THE BIG PICTURE ON PROCESS STRATEGY
1. Every Action is Part of a Process
Everything everyone does in an organization is part of a process, whether acknowledged as one or not.
2. Get the Big Outputs and Big Processes Right
One of the largest drivers of org efficiency and effectiveness is aligned functional strategies with well-defined and reinforcing sub-strategies and initiatives.
3. Process Excellence is Everyone's Job
Process is about people, infrastructure and partners creating more quality outputs with fewer inputs.
4. Anyone can Learn & Apply the Process Toolkit
Everyone should learn the basics of the process toolkit to lift the overall efficiency and effectiveness of individuals and teams.
EVERYTHING IS PART OF A PROCESS
Every company is made up of hundreds to thousands of processes. Every action in an organization is part of a process, whether acknowledged as one or not. A process simply takes inputs and creates outputs. Efficiency improves when a process creates more output with less input. Effectiveness is when a process creates the right output. Processes are executed by team members, infrastructure and partners. All of the costs of a company are inputs to a process or help execute a process.
Companies don't typically talk about or have a "process strategy," but they should. Imagine if everyone, every team and every function in a company could create more output with the existing resources. Over time, the company would be a lean, mean profit-making machine.
Process excellence is not a function, or a responsibility of one team, it is an organizational capability driven by the top-down through strategic alignment and leadership and realized from the bottom-up through process enablement and improvement. Processes make up the circulatory system of an organization, and it is everyone's responsibility to drive process excellence. You can define process strategy at the individual, team, functional and cross-functional levels.
TOP DOWN STRATEGIC ALIGNMENT & LEADERSHIP
A business model is one big process where the organization efficiently and effectively develops and delivers the value proposition and go-to-market to fulfill the needs of customers better than the competition to achieve the mission. Strategic alignment is making sure all of the elements of the business model have strategies that reinforce each other, which drives significant gains in efficiency and effectiveness. You can assess a company's strategic alignment by asking some basic yes and no questions:
- Is there a compelling and inspiring mission and vision?
- Are the target markets, customers and geographies well defined and understood?
- Does the value proposition create more value for customers than competitors?
- Do the go-to-market strategies amplify the value proposition to the target customers?
- Is the organization focused on developing and delivering the value proposition and go-to-market?
The next level of process excellence is at the functional level. Every function in an organization has some big process(es) that generate big outputs. Functional strategy simply defines the big output goals and the initiatives to improve the efficiency and effectiveness of the big process(es).
An organization that is strategically aligned and has strong functional strategies has the top down process alignment to drive process excellence. The next element to process excellence is ensuring the leadership at all levels is committed to process excellence, which entails utilizing process language, solving big company bottlenecks, and holding people accountable to improving big processes and measuring goals and output.
Process excellence necessitates both the top down strategic alignment and leadership and the bottom-up process enablement and improvement.
BOTTOM-UP PROCESS ENABLEMENT & IMPROVEMENT
Process excellence is about individuals and teams working more efficiently and effectively, which necessitates a bottom-up approach to process enablement and improvement. Process enablement takes training, accountability, and cultural reinforcement.
Process maturity is one of the most useful ideas to process excellence. It is simply the idea that every process is at a certain level of maturity starting at 1 - initial/chaotic to 5 - optimizing. In most companies, the majority of processes are level 1 or 2. The processes happen, but not consistently, and the knowledge of the process is typically in someone's head. Half the journey to process excellence is getting the majority of essential processes to maturity level 3 and 4, where processes are well-defined and managed.
It can't be emphasized enough, to mature the majority of processes to level 3 and 4. Once you standardize a process into a standard operating procedure, that other people can execute, then you can truly start improving the process. Furthermore, just by documenting and measuring processes, individuals and teams will naturally begin improving them.
ANSWER THE BASIC PROCESS QUESTIONS
When documenting a process, you need to answer some basic questions, which we've outlined for you in the anatomy of a process.
MAP THAT PROCESS
In addition to documenting a process into an SOP (Standard Operating Procedure), it's helpful to map the process. A conceptual representation of a process provides the scaffolding to apply structured thinking. As you start managing a process (level 4), you begin measuring metrics on the various steps of a process. Below is a simple example of a hiring interview process and process mapping symbols. Process mapping is one of those skills you develop with practice.
THE PROCESS TOOLKIT
The two main process improvement methodologies are six sigma and lean. While they both originated from manufacturing companies, they have permeated all industries and functions. Six sigma originated at 3M and lean at Toyota. We typically prefer lean methodologies, given the pragmatic and straightforward concepts are easy to apply to processes. The central idea of lean is to eliminate all non-value add activities or waste out of a process. Below are the eight forms of waste to eliminate. We cover more of the lean toolkit in the process competency section of Stratechi.
When it comes to projects, agile has emerged as a leading project methodology, given it embodies many of the lean philosophies and ideas.
Typically, companies that want a step-function improvement in the efficiency and effectiveness of their processes and projects adopt six sigma or lean, and agile (for projects). They thoughtfully permeate and engrain the methodologies into their culture and empower their team members through training and application.
Automating processes grow the capacity of an organization. So often, there are roles in an organization that should be automated. Companies typically have many people whose entire job is to run the same reports, process the same paperwork, do the same manual task, day in and day out. If you can cost-effectively automate what they do, you free up incredible capacity in the organization. If you don’t automate what they do, the faster you grow, the more people you have to hire to do the manual tasks. Manual tasks often become significant bottlenecks to growth. Today, with the ubiquity and ease of use of software and online tools, you can automate almost anything.
The beauty about process transformation is it can happen at any level, with anyone, and any team. It doesn't need to start from the top down. Frankly, you just need the discipline of documenting, mapping, measuring, managing and ultimately improving processes. Broad-based process transformations take a significant amount of time, energy, resources, training, accountability and change management. Ultimately, process transformations can drive substantial ROI as the organization focuses on producing more of the right output with less input.