Addressing Fear and Confabulation In Business Process Management When Times Are Tough

Happy Halloween. I am writing this post in the wake of some pretty harsh economic indicators. This week has not been good for BPM. For the most part, the news has been about consumer confidence and consumption being at all-time lows and news of lay-offs and job losses peaking at nearly 750,000 in this calendar year. BPM initiatives in this climate are deeply challenged to keep people engaged, productive and cooperative. This is especially true if what you’re doing has even the slightest appearance of cutting costs. Executives are thrilled with the idea of cutting costs but you can expect all of your stakeholders will identify themselves as a cost in the process. And what do people do when they’re afraid for their jobs? They modify their behavior.

Fear and BPM?

Fear evokes instinctual reactions in everyone. The very fabric of our being is primed to fight or flee. So much is at stake right now that it is only natural for people to struggle with objectivity and complete honesty. They become protective and defensive. Some people become angry, some blame others, some withdraw and lose their confidence and will to compete, and some lie like there’s no tomorrow. Either way, if fear is running amok in your shop, your BPM hopes for lasting improvement are being compromised.

I met with a public health client this week who is beginning to show signs of wear and tear. It’s more difficult than ever to get subject matter experts in one room with all of the competing agendas they now have. Budgets lack certainty so it’s harder to commit to plans and strategies. Heavy questions like State financing hang over projects like brooding storm clouds. People doubt and that doubt is a mind-killer. Process improvement and doubt are nearly mutually-exclusive phenomena.

Confabulations!

To confabulate is to tell people what you think they want to hear about the way things are and the way things ought to turn out. You’ve heard of people doing this in psychotherapy. Well, it happens in BPM projects even in the best of times and circumstances. People – particularly managers – tell process analysts and consultants what they want based in large part on what they think the rules of the game demand. Basically, if I think you want to model a current state that has certain features, I will make it up as we go along so the model comes out looking like I think you want it to. It’s because people do this that I invite as many experts to process documentation meetings as possible (within reasonable constraints). I want to hear what everybody has to say about the process. It’s also why I don’t include the boss in the first session. They fear for their lives so I bring them in toward the end to validate what their staff have told me. Staff are so much more candid when their boss is out of the room! If this sounds like an intervention on an alcoholic it’s because the approach is similar. Only the problem is not the manager. It’s a less-than-ideal process that some managers believe reflect poorly on them and their performance.

What To Do About Fear and Process Confabulation?

• Make some strategic decisions at the executive level about the viability of your initiative. If it’s best to hold off for a few months, then wait.
• Go easy on terminology like “eliminating waste” and even “automation” for that matter (unless you’re clear that is what you’re after and you’re prepared to deal with the fall-out)
• Communicate, market and promote your BPM initiative in positive terms. Share the benefits, value-add and goals for organization. Have your executive sponsor write a short, persuasive and motivating letter and make sure everybody reads it or hears it.
• Observe workflow and process by means of direct observation first
• Document process with the help of non-management experts. Be inclusive and cross-functional in who it is you invite.
• Validate processes with managers and directors
• Identify process-related data and metrics and validate your model and assumptions by reviewing the data. The data rarely lies. If you have 100 customer complaint letters and a manager telling you people complain “once in a while” then you can deal with that discrepancy. If a manager tells you their staff processes 10 invoices per hour each and there are 5 staff working 7 hours per day, then somewhere there should be data supporting 350 invoices per day. Close the loop and don’t get snookered into believing without evidence of performance.
• Be objective, firm and confident.
• Lead by example and engage others in the same productive, positive behaviors.
• Believe that BPM projects and initiatives that overlook human behavior and organizational dynamics like these are guaranteed to flop. This is not an IT project.

HR Dimensions of BPM (business process management) Are Mission-Critical

Business Process Management (BPM) promises to bring the disciplines of IT and HR together. That’s the promise, anyway.  BPM draws the map and establishes goals while HR provides the framework to hold people accountable for those goals. Sadly, I rarely see the integration of HR in BPM projects led by IT folks and yet I believe it’s absolutely essential. Bridging the divide between HR and IT is not so difficult if you follow some simple guidelines.

• Understand HR’s Role. This is fundamental to your success. You must understand that significant changes in business process cause changes in job description and performance expectations. HR can help you decide which changes are significant enough to have a material impact on job descriptions and can identify those performance measures that make a difference to performance appraisal. Similarly, significant changes in processes may mean change in employee recruiting (you may, in fact, be seeking a different skill-set than previously thought) and it will likely mean considerable change in supervision.
• Integrate From The Beginning. Include HR in the BPM discussion from the start. Invite HR to the table and seek their input and advice. If you don’t have an HR professional on your staff, invite a consultant from the community. Trust me, the lawsuits that can result from botching this aspect of your BPM initiative will outstrip the cost of hiring an HR consultant by a factor of 100.
• Include HR in Human-Centric BPR (re-engineering). BPM and BPR are not simply mapping exercises. Eliminating waste, finding efficiencies and improving quality in the way things are done is about modifying human behavior. All of our models and talk of “suppliers, triggers, resources, outputs and metrics” must bear in mind that real people are involved at every juncture.
• Conduct HR/BPM Gap Analysis. Involve HR in assessment of the changes you’re making to the current state. Review your future state designs together and determine:

1. What rules need to be properly documented and how will people be held accountable for following those rules?
2. How will employees navigate the decision-making processes and who do they seek permissions from?
3. What training will employees require to implement the new state of your business processes?
4. Who will provide that training and how will you know when your people are competent in the new way of doing things?
5. Are there any risks associated with your new business processes? Exposure to dangerous conditions? Risk of accident or injury? Violations of workplace safety laws? Your HR professional can answer these questions for you.

• Establish New Performance Metrics Together.  Assume the new key performance indicators (KPIs) will have a direct impact on the way employees are appraised and rewarded. There may be some exceptions and your HR professional can help you decide.
• Enlist HR to Communicate your BPM Initiative. Establishing buy-in and overcoming resistance to change (your biggest barriers to success) are dealt with by executing a comprehensive communication plan. You must create and maintain momentum by including all of your stakeholders in the conversation. Your greatest asset in communications is your HR professional. IT people in particular should not attempt to communicate without the help of HR.
• Implementation & Training. You want to implement changes in process and HR professionals want to properly train people. Implementation is the intersection where HR and IT usually collide. If you’ve followed these guidelines reasonably well till now, implementation will be a success because it will have been a collaborative effort.
• Assess Compliance. Compliance is a creature with many heads. While IT may have ERP, XML and integration standards they are trying to comply with and the CFO has Sarbanes-Oxley compliance issues with the new process, HR will have a full slate of compliance issues to assess. There are safety and occupational hazrds to assess, discrimination and disability conditions to review and the full array of hiring/training/supervising processes to evaluate in light of a modified workflow. It’s not impossible, for instance, to engineer or design a business process that suddenly creates a disadvantage for people with a disability who had been properly hired to do things the “old way”.

The most often-cited reason BPM projects stumble and fall is that organizational dynamics and human behaviors weren’t properly assessed and accounted for. There is a lot of psychology at work here. HR people are a different breed and IT people – most often asked to lead BPM – need to accept and include HR. I think the creation of HR/IT teams for the purpose of BPM ought to be your first BPM initiative. It’ll create the conditions for everything else you’re hoping to accomplish.

Positioning Your Business For Growth With Business Process Management (BPM)

If blogs are supposed to be about free-wheeling opinions, then I need to share a big one today: this economy is suffering in part because consumer sentiment, confidence and trust are at an all-time low. That’s a no-brainer. However, building rapport and confidence with consumers is not the responsibility of government. I am afraid for those business people at all levels in companies who are waiting for a legislative or bureaucratic solution to the consumer confidence problem. Government intervention can work for injecting capital and regulating banks but you cannot mandate or regulate sentiment. Helping your customers and prospects with the decision to buy what you’re selling is your responsibility. You need guts and new ideas right now. This isn’t to say that there aren’t macro-economic forces that need to be corrected. Of course, there are. It is to say that business plays a role and those who understand that role and the processes involved in injecting consumers with confidence will win big. Those who are passive, will not.

Carpet Baggers?

Here’s a very simple example of what I mean (I share this and other stories for the sake of the small business owner, the non-profit and the smaller government agency). I met a guy last week who is taking advantage – that’s right…exploiting – the current economy and selling carpet cleaning to people who had been thinking about buying new carpeting. He’s growing his business everyday because his customers see the value in preserving what carpet they have and delaying a bigger purchase. His marketing process literally seeks out those people who were going to buy carpet and he offers them a cheap alternative. He’s new to this service offering but he saw an opportunity and seized it. Bear in mind, he seized it in a rather big way by buying a carpet-cleaning franchise. That’s guts.

GM and Chrysler are designing their solution to their collective demise by entering into merger talks. They have a business problem so they’re looking for a business solution. Can you imagine the business process opportunities in this case? With any luck, they’re talking about engineering “green” cars that run on something other than gasoline – something they should have begun 30 years ago. If you’re struggling right now, are there any lessons to be learned from this example? Can you imagine a business process that involved another business even if it meant your competition? Can you imagine engineering new products now before you discover you’re in a deeper hole? That’s creative and disruptive thinking.

eBay is re-engineering and discovered they had inefficiencies. Sadly, those inefficiencies were directly related to positions and people. Those people have names and families. Many hundreds have lost their jobs. What if they had evaluated their processes much earlier and re-assigned people to developing new markets and products? Could they have staved off drastic cuts and grown their business instead? Can you look into your processes now and divert resources from wasteful cost centers to top-line profit centers?

Growth is a Process Too – Put the ‘B’ and the ‘M’ back into BPM

Keep in mind that BPM stands for BUSINESS PROCESS MANAGEMENT.  Break it down. BPM is an approach to managing business based upon a process view or perpsective. Business and management have everything to do with enabling growth. There are several dimensions to the “growth” role of BPM.

• Growth by virtue of increased market share through improved sales processes and delivery systems
• Growth in sales by virtue of reduced pricing and better positioning
• Growth in profits on existing sales by virtue of cost cutting measures (elimination of waste)
• Growth in sales by virtue of rapid innovation, differentiation, and new features
• Growth in terms of customer loyalty resulting from higher quality and a reduction in defect-related complaints

Got Guts?

This is not for the squeamish. The kind of leadership I am talking about – the nerve to walk into executive offices asking for the time to discuss the process-driven way out of down markets – is a trait found in people who see growth as both vital and the natural bi-product of doing things right. People who see across horizons to a time when today’s innovation is tomorrow’s normal. People who believe in the relationship between customer needs (demand based on pain or desire) and a company’s ability to supply that need in a cost-effective yet profitable way. Always seeking to understand the demand side of the equation first!

Tell Your Story

BPM offers business people from all backgrounds and disciplines a common language and view into how things are done and can be done. In many respects, BPM is to management what film is to story-telling. It provides every story-teller and every audience a common platform for interpretation and dialogue. Get your BPM into the streets and tell people what makes you unique and how it is that you keep evolving for the sake of the customer.

Apple does this all the time. Steve Jobs schedules a big story-telling hour and everybody shows up to hear him tell the story of Apple’s latest innovation, new processes, new suppliers, new design. Can you do something akin to that in your market?

Where Are You Headed?

Give some serious thought to this direction thing. Are you shrinking or growing? Are you heading off in a lateral direction to find new markets in new geographies? Are you aligning yourself in a vertical market so that you become integrated in something else with new partners?  Either way, can BPM help you get there?

If you and your team haven’t stood in front of your core processes in a long time – big, colorful, projected on the wall – then I suggest strongly you do that. Don’t read them for the sake of technology or throughput. Look at your process diagrams and models with the eyes of an explorer and get the big picture into view. They are the best map of your territory. You need to know where you’re going and so do your peers. Use your maps and tell your story. Share your vision.

Proof of Concept (PoC) Important to Success of Business Process Re-Engineering (BPR) and Workflow Improvement Initiatives

How’s Business?

According to Bloomberg.com, “confidence among Americans fell by the most on record and single-family housing starts hit a 26- year low, posing an increasing threat to consumer spending that accounts for more than two-thirds of the economy. The Reuters/University of Michigan preliminary index of consumer sentiment fell to 57.5 this month from 70.3 in September. The measure averaged 85.6 last year. Construction of single-family homes dropped 12 percent last month, the Commerce Department said in Washington.” It’s high-time we turn this ship around. Words like “confidence”, “sentiment”, “trust” and “fear” are at the heart of this problem. Business people (you!) play an absolutely essential and vital role in restoring trust and confidence. What does all this have to do with a Proof of Concept?

Proof Restores Trust & Confidence

It’s the innovators and those who seek to disrupt the dynamic that lead the rest of us out of the dark. Consumer confidence is a function of trust and trust is a function of your product-quality, price, brand and your market. In your zeal to disrupt and innovate OR in your more conservative endeavor to make your current operating environment more stable and predictable (also a good idea when the market is tight), make sure you employ a Proof of Concept (PoC). Now is not the time for costly mistakes that erode trust.

What About Smaller Companies, Non-Profits and Government Agencies?

I can hear some of you now: “Who does this need for PoC apply to? Do small businesses, non-profits and government agencies need to take these measures as well? Isn’t this just for technology companies and manufacturers?” – The answer is that the need for PoC or some semblance of it applies to all of us in every instance of business process re-engineering (BPR.)

There are a number of approaches to testing and proving your concept: simulation, pilot testing, prototyping, and/or developing a business case. Whatever your chosen approach, proving and substantiating your concepts in business process re-engineering and workflow re-design can save you a lot of money and time. It may also save your job. It will certainly prevent fiasco with customers.

Proof of Concept…kinda self-explanatory

What problem are you addressing and how is your re-engineered process or re-designed, improved workflow going to solve that problem? A PoC will include results or actual measures of efficacy. You need to provide your leadership team (or yourself) with sufficient data to support your claim that this concept will have the desired impact. A Proof of Concept addresses:

• a clear definition of the problem you are solving
• specific attributes of the solution you are recommending
• measures of efficacy, outcome and performance and how you will measure them
• resource requirements
• technology requirements
• the full range of project mgmt and implementation variables (critical path, timeline, milestones, tasks, interdependencies, etc.)
• budget
• logic model (or use-case scenario) that supports your assertion that “it works” and satisfies your business requirements

In essence, a proof of concept is a prototype of sorts. It allows you to roll out your proposed solution on a very limited basis and test, validate and verify your approach and results. It establishes the feasibility and viability of what you’re proposing. In manufacturing circles and among engineers, a PoC actually precedes a prototype and establishes that a prototype is a worthy next step in the R&D and product development process.

In services sectors, a PoC may include allowing your prospective customer to try a service and prove the concept to themselves. This is actually a ripe time to take this approach in your marketing and sales.

The Benefits of a PoC?

It ought to be clear by now that by developing an approach to Proof of Concept and an environment within your company that recognizes the importance of rapid testing of innovations, you can begin to shape your products and services in new, more efficient and more customer-specific ways. You do all of this and you avoid the dreaded Unintended Consequences of making changes without considering all of the implications. This goes back to pre- and post-process metrics. What happens up and down stream from a process will become apparent to you when you begin testing in a disciplined fashion.

Market Roller-Coaster Ride Strongest Justification For Business Process Management, Analysis and Re-Engineering

Business Process Resiliency

The past week’s tumultuous downward spiral, global banking interventions and stock market spike speak to the need for organizational resiliency everywhere. I’m speaking primarily to those of you who are scrambling this week to get your shop under some semblance of control in the wake of your market’s turbulence. You’re desperately seeking answers and you’ve heard or read somewhere that workflow management and business process management (inclusive of documentation, analysis, design and re-engineering) can transform the way you do business. The promises are lofty but, like technology, workflow management and BPM are essential tools. The difference is not in saying “we do BPM” but in the way that you implement BPM in the social, cultural, and operational fabric of your organization. The value and benefit is in HOW you use BPM. But the bottom-line is BPM produces a degree of resiliency not possible without it. That may be a strong opinion but I will stand by it. One cannot adapt to invisible conditions. BPM makes conditions visible and adaptable. You do the math.

BPM Builds Resiliency

To contend that BPM builds resiliency is not quite complete. It makes resiliency possible. It is the lens through which you can identify your resiliency needs. Without visible processes, you have to rely entirely on anecdotes, opinions and assumptions concerning your strengths, weaknesses, productivity and efficiency. All of which vary from one employee, supervisor or director to another. Social constructs like that are always relative. BPM is the closest thing we have to a mechanical view of your enterprise and much less susceptible to relative interpretation. A business process model is the shortest and potentially most accurate model depicting what you do and how you do it. Imagine military leaders discussing strategy and tactics in the midst of battle rather than at the perimeter of a table housing a model of their battlefield and you begin to get the picture. If you’re in the thick of the trees, it’s tough to see the forest and your place in it. If you’re slogging it out in the muck, it’s tough to develop an adaptive strategy with your mates.

Resiliency is about adapting to conditions and bouncing back from blows. Adaptation requires knowledge of conditions in the environment or ecosystem as much as it requires knowledge of ones own capabilities, traits and resources. There is no substitute or alternative at the moment for BPM in demonstrating, reflecting, modeling and measuring conditions in both the company and its market. It’s the shortest route to a complete assessment and planning.

Measures and Metrics Count

Notice that adaptation is also a function of measuring conditions. Unlike natural selection processes which might favor traits and capabilities honed over decades, centuries, and millenia, we need immediate access to accurate data concerning our strengths and weaknesses. Our environment is changing much too fast to wait for year-end results. BPM will equip you with deep knowledge of what it is you need to measure. A high-performance entity measures in surprising ways and – of course, – what gets measured varies widely across industries. However, what gets measured gets managed. It’s not what you expect that will change deliberately. It’s what you inspect.

Break The Rules?

Our experience with economic upheaval ought to be having the effect of causing you to challenge your assumptions, myths and deep-seated beliefs in the rules you follow. Not sure what rules govern your business? Don’t worry, that’s what BPM will help you discover. BPM establishes the rationale for process and articulates the business rules you follow. Upon identifying your business rules, challenge them. If you can break them and establish new rules without breaking the law or any ethical/moral codes and without compromising your quality, customers, employees or mission then you will be participating fully in your own adaption and resiliency. How about that!

If the rules you live by don’t change while the economic and market forces around you are changing at the speed of light (as they have been for a month or two) then, my friends, you will get left behind. Don’t let this happen.

Up and Down

Like the roller-coaster we’re on, you need to assess what you’re up to at the macro levels of strategy and economic/market factors as much as you do at the more micro levels of business process and key performance metrics. Inside, out, up and down. Many of you are new to this field. Some of you are new analysts and some of you are executives. All of you may be wondering if business process management is right for you. The answer is that it is essential.

Time For Serious Strategic Planning, Widening Process Improvement & Balanced Scorecard

If there was ever a time to call your executive and leadership teams together for some mission-critical thinking, this is that time. I am slightly biased toward making those process-oriented meetings but that’s besides the point. The market – globally, nationally, locally as well as from a unique, individual consumer standpoint – is taking a beating. A mugging really. The capital we thought we had to conduct business with is not there the way we thought it was months ago when all we feared was a recession. With recession eclipsed by fears of a deeper, longer meltdown, it’s time to think and talk about survival of the fittest.

Who’s Fittest?

How is fitness defined in your industry? We know stock price alone isn’t the answer. If that were the case, nobody would be considered fit today. Is it profitability? Productivity? Innovation? Customer satisfaction? How is the strongest competitor in your field or in your market deemed the strongest? How long can they sustain in a down economy?

You must be able to define fitness and bear in mind that definition will vary from one industry to another. What makes a great hospital does not make a great publication or a great restaurant or a great garment factory.

There is an argument to be made for reading Colins’ Built to Last before the end of the month. Preserve the core and change the tactics and process as it is called for in order to adapt to this new environment.

Build On Core Competencies & Core Processes That Work

Want to widen your process-orientation? Want to document, design and implement more efficiency, productivity and innovation? Start by pinning down and understanding what you do best. Start by identifying what your core competencies are and deeply understanding what makes them so. Take an inventory of what it is you do best and how it is that came to pass. Do not change a thing in these areas right now if you can help it – except to do more if you can.

Is there some aspect of your core competencies that can be expanded to other areas of your work, product-line or service? Can you become the outsource provider of these services to another firm? To a competitor? Can you market and promote your core competencies in new ways? Can you take them into new markets and embed what you do in an entirely new supply-chain? The point is to identify what you have 100% confidence in and do as much of it as possible during tough times. This is your greatest survival tactic. Don’t under-estimate your need to survive right now. Read Zook’s Profit from the Core before the end of the month while you’re at it.

Balancing Your Scorecard

As I mentioned earlier in this post, you must begin identifying your most meaningful performance metrics. Collectively, we do an abysmal job of this. We rely too much on financial measures or quality measures or employee satisfaction measures or none at all. Too often, we measure one dimension of our business at the exclusion of others. If you haven’t already done so, pick up Niven’s Balanced Scorecard. The implementation of a balanced set of metrics can be relatively straightforward and will do wonders for you if you can stick to it.

Do yourself and your organization a favor this week and make a commitment to measuring at least one  from each of the four dimensions of: customer satisfaction; financial performance; internal process improvement; and employee growth. If you make this commitment today while times are tough and while your employees are looking to your for leadership, then you will instill in them an abiding belief in your ability to see and appreciate the big picture. You will also be setting in motion the machinery that will set you far apart – so far as to be in a different league  – from your competitors when the dust of this economy settles. You will thrive.

Do These Things

Leverage your process improvements, your new skills and your deep desire to outlast the bad news of late. Bring your people together. Have frank and hard-working sessions together. Plan like professionals. Work more and work smarter. Apply your process-orientation as widely as possible and make a commitment to measuring what matters. Then what matters will get done in some surprising ways and you’ll be glad you made these commitments 1, 2 and 3 years from now – long after your competition has thrown in the towel.

Make The Tough Decisions

As you plan, apply yourselves to the core of your business, and begin measuring your performance in new ways, I assure you that weaknesses will become apparent. You will certainly be faced with difficult decisions to make. Resist the impulse of simply making deep cuts. If you manage to discover you have resources at your disposal, think of them as an investment before you think of them as a savings. This may, in fact, be the best time in your industry to provide exceptional customer service or it may be best to expand into a new market. The very people you may have otherwise shed may be the best people to take you in a new direction. Lead outside the box. If you do have people to let go of and you cannot justify any other conclusion, make the decision, be compassionate about it and help everyone through the transition. By all means, keep your high performers who “get” your vision and mission.

Key Performance Indicators: Before, During & After Your Business Process

I want to make a special case tonight for the reasoned approach to Key Performance Indicators (KPIs) that involves what happens before, during and after your process. This field (business process management and analysis (and on and on with the jargon)) makes the very most sense when we stop seeing processes as discrete “events” much the same way we advocate for “seeing” tasks in relation to one another when strung together to form a process. That was a mouthful but I hope you get the point. The more holistically we see these phenomena unfolding, the better we can manage them.

We’ve Seen This Movie Before

This is rather basic no matter how “new age” it might still sound to some people. My process can be viewed and considered in relation to the process prior (which constitutes the “triggering event” and the processes immediately following it. We’ve approached the physical sciences in this fashion for a pretty long time and it works very well. Smaller phenomena are nested inside larger phenomena. They are included in yet transcended by larger phenomena. It also helps to understand that the larger has more inherent value than the sum of its smaller parts.

By studying my triggering events and measuring them accordingly, I inform the process I am analyzing. By measuring what happens downstream, I similarly inform my analysis. Suddenly, if I have metrics for Input and Output that tell me something important which translates in favor of my goals and objectives, I will know precisely how to calibrate my process in terms of its productivity, efficiency, quality, volume, throughput and so on.

I know this is going to sound remedial to some of you and I also know that others will find this concept and practice confusing. The best I can do is point you in the direction of BPMS solutions that include simulators. There are also simulation engines from ProModel that are very good.

Simulation allows you tweak your Inputs and imagine what your Outputs will look like under different conditions. This is a practice that involves rigor and discipline. Everybody around you will find it boring. That is, until you point out the impact a process design change can have on suppliers at the point of Input or the impact on customers at Output. There are top-line sales and bottom-line inventory considerations here so do make sure your teams understand that it isn’t enough to see tasks strung together as processes but they must also see processes strung together – end-to-end – to form your entire enterprise. From this vantage point, you will all make your best business decisions and manage your risks effectively along the way.

Key A Good Fit

One final note relating to the title of this post: this practice of looking downstream and upstream for metrics is what makes your measures “key”. They describe critical indicators at critical junctures. If I screw up upstream, you can bet it will ripple through your process and screw things up downstream. One critical “key” performance indicator depends on others in its “ecosystem”. Again, I know it sounds a little cheeky for some of you but others of need to keep your eyes on all of these variables throughout your analysis. This is how you manage Unintended Consequences.

Do you have any horror stories you’d like to share? Any unintended consequences in making radical process changes? We’d love to hear from you.