it executes its strategy—sounds prime to me!
Implications
If we accept that business processes are the value pathways, as well as the way organizational strategy is operationalized, where does that lead us? The inescapable conclusion must be that the starting point for effective organizational management is to understand, manage, and optimize those business processes. Without a proactive focus on business processes, organizational performance cannot be optimized and strategy cannot be effectively executed.
If value is created, accumulated, and delivered across the organization, what measurements of performance are made in that direction? Do we know if those cross-functional processes are working well? Do we know what “working well” would mean? Do we know where the performance gaps are and if anyone doing anything about them?
If value is created, accumulated, and delivered across the organization, who is in charge of that? The organization chart is silent on such cross-functional matters. Sure, we can say that the CEO is responsible for everything, but she knew that and it doesn`t help. Can it really be a good idea that the path through which we exchange value with our customers is not managed?
Relationship to Business/Enterprise Architecture
I`ve said that process performance should be the primary focus of an organization, but not the only focus. There are many other aspects and the positioning of the many other architectural elements naturally arises.
There are many “architecture” types. As well as business architectures and enterprise architectures, there are architectures that address IT, information, capabilities, services, systems, rules, applications, organizations, and people. This Column does not seek to either explain or reconcile the many views of business or enterprise architecture, but it does have a particular architectural stance—the primacy of process—and this requires that processes be the focal point of any architectural view. All of the common architectural perspectives are valid[1], but the process context is fundamental and each other perspective has a direct relationship to it. While other constructs are useful and often vital, particularly to guide information systems, the tendency to define ‘every` object and show the relationships to ‘every other` object via abstract diagrams, may be of limited benefit to managers.
Accepting the ‘primacy of process` principle, and starting with the process architecture, allows an organization to focus on the purpose and performance of the value pathways. Other architectural elements can be added when they are be shown to add value, when they are an aid to management and not a further complication.
Conclusions
Management needs its own disruption. A practical and pragmatic approach to understanding the organization as a system for value creation, accumulation, and delivery is required. Clear links between strategy and process execution must be defined. Mechanisms for identifying, managing, and improving process performance must be realized.
Organizations must reimagine their operations as value creation and delivery flows.
In Practice…
There are many things you might do in response to the issues discussed in this Column. Here are three practical steps you might consider doing now to get started on the creation of sustainable process-based management and process improvement.
Discover the value pathways
Document the process architecture for your organization. Find the strategy statements and determine who are the customers and other stakeholders and your organization`s value proposition for them. These are likely your core highest level processes. Decompose those processes down a level or two.
Agree on performance targets
If those processes were working as well as the key stakeholders would like them to, what would they be doing? How would you know? Define and document the critical few performance measures.
Mind the gaps
Capture the performance data and make evidence-based decisions about what to do for any performance gaps.
[1] Although I still struggle to see how ‘capabilities` add value that is not already provided by ‘processes`, but we`ll leave that for another day
0 comments:
Post a Comment