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The Power of Process
Back in the early to mid-90s, Michael Hammer wrote
several books on the then popular topic of "re-engineering". Although
the term may have since lost some of its luster, the heart of the
concept - a focu s
on process - is still as valid and vital today.
Process at the Heart of the Organization
Hammer's thesis is that processes must be at the heart,
rather than the periphery, of companies' organization and management.
They must influence both structure and systems. They must shape
how people think and the attitudes they have.
Customer Satisfaction Directly Linked to Your
Processes
And the single most important word in the definition
of process is "customer." A process perspective on a business is
the customer's perspective. To a customer, processes are the essence
of a company. The customer does not see or care about the company's
organizational structure or its management philosophies. The customer
sees only the company's products and services, all of which are
produced by its processes.
Process Management Must Be A Way of Life
The heart of managing a business is managing its processes:
assuring that they are performing up to their potential, looking
for opportunities to make them better, and translating these opportunities
into realities. This is not a part-time or occasional responsibility.
Attending to processes is management's primary ongoing responsibility.
Process centering is not a project; it is a way of life.
A process perspective sees not individual tasks in
isolation, but the entire collection of tasks that contribute to
a desired outcome. Narrow points of view are useless in a process
context. And process work requires that everyone involved be directed
toward a common goal; otherwise, conflicting objectives and parochial
agendas impair the effort.
In Beyond Re-engineering, Hammer lays out 4 critical
principles:
Principle 1: The mission of a business is to create
value for its customers
A company exists to create customer value. Everything
a company does must be directed to this end. Create customer value
and you'll create shareholder value.
Principle 2: It is a company's processes that
create value for its customers
The tasks are the bits of work that people actually
perform, but the tasks themselves do not create value nor do the
individuals performing them. It is only whole processes, all the
tasks put together, that create value.
Principle 3: Business success comes from superior
process performance
Delivering consistently superior products over long
periods of time requires a set of consistently superior processes-for
product development, manufacturing, order fulfillment, service,
etc. It is not any one product but its process capability that gives
a company its crucial advantage.
Principle 4: Superior process performance is achieved
by having a superior process design, the right people to perform
it, and the right environment for them to work in.
Hammer cautions strongly that a company must continue
to focus on its processes so that they stay attuned to the needs
of the changing business environment. One-shot improvements, even
dramatic ones, are of little value.
What You Measure You Can Manage
He also points out that without measurement you'll
never be able to know how well your processes are working or how
to refine them. Companies must identify the key measures by which
each of their processes will be assessed and some of these measures
must be based on what is important to the customer. By studying
customers and their requirements of the output of the process, a
company can decide whether to measure cycle time, accuracy, or other
aspects of process performance.
Another set of measures must reflect the company's
own needs: process costs, asset utilization, and other such typically
financial matters. Measures are essential not only for knowing how
the process is performing but for directing efforts to improve it.
Communicate Results of Measurements
Whatever measures are employed, they must reflect
the process as a whole and must be communicated to, and used by,
everyone working on the process. Measures are an enormously important
tool for shaping people's attitudes and behaviors.
Avoid Process Silos
And finally Hammer points out that it would be tragic
if functional silos were to be replaced by process tunnels, if the
old fragmentation into departmental dukedoms were merely to give
way to process protectorates that are defended with equal jealousy.
A business is not just a group of processes, it is a system of processes
that must interact to create all the results customers need.
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