FCPA Compliance and Ethics Blog

June 5, 2015

Business processes-getting the balance right

Filed under: Tim Aikens — tfoxlaw @ 12:01 am
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7K0A0501Ed. Note-today I cross-posted an article from the blog, Brains, Business and Culture by Tim Aikens, with permission. 

Ever since Messrs Hammer and Champy published Reengineering the Corporation in 1993, consultants have done good business in helping clients reengineer the way they do things.  Many companies have benefitted greatly, others have struggled either to make effective change or to make the change stick.  What has generally emerged is the recognition that any business has a set of key processes which have a major impact on the success or otherwise of the business.  Getting these right is critical – it is important to have ‘good process’.

Typically, a good process is very clear, well operationalised and the staff are well trained in its execution.  In the world of CRM (customer relationship management) the processes are supported by significant IT infrastructure.  In some areas of manufacturing the process is almost entirely automated.  However, in developing a good process we can potentially create a dilemma.  The clearer and more ingrained the process – or the bigger the investment in the process, the harder it becomes to change, adjust or even improve.

So where is the balance between a really good process that is well executed and the ability to remain flexible, seek further improvement, respond to the competition or take advantage of new technology?  The answer isn’t simple and it is one most businesses will struggle with at some stage (or even all the time).

At a very high level, I think two things are needed to address the issue.  The first is – of course – a process that considers the impact and need for change in a process and how this is undertaken.  The second is a culture that openly desires and encourages a level of constructive challenge and the third is an organisation that has the freedom to challenge.

Taking the first of these, most processes can be defined in two dimensions.  Firstly, the extent to which they are critical to business success.  Some will always be more important than others.  The second dimension is the extent to which they may susceptible to rapid change – by new technology, competitive forces or the customer for example.

In a diagram it would show that up in the top right hand corner the ‘process’ needs undertake a regular review, whereas those in the bottom left corner need perhaps a less frequent and less intense review.  These reviews need to look at the process against;

Strategic fit; does the process continue to support strategy?

Technology; what technology changes are worth considering to improve the process?

Competition; is the process still delivering competitive advantage, what must be done to stay ahead or get ahead?

People; are the staff effectively trained, properly competent and are there enough of them?

The customer; what if anything has changed with the customer, how can the experience be improved?

Integration: does this process ‘fit’ with all other related processes; have changes to other processes had an impact on this one?

This is not an exhaustive list – there may well be other considerations.  The important thing is to have a structured review in a timely manner.  Doing this will require time and effort which is why you need to consider the relative need for such a review on a process by process basis.  James Dyson and his company rely a lot on their reputation for innovation and leading edge technology.  Consequently he will always be looking not only at his development processes, but also at how he manufactures his products, given that they will be subject to regular technology upgrades.  On the other hand a good old fashioned whiskey distillery might want to focus more on its customer and marketing processes than the manufacturing technology!  The outcome may well be plans for change or may simply be confirmation that the current purpose is good and can be continued with confidence.

What about culture?  How can that affect your organisation’s ability to both deliver process and allow an environment for healthy challenge and change?  Consider this scenario.  As a young graduate you have been working for a telecommunications company for a couple of years on the development and delivery of new networks.  With your recently acquired experience and expertise you believe that some significant improvements can be made to a number of processes.  To what extent do you feel comfortable with talking about your ideas to your superiors even if they mean cutting across what might be ‘accepted wisdom’?  Equally, to what extent have you felt free (or even encouraged) to explore and challenge new ideas, yet still meeting the needs of the currently accepted process?  In a number of industries the need to follow approved processes is paramount – not least for health and safety reasons.  Yet creating an environment where these can be challenged is equally important.

Culture is set from the top.  The management team need to be clear about the behaviours they expect to see and set the standard themselves.  If you see a senior manager asking what could be improved on the one hand and setting clear expectations for process compliance on the other it could appear confusing unless clearly articulated.  Yet it is possible.  I have seen this happen myself in working in the oil industry where process compliance is essential.  Yet staff have come up with ideas to challenge the status quo and made them work!

How good is your organisation at managing process and encouraging change?

Tim Aikens is an experienced management consultant specializing in business and organizational transformation. I have worked for several large consulting companies and now offer my services as an independent consultant. He provides partner level consulting at a fair price! He can be reached via email at tim@azarel.org or by phone at 44 7917565011.

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