Process-based Business Development Lecture 4 Autumn 2010

Lecture 3

It takes several different images and perspectives to successfully manage and develop an enterprise A core process map represents one of the key perspectives of an enterprise

Core process model – key points Facilitates the possibilities to match external promises (“this is what you get”) with internal ability (“this is what we are good at”) One of the key starting points for developing single processes

The process map should not consider the functional organization, unless necessary A1 needs

A1

B1

C1 B2

A2

C2

B3

satisfied needs

needs

B1

A3

B2

C3

B4

C1

C2

C3

B3 A3

A2

B4

satisfied needs

Criteria for a properly established process • Usable – A truly valuable structural capital (documentation) exists

• Known – The process users are aware of the existence of the process documentation

• Accepted – The process, its design and documentation are accepted

• Understood – The process, its design and documentation are understood

• Available – The structural capital has a reasonable availability

• USED! – The process structure and the structural capital are actually used

Benefits of having established processes • Avoid inventing the wheel over and over again • Basic foundation to control the business • Is a foundation for having common systems (IT, management etc) • Foundation to make work standardized and globally introduced • The customer gets the same treatment every time • Avoid dependence of individuals

ISO 9001 – 4.1 General requirements “The organization shall: • determine the processes needed for the quality management system • determine the sequence and interaction of these processes, • • • •

determine criteria and methods needed to ensure that both the operation and control of these processes are effective. ensure the availability of resources and information necessary to support the operation and monitoring of these processes. monitor, measure and analyse these processes, and implement actions necessary to achieve planned results and continual improvement of these processes.”

Lecture 4

The four areas of the course 1. Process thinking

2. Process development

3. Process management

4. Process orientation

Understand and apply the process view

Enable the right performance level

Secure the performance level

Adapting the enterprise to a process paradigm

Integrated processes in fragmented organisations gives limited benefits

NEED VILLE

SATISFACTION VILLE

Process-based business development Business idea & strategy

Core processes

organizational structure

culture & values

competence & resources

work & leadership

supporting systems

Business environment

Process ownership

Road

Road

Road

Traditional line Resources management

Traditional line Resources management

Traditional line Resources management

Journey

Journey

Journey

Customer satisfaction

Customer need

Function-oriented way of splitting responsibility

Customer need

Road Resources

Road Process owner Resources

Road Resources

Line management

Line management

Line management

Journey

Journey

Journey

Customer satisfaction

Split of responsibility with process owners

What does it mean to be responsible for a process? • The process owner is responsible for the process seen as a structure (a road) • However, the underlying objective is to improve the actual work (the journey along the road) • The combination of process structure, people (competence), other resources and systems must perform well • The responsibility of the process owner should thus not be seen in isolation, in the long it is only the working process that has any value • Cooperation with line organisation is key to successful process ownership

The process owner’s overall objectives Development objectives • Process effectiveness – ability to satisfy the customers’ needs and expectations (doing the right things) • Process efficiency – ability to create an effective result with an optimal use of resources (doing things right) • Process adaptability – ability to adapt to changed internal and external conditions and requirements Usage objectives • Established process – a process that is always is used by everyone supposed to use it

Process effectiveness

• Who are the most important customers of the SATISFACTION VILLE process? NEED VILLE

• What are the customers’ needs & demands? • How shall the process satisfy the customers?

The process’ efficiency

• What are the major problems in the process? • How can these problems be solved? NEED VILLE

SATISFACTION VILLE

• How can we increase the flow in process? • Are we using the optimal resources in the optimal way?

The process’ adaptability

• Do people understand when and how to use the process?

SATISFACTION VILLE

NEED VILLE

• Do the process structure permit personal initiatives?

• Is the process defined on the right level of detail? • Can the process adapt to new circumstances / needs?

What is Process Ownership - two different perspectives • Serves as a ”white-space ombudsman,” who facilitates the resolution of interface problems among the functions that contribute to a process. (Rummler & Brache)

• Is the manager in charge of designing the process, building its supporting tools, installing it in the organisation, and ensuring its ongoing high performance. (Hammer)

What are the main practical implications of the two perspectives on the process owner? Questions: • Compare the two definitions. For respective definition: – Describe the basic conditions for the process owner – Describe a possible success formula – What can the process owner expect to achieve? Group size: 2 Time: 10 minutes Presentation: Oral

Manager of the white-space

Function

Function

Function

Process Owner

Designer, installer and controller Function

Process Owner

Function

Function

Customer

Process Owner – authority and responsibility (example) Has the responsibility to: • Set strategic goals for the process • Set KPI targets and monitor performance • Define and document the process • Initiate implementation of the process • Follow up and improve the performance of the process • Ensure a world-class performance of the process Has the authority to: • Decide on process improvements • Request an optimal execution of the process The process owner is appointed by the management team

Depending on development stage, the process owner partly have to play different roles Coach - monitor and control, continuous improvements

Visionary inspire to radical improvements

Entrepreneur manage change

Missionary advocate process thinking

Teacher and disciplinarian advocate the process, establish baseline Process Management

Time

The first (active & structured) process owner has a challenge • Develop relevant documentation, measurement system etc • Stabilize the process performance • Advocate process thinking for a cultural shift • Establish cooperation with line managers • Establish culture for continuous improvements • Etc.

Successful companies appoint some of their best managers as process owners In the absence of strong process owners the old organizational structures will soon reassert themselves

Avoid vertical split of process ownership • Division in sub-processes easily creates new walls

• Delegation should as far as possible be based on a horizontal perspective of the process

Limit the workload of the process owner – Process manager Process owner

Process manager • Purpose – to manage the tactical and operative process owner tasks in a large organization. The exact split of responsibility between the process owner and the process manager is determined by the organization's prerequisites • Often a full time assignment

The strategic aspects of process ownership cannot be delegated Strategic activities within Process Management

Process owner

Process manager and process team Operational activities within Process Management

A process owner neglecting the strategic responsibility will hinder the process manager Strategic activities within Process Management

Process owner

Process manager and process team Operational activities within Process Management

The process manager cannot compensate for an inactive or nonexistent process owner Strategic activities within Process Management

Process owner

Process manager and process team Operational activities within Process Management

Anchor throughout the process and secure living continuous improvements – Process team Alternative 1

Alternative 2

Process owner

Process owner

Process team

Process manager

Process team

Process team • A group of process users (and/or process managers) who together have knowledge of the entire process • The members of the process team constitute the key link between process users and daily operation respectively the process owner/manager • A key mission for the team and its members is to contribute to the establishment of the process and the continuous improvement of it • Possible meeting frequency: monthly

Establish and coordinate development of a globally deployed process – Global process manager Alternative 1 – global process (three sites), local process teams

Alternative 2– global process (three sites), global and local process teams

Process owner

Process owner Global process team

Global process manager

Global process manager

Process manager

Process manager

Process manager

Process manager

Process manager

Process manager

Process team

Process team

Process team

Process team

Process team

Process team

Integrated process, resource/competence and work managament

Roles in process organisations

Process management Road Road Road Resources Line

Resources Line

Resources Line

management

management

management

Journey

Journey

Journey

Customer satisfaction

Customer need

Function-oriented way of splitting responsibility

Customer need

Process management Road Road Road Resource management

Resources

Resource Resources management

Resource Resources management

Journey Journey Journey Work management Work management Work management

Customer satisfaction

Process-oriented way of splitting responsibility

The purpose of all organisational designs • DIFFERENTIATE – give attention to various roles and areas of responsibility • INTEGRATE – create a totality by relating the differentiated roles and areas

The principle structure and roles of a process organisation Business owner

Team Team

Business Flow owner owner Flow owner

Business owner

Team Team

Resource owner

Team

Resource owner

Resource owner

Process owner

Product owner

Process owner

Product owner Product owner

Process owner

The solution for “work management” is case unique Generic solution

Unique solution

PM

RM

WM

The underlying ideas of the process organisation (1) • Harmony between controlling and controlled unit • Balance between vertical and horizontal perspective • Balanced between the future and the operative present – Process – Competence

• Team-based work

The underlying ideas of the process organisation (2) • Focus on competence • Handles interfaces to the environment efficient • Creates commitment • Good cooperation and coordination (through team work and process focus)

What is a competence centre? • A group of people with similar knowledge and skills • The centre ensures that the knowledge and skills of the individuals are maintained and developed. • The centre is the base from which resources are allocated to the projects • Two driving perspectives: competence need of the business (now and future) and individual development • The group can be virtual, the individuals geographically spread.

The role of the Resource owner •

- examples of responsibilities Responsible for the development of the allocated employees’ competence

•

Responsible for a continuous identification of internal and external customers’ needs and requirements on the resources.

•

Responsible for the long-term adjustment of resources. (Type of resource, competence, capacity, quantity etc)

•

•

Provide appropriate resources to the processes. Allocate, in collaboration with the project/order manager, appropriate resources with regard to competence, size, capacity etc. Acquire and adjust resources

•

Support and mentor the personnel resources

The role of the project/order manager •

• • •

•

•

- examples of responsibilities Responsible, towards the customer, for the execution of the project/order in accordance with the established process and according to the project/order specific goals and requirements. Manage the employees in the operative work Have a result responsibility Responsible for identification of project/order specific internal and external customers’ needs and requirements on the process. Responsible, together with the process owner , for enhancement of efficiency and improvement of the processes. Interact and communicate with project/order managers.