The Process Paradox - How can processes deliver consistency while constantly changing.

"Any process, in any organization will perfectly produce that which it has been designed to produce."

Any process, in any organization will perfectly produce that which it has been designed to produce. If your role or job function causes you to have responsibility for or cause the creation of processes - then you must admit the above statement as a factual truth. If you cannot come to this rationalization then you must stop reading now because there is nothing more that I can do for you. If you are able to come to that understanding then together we're going to explore processes how they come to exist, when good processes go bad and how to improve them.

Put simply a process may be defined as - those modes, methods or methodologies that transform inputs into outputs. In other words processes are how organizations create value; the word is better defined by Clayton Christensen in his book The Innovator's Solution where he defines a process as - 'the work of people, equipment, technology, product designs, brands, information, energy, and cash into products and services of greater worth. The patterns of interaction, coordination, communication, and decision making through which they accomplish these transformations.' he goes on to state further that 'processes include the ways that products are developed and made which include the methods by which procurement, market research, budgeting, employee development, compensation and resource allocation are accomplished.'

How do processes come to exist ?

Processes exist for one reason and one reason only - to deliver consistency. That's it, there's no other reason that they exist, when a firm is in its infancy there is a heavy reliance on the resources within the firm to produce consistent results. These resources are normally the founders who have to physically work and produce in order to consistently meet the customers' requirements. However, as the firm grows they must turn their attention away from operational to more strategic activities if growth is to continue. As such they may hire persons to come in and fill those roles in their operations but how will they ensure that these persons will deliver the same outcomes that customers have become used to? You've guessed right if you said - Processes.

Ever go somewhere and hear the staff say - 'that's how we do things around here' or 'that's how we do it'. What you're observing is organizational culture in action but how did it come to that? When did they first start saying - 'that's how we do it around here.' It's an outcome of what we've been discussing the RPV Framework, Resource, Process and Values, it's the culture creation framework or at least that's what I call it. Now, let's be clear we're still talking processes but folks need to be aware of what you're up against when you try to change a process within a firm; many times you'll be going up against ingrained, entrenched organizational culture.

Okay. so your processes are in place but you need to now determine if the persons you've hired to deliver consistency are in fact doing that, but how could you know? You've guessed right again if you said - KPI's. Now I like to think of KPI's as a part of a family of data - I refer to that family as Measures, Metrics & Indicators (MMI). Measures are those data points which only have a magnitude and form the basis for more complex measures and indicators. Measures include such data points as pallets, barrels, containers, etc. I like to define Metrics as a combination of one or more measure that has been qualified. The qualifier may for example be time such as barrels per hour, or the qualifier may be a resource such as revenue per employee. Now an indicator is a combination of one or more measures or metrics, the measures and metrics are the drivers for the indicator and by adjusting these drivers you can affect the outcomes. Examples of indicators would include; productivity per man hour, whenever you encounter a compound measure of performance it is an indicator. However not all indicators are 'Key', Key Indicators are those that rise to the level of corporate observation, to be clear you may have Key Performance Indicators, Key Quality Indicators, Key Sourcing Indicators not everything's a KPI.

What's with the epistle about KPI's ? Aren't we talking about processes? I'm getting there - but I had to lay the groundwork. Now by monitoring these MMI's you can ensure not just consistency but improvement in the delivery of consistency for your customers. But, MMI's perform another job that you may not see at first but it plays a critical role in culture creation. MMI's show the workforce in strict terms what the organization values. Let's say a firm has an attendance register and that punctuality is a component of your performance review - persons working at this firm will come to realize that the firm places a high value on punctuality or time. There will, at that firm develop a culture of sensitivity to time.

There you have it, that's how processes come to exist; they exist to deliver consistency over time which is pretty good - except that things change over time. If things change how can we rely on processes which at their core were designed to ensure that things don't change! Let's get to it...

When good processes go bad

It sounds like the title to some low budget movie but I assure you we're still talking about processes. In the introduction there was a statement that said - Any process, in any organization will perfectly produce that which it has been designed to produce. The learned and late Clayton Christensen stated that processes had a lot to do with the work of people, their interactions and communications in transforming inputs into outputs he included the technologies, methodologies and tools being used as part and parcel to the definition of processes. But, processes are designed to produce a specific outcome utilizing specific resources using specific tools any deviation will lead to an alternate outcome. But organizations change, customers change but processes remain the same; how can we ensure the same consistency in delivery according to the customer requirements? Enter processes ugly relative: the work-around.

The 'work-around' and it's little brother the 'quick fix' don't address root causes, their specialty is to infiltrate processes, muck up the works and create subroutines that address an individual deviation from an existing process. Work-around and quick fixes normally form part of the informal processes within firms, unwritten, unapproved but in place. What was really needed was the creation of an exception process to address fully the deviation or a revision of the existing process to determine its continued viability in the face of the change. But that rarely happens because work-arounds are incredibly useful and timely and they sure can get you out of a jam! Pretty soon however we lose track of where the process starts and the work-around ends and so begins the misalignment. Now it's not just workflows that cause misalignment in processes staff capabilities and capacities - their toolkits can impact the effectiveness of processes.

The processes in some firms work perfectly to create problems, if you work in a job where you're constantly putting out fires or solving customer complaints about service delivery or quality, then you my friend are the victim of a mis-aligned process. The context for which the process was originally designed has changed, it can no longer meet the customer requirements based on its design parameters - but that's the way we do things around here. Your firefighting efforts are short term and team members revert to the culture furthermore the firm doesn't value what you're suggesting, and the toolkits of persons you need to sustain the change render them incapable of understanding the change needed - it's going to be harder than you thought to change this process...

How to improve processes?

Now that you are aware of the complexity related to processes as well as some of the difficulties in maintaining the efficacy of processes let's learn about how to improve processes.

Process improvement can be proactive or reactive, that is you can control the inputs or the outputs. If all inputs are free from defects then the probability that the outputs will also be free from defects will also be high, but this doesn't guarantee perfection as all processes naturally produce variation; the question being - is the variation within the acceptable limits? Let's look at some steps that you can take to improve the alignment and performance of processes within your firm.

Determine your process strategy - this will allow you to align service delivery or output requirements with firm capabilities and capacities. Process strategy will be intrinsically linked to your market strategy ideally you'll choose one of the following strategies, process focused, repetitive focused, product focus or mass customization. The whole organization has to be aligned if the benefits are to be reaped or you may run into bottlenecks, deviations or starvation of your processes.

Firm Capacities and Capabilities - firm capacity is the throughput, production or service level that will produce a desired economic benefit for shareholders. A knowledge of the desired output levels will inform decisions such as type (human or automated) and number of labour, this will be informed by the capabilities within the firm. It's here that you'll convert financial inputs into competitive advantages through measures such as improved quality or throughput speed that come with improved processes. You'll utilize tools such as constraint management, bottleneck management, optimization and break-even analysis to manage the tradeoffs that will lead to more favourable outcomes. You may need to train or develop team members in order to meet some capability requirements if development isn't an option then hiring or outsourcing is always an option.

Process Capabilities - never mind that you promise your customers 98% service level or 2 minutes wait time for calls; what is the reality of the situation? That's what matters; what can your existing process consistently produce? Without this truth you won't be able to improve in any meaningful way. You must gather useful data about your operations continuously, you'll utilize tools such as Process Capability Ratio, Index, Acceptance Sampling, SPC and AOQ to determine if the process outputs meet the design parameters or expectations. Once you have a good understanding of your capabilities then you can go about improvement.

Document your processes - enough can never be said about proper documentation of processes. Documented processes creates a body of knowledge within the firm that is resistant to brain drain. Long after persons with certain capabilities have come and gone the knowledge that they have shared remains to be improved upon and continue to deliver value. Firms must document what they do and do what they document in order to ensure consistency in the delivery of service or quality.

Process Optimization & Simulation - by utilizing data from process capability studies and through digitization of process flows you will be able to utilize simulation software to validate process performance. Optimization will allows you to create integrated processes that cut across business units and reduce redundancies while improving efficiencies. Some software can suggest bottlenecks or show issues with utilization, workflows and a number of other key process related issues. Simulation tools are also a good way to create digital twins of your operations as some have this capability as well as as value chain mapping.

Implement a Quality Management System - a robust quality management system can help to improve the consistency in service delivery or quality. It's also a good way to get top management's participation this provides the heavy-weight support that is needed for some process improvement exercises. Furthermore a quality management designation is a good indicator to competitors, suppliers and customers about your organizational values and your commitment to those values. It also communicates to team members the shift in the firm's expectations of them and clearly shows how their roles will change and how those changes will improve the economic benefit of the firm.

Measure for what you want - we spoke earlier about MMI's and the role they play in value creation as part of the RPV Framework. It's important to monitor and improve processes by the measurement of key data points, the frequency of measurement will based on the nature of the data; is the data responsive requiring frequent updates to stave off issues or is it less prone to variation such that less frequent review is required. Remember MMI's aren't one size fits all plus the context of business changes all the time - change your MMI's based on your strategic objectives to stay on top of process outputs.

There are still more ways to improve processes perhaps ways I've not yet had the opportunity to learn about. If you know of ways to improve processes that I've failed to mention please drop them in the comments so that we can improve our collective knowledge. Until then remember this - process management and improvement is an infinite game, stay safe.