When beginning work with new clients, we immediately engage department heads with a series of fundamental questions. We start by asking:
- What is your department’s purpose?
- Who is your department’s customer?
- What business processes are contained within your department?
- How do they connect to one another?
- What is the purpose of each process?
It turns out these are difficult questions to answer. Surprisingly, fully understanding the purpose of your work, your department, and even the enterprise is challenging. This is truest at the process level.
The Purpose of a Process
The most general purpose of any process can be stated as follows:
“A process ethically serves a loyal customer using minimum resources”.
1. Ethically means you play by the rules that govern the process.
2. Serve a loyal customer means you know your customer and its requirements such that you deliver a Customer Value Package (CVP) delighting your customer, who prefers your solution above all other options.
3. Using minimum resources means delivering that CVP with the least amount of resources and waste.
To achieve this purpose, a process must fully define its Customer Value Package. At a minimum a process must: know the customer, identify the customer’s quality, time & cost requirements for the process product or service, and understand the customer’s perception of value. This is the information needed to create a CVP that will:
- Solve the customer’s problem or satisfies the customer’s want or need,
- Within a time the customer deems acceptable,
- At a cost of ownership the customer is willing to pay,
- Through a relationship as desired by the customer.
A Best Practice Process is Ethical, Effective, and Efficient.
Ethical Delivers Compliance
Although an organization may effectively serve its customer at an attractive level of financial and operating performance, it must also measure that it is doing so in a responsible and sustainable way. Organization governance includes areas such as compliance to regulatory requirements, protection of the entity’s intellectual property, and risk mitigation.
Effective Delivers Customer Loyalty
Customer value is when the process end-result is perceived by the customer as being worthy of loyalty. Loyalty means the customer is delighted with the value proposition provided by the process and is faithful to the process. Customer value is about the outcomes the customer experiences, not the tangible products or services received. Understanding and delivering a consistent, sustainable, and superior CVP earns customer loyalty.
Efficient Delivers Minimum Resources
An organization should understand the efficiency with which it converts its inputs to valuable products and services its customers desire. Less efficient organizations operate at a competitive disadvantage that manifests itself in many ways, including higher costs (often leading to noncompetitive prices), less reliable and dependable solutions, and slower response times.
While most organizations spend time and money on the assets required – such as people, equipment and technology – to deliver the value proposition, very few spend money on equally important business processes that turn those assets into profits. In addition, fewer still understand the role of the CVP and process purpose in designing the best process to execute that purpose.
As a department manager with valuable responsibilities, start by asking yourself:
“What is the purpose of my department and the business processes that deliver value to our customer?”
Interested in learning more?