In our first few articles of last year, we urged business process based management as against functional management as a way of getting the most from your organisation and delivering better value to your stakeholders.
First, a Fishy Tale:
A newly minted fishery Ph.D decided to set up a catfish fingerling production operation. The results of three dismal trials were as follows:
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First try: Owing to power failure during the night, the newly fertilised eggs died for lack of heat (usually provided by a 60 watt bulb)
Second try: There was nothing with which to crush the pituitary for preparing the solution to be used for injecting the female (to induce spawning)
Third try: The hand put in charge to watch the fry failed to control the water level in the flow tank. There was an overflow and over 90% of the fry were lost.
We'll keep this story in mind as we continue.
20:20 Vision - Gaining Process Clarity Business or Core Processes
The generic organisational model presented by the European Network for Advanced Performance Studies (ENAPS) is an extension of Porter's value chain concept. Every organisation engages in a sequence of activities that results in a desired outcome for the customer. This sequence constitutes what the ENAPS model refers to as the Business Processes.
The Business Processes in the ENAPS model are product/service development, obtaining customer commitment, order fulfilment and customer service. The outcome from this chain of processes is the reason for the organisation's existence: provision of a good or service for the customer. In our story above, the fingerling production setup is likely a part of the order fulfilment business process. Note that your first sales to each customer is assured by the first two business processes (i.e. you have something to offer, and persuade prospects to exchange their money for it). The last two business processes ensure a positive customer experience and lead to repeat patronage.
Secondary Processes
A look at any organisation will show that the business processes cannot be successfully executed without other types of activities which, while not being core in themselves, are necessary to enable the core processes run smoothly. The ENAPS model refers to these as Secondary processes. Some of the secondary processes are required for the day to day running of the core processes. They are known as support processes and include things like HR management, financial management and information management among others.
Another class of secondary processes help the organisation take its performance to a higher level. The model refers to these as Evolution processes and they include strategic planning, continuous improvement, human resource development and other processes whose impact is on future results.
Open the following link to see a representation of processes following the ENAPS model.
Assessing Organisational Maturity
It is one thing to have the processes. It is quite another to have them deliver the required outcomes every time. Organisations differ in their ability to obtain consistent results form their processes. The Carnegie Mellon University developed a model for assessing organisational maturity. Initially designed for assessing software companies seeking defence contracts, the so-called Capability Maturity Model (CMM) characterises organisations on the five levels described below:
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Initial Level:
Organizations at this level are characterized by ad-hoc procedures, reactionary responses, lack of effective planning. Over commitment and missed schedules are common. Performance depends on the ability of individual employees, and heroics are highly valued. Obviously our fingerling production outfit is operating at this level.
Repeatable Level:
Organisations at this level have established, documented and enforced procedures. Problems are recognised and tackled as they arise. To get to this level our fingerling production operation would need to document the production process such that there are few surprises.
Defined Level:
For organizations at this level, processes are integrated. Roles responsibilities, readiness and verification criteria, inputs, work procedures etc are defined.
Managed Level:
At this maturity level, metrics are established for products/services and processes. Statistical control methods are used to manage the process and spcial causes of variation are eliminated.
Optimised Level:
At this level, the entire organisation is focused on continuous improvement. Prevention rather than correction is the norm.
Where Do You Stand$%:
Every organisation or function needs to assess its level of maturity as a first step in moving to higher and more predictable performance levels. An automated manufacturing outfit may be at maturity level 3 in order fulfillment, but if it is still at the initial level in customer service, the overall customer experience will be negative. A consulting outfit at the defined level in order fulfullment and customer service but level 1 in obtaining customer commitment will have few customers to begin with. An organisation in a fad driven industry - e.g. fashion, that is at a low maturity level in product/service development sows the seeds of future failure.
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