In this article we propose to look at the way processes are implemented in organizations and identify key questions to evaluate whether they are properly sized.

What is your organizational culture and/or business context?

Over the last years we have had the chance to work both in what we would call process oriented and people oriented organizations.

Don’t be misguided: both usually have processes. Today most organizations of a certain size will have established processes, some more mature than others. However organizations differ in the way they define and apply processes.

Process oriented organizations structure the work with widespread and detailed procedures, templates and workflows. For example, workflows can exist for contract negotiation and approval, procurement requests, budget approvals, travel requests, system authorizations requests, etc.  Procedures and templates exist for most work activities and are strongly enforced in those organizations.

People oriented organizations on the other hand may also have processes, but these processes are not as formally documented and structured as the process oriented organizations.  There are more guidelines than detailed procedures and workflows. These organizations rely more on the people themselves to make the process smooth.

Both ways of working can be good to some extent. So is it possible to leverage the best of both worlds? And where does it make sense to promote one rather than the other?

In process oriented organizations the advantage is that it is easier to enforce discipline and reach consistency, even with employee rotation.  The drawback is a lack of flexibility: if anything goes wrong, the process is stuck and people may not feel as responsible for the end result. It requires also more extensive training of the people on the procedures.

In companies who need to be JSOX compliant (US companies typically) or highly regulated sectors like Pharma, documentation of decisions is key and therefore workflows are extremely useful for this purpose. We can clearly see who has approved what and when.  There a process oriented organization makes sense.

In people oriented organizations, the process relies on the good will of subject matter experts to guide their colleagues through the steps, because the process is less automated or embedded in tools people need to use. This stimulates flexibility and creativity, which is nowadays more and more necessary to reach sustainable success.  It also forces collaboration because one cannot succeed without the help of others.

So clearly each type has its advantages and needs to look at leveraging the advantages of the other.

Effectiveness- Which processes need more attention ?

Generally speaking strong process requirements make sense for repetitive tasks with a high volume which do not require flexibility or creativity. This can guarantee consistency and efficiency. 

Some professional domains or functions are more process oriented than others: Finance, IT, Procurement and Manufacturing typically are very process oriented while HR, R&D, Marketing & Sales are much less, but then even in the same domain it can vary.

Nevertheless all can benefit from an appropriate process approach.  For example, in the HR hiring process, to ensure fairness and compliance to diversity standards, it is important to define a process that safeguards from major deviations from these standards.

Another criteria to determine whether a strong process should be developed is a relationship to a competitive advantage. If you are  a service company, it will be high customer value to get consistency in the service you are delivering and therefore be able to monitor a well defined process.

Yet another one is the risks level you are facing related to the process. The payroll process, with its high sensitivity among the employees, definitely requires a strong process to guarantee quality.

Efficiency- Are your processes lean ?

Having a process is good, but if it requires too much effort from people, it will take a significant effort and time to complete it and the expected result might come too late to be impactful. If the process is too heavy or complex (too many steps, too many approvals) or if it offers too many options, ambiguity remains and generates unnecessary delays. 

For example, the contract or procurement workflow may let the requester choose the number and identity of approvers.  This could be considered as good in terms of flexibility, but there was little training or documentation to help the requester. So he had to go and ask around who the approvers should be instead of using clear guidelines based on the organizational structure or just having the system automatically select the approvers based on the nature and budget of the request.

A second example is a company which was requiring a multitude of approvals for project charters and the people who were supposed to approve were not necessarily aware or did not understand themselves why they should be approving. As a result, the approval took a very long time and even if a project charter was available early in the project, it could only be approved a few months after the project start, which made it difficult to communicate it at the right time to the teams. In this case, it may be wise to have a lighter process to cope with the pace of the organization. 

In both examples above, the intention was to minimize the perceived risk, but at the expense of significant delays.  We believe this creates the illusion of control. Typically in such organizations the structure is not very flat and a high number of middle managers track process compliance but do not really analyze the content.  This can result in micro-management, which stifles creativity and efficiency, and could lead to a “rank-and-file” behavior: people do not feel responsible anymore for the result, as ownership is diluted in the process steps. 

How flexible are your processes?

Common sense must prevail. The 80/20 rule certainly applies here: processes should be to some extent adaptable depending on your circumstances.

Let’s take the example of public tenders. Focus is on compliance but they can be inflexible and inefficient: public companies have to follow a very strong procedure for tenders, defining upfront criteria, documenting and communicating ratings to inform participating companies about their choice. This quite heavy process aims at ensuring fairness and supposedly tries to avoid as much as possible the human factor.  However, it can be bypassed in different ways: favoring one supplier by aligning the specs on their offering, keeping subjective ratings of the criteria. What is supposed to be good becomes then a liability, and lots of participating companies are then just wasting their time and money.

In this case, a more people oriented approach may sometimes make more sense, depending on the nature of the purchase. Professional l services typically rely heavily on the people delivering it. This is less true for products or standardized services. You may theoretically assess objectively people delivering services based on their documented skills and experience but in the end what really matters is the “click” in the relationship and this is rarely a selection criteria, because it is not considered as an objective one. Working with people understanding you, willing to be flexible in their approach makes a huge difference. Of course you want to keep prices under control, but you may not need to ask a very detailed offer to several suppliers to enable a negotiation with the preferred vendor, certainly if both customer and supplier have a long-term approach in mind. Also even more for services, value should be the criteria and not the mere price. For example, in the case of time and materials contract, what if a consultant that costs 20% more is actually 100% more efficient, completing the same work in half the time?  So yes, processes help ensure consistency but should also not loose sight of the final objective and adapt accordingly.

How do you ensure compliance with the defined processes?

How consistently do your employees apply your process?  The best process can be defined, but if people do not follow it, or follow only partially, or do not follow the spirit in which the process was designed, there is a good chance the opportunity will be missed.

Let’s take the example of a request for proposal in a private company where the process is somewhat flexible but compliance is not actively monitored. In this case teams spent significant time in defining selection criteria and aligning questions to the bidders with these criteria, also adapting the evaluation process so that it would be manageable for the reviewers by deciding to rate groups of questions rather than individual ones. This worked well for most evaluators with the exception of some key players who in the end decided they did not have to play by the same rules.  Different arguments could be put forward.  Some could argue that the preparation process prepares the team to ask the relevant and significant questions and that the rating itself does not need to be as formal. Others could argue that wasted effort could be avoided by admitting that in the end our brains work more efficiently than we sometimes admit and that gut feeling can be superior to any decision grid that we may come up with (for more on this, read the “Blink” book).

Whatever the reason might be, once the process has been defined, it should be followed by all. We believe that it may be more efficient to select a limited but manageable number of criteria and rate the vendors in a formal–and maybe subjective- way to ensure a fair comparison between them. Collective intelligence will ensure the final rating is not too biased.

Do you have clear process ownership? Is the role of process owner clearly defined ?

Is someone officially in charge of defining the processes and monitoring if they are followed and executed appropriately ?

In order to bring benefits, the process should be applied wisely, keeping in mind the objective behind the process. Complying to a process without fully understanding its goal will have limited impact. Therefore it is important to have someone with enough experience watching how the process is used and if needed coach people, and have the time to provide support when requested by the users, and for example decide on how far the process should go depending on the circumstances.

It comes down to the following: the process is as good as the compliance to its intended purpose. In other words, process will not deliver on its promises if the process is not used by people in the spirit in which it has been built. Therefore compliance to the spirit –and not literally- should be monitored as well. If there is no monitoring – by an experienced “guardian”, the process owner- then the process will most likely be lip service. And will not address the challenges it was supposed to.

A good monitoring on the other hand, with common sense to apply the guidelines wisely and proportionately to the cost at stake and the speed at which the process should flow will deliver value.

Conclusions

This article focused on a few critical questions to consider when designing processes: culture/context, effectiveness, efficiency, flexibility, compliance and ownership.  These can be used as a checklist when reviewing processes.

 

If you have any other in mind or additional comments or examples, please share with us.

 

Articles on the same topic: 

Merging Methodologies to make a Business Process Reengineering a success

Bring discipline and focus with process management

Customer reference: Swift