A blended approach to business process improvement deployment
In this SoftExpert white paper, Gerry Bruno of Gerard Bruno Associates and Ian Huntly, CEO and MD of Rifle-Shot Performance Holdings, discuss the importance of a blended approach to business process improvement deployment. SoftExpert is represented in Sub-Saharan Africa by Rifle-Shot Performance Holdings.
Business process improvement (BPI) to an organisation should be as essential and natural as breathing is to life. Unfortunately, this is not the case. Process improvement is frequently thought of as disruptive, expensive, time consuming and ineffective. In short, BPI is better avoided than attempted. In this article, Bruno and Huntly will examine the need for BPI, the reasons organisations shun it and offer a viable alternative to not improving processes.
Every business is a collection of processes. Things get done (products manufactured or services delivered) via processes. Customers will come to you or leave you because of their experiences with your processes.
Profitability is process driven as well. Profit is the difference between what it costs (directly and indirectly) to make and support a product or to deliver a service and what the customer pays for that product or service. If we examine this critical equation, one perspective would suggest profits could be increased by raising the price of goods or services to customers. This is usually not the best way to increase profit, especially if you have price-based competitors.
So let's look at the other side of our profit equation, the production and support of goods and services. These processes consume time and money, that is, your time and money. Accordingly, process is the "Promised Land of Profitability."
This is hard to believe, but the average business process contains a whopping 80% of something called "non-value-added activity" (NVA). NVA is any step in a process that you pay for, that adds time to delivery, which the customer didn't request nor does nothing to aid in the production of a product or the delivery of a service. Much NVA can be classified as waste.
The identification and elimination of NVA increases the efficiency of processes. This is BPI. Ridding workflows of unnecessary NVA is the only intelligent way to increase profitability. Streamlining workflows increases process efficiency by definition. However, BPI has the added bonus of increasing effectiveness. The elimination of NVA always reduces cycle time. Speedier delivery of goods and services usually delights the customer.
An additional boost in effectiveness comes with fewer errors and/or defects. Every step in a process is an opportunity for something to go wrong. Errors and defects frequently occur during non-value-added tasks. Accordingly, eliminating these unnecessary steps diminishes exposure to errors or defects.
Another compelling reason to engage in BPI is that it works. Bruno had the opportunity to function as an internal BPI consultant in an organisation for seven years. During that period he studied and improved dozens of workflows. They were able to reduce the number of steps in existing processes by an average of 62%. His experience with people receiving fundamental instruction in BPI and applying that newly acquired knowledge to business processes is an astonishing 50% reduction in the number of steps with corresponding decreases in cycle time. Customer satisfaction was always measurably improved.
So...why do most organisations avoid BPI like the plague?
Actually, there are some very good reasons. As has already been mentioned, BPI has been viewed as disruptive, time/resource consuming, expensive and ineffective. Process improvement is frequently seen as a threat to almost everyone in the organisation. Small wonder so few organisations engage in BPI.
Let's examine the two traditional approaches to improving business processes. Both have their pluses and minuses.
The Hired Gun:
Most of the process improvement consultants we know are very good at what they do. They are experienced professionals who can make a big difference in the effectiveness and efficiency of any workflow. Using external consultants has its advantages. Consultants can provide minimal disruption to operations. For the most part, staff are able to go about their daily routines uninterrupted.
The professional consultant can get results quickly as opposed to internal teams that frequently take months to complete BPI projects. Consultants are objective. They will make recommendations based on what is best for the organisation and professionals should not be influenced by internal politics. This is not always true when an organisation attempts BPI with internal staff. Furthermore, consultants know how to express proposed process recommendations which results in a format that plays well with most top managers.
The downside of using consultants is they are expensive. Not only are you paying a hefty daily rate, but you are also paying the consultant to learn processes that you and your staff already understand. Consultants can become addictive. When you get good results, you may become dependent on consultants to improve all of your work flows.
A final problem with the "Hired Gun Approach" is as old as process improvement itself, "Fear." BPI consultants may generate lots of it. For years, terms like "Efficiency Experts", "Reengineering", "Downsizing", or "Rightsizing" have struck terror into the hearts of workers, supervisors and mid-level managers alike. Consequently, information given to consultants on which these professionals base decisions is frequently flawed.
The resultant recommendations developed by consultants are then thrust upon staff. Consultant developed ideas and implementing those improvements are sometimes met with passive aggressive resistance. If the people in an organisation want an idea to fail (no matter how brilliant), fail it will.
Many people are "Do-it-Yourselfers." They love to roll up their sleeves and get under the hood. The 1980s were the hey-day for "Do-It-Yourself BPI". Many positive things were discovered using this methodology. During this period thousands of continuous quality improvement (CQI) teams were launched. Hopes were built and dashed with this approach.
The benefits of the CQI team technique are multiple. Most importantly the approach works. From a BPI perspective, teams cut the number of steps in existing processes they studied in half with corresponding reductions in cycle times.
For all of its value the "Do-it-Yourself" approach had significant drawbacks. The primary problem was disruption. People were taken from production or service delivery for training and team activities, leaving supervisors and mid-level managers who had to meet production deadlines with diminished human resources.
Frequently, a team's activities conflicted with operational realities, frustrating everyone involved. The "Part-Time Team" approach took valuable time to generate results. Experience has shown that teams reflected an average of 90 days cycle time for project completion. Projects lost momentum and/or management support because of the amount of time it took to improve a process.
This was true for two reasons. First, people were on the learning curve with BPI so all activities took longer. Secondly, efforts were part-time and therefore, disjointed. Team activities often took a backseat to production. BPI was everybody's secondary job and nobody's primary job.
Other issues that surfaced with this approach included cost. Even though it was a "Do-it-Yourself" approach, consultants were called in to train large numbers of staff in BPI, coach teams through projects and advise management along the way. Another significant and frustrating situation was with the acceptance and implementation of team developed improvements. There is an old saying, "You can't be a prophet in your own land." Unfortunately, many teams suffered from this paradigm.
An additional millstone for teams trying to sell ideas to top management was an organisational language barrier. Workers and supervisory staff live in a "World of Process" and express project results enthusiastically in the language of process. Unfortunately, top management live in a "World of Sales and Finance," failure to express results in financial terms such as return on investment may fall on deaf ears. This frustrates top management who have invested time and money in the "Do-it-Yourself" experiment and the team members who worked so hard on the projects, but to no avail.
Now that we have examined the pros and cons of these two approaches let's return to BPI and summarise and see what lessons we have learned thus far. First, we will distil the positive attributes for a successful BPI initiative. They include:
* Getting results;
* Minimising impact on operations;
* Completing BPI projects quickly;
* Minimising expenses for BPI projects;
* Including workers for superior solutions;
* Ensuring ownership of improvements through participation;
* Expressing project results in both process and financial terms;
* Fostering an organisational culture that is free of fear; and
* Engaging focused professional expertise.
Most of the time spent in BPI is doing the leg work involved with the documentation of the process as it is presently done. This should be done by the internal consultant. The benefit of this approach is the minimal disruption to operations. After the internal consultant has documented the present process it is time to engage the workers.
The important difference from the CQI experience is that worker involvement will be very limited, quick, high intensity and results laden. Remember the benefits of worker involvement are superior results and ownership of solutions through participation. The internal consultant may host two brief events with members of the work team responsible for the process.
The first event is to ratify the state of the "Present State" process to include process metrics. Depending on the size of the process this may take about an hour. The second event is called a "Possibilities Interview." During this high energy session, the internal consultant and workers go through the process one task at a time and brainstorm improvements and alternatives to each step. By the end of the structured Possibilities Interview the elements of the improvements have been identified. At this point workers are vested in the solution.
The internal consultant should work with top management and CFO to be sure he/she is bilingual. This means recommendations and results are not only expressed in process metrics but will be understood in financial terms as well. Accordingly, the internal consultant and top management should agree to standard process and financial metrics to be included in every project presentation. Additionally, a return on investment formula should be developed for any purchase associated with operational improvements.
Finally, it is essential for top management and the internal consultant be committed to driving out fear. Bruno said he had never seen BPI succeed over the long term in any organisation where fear was associated with improving workflows.
Improving business processes is critical to profitability, competitiveness and survival. Many organisations have fielded BPI efforts that reaped more frustration than benefit. The resulting "Sour Taste" has caused a reluctance to improve business workflows. In this article, we have explored the reasons why many well intended CQI attempts failed. Rather than "Tossing the Baby Out with the Bath Water" Rifle-Shot Performance Holdings recommends benefiting from the hard learned experiences of the 1980s and 1990s. Using an internal consultancy/blended approach to BPI deployment will provide organisations with a highly effective model. The failures of the past do not lessen the BPI imperative.