Category Archives: Management

Business Process Data: On Dashboards and Windshields

Reading about IBM’s “Stream Computing” in Business Week magazine this week, I am reminded of a time in a meeting several years ago when I groaned: “I don’t want a better dashboard; I want a cleaner windshield. I want to know what’s coming and a dashboard can’t tell me that. Those are lagging indicators.  At best, a dashboard tells me what I have done in the recent past. I want to know what my suppliers and customers are doing as they approach…before they get here.”

On My Windshield

I never did get my Windshield. Today, we’re lucky if we have a dashboard. It would  put many of us in a small minority if we could have near-real-time indicators of what just happened  on our desk-tops. From a business process management perspective, how would life be if I could see changes in my supply chain before they affect me? If I could see my suppliers’ dashboards, would that be enough to give me an idea of what I could expect?  If, instead of relying on marketing, I relied on interoperable business data between my company and my customers, could I see their demand before they pick up the phone and place an order? That information would help me in innumerable ways.I suspect very large companies can afford supply-chain and distribution information management and reporting but what is a mid and small sized organization to do?

Is it possible that my contracts with suppliers and customers might involve strategic dashboard exchange? Of course  it is. In a business-to-business relationship, my clients might even think they were doing business with a pretty smart guy if they knew I needed to know something about their data prior to them needing to know they need me. I bet they would be happy to give me that information in small packets called “Bugs”. Throughout the day, “bugs” would hit my “windshield” and I would know what’s coming down the road. You could have a lot of fun with this metaphor. Landscape, traffic signs, intersections, accidents, traffic jams, you name it.

Operations, Finance, Marketing and Sales: Performance Metrics During the Race

Dashboards are helpful. Don’t get me wrong. I find them especially helpful once I have arrived. I can quickly look back over the course of the trip (or the day at work) and understand where I have been, what my top speed was, how many miles I covered and how much fuel I used (plug your favorite business metrics in here). A windshield, however, lets me calibrate  what is happening in the midst of a high-speed race. As a former football player, I can tell you that my stats after the game were a lot less important to me than was knowing where the line-backer was when I pulled out on a sweep. Failure to see my adversary or my teammates often caused me great pain. Successfully anticipating blows led to touchdowns.

The Importance of Anticipation: Getting Out of the Blind Spot

We are living through the negative consequences of not anticipating what lies ahead. We’ve all become so enamored with the rear-view mirror and the mounted DVD players in our SUVs that we have forgotten to simply out the window in front of us and drive defensively.

This may all seem trite and I may sound like I am beating this metaphor to death but I think we need simple reminders these days. Look outside your vehicle and assess what is happening down the road. Many companies have done this very well and managed to keep staffing levels and inventory at quite safe levels. Other companies were so busy fiddling with their dashboards and cell phones and doing their make-up while they drove that they missed their exit and went over a cliff.

What do you need to know about the road ahead and the drivers around you? What kinds of “bugs” do you want hitting your “windshield”? This is a great question for your next executive team meeting. It’s also a great question for your business analysts and your line staff.

  • what would you need to know about your customers’ “demand behavior” that would allow you to do your job better?
  • what would you need to know about your suppliers and supplies?
  • what would you need to know about the economy?
  • political changes around the state, country, world?
  • currency and credit changes?
  • social trends and patterns?
  • legal developments?

Keep in mind that as you’re driving in LA, for example, you don’t want to know what’s happening on the roads in Brussels. Keep your expectations “close” to you. There is little true and accurate value in looking “down the road” for more than 30-60 days at a time. Conditions on the roads are changing far too quickly. Pay attention to the drivers next to you where it matters most. The next bend in the road is far more important than the bridge several hundred miles away.

Give your data needs some attention, ask your suppliers and customers for data and use it effectively. Good data makes good information. Reliable information becomes intelligence and enough intelligence used appropriately over time makes one wise.

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Business Process Re-Engineering: The Enemy of Inertia, Waste and Consensus Complacency

Working with several governmental and non-profit agencies recently, I noticed a pattern emerging that is at once counter-productive and based entirely in fear. What I used to think of as intellectual sloth is giving way to wasteful complacency and what I choose to call a “consensus trance” resulting from fear of losing one’s job and identity. Who would have ever thought the BPM field would awaken so many strange psycho-social bedfellows?

Snap out of it!

I find that the best response to this trance is a tactic long employed by carnival hypnotists: snap people out of it. As an outside consultant, I have a responsibility to identify waste and recommend alternatives and solutions. In order to pull that off in an atmosphere of fear and economic uncertainty, I am resorting to a heightened assertiveness, directness and tough love. I have to point out that it is not simply a matter of process but a matter of organizational dynamics causing my clients pain. Morale is taking a direct hit as it often does when people aren’t performing in ways they know they could (given the opportunity) however, coddling people and enabling even sicker patterns to take root is not the answer.

“Will” the change you want to see in your organization

I am encouraging (if not demanding) that mid-level people and directors seek out more definitive executive sponsorship and greater political will power to enforce change initiatives. Slowly, it’s working. I am documenting decisions like never before so that I can hold people accountable. I am measuring project status at every turn. I am amending contracts wherever possible. None of this is fun but it is all so necessary. If you haven’t already done so, push hard on your Project Charter and Executive Sponsor. Then push even harder on Project Management and then hold people accountable with actual consequences.

Failure is not the end of the world

If your project fails, your process re-engineering efforts produce the wrong outcome, or people on your team fail to meet expectations, act accordingly and appropriately and move on. Dwelling on the fall-out right now will not help anyone. What we need is will, speed, and efficacy.

Let me know what works!

BPM Requires Will & Leadership: Part 2 – The Solution

The Solution: Leadership and Management for the 21st Century

I am suggesting a rather radical approach to the process re-engineering required to pull ourselves and our organizations out of the pits and back into the game. Frankly, it begins with leadership. We have to be led out of the dark places we now inhabit. The problem with leadership is that it is – in business, non-profits and government – totally antithetical to our political system and philosophy. Our democracy is in much better shape than our economy so perhaps there is a lesson in there for us.

Identifying and Appointing Our Leaders

Our business leaders are very rarely elected by virtue of their competence and performance. More often, they are; dictatorships (sole proprietors); family-owned monarchies where the crown is passed to heirs; pseudo meritocracies where high performers are imported by the board from outside the company; or corrupt, criminal gangs that promote the most manipulative con-men from among executive ranks only. I hate to be so cynical but make a list of the organizations you know who hold elections for executive post and share with us. I dare you!

The democratic process is our most cherished accomplishment yet we fail to recognize the irony of its absence in business leadership.

Gary Hamel challenges us in the current issue of Harvard Business Review (February, 2009) to acknowledge and develop 25 modern management practices. It’s a brilliant proposal. Most of the 25 have direct and immediate implications for the future of BPM so I urge you to read the article. Here’s my brief summary for your consideration:

  • Promote interdependence by encouraging the formation of smaller business units that participate in multiple internal as well as external networks
  • Reinvent management at the individual level and provide everyone the data they need (within their small business units) to know how they are performing in real time. Transparency will ensure that only the strong survive. There will be no hiding from the truth when you leverage information.
  • Recast the organization as a social system where leaders are social architects who provide everyone the time, space and resources to collaborate and innovate.
  • Celebrate and harness divergence of ideas and diversity of tactics.
  • Minimize the tendency to recede to the way things have always been done. Recessions are born out of retrenching.
  • Innovation and invention will provide for the variety, selection and deployment required for evolution.
  • Spread the responsibility for strategy and direction throughout the hive, herd or flock. “Buy-in” is a notion that involves a sales job. Aim for participation instead.
  • Democratize information. When leaders hoard information, they are feared instead of trusted.
  • Enable the revolutionaries and measure the number of new ideas people bring to the table. Find your renegades.
  • Promote experimentation and accept small, failed pilots as proof that people are trying to find a new and better way to make your widgets.
  • Include people of all ranks in the engineering of the work they do. Defining one’s work incites a deep sense of ownership and passion.
  • Retrain leaders and managers so they can acquire the tools and practice management in complex ecosystems.

BPM Must Align with the Business Model

I have witnessed several very strong process-related projects fall  flat in the wake of our economic conditions. That’s not surprising given the spate of lay-offs and bankruptcies. What is surprising is the lack of fundamental integration I bear witness to. BPM and related projects, when they stand on their own, are weak, fragmented, vulnerable and will be deemed to lack business viability  in a heart beat (especially during an economic heart attack). Failure to fully integrate and demonstrate inherent value in the business model is the surest path to obsolescence.

I believe firmly in the practice, art, science and discipline of BPM and all of its cousins (Lean, Six Sigma, workflow, etc.) however, I remain steadfastly concerned that IT is much more akin to BPM than are operations people and executives. That has to change. Unfortunately, the projects I have seen shrink and dissolve these past few weeks were mission-critical.  However, it is only reasonable to expect that executives must make the best decisions they know how with the information they have. I hope we, as a field and as a discipline, can do more to demonstrate value and weave BPM into the very fabric of our organizations. As a consultant, I hope I can find new ways to better and more fully make the case for the integration of BPM within and throughout organizations so it matures into a business fundamental and not a “project”. I sincerely hope that you and your peers can provide your executives with the most succinct case for continuous process management in order that they might make the most informed decisions.

Business Modeling – the Essence of Viability

The latest Harvard Business Review (December 2008) has a section dedicated to the development of Business Models. Bear in mind that a business model is not a business plan and it is not a business case. Somewhere in between though. A business model is akin to a logic model in that it quickly establishes the logical connections or relationships between who you are, what you do, how you do it, and the effect you want to have. A business model (in particular, the model suggested in HBR by M. Johnson and C. Christensen) is best boiled down to 4 big chunks:

  1. Customer Value Proposition
  2. Financial Formula
  3. Key Resources
  4. Key processes

Now, if you’re paying attention and you think BPM is pretty swell, you noticed #4. Let’s start at the top though.

Customer Value Proposition

  • who is your targeted customer?
  • what problem are you going to solve with your product/service?
  • what is your product/service and how does it solve the problem?
  • who else is doing anything similar (the competition)?

Financial Formula

  • how do you propose making money/generating revenue?
  • what are your costs?
  • what will your profit margins be?
  • how long will it take you to generate revenue and make a profit?

Key Resources

  • People
  • technology, systems and other tools
  • information and R&D
  • brand, reputation, relationships, allies, market data and sales channels

Key Processes

  • core processes and process owners
  • business rules
  • performance metrics
  • other norms and standards

BPM’s “Must Do”

While business modeling, planning and the like are not usually in the domain of your average analyst or IT staffer, it is imperative that support be generated for the fourth dimension of business models. This is especially true in smaller organizations…the vast majority of companies. You must make your case and educate people within your organization. The best way to do this is to become fluent in business-speak (to refine your business acumen). Approaching your peers with a business model in-hand, making the case for improved Key Processes to enhance the overall business model – complete with simple examples and data-driven ROI scenarios – is your best bet. Demonstrate the relationships and dependencies between these four moving parts and move away from fragmented and discretionary “projects” until you are firmly ensconced as an unequivocal  fundamental. A business is a 4-legged animal. You must become one-fourth of the team that will lead your organization to victory.

Business Process Improvement Involves Tremendous Risk Management

PMBOK (the project management book of knowledge) gives us a wonderful (and comprehensive) outline for managing risk in any project. Now more than ever, you and I have a lot of risk to manage and mitigate – especially if we are managing a portfolio of business processes and/or are expected to treat our process improvement initiatives as though they are full-fledged projects (which I believe they are).

Here’s the basic outline and a few tools (credit goes to PMBOK). As you read, notice how much emphasis there is on access to information, data and analysis. Risk management is a series of actions and exercises. It is very much a verb! Those of us who are tasked with improving workflow and business processes need to be mindful of the risks involved in our work and bright ideas as much as we need to be aware of the broader environment we are working in. Be vigilant for risks inherent in your inputs, process, outputs (deliverables) as well as your assumptions.  Nobody wants to make a mess of something they were asked to improve.

Risk Management Outline

1. Risk Management Planning – approach to and plan for risk management as well as the approach an organization takes to execution of plans

2. Risk Identification – determining risks and identifying the characteristics of those risks

3. Qualitative Risk Analysis – prioritizing risks responses based on probability of occurrence and impact

4. Quantitative Risk Analysis – analyzing effect of risks should they come to fruition

5. Risk Response Planning – developing options and actions to minimize risks and their effects

6. Risk Monitoring & Control – tracking risks, monitoring residual risks, identifying new risks, executing risk response plans and evaluating effects of those plans

Note: PMBOK states some risks are positive and refers to them as Opportunities. Some risks are negative and are commonly  referred to as Threats. I think it is a stretch to call a risk an “opportunity.”  I prefer that you conduct a SWOT analysis.

I  am including a couple of simple tools (since its Thanksgiving!)

Impact

Very Low

Moderately Low

Neutral

Moderately High

Very High

Cost

Time

Scope

Quality

Measuring Probability

Probability

Threats

Opportunities

Very High

Moderately High

Neutral

Moderately Low

Very Low

Risk Assessment Tool

Dimension

Risk

Technical

· Requirements

· Technology

· Complexity & interfaces

· Performance & reliability

· Quality

External

· Subcontractors & suppliers

· Regulatory

· Market

· Customer

· Weather

Organizational

· Project dependencies

· Resources

· Funding

· Prioritization

Project Mgmt

· Estimating

· Planning

· Controlling

· Communication

BPM and Project Management Require More Honesty

As economic bailouts, uncertainty, stock market plunges, job losses and Chapter 11 filings proliferate, the bad habits of procrastination, workplace pandering and conflict avoidance must be addressed. This is as true among project managers, business and systems analysts, IT directors, CIOs, and consultants as it is anywhere else in the organization. It is not the responsibility of shareholders or boards of directors to ask the difficult, prying questions. That job falls on all of us. My experiences of late have reminded me that one of the most important ingredients in the field of BPM – whatever your role – is honesty. Sadly, the kind of candor we need so desperately is lacking and, sadder still, it is lacking by virtue of fear.

The Veil of IT

I have long been a critic of approaches to business challenges that lead with IT. I know it’s not really endemic but it feels like IT – with all its complexity and constant change, foreign languages and virtual qualities – easily shrouds and conceals reality from the lay-person and the executive suite. I have advocated from my humble beginnings that business process improvements are not IT projects. Not because I am a purist and believe singularly in the capabilities of operations folks but because I have worked with too many IT people who were challenged in the process of bridging theoretical, conceptual, linguistic and practical gaps between parties. I also believe that BPM stands a fair chance of overcoming those gaps but it is no guarantee. An honest, plain language approach is best.

Just the Brutal Facts

The act of watching banks, retailers and they-once-were-giants automobile manufacturers beg for financial aid and close their doors ought to be sending a piercing, shrill alarm through every organization and project team: tell the truth. It should also be establishing a new order: if this project is a high priority, then it will be first on your list and you will attend to it as though your livelihood depends on it. Thirdly, if you know something that has enterprise-wide, bottom-line, life or death implications, you must speak up and let your immediate superiors know about it.

I have several clients at present who have begun mission-critical projects (which truly will make or break their success) only to come up with competing projects and priorities 2 and 3 short months after project initiation. Consequently, SMEs and managers are stretched not knowing what meetings to attend and what homework to do. I have other clients who suffer from the obscuration of truth by virtue of frightened and manipulative IT leaders who continue to speak IT gibberish hoping to buy themselves more time and additional staffing resources to compensate for their own lack. I have other clients who insist on keeping critical information from the CEO or CFO, failing to disclose the true nature of process-related problems in meetings.

Yesterday, for example, I met with a hospital system executive and management team whose CIO insisted that the executive sponsor for a mission-critical IT project was one of his subordinates. I had to remind he and the entire team that sponsorship of a multi-million dollar, do-or-die project is not to be pushed down to a subordinate – particularly one complaining of being over-burdened by external healthcare quality audits and accreditation initiatives. The CIO’s reluctance to accept responsibility for this BPM project was alarming, especially given remarks from the CEO just minutes earlier that reinforced the critical nature of the project. How is it that the CEO and CIO were both so far off the mark in terms of ownership? Why is it that an outsider had to persuade them to reconsider their decisions and approach?

BPM Needs Executive Leadership

These issues – truth, leadership, due diligence, strategic decision-making – speak loudly on behalf of the importance of a BPO or Business Process Officer role. A role that transcends operations and IT and reports directly to the CEO is needed in some organizations if the CIO or COO do not want to or cannot accept full responsibility for it.These projects often involve enterprise-wide resources and decisions that – if not executed properly – can and will ensure success or failure. They need to be treated as such.

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.