RummlerBrache
A T H O U G H T PA P E R
1 What is a Process?
Why Should You Care?
Departmentssuch as Marketing, Sales, Manufacturing,
Distribution, Customer Service, Finance, Human Resources, and
Information Systemsdo not produce products or services.
This is not to say that they should be abandoned. A logical
structure:
I Makes it easy for people to share resources.
I Creates centers of expertise in which people can learn from
each other and establish career paths.
I Facilitates the daily care-and-feeding of people, who have a
need for direction, feedback, and rewards.
Departments are solely groupings of people for administrative pur-
poses. While structure can be a significant enabler or impediment, the
boxes on the organization chart dont produce the goods.
OK, so it must be people who produce products and services. Nope.
Talent is critical to organization success. However, you can put the
most highly-qualified automotive designers, engineers, equipment
operators, and marketers in a room with a budget and the appropri-
ate raw materials and youd better get a comfortable chair. A car isnt
going to emerge any time soon.
Enough suspense. The producers of products and services for both
external and internal customers are business processes. Processes are the
flows of work in which people function and which departments
organize. Some processesbusiness development, order fulfillment,
product development, customer support, billingtouch external cus-
tomers. Othershiring, planning, financial reporting, facilities main-
tenanceare invisible to those who pay the bills but are essential to
running the business.
by Alan P. Brache
Departments are only as capable as the processes that flow within
and between them.
People are only as productive as the processes in which they do their
jobs.
Computer systems are only as valuable as the processes that define
the nature, format, recipients, and timing of the information that they
are to provide.
Choosing an organization structure, acquiring and developing peo-
ple, and automating are means to an end. The end is a set of cus-
tomer-focused, well-oiled business processes.
If the assembly of automotive talent described above is going to pro-
duce a car that meets customer needs and generates profit, the first
order of business should be to create a strategy that defines the size
and shape of the market they will serve. Their immediate next step
should be to design the processes for implementing that strategy.
Thenand only thenshould they worry about structure, staffing,
tools, equipment, computer systems, and bricks-and-mortar.
While some processes are housed entirely within a department, most
critical processessuch as those listed aboveare cross-functional. In
cross-functional processes, the hand-offs (which occur in the white
space on the organization chart) are as important as the intra-depart-
ment activities and the individual skills. A relay team may have the
worlds fastest runners but perform poorly because it doesnt smooth-
ly pass the baton.
Strategy is the destination; processes are the vehicles to reach that
destination.
Processes are nothing less than how work gets done.
W H AT IS A PROCESS? | A THOUGHT PAPER
2 Which Processes Should
You Work On?
If your business processes are going to fulfill their potential,
you should embark on two pursuits: Process Improvement and
Process Management.
The Process Improvement and Management journey begins
with creating or reaffirming the strategy of the company, agency,
or division. A strategy answers three fundamental questions:
I What products and/or services are we going to offer?
I What markets/customer groups are we going to serve?
I What competitive advantages will fuel our success?
With a strategy as the guiding hand, Process Improvement
begins with:
I Identifying the processes that are most critical to creating
your competitive advantages
I Analyzing the need of each critical process
G In some cases, you may need to create a process that you
dont currently have. For example, you may have decided
to grow through acquisition and you do not have an acqui-
sitions process. Or, you may have decided to expand into
other countries and you dont have a process for global
licensee identification, contracting, and management.
process design. Chapter 8 addresses Process Management.
G In other cases, a critical process exists, but needs significant
improvement. For example, your order fulfillment process
may take too long, cost too much, and make it painful for
customers to do business with you. Or, your product devel-
opment process may have worked well in the past but is not
built for either the range or volume of products that you
will need in the future.
G Other processes do not need radical surgery, but they need
fine-tuning. For example, your customer service process
needs a web-based help function. Or, your budgeting
process needs to be more hard-wired to your planning and
resource allocation processes.
G Lastly, some of your critical processes may need only to be
maintained through what we call Process Management.
They may not be perfect, or even world-class, but they are
performing well enough that it would be unwise to invest
in significant or even incremental improvement. However,
that does not mean you can ignore them. They need to be
managed. For example, your distribution and recruiting
processes may be functioning well, but need to be continu-
ously monitored so that they dont deteriorate.
Lets examine the steps in Process Improvement, which includes
 What is Your Goal?
3 Who Should be Involved?

You shouldnt pursue Process Improvement because its conceptually logical or a noble pursuit; you should do it to solve a high-
impact problem. The driving force of a Process Improvement project is a Critical Business Issue (CBI) that may be centered on
quality improvement, cost reduction, and/or cycle time reduction. (All three of these variables are always in the mix, but you need
to agree on which one or two are the primary motivations for the project.)

Once you reach consensus on the CBI, the individual championing the effort should lead the Process Improvement project
definition, which results in:

I Project GOALS, including not only metrics around the G The Steering Team, constituted of the executives who head
CBI, but other measures of project success (e.g., role clari- up the departments touched by the process
ty, systems installation, culture transformation)
G The Design Team, which is the (usually cross-functional)
I Process SCOPE (start and stop points) group of individuals with current hands-on experience
working in the process
I Project CONSTRAINTS, which are the guardrails within
which the new process must function. For example, your G The Design Team Leader, who chairs the group
headcount and safety policies may be givens. Or, perhaps
G The Facilitator(s) who provide the process design
the process must use the enterprise computer system that
methodology/tools, team and schedule management,
you just spent $4 million to install.
and documentation
I Project ROLES, including:
I Project TIME LINE
G The executive who should serve as the Project Sponsor

Having defined the project, its time to go to work.

4 What is Your Current State?

Once your Process Improvement project is structured, the Once the SHOULD is created, the team builds an
Design Team gets to work understanding the current process,
which we call the IS. (If you are creating a new process, it is
3 implementation plan. Its tough to get to your desti-
nation if you dont know where you are.
still useful to understand any activities that are going on, even
if calling them a process is giving more credit than is due. In The teamwhich typically has not worked on this
rare cases, there is no process and no individual activities, in
which case there is no IS.) 4 type of project beforegels during the IS phase,
making them more effective and efficient when they
get to the SHOULD design.
Some people believe that examining the IS is unwise because
it consumes time and runs the risk of constraining the innova-
The Disconnects that are captured during the IS phase include
tion that should be marshaled when creating the future process,
non-value-added steps, redundancies, bottlenecks, unnecessary
which we call the SHOULD. They ask, Why document the
documentation, and activities carried out in series that could be
way things are when we know theyre going to change?
in parallel. In addition to these process design Disconnects, you
should look for process execution Disconnects. These are situa-
There are four answers to this question:
tions in which the steps in the process make sense; your organi-
Capturing the IS ensures that the Design Team zation just isnt good at carrying them out. The cause could be

1 members, each of whom typically understands only

a part of the elephant, sees all of the components
of the process, even if it is broken or out-of-date.
lack of skills, inadequate computer systems, foolish policies,
and/or an unsupportive culture.

While it is important to document and analyze the IS process,

that activity should not consume more time than it deserves.
As the team documents the IS via a Process Map (a

1:5.
cross-functional flowchart), they capture what works In a typical Process Improvement project,
today and what doesnt work. We refer to the latter the ratio of IS time to SHOULD time is

2 as Disconnects. You want your SHOULD process

to build on any strengths in the IS and to eliminate
its Disconnects.
5 What is Your Future State?
Now its time to move from the analytical phase to the creative
phase of the Process Improvement project.
You may want to inject into the process some people who
while perhaps unfamiliar with the IS, are utopian, and/or difficult
to controlwill stretch the thinking of the Design Team.
Creating the SHOULD process begins with identifying the
3-6 high-level sub-processes, which may or may not be the
same as those in the IS. After reaching consensus on those
phases, the Design Team double-clicks on each box, resulting
in a flowchart of 20-30 steps. To ensure a breakthrough
process, we sometimes structure a design competition in
which sub-teams develop the process in parallel. The ulti-
mate result is usually a hybrid that is superior to the solution
developed by either team.
Reaching consensus at this level of detail typically generates
heated discussions, considerable sweat, and sometimes blood
and tears. Your Facilitators will earn their money by stretching
and challenging the teams thinking by continually asking
Why? and Why Not? During this part of the process, they
will ensure that the team members rise above their parochial
interests and keep their eyes on the prize, which is the
SHOULD that is best for the organization.
Once your team agrees on the SHOULD at this level of gran-
ularity, they will take it to the next level of detail. You dont
want to weaken the design by identifying department roles
prematurely orunless its a constraint youve been given
lock yourselves into the existing organization structure. So, for
the first time, this Process Map documents not only the what
(the steps and outputs) but also the who (the departments
and systems that will carry out each activity).
After your Design Team has a draft SHOULD, it should test
and refine it by ensuring that it captures the strengths of and
eliminates the Disconnects in the IS. The Design Team should
further test it by running it by the Steering Team, a sample of
customers, and people outside the team who work in the
process. You may also benefit from investing in benchmarking
against world-class processes in organizations that may or may
not be in your industry.
 6 How Will You Measure Performance?
At this point, the SHOULD process looks good, feels right,
has been approved by management, and has been blessed by
customers. However, you will want real-world proof that it is
functioning as desired. So, during the SHOULD phase, your
Design Team should produce not only the future process, but a
set of measures by which to evaluate its performance. These
measures set the stage for the ongoing guidance and oversight
of the process which we call Process Management.
The measures process begins at the end of the process by
answering these questions:
I What is important to the customers of this process? How
do they assess its performance?
I In addition to whats important to the customers, what is
important to those who own the process?
For example, customers of your order fulfillment process
probably care that the order they receive:
1) contains the right products,
2) is sent to the correct address,
3) contains the number of products they ordered,
4) contains products that are undamaged and function
as they should, and,
5) arrives by the promised date.
These expectations are turned into numerical measures and
goals.
Those who manage the order fulfillment process probably
care not only about meeting customer expectations but also
about the cost of the order fulfillment process. If so, they will
want to install a goal for the cost of filling an order.
These end-of-process measures are then taken upstream in the
process, so: 1) the individual or team that is monitoring process
performance minimizes surprises by having leading indicators
of process performance; and, 2) if an end-of-process goal is not
met, theres a network through which to trace the problem to
its root cause.
Lastly, you will want to install a measurement system that
answers these questions:
I What person or system will be responsible for tracking
actual performance against your goals?
I How will the performance information be displayed?
I What analysis, if any, needs to be done before the
information is distributed?
I Who will receive the information?
I How often will they receive it?
I What are the recipients expected to do with the
information?
The old saw, If you arent measuring it, you arent managing
it, applies here. If you agree that processes are how work gets
done, process metrics should be front-and-center in your busi-
ness management dashboard.
7 How Will You Get There
From Here?

Your next objective is to build a plan for migrating from the
IS process to the SHOULD process.
The first step is to determine your implementation strategy
by answering these questions:
Remember that you are not only installing a new process, but
also whatever systems, policies, skills, structure, measurement,
and culture need to support it.
Implementation success factors include:

I Do we want to pilot-test the new process in a certain loca- I Preparing customers for the new process
tion (e.g., the Southwest division), or for a certain type of
I Ensuring that people who work in the process understand
input (e.g., single-product orders for under 100 units), or
the what and the why of the new process
for a certain time (e.g., the next 30 days)?
I Using robust project management practices during imple-
I Do we want a hard cutover in which the entire new
mentation definition, planning, and execution
process takes effect as of a certain date or should we phase
it in over time? If we phase it in, should the phases be sub- I Employing change management principles that ensure that
processes, inputs, or locations? the soft (behavior) changes get as much or more atten-
tion as the hard (systems) changes.
Next, you will want to build an implementation plan, using
whatever planning format you have found works well in your
organization. At the bare minimum, it should include the steps
to be taken, when each step will be taken, and who is respon-
sible for seeing that the step is taken.
8 How Will You Ensure that Your
Process Continues to Perform Well?

Once the process is in place, you will want to make sure that it not only holds the gains but continuously improves and adapts
to the inevitable changes in the business. To accomplish this objective, you need to move from Process Improvement to Process
Management.

While there is no single prescription for Process Management, it always includes the continuous monitoring, reporting, and feed-
back of performance in terms of the goals that the Design Team developed during SHOULD design.

Other steps that can help you install Process Management

include:

I Designating a Process Owneran executive who champi-
ons and ensures the ongoing excellence of each core process
I Regularly scheduling Process Owners to meet in a Process
Council that ensures that one process doesnt succeed in a
way that causes another to fail
I Ensuring that everyone is trained not just in their specialty
but also in managing the white space (the baton-passing
across functional lines)
I Installing a process culture that rewards process under-
standing and improvement.

I Developing process plans. If you agree that processes are

how work gets done, process planslinked to your
strategy and budgeting protocolshould drive your
department plans
9 What are the Benefits of Taking the Process
Improvement and Management Journey?

The immediate return on your investment in Process Improvement is the resolution of a Critical Business Issue.
The long-term benefits of Process Improvement and Management are:

I Implementing your strategy I Ensuring that your people have the necessary skills

I Maximizing customer satisfaction I Allocating the appropriate financial and human

resources to each part of the business
I Eliminating waste
I Making your organization a more rewarding place to
I Breaking down the silos that can isolate one depart-
work
ment from another
I Enabling your people to make the full use of their
I Enabling the organization to manage the white space
abilities
on the organization chart
I Ensuring that your dashboard includes appropriate
I Establishing a structure that best supports the flow of
leading and lagging indicators
work
I Providing opportunities for your employees to design
I Installing computer systems that best serve the needs of
the flow of work in which they do their jobs
the business

Process Improvement and Management will rivet your

organizations focus on how work gets done.

RummlerBrache
A PRITCHETT Company

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