It is well-known that a process-oriented organisation – further named “Process Organisation” – has many benefits. Among others, process orientation goes together with customer focus and with continuous improvement; which aims to deliver as much as possible value for customers and other stakeholders. If you still doubt about the effects of process-orientation on organisational performance, I recommend you to read this study report by Škrinjar, Štemberger, & Hernaus.
However, before describing how to become a Process Organisation, it is good to know the characteristics of it.
The Process Organisation defined
A Process Organisation may simply be defined as one that enables and stimulates the execution of “Process Work”. This obviously requires more explanation about “process work”.
Process Work vs. Task Work
The advantages of Taylorism and Fordism – or industrialism more in general – were considerable increases in productivity. However, these management theories were characterised by extreme fragmentation of work, ending up in utmost specialised tasks; which Michael Hammer would call “Task Work”.
Charlie Chaplin’s Modern Times is a nice illustration of where such work may actually lead to. Apart from the poor human and (intrinsic) motivational aspects, the main issue is that people executing such “task work” have no concern – and most often are unaware – of what other people in the same organisation are doing. They are ‘only’ supposed to carry out tasks, most often ignoring the broader context of the organisation; let alone the value of their work for the client who will use the product or service to be delivered.
Process work, instead, entails external focus – e.g. customer-focus -, is holistic and is outcome-driven. In a Process Organisation, workers know the effects and the impact of their work on the activities by colleagues, and on the final product and service; thus also on the possible effects to the actual customer satisfaction.
Benefits of the Process Organisation
As with Process Work, people have a large(r) understanding of their work – and the meaning and value of it -, they will be much more involved and committed. Hence, they will be even more motivated and disciplined to take colleagues and customers expectations into account. Employees thus will be more intrinsically motivated, what naturally will lead to higher performance.
Moreover, less supervising and controlling activities will be needed. Though probably unneeded to mention, such ‘middle management’ activities are often expensive and usually create additional “organisational layers”, which on their turn lead to less effective communication. Hence, additional benefits of the Process Organisation are higher organisational efficiency and effectiveness.
The 14 characteristics
In his document “The Process Enterprise: An Executive Perspective”, Hammer quoted 14 characteristics – say conditions – for an organisation to become or to stay process-oriented:
1. A common Model of the organisation – in process terms
This model is the ‘big picture’ and represents the organisation’s main processes at a high level, including most important inputs, outputs and dependencies between the processes. You may compare it to an enriched Value Chain (according to Michael Porter), or to a Lean Value Stream Map – at the enterprise level (or even the so called ‘Extended Value Stream Map’).
The main purpose of this Model is that any member within the organisation understands how s/he contributes to the overall organisational activities and objectives. See also the previous blog explaining the importance of process knowledge, leading to higher involvement and motivation.
2. Process Owners rather than functional managers
Traditional organisation hierarchy, consisting of functional managers are counterproductive in a process organisation, as they often cause (functional) silo’s, leading to inefficiencies and lower performance. Process Owners instead are responsible for (re)design, smooth execution and performance of an entire processes, e.g. from start to end. Their role is also to stimulate all process workers and stakeholders to continuously improve the process.
3. Process (re-)designs
To achieve objectives and to deliver qualitative, repeatable and predictable output, business processes should be clearly designed (e.g. which activities to perform at what time, by whom, etc.). Organisations with a higher ‘process maturity level’ will also regularly redesign their processes for continuous improvement purposes.
4. Process teams
Every member of the process team must be aware that their individual work is only successful when integrated with the efforts of their (process) colleagues, so delivering the right output and fulfilling the objectives of the business process. Such process teams are supposed to be ‘cross-functional’, as processes usually flow across functional domains.
5. Process literacy
In addition to the organisational model (see characteristic 1), each member of a process team should also understand his/her own process(es), including his/her contribution to the overall quality of the end product or service. Specific process diagrams or Value Stream Maps should be known by any process team member. This implies that process team members must be able to understand process diagrams or value stream maps and that they have to be trained in the basics of process management.
6. Process Metrics
Process performance and the achievement of process objectives, particularly with a customer-focus cannot lack in the Process Organisation. Every team member should also understand how s/he contributes to this performance, to encourage them to care about the process and its output(s), to create as much as possible value for the customer, but for all stakeholders in general. This means that they also should know the factors impacting the process performance.
To my experience, this is the most important condition or ‘critical success factor’ for a Process Organisation : absolute – and passionate – commitment from the most senior management is really mandatory to become, or to stay, a Process Organisation. Without such a commitment at senior level, any attempt will finally be useless and will rather lead to suboptimisation, since process-orientation will not be consistent in every part of the organisation.
8. Integration (= holistic or systemic approach)
A Process Organisation requires a holistic – say systemic – approach, assuring that
- relations and dependencies between business processes are known
- contributions of processes to the overall organisational objectives and strategy are clear
This is also illustrated by this (previous) blog, which explains the importance of ‘translating’ the strategic objectives towards process objectives, down to individual (or team) objectives; so every worker is aware of to which higher organisational goal s/he contributes.
9. Coaching for optimal capabilities
Nobody will doubt whether people’s capabilities are tremendously important for performing business processes. Hence, skills should be cared of, based on the process design, but also taking personal goals – and individual growth ambition – of employees into account.
10. Cultural aspects
Senior management should install and cultivate a value system, fostering an organisational culture enhancing responsibility, omitting finger-pointing (e.g. ‘no-blame’) and stressing the importance of customer-focus. Such values will be sustainable only when internalised in the culture; such an internalisation is obviously long-term work and also demands persistence.
11. Process supporting use of ICT
As a Process Organisation is de facto also a ‘Learning organisation’ (like according to Peter Senge), it should also rely on information & communication technology, supporting end-to-end processes beyond departmental – and even across organisational – boundaries.
This may be enabled thanks to organisation-wide applications (like ERP, CRM, etc.) – or even inter-organisational software (like SCM). Obviously also less ‘data structured’ systems like Document (DMS) and Content Management Systems (CMS) are recommended to improve organisational knowledge.
12. Facilities & Work environment
Appropriate facilities obviously catalyse process flow, which means that process teams should be put together (for instance in a same room) wherever possible, rather than located in – isolated – functional departments.
13. Process enabling Human Resources system(s)
Professional growth should be seen as “process careers”, thus learning new skills & disciplines rather than hierarchical (intra functional) growth. Also possible compensation systems should be considered from a process & team perspective, rather than pure individual and departmental rewards (which too often stimulate ego-centric or silo mentality and counterproductive behavior).
14. Management activities & systems
Typical management activities like budgeting and planning should also be process-centered rather than departmental. We will see later how Lean Accounting may support such an impactful paradigm shift.
Describe in below ‘Comments’ box to which above mentioned characteristics your organisation already fulfills, or which are the biggest challenges to implement these; and get an assessment form for free, which will help you to determine the process maturity level of your organisation.
P.S.: Please share this information with your Facebook friends and fans, LinkedIn contacts,Twitter followers and Google+ circles, through the share buttons below. Thank you!