Strategic Process Management is the active management, improvement and alignment of business processes to corporate strategy. Shown following are the basic Strategic Process Management steps, that if put in place, will improve the performance of any enterprise.
Strategic Process Management
1. Reorganize around work.
Most organizational problems lay hidden in broken business processes and the gaps created by disconnected organization boundaries, functions, and jobs. In traditional top-down structures, leaders direct managers and staff along department lines organized around task responsibilities. These jobs are typically bound by vertical and hierarchical reporting relationships with increasingly narrower increments of scope and responsibility.
Workflow, on the other hand, derives from the more natural horizontal relationships that exist between jobs, functions, and departments. Workflows horizontally across organizational boundaries from department-to-department, function-to-function, and job-to-job. We know that on average, 72% of all improvement opportunities are directly related to broken business processes caused by organizational silos.
Strategic Process Management tackles the silos created by traditional organizational structures. Rethink responsibilities in terms of business process and flow of work. Then rethink reporting relationships according to logical handoffs created by contiguous business process boundaries. In doing this, leadership can align work with organizational structure. While customer value is delivered through the execution of work, leadership rarely considers workflow when constructing the organization chart.
2. Streamline processes.
We find the value-added activities in most business processes to be in the range of 25-40%, while the value-added time to be in the 5-15% range. Most work inefficiencies come from checks, reviews, and approvals due to unclear process deliverables and a resulting lack of trust in decision-making. Leaders see an additional review as the answer to errors and quality deficiencies, while in actuality reviews often create a wasteful and less reliable process.
3. Specify deliverables.
In its simplest form, work is the execution of tasks that together deliver specified products and services (deliverables) to a customer (external or internal). We generally find deliverables to be undefined, significantly lacking in clarity, completeness, and understanding. The lack of definition in process deliverables is a significant root cause of most workflow problems.
4. Cleanup responsibilities.
Most organizations (especially as they get larger) contain an abundance of responsible positions without clear accountabilities in place. Every time two or more job positions are responsible for work you can count on a performance problem. Every business process (and every main deliverable) should have a single position responsible and accountable for its successful performance. Somewhere along the way, many leaders have forgotten to match up work with accountability.
5. Find opportunities.
Finding what’s wrong in the flow of work isn't that hard to do. All you have to do is ask those who do the work what problems they have in executing their assignments. In our experience, business processes contain 25 to 75 improvement opportunities that can be identified just by asking those who participate in the process. In a typical business system, this can easily include 500 opportunities for improvement.
6. Matchup resources.
One of the best places to look for improvement is to assess the extent to which resource capacities are matched to work requirement. Assets include areas such as people, equipment, information technology, and facilities. While this exercise is essential and common in manufacturing operations, it is surprisingly missing in most other areas of business.
7. Centralize data management.
Data input typically starts a value stream and accumulates additional information as it moves through connecting business processes to achieve the purpose of the value stream. We frequently find the collection of inaccurate and insufficient data from the very beginning and it continues to be pushed along through a value stream causing significant rework, wasted time and effort. Along with this, we find typically data storage and ownership to be distributed and uncontrolled throughout the organization.
8. Decentralize knowledge management.
While data is typically decentralized within an organization, we find knowledge to often be centralized and difficult to access for those who need it most. Knowledge represents a valuable piece of intellectual property in the organization and it should be owned and distributed to those who need it where they need it.
9. Fix what’s broken.
At the end of the day, improvement requires the implementation of new ways to yield a successful outcome. The accumulation, categorization, and prioritization of opportunities make clear what needs to be done. While implementation is simple, managing solutions to common problems is usually just not that easy to do.
10. Measure what matters.
The measurement of meaningful performance, while very straightforward conceptually, is typically missed in most organizations. Successful measurement involves understanding purpose, expressing a goal, and determining what measure will tell you whether the goal is achieved or not. Rather than getting hung up on what KPI's are best for your industry, leaders would be better served by understanding the purpose of every business system and business process and measuring the extent to which that system or process achieved its purpose.
11. Control change.
Finally, the management of change is essential to successful improvement. Change control is essential to the management of change. Most organizations that we see do not manage change (or change control) and do not have a tracking system.
12. Monitor through regular review.
A regular review must take place with every performance improvement effort through daily, weekly, and monthly status reviews. This does not need to be overly complicated, just focused, and purposeful. The challenge, of course, is not in knowing what’s wrong, but in addressing performance shortcomings and their underlying causes.
Strategic Process Management Drives Performance Improvement
At the end of the day, it is the work that delivers an organization’s value proposition which creates profits. It sometimes appears leaders miss that work must consistently be improved for the organization to thrive. By utilizing Strategic Process Management, any organization can improve its performance in well under six months. Our goal, of course, is to have more organizations try this out for themselves.
Challenge the way you think about work. Download the free eBook today to learn:
- How to map business processes
- How to create a business system diagram
- How to transform your business