Process Improvement by experience.

Process improvement? Know how to satisfy your client.  

The client comes first! A known statement in many organizations, which unfortunately is often not the case. Processes are often theoretical, out of date, not efficient and not adapted to clients’ demand and therefore ineffective. A good approach for process improvement can help to learn to work more client and/or stakeholder oriented, while achieving cost savings. Do you want to be successful in process improvement? Know what your client expects from you and ensure your organization is able to perform to these expectations.  

It is striking that process improvement sometimes is primarily about preventing waste and optimizing work processes. Obviously, that is important, but surely not the key driver. A process starts with the question how to ascertain that the client assigns value and interest in your product or service and whether they want to pay the price for it. They select contractors/suppliers on their expectations and demands. An additional important issue is the organization equipped and able to anticipate to these needs. Process improvement must start with the question whether and to which extent the processes are focused to meet the requirements and expectations of the client. The second step is to determine if the process activity adds value to the clients’ expectations. The third step, which is very often forgotten, is the organization ready to offer the required service. Finally to determine the importance of whether and to which extent these activities result in waste and process optimization.

Managing expectations.

The biggest mistake made in process improvement is that the focus is not always with the clients’ interests. The focal point is cost savings without considering the desires and expectations of clients, which is an unjustifiable judgment. Companies are anxious to reduce costs and this find its way in how the organizations are set up and structured with regards to authorization and accountability levels. Prior to process improvement it is extremely important to determine the added value for the client. What does the client expect to get for his money? Generally spoken his needs can be divided into four aspects: price, quality, service and delivery. Each aspect can be inventoried and evaluated to ascertain the clients’ demands. The strength and weaknesses of the organization is indicative and decisive for the service to be rendered.

It seems so simple, but is it that simple?  

What is the best way to go?

Risk Inventory?

Security risk analysis, otherwise known as risk assessment, is fundamental to the security of your organization. It is should be obvious that risks are not limited to security and/or safety, but much to my surprise I notice that this is rarely the case. Obviously a company is exposed daily to commercial, financial and more risks. However if you do not comply with your clients’ demand, you might be confronted with your biggest risk exposure. No clients means no business! End of story.

It is therefore essential in ensuring that controls and expenditures are fully commensurate with the risks to which the organization is exposed.

Simply said, almost everything we do in today's business world involves a risk of some kind: customer requirements or habits change, new competitors appear and factors within and beyond your control could delay your project. A risk analysis can help you to assess these risks and decide what actions to take to minimize disruptions to your business process and avoid unnecessary investments.

Failing to the clients' demands could easily result in potential threats which could hamper the growth of your business.

Risk Calculation

There many ways to determine of calculating your risks. I believe you must keep it simple and close to the basis of risk management. The standard formula for a risk score is "risk = probability x loss". Perhaps needless to explain, but nevertheless a small introduction for the ones who do not have experience with risk calculations. The loss could be divided into four criteria, namely Quality, SHE, Costs and Time. You may use the logic of the following table.

After having calculated the risk score you can determine the mitigating measures or plan of avoidance. Your second calculation is a risk score of the possible reduced probability or limited loss.

It has been proven a reliable way to ascertain your risk exposure.

The result

Opportunities which could possibly be jeopardized by unexpected threats have been pre-inventoried and evaporated. 

Accountability & Responsibility

It is important to set a clear communication matrix per process with clear accountabilities and responsibilities. In my post of 2nd March 2015 "Responsibility without Authority" I have extensively highlighted the importance of this topic and the frustration it can generate in organizations. This phenomena is better known as the No Authority Gauntlet (NAG) Syndrome. Some highlights from this post I like to share with you, which might capture your interest to read this post as well.

Perhaps the most unrecognized factor which leads to failed projects, initiatives, disappointed customers, low employee morale and dissent among employees, the form of utterly ineffective delegation is often overlooked. Specifically matrix organizations are vulnerable to this phenomenon, where individuals are managed through more than one reporting line.

Responsibility without authority may negatively influence the business process, but most likely result in flaccid cooperation and jeopardized working relations.

“Process management,” has its share of failures because the “process owner” had no authority. Once the frothy-mouthed corporate enthusiasm dies down and the suit-clad consultants go away, nagging process owners find they cannot enforce the new ERP, process improvement (or whatever) that cuts across the organization. Organizations waste millions of dollars this way. Research has shown that initiatives undertaken by nagging, pseudo-managers takes way longer than initiatives undertaken by managers who have ordinary managerial authority.

We’re talking about one of the major risks to success, and yet it costs absolutely nothing to mitigate. 

Is this in the interest of clients? The answer is self-evident.

Is there a conclusion to take from this?

Process improvement requires more than just reviewing procedures and processes.

The conclusion I have read in an interesting article of Kathy A. Long, BPM Lead for Shell Oil Exploration & Production's North America Onshore Division, formerly president of her own company, Innovative Process Consulting.

I could not have expressed it better, as she did and I fully concur her vision.

The three critical success factors for true process improvement are:

• Acknowledgement that "people are the process" Understanding that it's people, not technology, that makes an organization successful.
• People enabled with the correct skills and capabilities. Everyone in an organization must be educated with an appropriate level of process understanding.
• Alignment of the 'Political' Ducks People in the process must own the process through active participation and empowerment.

If organizations are going to implement successful process change, they must realize that "people are the process," thereby acknowledging that people are their most important asset. Organizations must enable people with the correct skill and capabilities to implement process change. And finally, all the 'political' ducks must be aligned in order to gain buy-in for change and to remove as many of the constraints to change as is feasible. To gain buy-in, people must understand the changes and have the skills to implement those changes; they must actively participate in the redesign of the process. Active participation by the people will, in turn, make them feel more ownership for the process. When people own something they want it to be successful.

Above all else, never forget, "People are the Process." Without them, nothing of value can be delivered to the customer.

Could I have said it better, I don't think so.

If you have any questions or need assistance, please do not hesitate to contact me.

Alex Fialka

QARP Quality Management