First of all, it is necessary to give a brief description of the problems & solution to implementing the process approach. For some managers and employees of companies, his methods seem simple and transparent, long learn-base, typical and easily applicable.
There are specialists who gladly preach the ideology of the process approach from various tribunes. The content of ninety-five percent of such speeches can be predicts in advance.
Following the “classical” canons, the lecturer tells about business processes. The need to describe them, the development of a scorecard and the subsequent management of business processes. Listeners get the impression that we are talking about elementary, routine and sometimes boring things.
Practical
In practice, however, things are much more become complicates, when trying to implement beautiful, and logical constructions of process approach theorists in a real enterprise. Managers-practitioners are faced with a large number of problems that they themselves have to solve.
Gentlemen theorists try in the process of negotiations not to touch on potential difficulties and smooth out sharp corners. But for implementation, what is important are the really working methods linked into the system, and not a set of abstract views.
The book attempts to concentrate on practical, really working methods and examples. Of course, it is impossible to do without a theory at all. But it is useful only when it is confirm by an experiment.
For an enterprise, such confirmation can result in considerable expenditure of money and time, so it is worth carefully analysing the experience of other companies and listening to the recommendations of management consultants.
Usual Conditions that require it !
Currently, the process approach is gaining new adherents. Owners and managers of companies of various sizes are trying to master the methods of the process approach. In practice and thereby increase the efficiency of their activities.
Unfortunately, quite often after several years of implementation in organisations there is a depressing picture.
- A landscape map of processes should be create.
- Regulations of business processes (in the form of standards of the organization) require to develop.
- Process commands require to define, and process owners are assign.
- Indicators used for planning, and monitoring processes have been identify properly.
- The company has been certified according to ISO 9001.
- It has a cumbersome and inefficient organisational structure.
- Top managers are overloaded with turnover.
- The authority for the operational management of processes is not delegated to those who actually perform them (but these specialists are responsible for everything in full).
- Top managers disrespect the rest of the staff.
- Employees lack the motivation to learn, adopt best practices and put them into practice.
Example
At a medium-sized company (about 600 employees) for several years as:
In fact, process documents are hardly use in. The Process owners practically do not manage the latter. Since most of the time is devoting to “traditional” management tasks. (“fire extinguishing” and internal policy).
Most of the company’s specialists believe that they have already pass the process approach. And they no longer need to learn. They categorically deny the need to change the obviously non-working mechanisms of the already existing “process approach” in the organization.
Saying:
“Are you suggesting that we describe and improve the processes once again? After all, we have already described and regulated them once!”
The managers of this enterprise did not see any significant changes after the introduction of the process approach. In fact, they did not exist: formal documents were developed, and responsibility was just as formally assigned to the owners of the processes.
The current situation in the company is characterise as follows:
Thus, despite the formal signs of the introduction of the process approach. The real situation in the company has not look any improvement at all, rather the opposite. People were discouraged from changing the situation for the better.
Sub-optimal processes were fixed in the regulations, and now the internal audit service strictly checks the units and identifies the slightest nominal deviations in the documents (“down to commas”). Any changes in processes are fraught with problems so serious that few people want to get involved with it.
Can this situation be calls a real introduction of a process approach to management? Unlikely.
From the above example, we can conclude that the formal implementation of the process approach may NOT bring the company the desirable effect. Rather, it will have a negative effect, as the staff is disappoint in this technique.
The People need faith in the ideal. In life, there are often employees of organisations who almost with religious conviction support the ideas of the process approach.
But when they, having complete something in this direction (for example, business process regulations). Do not receive either attention or recognition from management. Few people want to continue working further.
Of course, top managers of companies are busy with business problems. But if they don’t have the energy or the time to be the leaders of the change that inevitably comes with the implementation of the process approach, why take it on at all? Owners and managers of companies should be honest with themselves.
If they do not have the opportunity to radically change something in the organization (and the process approach requires this), you should not try to shift the problems of implementing changes on the shoulders of ordinary employees, calmly waiting for a “miraculous” effect.
Based on practical experience, the following problems of implementing a process approach can be formulates:
- Lack of understanding by management of the need to implement the process approach as an ideology.
- Unpreparedness for major changes in the management structure of the company (and in the organizational structure).
- Building a system of processes that is inadequate to the real business of the company.
- Lack of understanding of why it is necessary to regulate processes and how to do it correctly.
- Errors in the creation of a scorecard, linking processes and indicators.
- Lack of necessary patience, desire and resources necessary for real optimization of processes.
- Inability to organize process management.
- Failure to create a system of continuous process improvement (i.e., to implement the PDCA cycle).
- Unsuccessful attempts to informally implement a quality management system (QMS).
Process approach as an ideology
What are the causes of these problems? Why is the real, rather than formal, implementation of a process approach to management so difficult?
The difficulty lies in the lack of leadership and staff involvement. Changes are necessary primarily in the minds of the company’s employees. They must be willing and willing to use new management practices, and this requires indispensable encouragement by management.
The company’s management is obliged to treat the process approach primarily as an ideology that needs to be introduced to the masses, and only then see in it a set of certain methods or software products.
Example # 1
The managers of the production and trade enterprise decided to introduce a process approach. In their minds, this meant the following. First, it is necessary to create a separate unit in the company that would describe all business processes.
It was assumed that it would use the method of describing processes “as is”, then create new processes “as it should be” and implement them.
Secondly, to perform work on the description of processes, it is worth purchasing a complex and expensive system designed for their comprehensive description.
According to managers, this unit should be engaged in the description and optimization of business processes, and managers and employees should work in accordance with the created regulations. The involvement of personnel in the project and any major changes in management principles were not expected.
Such intentions are consistent with plans to introduce the process approach not as a management ideology, but as a simple set of methods and tools.
Example # 2
Often there are situations when the company’s managers seriously hope to introduce a process approach in an orderly manner.
One company issued an order to “implement a process management approach to … Number… Month… years”, while only two months were given for execution.
In another organization, management forced staff to attend a workshop on the process approach and instructed the head of one of the departments to implement the studied methodologies within three months.
In the third case, a large holding company drew up formal implementation plans, developed a general list of processes, and then appointed several managers responsible for implementation. At the same time, top managers remained aloof from the work done.
Lack of preparedness for major changes
Both owners and managers of many companies are simply not ready for serious changes. That will inevitably affect the organisation’s management system with the informal implementation of the process approach. (since everyone wants to get a quick result with relatively small investments). When embarking on its implementation, many do not realize how serious efforts will be required to obtain tangible results.
Owners can see ways to really improve the efficiency of the company through the purchase (restructuring) of assets. The introduction of new technologies and the modernisation of equipment. The expansion of sales markets, the attraction of new managers, etc.
They should analyse the situation and decide which changes they really have enough time to manage. At the same time, some of the tasks of change management can be coordinated directly by the owners, others are entrusted to top managers or transferred to consultants, etc.
But everyone should be aware of the priority directions and tasks of the enterprise development and the resources necessary for this (first of all, the time spent by the owners and management). Otherwise, the declared changes will not be realistically managed, which will lead either to formal implementation (and lack of practical effect) or to the suspension of draft changes.
Example
The owners of the enterprise had to actively deal with the problem of replacing the production technology with a more modern one. The company use outdated technology. Its competitiveness declined, market share declined.
It was urgent to change the situation, take measures to modernize and acquire new equipment. Therefore, the owners and management did not have enough time to solve the issues of organizing the project of introducing the process approach.
However, the project has been completed, the processes are described and regulated, and the process owners are appointed. But all this remained on paper and did not receive further development. The management and specialists of the company considered the project only as an additional burden to their intense daily activities, which took up working (and not only) time.
Thus, the owners and managers of the enterprise should be aware of the possibility and expediency of starting a project to implement the process approach at this point in time.
A system of processes that is inadequate to real business
The activity of any organization is the implementation of processes. Managers and specialists intuitively understand this, but, as a rule, it is difficult to adequately distinguish processes.
For what purpose is it necessary to allocate them and build a system of processes of the organization? Why should this system be adequate? The tasks of improving business efficiency and its further development determine the requirements for management tools that managers can use.
Looking at the company as a system of processes and organizing their management are one of the possible approaches to optimizing business management. Adequately allocated processes and the system built of them (sometimes they say – a network) of processes should correspond to the essence of the business in question and the goals of its development.
It should not be surprising that the introduction of the process approach does not bring a tangible effect, when business processes in the organization are allocated subjectively, and the process system is built formally and does not correspond to real business.
Management System & Process Approach
If the owners approached the issue of building a business as superficially as some managers and specialists approached the allocation of processes in the organization and the creation of a system from them, then such a business would hardly have taken place. But responsible people – business owners and top-level managers – may need to engage in business. The optimisation of the management system “on the principles of the process approach. As well as taking into account the requirements of ISO 9001 standards” is entrusted to middle managers and specialists …
- The process is the management of the main production equipment, its executor – production units, output – finished products.
- Process is the development of technological processes, the performers are technologists, the result is the technological documentation for the production of products.
- The process consists in changing technology, organizing production, etc., that is, it is associated with the reorganization of production activities, the management system, etc.
Example
As part of the project of description, regulation and optimization of business processes. The strategic development service of a large holding developed a list of typical business processes (i.e., in fact, proposed the basis of a business process system).
It is use by working groups at enterprises belonging to the holding in order to regulate business processes. It was assumed that their description and analysis would allow not only to optimise individual business processes. But also to exchange (between the enterprises of the holding) the experience of their best organization. The list develops on the basis of a standard list present by a large international consulting company. It took into account the specifics of the activities of the holding’s enterprises.
In fact, it was supposed to be the basis for creating a system of business processes in a group of companies. However, both the structure of the processes in the list and their names were not always clear to the heads of those enterprises that should use it.
An example is the name “Process Control“. Business leaders and professionals are fails to unambiguously interpret the meaning of the term. As a result, the boundaries of the process were blurred.
The following definitions of process control were proposed:
This example emphasises the unsuitability of formal lists for solving the problem of forming a real system of business processes of one company or group of companies.
There are several reasons that lead to the construction of an inadequate system of processes in organizations trying to implement a process approach. It is important to remember that a dedicated and documented system of processes, inadequate to real business, prevents the genuine, informal implementation of the process approach and the receipt of tangible results in terms of improving the company’s business.
Misunderstanding of why process regulation is needed and how to properly implement it
Why do enterprises describe and then regulate their business processes, and does this lead to a noticeable increase in efficiency? Experience shows that there is no direct dependence. Moreover, the regulation of processes often does not lead to an increase in efficiency. If the processes of the enterprise are not described (and even more so are not regulated), this means that the work is carried out on the basis of established norms and rules that are firmly held in the minds of employees.
The People know how to perform processes and get the result required by management. With such an organization of work, losses of various types of resources (financial, material, human and temporary) are inevitable. But regulation, which is not accompanied by an analysis and changes in the processes existing at the enterprise, has almost no effect.
Nevertheless, processes can and should be described and regulated for:
- Analysis of problems, bottlenecks, losses in the implementation of processes with the subsequent development and implementation of improvement measures.
- Standardization of activities, ensuring the repeatability of processes and the ability to manage them.
- Dissemination of experience to other organizations (branches, new enterprises).
- Comparing yourself with competitors and improving processes (benchmarking).
- Determining how the work should be done (for new organizations, in the case of creating new lines of business in existing enterprises, etc.).
- Accumulation of knowledge and their transfer to new employees (during training, hiring).
- To conduct internal audits.
Unfortunately, in American companies, the issue of regulating processes is most often solved formally. The types of documents used for this purpose are inconvenient.
Often the following situation arises: Employees of the enterprise work for a long time on the creation of regulations, and at the end of this work people begin to be tormented by doubts whether (and how specifically) these regulations can be used further.
In addition, formal ways of presenting processes in regulations are very common in domestic organisations. These methods are not suitable for real analysis and process control.
Thus, the lack of understanding among managers and employees of the goals and objectives of regulation (as well as skills, adequate methods and experience) does not allow it to be used as a useful tool for improving the efficiency of companies.
Example
At the production plant (with a number of about 1000 employees), a document template was developed designed to regulate processes. Graphically, the processes should be require to present in the form of a flowchart. The diagrams were accompanied by tables, and both had to be placed on the sheet at the same time. It should be noted that the template was very inconvenient for practical use.
For the purposes of ISO certification, a process landscape map was constructed that reflected processes such as sales, procurement, production, etc. These were then described using flowcharts and tables in documents developed on the basis of the template. During this procedure, a number of mistakes were made in determining the boundaries, levels of consideration, etc.
As a result, process diagrams were obtained with which it was impossible to work both in terms of improvements and management organization. Nevertheless, the company’s employees were very proud of the developed regulations, and the company was certified by the QMS for compliance with the requirements of ISO 9001.
The situation considered is typical for many american enterprises. A formal approach to the allocation and regulation of processes leads to the creation of a mass of documents that do not work in practice, are unnecessary for the enterprise.
Errors when creating a scorecard
A misconception is the opinion that the introduction of the process approach is only a detailed description and reorganisation of processes. Even if the company manages to perform their one-time improvements, then over time the effectiveness will begin to decline again. This is natural, since organisations, like people, tend to grow old and become less mobile, strong, ready for change.
The Processes need to be improved continuously, while maintaining the achieved levels of efficiency. It is impossible to do this without an adequate business system of goals and indicators for process management. You can verify this by considering the situation described below.
Suppose a company identifies top-level processes as it was presented in the previous practical example, and then incorrectly (without taking into account real value chains, analysis of material and information flows, strategic business goals, etc.) details them (creating appropriate schemes and a list).
Management then defines metrics for all detailed processes, looking at each of them sequentially and defining metrics.
As a result, most likely, it will turn out that:
- The built system is fragmentary (i.e., it lacks a number of important indicators necessary for management).
Some indicators are contradictory (this means that the achievement of one of them excludes the achievement of the other, etc.). - Indicators are not focused on the achievement of the company’s strategic goals, its overall performance and efficiency.
- Based on such a scorecard, it is impossible to manage effectively, since the following key mistakes were made during its construction:
- There was no focus on the strategic goals of the organization.
- An inadequate system of processes was used as a basis for determining the indicators.
- The focus on the final result and efficiency in terms of cross-functional interaction (i.e., on “end-to-end” processes) were not taken into account.
Thus, in order to build a real, adequate to business goals system of indicators for process management, the management of the organization needs to make significant efforts.
Example
At the production plant (with a staff of about 800 people), three scorecards should develop at once. One of them was traditional, and the indicators in it were tied to structural units. The second was created during the implementation of the QMS and covered the QMS processes. The third scorecard was built after the first two.
The BSC methodology was used as a basis. As a result, a situation arose at the enterprise when all three systems operated simultaneously and intersected in a number of indicators. This state of affairs did not suit either the managers or the employees of the enterprise. It was not possible to effectively manage such a scorecard.
This example shows what the development of a scorecard performed formally can lead to.
Lack of patience, desire and resources needed to really optimize processes
Owners of the enterprise and its managers may sincerely want to informally implement a process approach to management and even make an appropriate decision. But one desire is not enough – you need to allocate the resources necessary to implement changes.
First of all, such resources include the time of owners and managers of the enterprise.
They should be patient and willing to actively participate in the project for a long time. The Statistics state that the main reasons for project failures are the lack of leadership and insufficient staff involvement.
As experience shows, in the absence of leadership, it is difficult to achieve a good result, even if there are enough financial resources and external consultants are involved.
So, the owners and managers of the enterprise must allocate their working time to participate in the project and ensure the involvement of personnel. In addition, to implement the project of introducing the process approach, it is necessary to create a working group of qualified specialists.
The working group should be provided with premises, computer equipment and communications, have tested methods for implementing the process approach. Methods can be obtained by training from relevant specialists, exchanging experience with other enterprises, attracting qualified personnel from the outside, using the services of consultants, etc.
Thus, the project of implementing the process approach requires certain costs from the organization. Do not think that you can achieve serious results without investing a penny.
Example
The management of a large production and trade enterprise decide to introduce a process approach. For this purpose, an external consultant need to decide, who recommended the creation of a working group at the enterprise. It was assumed that its participants would be directly involve in the project.
They needed to learn from consultants the techniques and master the practical experience of implementing the process approach. The project manager on the part of the enterprise allocated three employees to participate in the working group. But all of them had just graduated from the institute and worked in the company for less than 4-5 months, poorly understood the specifics of its activities, knew about management only from books, and had never heard about the process approach to management before.
These workers did not have the necessary interest. In the course of the project, they intended to gain some experience, but they were not interested enough in the issues of real efficiency improvement of the company.
Is it possible to start a project to implement a process approach to management, relying on such resources? Absolutely not. The management of the enterprise failed to allocate resources corresponding to the importance of the goals and objectives set.
Inability to organize process management
The process approach can only be considered implemented when processes are managed in the organization. In many companies, the introduction of the process approach stopped at the stage of description and subsequent regulation of processes.
Scorecards have been established in some enterprises. However, only in a very small number of companies has management systematically approached the issue of organising process management.
To manage processes, it is not enough to write in regulatory documents that processes must be managed by owners, etc. It is necessary to create appropriate real management mechanisms.
Such activities directly depend on changes in the minds of managers, and this is associate with certain difficulties: It takes quite a long time for the management to begin to think and work in a new way. If during the implementation of the process approach, owners and top-level managers do not pay priority attention to this issue, then the process management system is unlikely to be created.
- Timely availability at the entrance of documents determining the need for production in raw materials and materials;
- Deviation from the normative level of stock in the warehouse;
- Failures due to the fault of other processes of the enterprise;
- Absence of liquid materials in stock.
Example
In some company, when regulating the “supply” process, the following indicators need to establish to manage this process:
Obviously, none of these indicators can be used to manage the “supply” process.
The first and third indicators do not depend on the process under consideration at all. The second and fourth head of the process “supply” can be influenced only partially.
In this system, there are no indicators by which the operational management (regulation) of the “supply” process could be carried out. There are no indicators are focuse on improving the process.
In addition, the regulations of the “supply” process did not provide for either the procedure for the operational management of the process (for example, when starting corrective actions), nor the procedure for analysing and improving the process.
Thus, the developed regulations of the “supply” process (as well as the regulations of other processes of the enterprise) were unsuitable for real process control.
Failure to create a system of continuous process improvement
The owners of the enterprise can set a goal for its management – to introduce a system of continuous improvement of processes. (Note that it is necessary to do this as part of the implementation of the QMS). However, often the matter does not go beyond formal declarations and some relevant additions to the documents.
The system of continuous improvement will not arise at the enterprise by itself. For its implementation appropriate mechanisms are require, primarily motivating personnel. If such mechanisms are not properly design, no positive changes in the company will occur.
The material interest of employees in carrying out improvement processes must necessarily be combining, with the willingness of managers involve in this process, to actively interact with employees.
Often in companies there is a situation when management does not want and cannot (due to excessive workload). To engage in improvements (except for those that bring a tangible increase in profits or cost reduction).
In particular, senior managers usually have no desire to consider any small, insignificant improvements. Thus, the owners and managers of the company are not able to develop and implement an improvement system that uses the time and intellectual resource of middle management and specialists. The implementation of the process approach to management in this case is incomplete.
Unsuccessful attempts to informally implement a quality management system (QMS)
The implementation of the process approach is one of the most important (and most complex) requirements of ISO 9001. The standard recommends identifying processes and organizing their management, but it does not prescribe the mechanism of these actions.
Managers of many companies, starting to develop and implement the QMS, talk about the informal nature of the implementation, that they are not so much interested in the certificate for the QMS, as in real improvements that should arise during the implementation. However, many difficulties arise in the practical implementation of the project. Therefore, unfortunately, the management of enterprises often seeks to limit themselves to the fulfilment of the formal requirements of ISO.
The system also becomes formal, and the staff has a negative attitude towards both the QMS and the process approach, which is its most important part.
Above, a number of problems associating to the introduction of the process approach in american organisations usually consider for better improvement !.