Tag Archives: Innovation

It’s Time for Strategic Business Process Management

I am coming off several weeks’ having to reassure clients that they are doing well and that – so long as they stick to their knitting – they’ll be ok a year from now. I have others who have required some serious, adult discussions. They lack a cohesive strategic plan, therefore, they lack in the areas of discipline, direction, commitment and – frankly – workflow IQ. They struggle with change, flexibility and orientation (“where are we?!”)

The disconnect is rampant. Perhaps it’s in the name. Shall we refer to business process management (BPM) as Strategic Process Management (SPM) from now on? You heard it here first, folks.

Strategy+Goals+Objectives+Metrics

I’ve heard others call it Business Motivation Modeling and agree that we need a deeper understanding of critical business drivers. This field and the broader business interests and stakeholders it serves needs to reminded constantly of the “means”, the “ends”, and the “influences”.  By keeping a strict focus on strategic goals (building the business, becoming #1, being fastest, cleanest, safest, whatever) and tactical objectives, business analysts and process engineers ought to be able to produce the outcome they’re looking for and they ought to be measure whether they’ve achieved their goals or not.

Environmental Analysis

However, failing to manage strategy and failing to carefully and comprehensively assess what is happening economically, politically, socially, technologically, competitively and legislatively will absolutely result in painful surprises. I have seen people very proud to have hit sadly meaningless targets lately.

Strategic and Technical Advisory Groups (STAGs)

I am calling for the formation of STAGs in every organization with 25+ employees. This committee will review and evaluate business process and other organizational change from both a technical standpoint and a strategic standpoint. Strict adherence to strategy (bearing in mind that strategy – not values – can and ought to change to reflect the environment) will be their direct responsibility. There will be an executive on each STAG until and unless every organization recruits a Chief Process Officer. Perhaps then, the brilliance of BPM will have been fully activated.

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Spy: Small Business Process Improvements Based on Process Benchmarks

I have to admit to being a chronic process observer and critic. Every time I sit in a restaurant, go into a store, arrive at a hotel, go to the doctor or shop online I pay attention to what staff and managers are doing and I judge. Sometimes I am deeply fond of what I see and other times I am vicious in my critique. While I am a little obsessive about all this, there is some virtue in the exercise. As a consultant, it’s important to have had exposure to tactics and process that work especially well in order to make stronger recommendations for clients. It’s also important, working across sectors to develop a mental inventory of what doesn’t work, what can be emulated and what can be tweaked to serve cross-purposes. Frankly, I would hope that anyone aspiring to build a business, product or consultancy in this domain would be doing the same kinds of things.

Spy versus Spy: Lean Innovation

Welcome to the age of transparency, reverse engineering and piracy. Watching the equivalent of So You Think You Can Dance on Indian TV broadcast by satellite last night, my Indian friend quipped: “They copy everything we do”. Reading about the new film Duplicity in the latest issue of Fast Company I am reminded that the “leanest” forms of adaptation are mimicry and emulation. It’s called “evolution” folks.It’s the 100th Monkey Theory in blazing sound and technicolor. In some cases, it’s downright criminal so be careful where you draw the line.

I’m sure by now you’ve heard that the sum total information in the world is doubling every 3-6 months or something like that. Similarly, in an open information age, we have the capacity to observe, re-engineer, implement, measure and observe again at dizzying rates. Knowing that competitors are observing and mimicking us should serve as a catalyst for greater and faster innovation (and ever more patent filings).

How About A Small Business?

Small enterprises can’t afford teams of engineers and analysts that prowl the web and deconstruct rival products the way Toyota and Honda tore into the Saturn. There is no virtue in piracy so what’s a small business to do? Give observation and emulation a try. Watch what others do and then think in terms of business process. What process can you borrow and pilot in your own shop?

Process Benchmarking

A Benchmark is a standard and, for our purposes, the Gold Standard. The Best Practice. I want to advocate for an open process exchange that enables up-and-coming enterprises to learn from the best. This idea may never take root in the private sector but it might in government and non-profit sectors. For example, what can my library learn from the Pentagon? What can a Blood Drive learn from the Census? What can the EPA learn from Green peace?

As a small business owner, I can effectively identify the leader in my market, the highest quality product or the lowest priced competitor and I can start studying how they deliver their products and services. Similarly, I can go to the leader in a totally unrelated field and observe them in action.

Benchmarking

Rivals’ and leaders’ strengths my not be in their products (engineering, materials, quality and performance) alone. You can look for benchmarks in the following areas:

  • Suppliers – supply chain, quality, ethics
  • Human Resources – recruiting, hiring and retention
  • Customer Service – walk-in, online and telephone, service responsiveness policies, dress code, etc
  • Marketing and Sales – packaging, pricing, branding, placement, promotions, sales tactics and pitches
  • Finance – pricing, financing, terms

The point is, identify some leaders, grab a pad of paper and a pen and go observe what they do and HOW they do it. Imagine how you could mimic, emulate or adopt what they do.

Keep it Simple

A final word on simple. While their algorithms are crazy complex and probably cannot ever be emulated, Google stands as the single greatest example of simplicity in customer experience. That simple one-box web page with scarcely 50 words on it – as of today – owns 64.2% of the world wide web’s search activity. They are killing their rivals with simplicity. How can you do the same?

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.

Is Present Reality (Current State) a Prerequisite for Design of the Future State?

Once in awhile, a riddle so obscure and enigmatic comes along that it baffles and stumps most of our brightest thinkers and deepest philosophers, qualifying as a Zen koan. Like the sound of one hand clapping or the sight of your face before you were conceived, the answer cannot really be found in any conventional sense. Well, in my humble opinion good people, the tension between current state and future state and the need to document and analyze the “as-is” prior to taking on the “to-be” doesn’t qualify as a Zen Koan or a crossword puzzle for that matter. There is no question. You have to understand the present dynamics and process in order to sensibly develop something new.

I know that I will offend some of the business process management wizards and high priests by saying as much but my position is one of firmly believing in the value of documenting and analyzing the current state to ensure a high quality future. Frankly, jumping into the design of the future state without regard for a rather precise current state is irresponsible. Not unlike asking someone how they’d like to perform in graduate school without first ascertaining whether they can read or not. Or promising someone full health without first diagnosing their diabetes. The present state in business tells a vast and deep story that shapes the possible and potential future.

Dangerous “Experts”

I attended a conference recently (devoted to the adoption of EMR in physician practices) whereupon I was able to listen to a discussion at our lunch table between a woefully ignorant doctor who wondered aloud what it would take to implement such a thing as an electronic medical record and an “expert” across the table who piped up and assured him that he needn’t worry about how things are done in in his practice today. He would only be required to imagine what life would be like with his new system. What a  load!

Notwithstanding that particular “consultant” and his advice to the good doctor, it got me wondering, “How many of my colleagues would suggest the same?” I wish I could survey all of my BPM brothers and sisters out there. Do you honestly think you can account for all of the business rules, decision-making, forms, customer preferences, suppliers, and key metrics involved in a process without concerning yourselves with the current state. Do you really think you can skip that step and begin modeling the future state without compromising quality or any other vital business attribute? I think not.

Change without consideration for the present is invention

Don’t get me wrong. I love to invent stuff and get wickedly creative when given a chance to roam free. However, invention cannot capture all of the good reasons why my system dynamics are what they are and cannot account for the benefits and value inherent in my current state without first elucidating them. Failing to harvest and capture the good, the rules, the data, the preferences, and the logic and simply launching into invention risks losing a lot including compliance with standards of all kinds. The risks involved can cause an invented business process to become fatally flawed in short order, grinding business to a halt.

Take your time and carefully document what you do today and how you do it. Inventing the wrong thing, failing and trying weeks or months later to return to an undocumented state is fools work.

Business Process Management (BPM) Core to Business Models Capable of Succeeding in this Economy

Reading the newspaper or watching TV news lately is an exercise in developing a blistering case of depression or anxiety or both. At the close of business this week we learned about record numbers of unemployment claims as well as lay-offs at Kodak, Ford, Starbucks, Caterpillar and Home Depot. Nearly twice as many people are unemployed today as were 12 months ago. The Dow dropped more than 8% this week and new home sales dropped almost 15% in December to their lowest point ever. How can anyone envision improved business prospects in this climate?

There’s Hope!

You can find examples of success if you look in the right places, folks. While the International Air Transport Association was reporting record losses for airlines this past year, they (in a January 30 USA Today story) acknowledged that “the only major carrier to report a profit in 2008 was Dallas-based discount giant Southwest Airlines.” Another story this week confirmed that while retailers continue to count the change in their pockets (and Circuit City says good-bye), this side-bar managed a small mention: “Citing its best holiday season ever, Amazon.com reported 4th quarter profits of $225M. The retailer said revenue rose 18% to $6.7 billion exceeding analysts estimates.”

This is Still an Economy After All

Those of us who remain in business must remember that we are in business. This is not family and it is not a social event. Nothing is certain in business and it is rich with risk and speculation. We are involved in developing and continuously massaging business models and business plans. If ever there was a bell weather event demanding BPM, this recession is it.  I have heard people tell me (this week!) that they do not want to “lose the art” involved in how they conduct themselves and execute their core processes. They “prefer the judgment and reflection involved in making choices as to how to proceed” and want to “preserve that unique and individualized process”…while they go out of business!

BPM is not and should not be about hard-coding anything. Rather, it enables you to design work and process that can more easily be tweaked and simulated to suit conditions assuming you stay on top of both the conditions and the process. This is active, dynamic and organic stuff.

Several people have commented that Southwest, Amazon, Wal-Mart and Costco are thriving right now because they have a different business model than their competitors. I want to suggest that that is the point. It is past time for all of us to question our business model and challenge (aggressively) our enshrined assumptions concerning the way we do business.  Each of these companies challenged their entire industry and introduced unparalleled and disruptive innovation.

When, in healthcare for instance, professionals wonder why their patients seek health education online at WebMD rather than making an appointment, someone is evidently not paying attention.  1,000,000 medical tourists will take their hard-earned money to Thailand, India and Mexico for that hip replacement. Wal-Mart sells prescriptions for $4 and Minute Clinics are popping up in malls and grocery stores by the hundreds. Times have changed so it’s best to invest in change.

Innovate or Die?

Most of us can find plenty of evidence for what it is our customers and prospects don’t want to buy. How many of us are working as hard as we can to discover what it is they do want to buy? How many of us are innovating our business processes so that we can drive a new business model in a new business and economic environment? Using BPM to bring a visual/graphic dimension to what you do and how you do it will allow you to unlock the “Special Sauce” potential in your business. Until you can look into the core of your business machinations, you lack the perspective to see how it is that you can discover quality and efficiency gains while incorporating the voice of your customer in the process.

Some people argue with the “Innovate or Die” adage. Ok. Try this: Adapt to rapidly changing conditions by changing your business model (customer value proposition, resource mix, processes, financial formula). Choose your market carefully and sell what your customers want to buy at a price they can afford.

Remember: there are still many trillions of dollars in the economy! What can you do to tap into that? How can BPM support your mission?

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 Conceptkinda 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.

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.