The dreaded “P” word…

November 6, 2008

By Michael B Tatham, Chief Executive Officer, The Tatham Group

I have a confession to make: I’m addicted to finding new words.

Not just any words, but rather ones that are simple and elegant – like ‘august’, ‘brisk’ or ‘misanthrope’. They bring colour and life to any sentence without adding complexity.

Yet, despite my love affair with the thesaurus, I’ve managed to develop a strong disdain for pompous jargon. Among these words are “distribution channels” or “undertaken” or “procedure.” They sully the English language and provide little added-value.

With a strong aversion to jargon, you can just imagine how I felt when I first started working for The Tatham Group. All day long I would hear the word “business process” and each time someone said it, I cringed at the thought of having to discuss something so bureaucratic. I mean, could there be anything more…boring?

Turns out, I was sorely mistaken. Although subconsciously I always knew that processes are part everything we do (from brushing our teeth, to banking, to passing a law) – it wasn’t until I began to understand that the word “process” is really just another way of saying “the things we do to achieve a particular goal.”

A business process is simply an extension of that definition; the difference is that it starts with a customer and it ends with a customer. All of a sudden, spending a lot of time talking about the customer made sense. And all of a sudden, the words “business process” were crucial to my vocabulary.

But understanding, thinking and working through process can be daunting. Frequently our customers admit that it’s a word they dread because it’s associated with bureaucracy and paperwork.

What many of them fail to realize is that the word process actually represents the key to their success. Here’s why:

Debunking “Process” Myths

Myth No. 1: A business process is just another way of saying bureaucratic paperwork.

First, let’s define what a business process is: put most simply, it’s a series of activities in a business, that when brought together that create a VALUE for the customer. It starts with the customer and ends with the customer. These are not just random actions, but rather, an entire group of activities that create a result that customers are willing to pay for. A customer doesn’t care that we are counting inventory or waiting for a shipment. But they care if they get the goods they purchased, that they are quality and on time.

Myth No. 2: A business process is only for a traditional department.

A business process is cross-functional and transcends organizational boundaries. Typically, it includes filling a customer’s order, developing new products and finding new customers. For instance filling a customer order involves receiving the order, filling the order, shipping the product, posting a bill; and processing the payment.

Myth No. 3: Business processes only happen in large, complex organizations.

Whether it’s a small “one-man band” or a Fortune-500 company, any organization can have a business process. The two key words in the definition are “together” and “organized”. People performing a process share a common purpose and work towards a common goal. They also have a set of rules that specify exactly what work is to be done by whom, when and where.

Myth No. 4: A business process focuses on one task, for example, accounting.

In task work, one person enters orders, another checks credit, a third allocates inventory, a fourth picks and packs, a fifth does traffic planning – with little or no concern (or even awareness) for what the others are doing, and with no overall picture of what ties all the pieces together. When people do their work in a bubble, the result is that it can create a lot of duplication, ‘busy work’ and ‘make-work’, which in turn breeds redundancy, miscommunication, conflict, rework and all kinds of other performance pathologies from which companies chronically suffer.

When each individual is narrowly focused on a specific task, managers must “glue” together these isolated bits of work by checking, supervising, controlling, expediting, etc. With process work, most of this redundant activity is unnecessary.

The second, and more important problem is that people become completely disconnected from the customer. Rather than streamlining their activities to provide the best possible service, each division competes with one another. When this happens, the service and the product is less likely to be consistent and predictable, as work is done differently each time.This further breeds a culture where employees are not loyal to the customer, but rather their divisional chief.

Myth No. 5: Process work is inwardly focused, aimed at achieving perfection within the organization.

Process work is customer-focused, holistic and outcome-oriented. It creates an outward rather than inward focus, because employees are always directed towards customers and the results that customers require. People in process organizations still do tasks; however, they think process. They understand the effects of their own activities on others and on customers; they take responsibility for outcomes and they do what the situation requires rather than just what the boss has told them.

Myth No. 6: Process is the enemy of creativity.

This is wrong. Process is not the opposite of creativity; it is the opposite of chaos. Process creates discipline and repeatability by putting individual activities into a precise framework. When they have a process perspective, people can focus their creativity where it belongs, on the content of their work, rather than on the structure of their work. As one senior executive has put it, “Process is a revolution in thought, leading to changes in business.” In fact, without processes, we would be operating in chaos, where nobody knows their role or what to do.

The Payoffs of Process

A business built around process will inevitable work with less overhead, shorter delivery times, fewer errors, and greater flexibility. Process work is also predictable and repeatable, since processes deliver results by design rather than by luck or through Herculean individual effort. Creating a business centered around process also allows a company to improve its performance over time, which, not only delivers high performance, but sustained performance, ultimately leading to lower costs and increased customer satisfaction.

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