Spirit of Performance

The purpose of an organization is to enable common men to do uncommon things.

Morality, to have any meaning at all, must not be exhortation, sermon, or good intentions.  It must be practices.  Specifically:

1. The focus of the organization must be on performance.  The first requirement of performance is high performance standards, for the group as well as for each individual.
2. The focus of the organization must be on opportunities rather than on problems.
3. The decisions that affect people – their placement, pay, promotion, demotion, and severance must express the values and beliefs of the organization.
4. Finally, in its people decisions, management must demonstrate that it realizes that integrity is one absolute requirement of any manager, the one quality that he has to bring with him and cannot be expected to acquire later on.

ACTION POINT: Focus on performance, opportunities, people and integrity.

Understanding Implementation Obstacles

You can avoid many implementation obstacles by laying the groundwork early

Before implementing your new process, it's useful to understand common obstacles to implementing a redesign and to ask yourself whether you've taken steps to avoid them.

You can avoid many implementation obstacles by laying the groundwork early in your BPI effort.  For example, help managers and employees see the importance of changing the process, and involve them in the redesign.  The more they participate, the more they will understand the value of the change and support its implementation.   

ACTION POINT:  Ask people to take part in testing the new process will help them see that the change is feasible, and will get them on board for implementation.

Implementing your Redesigned Business Process

Many experts maintain that implementation is the most difficult step in any BPI effort. 

With resources in place and the process design completed and tested, you're ready to implement your redesigned process.  That is, you'll actually start using the new process within your organization.

Many experts maintain that implementation is the most difficult step in any BPI effort.  To boos your changes of success, think of implementation as consisting of these parts.

• Understanding implementation obstacles
• Rolling out the new process.

ACTION POINT: Recognize and prepare for the challenges that will be part of any process change.

Obtain the Resources

 To build the required infrastructure and gather necessary material, you will likely need to work with other departments or business units. 

Once you've identified the resources you'll need to implement your new process, you'll have to figure out how to acquire them.  To build the required infrastructure and gather necessary material, you will likely need to work with other departments or business units.  For example, if your redesigned process requires extensive new equipment or technology, you will probably have to order these materials through your company's purchasing or IT department.

If numerous people will require training in using the new process, you may have to work with the human resources department to provide relevant workshops or courses.  However, if the redesigned process requires that just one person be trained in a relatively straightforward task that does not call for a change in job responsibilities, you may not need formal HR involvement.  In this case, you may be able to simply ask another employee in you department to meet with the employee and explain the new task to him or her.

ACTION POINT: Consider the degree of training, equipment or technology that will be required with a process change.

Understand Resource Types

A new process often creates new responsibilities that need to be incorporated into management activities.

Depending on the complexity and scope of your new process, the resources you'll need can vary dramatically.  For example, a process change may require:

• New or changed work roles.  With many BPI efforts, you may decide to use consultants or contractors to perform the redesigned process.  Or you may change an existing employee's job responsibilities so that he or she now performs part of the redesigned process, or hire entirely new employees to carry out the process.
• New equipment or technology.  Some process redesigns require new equipment or technology. 
• New physical space where equipment and technology can reside or where people can carry out the process.
• Support form information technology experts.
• Training
• New management responsibilities and metrics.  A new process often creates new responsibilities that need to be incorporated into management activities.

ACTION POINT:  Major process changes will require some or all of the resources above,  However, many process changes are more minor and require less substantial resources.

The Responsible Worker

The responsible worker has a personal commitment to getting results.

But there also is the task of building and leading organizations in which every person sees herself as a “manager” and accepts the full burden of what is basically managerial  responsibility for her own job and work group, for her contribution to the performance and results of the entire organization, and for the social tasks of the work community.

Responsibility, therefore, is both external and internal.  Externally it implies accountability to some person or body and accountability for specific performance.  Internally it implies commitment.  The Responsible Worker is a worker who not only is accountable for specific results but also has authority to do whatever is necessary to produce these results and, finally, is committed to these results as a personal achievement.

ACTION POINT:  Are you personally committed to getting results at work, or are you just going through the motions? 

Tips for Redesigning a Business Process

Change the process in ways that provide value that the customer wants--for example, more speed and efficiency, more accuracy, less cost, or a singe point of contact between customers and your company.

The following list of tips can aid in the redesign of a business process:

• Change the process in ways that provide value that the customer wants--for example, more speed and efficiency, more accuracy, less cost, or a singe point of contact between customers and your company.
• Don't be constrained by current job titles, responsibilities, and locations.  If you need to create a new position to make the process flow as effectively as possible, consider doing so.
• Attack the biggest time-wasters in the process first--such as points where there is extensive waiting, moving, or rework.
• Examine the logic behind the current sequence of steps in the process. Ask yourself whether the process would work more quickly or efficiently if you rearranged the steps.
• Look for opportunities to remove unnecessary reviews of completed work.  When people know that their work will be reviewed multiple times, the incentive to git it right the first time diminishes.
• To decrease the number of steps in a process, eliminate sign offs or approvals by individuals on activities they don't know much about.  Instead push decision making down to where the work is actually being done.
• Identify opportunities to simplify steps that are unnecessarily complex.
• Involve as few people as possible in performing a process.   You'll reduce the number of potential bottlenecks and other problems.
• Identify problem points in the process by asking the people involved where they experience frustration, and by asking what precisely, frustrates them.  Answers might include "When this part of the work gets to me, there's missing information."
• To identify bottlenecks in the current process, increase the inputs flowing through it, and accelerate the speed at which the process is performed.  Bottlenecks will become more noticeable under these conditions.

ACTION POINT: Consider the tips above when reviewing and redesigning a process.

Redesign the New Process

When people contribute ideas for changing a process, they often feel more committed to it.

Some questions to have your stakeholders consider when presenting a redesigned process are:

• "Does this process, as designed, address the performance issues identified in the project goal?  Does it enable us to take advantage of important opportunities?"
• "Where do you see potential issues arising in this proposed process?"
• "What suggestions would you offer to improve the process's effectiveness at achieving the projects goals?"
• "In your opinion, have we missed something that's important? If so, what is it?"

By inviting contributions from stakeholders, you begin building support for the new process your team has crafted.  When people contribute ideas for changing a process, they often feel more committed to it.

ACTION POINT: Consider further revisions to your redesigned process based on the feedback of stakeholders.

Document Your New Design

The general who wins the battle makes many calculations in his temple before the battle is fought. --Sun Tzu

Document the latest version of your redesign in an activity flowchart.  Omit details about who will do which tasks.  That information will come later.  For now, you want to present a relatively simple version of the process to stakeholders to invite their feedback and ideas.

Present the new activity flowchart--along with information about how you generated ideas for the proposed process--to key stakeholders.  These stakeholders will likely include your manager as well as others in the company who would be affected by the changed process.

ACTION POINT: Plan your changes and clarify them by writing them out.

The Purpose of Profit

Profit is the ultimate test of business performance.

Profit serves three purposes.  One is it measures the net effectiveness and soundness of a business’s efforts.  Another is the “risk premium” that covers the costs of staying in business-replacement, obsolescence, market risk and uncertainty.  Seen from this point of view, there is no such thing as “profit”; there are only “costs of being in business” and “costs of staying business.”  And the task of a business is to provide adequate profit.  

Finally, profit ensures the supply of future capital for innovation and expansion, either directly, by providing the means of self-financing out of retained earnings, or indirectly, through providing sufficient inducement for new outside capital in the form in which it is best suited to the enterprise’s objectives.

ACTION POINT: Decide to pull the plug on an unprofitable business if it is not covering the cost required to stay in business or providing enough capital for future growth.

Envision a Better Process

Define performance metrics related to:

In addition to brainstorming ways to improve the process determine how to measure the new process's performance.  Define performance metrics related to:

• Customer satisfaction - for example, "Number of times customer has to phone the company before getting their problem solved" or "amount of time on hold."
• Quality - such as "Number of errors in assembly, or pick, or delivery."
• Cost - such as "Amount spent per quarter on parts."
• Cycle time - for instance, "Number of hours to assemble one unit of product."

ACTION POINT: Direct process improvement toward the activities that will impact the metrics listed above.

Envision a Better Process

 Be sure that the ideal process directly addresses the business problem or opportunity identified in the project goals. 

With your team , visualize what an ideal process would look like.  Be sure that the ideal process directly addresses the business problem or opportunity identified in the project goals.   Brainstorm ways to make the process better.

During the brainstorming, set aside the "as is" process flowchart, so new ideas won't be influenced by the status quo.  Then think about ways to improve the process's performance.  First, think about ways to     exceed customers' expectations.  Could the accuracy, speed, and quality of the process be improved?  How might the process be improved to make it easier for customers to do business with the company?

Second, consider ways to cut costs.  Could steps be eliminated form the process to reduce the number of resources required or reduce the cost of the resources used?  Third brainstorm ideas for reducing cycle time--the total time it takes to complete the process.  Could requests for clarification or information be eliminated to speed up the process?

ACTION POINT: When improving a process consider ways to: exceed customer expectations, cut costs and reduce cycle time.

Redesign Your Business Process

...redesign the process so that it produces the outcomes you're looking for.

You've analyzed the existing process that you identified for improvement.  Now it's time for your BPI team to redesign the process so that it produces the outcomes you're looking for.  The redesign process consists of these steps:

• Envisioning a better process
• Testing your team's ideas
• Considering the implications of a potential redesign
• Documenting your redesign
• Gathering feedback from stakeholders and refining the redesigned process

ACTION POINT: At the end of your redesign phase, you should have a set of documents describing the proposed process redesign that is approved by management and other key stakeholders.

Balancing Objectives and Measurements

The traditional theorem of the maximization of profit has to be discarded.

To manage a business is to balance a variety of needs and goals.  To emphasize only profit, misdirects managers to the point where they may endanger the survival of the business.  To obtain profit today, they tend to undermine the future.  They may push the most easily sale able product lines and slight those that are the market of tomorrow.  They tend to shortchange research, promotion, and other postponable investments.  Above all, they shy away from any capital expenditure that may increase the investment capital base against which profits are measured; and the result is dangerous obsolescing of equipment.  In other words, they are directed into the worst practices of management.

Objectives are needed in every area where performance and results directly and vitally affect the survival and prosperity of the business.  There are eight areas in which performance and objectives have to be set:  market standing, innovation, productivity, physical and financial resources, profitability, manager performance and development, worker performance and attitude, and public responsibility.  Different key areas require different emphasis in different businesses-and different emphasis at different stages of the development of each business.  But the areas are the same, whatever the business, whatever the economic conditions, whatever the business’s size or stage of growth.

ACTION POINT: In addition to setting profit objectives, set objectives for your business in the following areas: market standing, innovation, productivity, physical and financial resources, profitability, manager performance and development, worker performance, and public responsibility.

Define BPI's Scope, Goals, and Schedule

Clarify how it relates to other existing processes, as well as to important stakeholders, such as your company's customers or suppliers. 

Define the scope, goals, and schedule for the selected process improvement project.  Scope defines what will and won't be included in the effort.   For example, to improve the way his office sets up new accounts, Joe decides to focus on changing the way people and technology interact to establish accounts.  He prefers not to change people's jobs or adopt new technologies if he can help it.

Also specify how the BPI effort supports your organization's goals.  Clarify how it relates to other existing processes, as well as to important stakeholders, such as your company's customers or suppliers.  And express the desired improvement in numerical terms.  Joe, for instance, determines that improving how his office sets up new accounts will help his company achieve its strategic goal of serving customers more efficiently and quickly.  The process of setting up accounts directly affects customer's satisfaction levels and has links to the other processes involved in approving loan applications, such as evaluating applicants' credit histories.  Joe expresses the desired improvement as: "Customers have to provide financial information only once in order to establish an account with us."

To define schedule, specify which milestones you'll need to achieve in order to change the problematic process and approximately when you expect to reach each milestone.  For example, Joe's BPI milestones include mapping the current new-account process within two months and conducting a trail run of a revised process by the end of the third quarter.

ACTION POINT: Define process improvement efforts with scope, goals, and schedule.

Tips for Prioritizing Business Process Improvement Efforts

Prioritize processes that have the greatest impact on customers.

The following tips can help prioritize your efforts in process improvement.

• Determine which process in your team is most critical to your team's ability to contribute to the organization.  Ask team members, as well as external stakeholders such as vendors and customers for their point of view.
• Prioritize processes that have the greatest impact on customers.
• Select processes for improvement that will generate the most benefit for the least amount of investment
• Look for processes that result in costly problems--such as failure to meet customer needs, high costs, or long cycle times.
• Identify processes needing improvement based on internal considerations.  For example, a problematic process is causing unnecessary conflict among team members, preventing them from concentrating on meeting customers' needs.

ACTION POINT:  Consider the tips above when reviewing processes that need improving.

Select a Process to Improve

This suggests that more than one process may benefit from improvement.

If you're like most managers, you may see several symptoms of problematic processes occurring simultaneously.  This suggests that more than one process may benefit from improvement.  For example, Jo, who manages a regional office for a financial services company, has noticed that customers are complaining about having to provide the same personal information several times while applying for a loan.  In addition, the office's growth--in terms of the number of new accounts signed per quarter--is lower than that of other regions, despite the considerable expertise of Joe's staff.

When it seems that several processes may need improvement, how do you decide which one to tackle first?  Create a process selection matrix in which you rate each process according to criteria such as how easily it might be changed and how problematic it may be for customers.  Rate each possibly problematic process on a scale of 1 to 5, with 5 being the highest score and 1 the lowest.  The table below shows an example of "Joe's process selection matrix".

Once you've rated each process total up your scores.  The highest score suggests the process you might want to improve first.  In Joe's case, he decides to focus on the process of setting up new accounts.

ACTION POINT: Prioritize the processes you seek to improve.

Planning a Business Process Improvement

The answer is yes if you notice certain telltale symptoms...

To plan a business process improvement, first decide whether process improvement is needed.  The answer is yes if you notice certain telltale symptoms--including the following:

• Customers are increasingly commenting that your company's product has deteriorated.
• Certain procedures seem overly complicated.
• Tasks take longer to complete than they did previously, or there is noticeable variation in the amount of time different people take to perform the same task.
• Things don't get done right the first time.
• Your team's performance is declining, or the team is consistently failing to reach agreed-upon goals.
• Employees are expressing frustration over confusing processes or bottlenecks that prevent them from fulfilling their job responsibilities.

ACTION POINT: In what areas is your organization experiencing the symptoms above?

Managing for the Short Term and Long Term

John Maynard Keynes’s best known saying is surely “In the long run we are all dead.” It is a total fallacy that, as Keynes implies, optimizing the short term creates the right long-term future.

It is a value question whether a business should be run for short-term results or for “the long run.” Financial analysts believe that businesses can be run for both, simultaneously. Successful businessmen know better. 

To be sure, everyone has to produce short-term results. But in any conflict between short-term results and long-term growth, one company decides in favor of long-term growth, and another company decides such a conflict in favor of short-term results. Again, this is not primarily a disagreement on economics. It is fundamentally a value conflict regarding the function of a business and the responsibility of management. 

ACTION POINT: Does your organization sacrifice the long-term wealth-producing capacity of the enterprise to produce short-term results? Consider how you can break out of this trap and still produce short-term profits

The Six Phases of BPI

...you need to take a structured approach to your process improvement efforts.

BPI offers crucial benefits to any team or organization.  But to generate those benefits, you need to take a structured approach to your process improvement efforts.  Experts recommend the following six phases for relatively complex process improvements:

1. Plan: Select an existing business process you want to improve, define its scope, and assemble your team.
2. Analyze: Closely examine the process you've identified as a candidate for improvement.
3. Redesign: Determine what changes you want to make to the target process.
4. Acquire resources:  Obtain the personnel, equipment, and other resources needed to make the process changes called for in your redesign.
5. Implement: Carry out the process changes.
6. Continually improve: Constantly evaluate the target process's effectiveness and make further changes as necessary.

ACTION POINT:   When you make simple process improvements in your department, you won't necessarily take the time to carry out each of the six phases explicitly.  Rather, you will likely think through the phases quickly.