processdesign
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This document outlines the key aspects of transitioning an organization from a traditional hierarchical structure to a process-centered one. It discusses shifting the focus from tasks to processes, empowering employees as professionals rather than workers, moving from managers to process owners, removing unnecessary non-value adding work, rethinking strategy around processes, and ensuring the corporate culture supports ongoing learning and change. The overall goal is to design processes that meet customer needs in the most efficient and effective way to improve outcomes.
processdesign
- 1. Agenda • Facts of the old world • Background • The four changing areas • The customers role • Changing from worker to professional • From manager to process owner • The end of the org chart • Process centering • The design • The process view • The customers role • The organisational changes • Reducing non-value adding work • Rethinking strategy • The corporate soul
- 2. Contents • The Customer's Role in a Process • How to Focus on Process • From Worker to Professional Role Shifts • What Does It Mean for the employee? • From Manager to Process Owner • The Process Owner • Coach and Advocate • The End of the Organizational Chart • The Soul of the Company • Rethinking Strategy • The Process of Change • Picking Tomorrow's Winners Company Character
- 3. Facts • Aetna Life & Casualty – Twenty-eight days to process applications for homeowner's insurance – Twenty-six minutes of real productive work. • Chrysler – When buying even small stationery items costing less than $10, incurred internal expenses of $300 in reviews, sign-offs, and approvals. • Texas Instruments – 180 days to fill an order for an integrated circuit while a competitor could often do it in thirty days. • Pepsi – 44 percent of the invoices that it sent retailers contained errors, leading to enormous reconciliation costs and endless squabbles with customers.
- 4. Food for thought • How much time does your processes take? • How accurate are your processes? • How efficient are your processes? • How much does it cost you for internal purchases?
- 5. Background • Realisation that managers and workers were applying task solutions to process problems – A task is a unit of work, a business activity usually performed by an individual while a process is a related group of tasks that together create value for the customer
- 6. The four areas 1. In Work, as every employee is transformed into a professional. 2. In Management, as managers shift from being supervisors to being process owners or coaches. 3. In the Enterprise, as the business transforms its strategic planning to develop strategies based on processes. 4. In Society, as the changes in work and organizations will reshape the world around us
- 7. The process view • all people in the company recognize and focus on their processes • A process perspective sees not individual tasks in isolation, but the entire collection of tasks that contribute to a desired outcome • Processes are concerned with results, not with what it takes to produce them
- 8. Steps to process centering Identify processes e.g. order fulfilment, product development, order acquisition, provide after sales support Ensure that everyone in the company is aware of these processes and their importance to the company Process measurement - e.g. cycle time, accuracy, process cost, Asset utilisation etc Process management – continued focus on processes to Cater to changing business environment 1 2 3 4
- 9. The customers role • A process perspective on a business is the customer's perspective • The customer does not see or care about the company's organizational structure or its management philosophies • The customer sees only the company's products and services, all of which are produced by its processes
- 10. Organisational changes • Replace simple and complex processes with simple processes and complex jobs • Autonomy and responsibility are integral to process- centered jobs • Work is classified as Value-adding work, or work for which the customer is willing to pay. Non-value-adding work, which creates no value for the customer but is required in order to get the value-adding work done. Waste, or work that neither adds nor enables value Non-value-adding work is the glue that binds together the value-adding work in conventional processes. It is all the administrative overhead—the reporting, checking, supervising, controlling, reviewing, and liaisoning. It is work that is needed to make conventional processes function, but it is also the source of errors, delay, inflexibility, and rigidity. It adds expense and complexity to processes, and makes them error-prone and hard to change.
- 11. Reducing Non-Value Adding Work • More the number of people involved more the need for coordination, communication, and checking • Even when one person cannot perform an entire process, it is still possible to have every person who is involved in the process understand it in its entirety and focus on its outcome • Consequences – frees people from administrative hassles – Jobs become bigger and more complex – changes the boundaries of traditional jobs
- 12. From worker to professional • Worker - does what he is told – Boss – Activity – Task • Success depends on – Pleasing the boss – Keep doing your task to keep the activity levels up • Professional - does what it takes – Customer – Result – Process • Success depends on – Knowledge – Perspective – Attitude
- 13. Addressing employee concerns • Will I succeed in this new world of work? – Success depends on knowledge, perspective & attitude • What title will I have? – titles that people have will describe their professions rather than their ranks in some pecking order • What sort of future can I expect? – Instead of being promoted from one job to a more senior one, your career is about personal growth, about doing more and doing it better
- 14. From Manager to Process Owner • A manager is someone who does the things that workers cannot do for themselves – In a process world the workers have the ability to work without supervision • The process owner owns the – Design, documentation & training process performers in its structure and conduct • The process owner should be a guide and a facilitator not boss • The process owner must have a broad knowledge of the process, an intuition of the needs of customers
- 15. End of the Org Chart ! Who is your boss ? • Who is your boss? In a process-centred organization there are five possible answers. • Perhaps the first person for the boss's title is the process owner. He or she defines your work and specifies how it should be carried out. You may have considerable latitude in execution, but at the end of the day he or she designs the process. • Your coach is also something of a boss. He or she is responsible for hiring and firing you and for training and developing you. Counselling, raises, etc are all delivered by your coach. • When it comes to making operating decisions, you are your own boss.. • Team-mates are your bosses because their evaluations of you and your performance are the most important. They're the closest to you, they know when you're performing well and have a vested interest in informing you when you're not. • Finally, you could reply that the customer who ultimately pays your salary is your boss. In the sense of setting your priorities and determining where you should be directing your energy, the customer definitely has the most clout.
- 16. Rethinking Strategy • Intensification: improving processes to serve current customers better • Extention: using strong processes to enter new markets • Augmentation: expanding processes to provide additional services to current customers • Conversion: taking a process that you perform well and performing it as a service for other companies • Innovation: applying processes that you perform well to create and deliver different goods or services • Diversification: creating new processes to deliver new goods or services
- 17. The corporate soul • Open inquiry – Can it accept unpleasant news and reject conventional wisdom? Does politics rear its ugly head? • Morale – Do the employees believe in the company or do they suffer from corporate cynicism? • Humility – Do people take their success for granted? Do they behave as if their past triumphs guarantee the future? • Learning – Are learning and experimentation organized disciplines in the company or are they haphazard practices? • Sustainability – Are these virtues the creation of one individual or are they an intrinsic part of the organization? Will they last of will they fade?
- 18. The design • So process design must begin with the following questions – What should the process really provide for its customers? – How much are customers willing to pay for the result of the process? – How quickly do they need it? – How much flexibility do they demand? – What degree of precision is required? • In addition to meeting customer requirements – The design should meet the company's needs: for profitability, return on assets, growth etc
- 19. • If I can tell you precisely what to do, then I don’t need you to do it. I can tell a machine to do it, and the machine is cheaper and doesn’t need vacations