Process variations: The dirty little secret of process management
With globalization, rapid technological innovations and more educated, empowered consumers, the challenges of operating and growing a business are becoming increasingly complex. Even relatively small companies now often sell in to different countries, operate in multiple regulatory environments and personalize their customer experience delivery based on attributes like client profile, size, location or behavior.
This level of business complexity is a huge challenge for organizations when it comes to successfully managing and standardizing business processes.
The myth of the ‘standard’ process
I remember very well my first experience with ‘standard’ processes and the challenge of multiple process variations. It started with one of my earliest projects in the 1990s, working on a global accounting change program for a well-known international airline. The project was designed to standardize airline revenue processes. Everyone involved was excited by the best-in-class processes we had developed. They all agreed to the plan. They all signed off. We hailed our new standard processes as a true breakthrough.
Then came the implementation phase. We quickly realized there wasn’t a single country across Europe that could apply the breakthrough ‘standardized’ processes we had created. Everywhere we looked, slight differences to the standard process were required. Each region demanded that processes be customized to meet local needs and regulations.
It felt like our concept of standard processes was a fiction - something that worked well in theory, on a flowchart, but completely failed when it was exposed to the real world.
While little by little we were able to implement the changes throughout Europe, there was no easy way to cope with the legitimate localization and customization demands of the business.
Separate processes had to be created in each region, which translated into major headaches, major investments in time and energy, and major project overruns, not to mention process inconsistencies and increasing complexity with every new process variation.
25 years later, managing process variations remains a huge problem for many organizations. This is true particularly for multi-nationals which have numerous locations, or offer multiple core products or services. Managing process variations still seems to be unnecessarily complex, costly, and inconsistent. The experts agree. Steve Stanton, an analyst with FCB Partners, says: “90 percent of the organizations I know have failed at standardization.”
That which we do not speak of
It’s kind of like the dirty little secret of process management. Process owners know they have so-called ‘standard’ processes that do not actually meet the requirements of the teams who are expected to apply them. And they know these processes can’t be applied, which means they may as well not exist.
There seem to be three common (and unsuccessful) responses to the problem of process standardization:
- Create standardized processes at a high-level only
- Create mega-processes that include every possible variation
- Owners are free to create separate individual variant processes
Scenario one is the most common for early maturity organizations. High level information is so summarized that it’s not very useful to anyone for day-to-day process guidance, or as a platform from which to navigate future change.
Scenario two is the most common response from technical teams and large transformation projects. Their attempt to tame all this complexity is often detailed, technically-correct process documents that apply approved process notation standards. The main challenge with this approach has been its poor history of winning engagement from business teams after these projects end. They just don’t find it comprehensible. And the second failure point is that it can stall agility and future change, because process owners aren’t confident applying changes and improvements to this documentation. They’re not ‘living’ documents.
The third scenario is the most common for organizations further along the process maturity curve. Separate individual variant processes are owned, managed and changed independently, resulting in exactly the administrative and change management headache you would expect from such an approach.
7 steps to conquer process variations
Despite the failed attempts by many teams to date, I believe that it is possible to achieve the benefits of standardized processes across an organization, with the ability to control process variations when and where they are legitimately needed.
Here are 7 capabilities organizations need to tame process variations:
- Agree on the Standard Process: The ability to agree on the core or standard process, owned by global process owners, which forms a platform against which to consider local variations.
- Highlight Changes: Local process variants should then be established off this standard process base only, with any changes applied by process variant experts to be highlighted and visible against the core process.
- Compare and Report: The ability to compare and report on all the process variations that exist for each standard process. Doing so allows visibility of activities that have been added, removed or changed, compared to the standard process.
- Intuitive Access: When navigating to processes, business teams should be able to select the process variant they seek from a list. Ideally they should automatically be routed to the relevant process variant if they have a ‘default’ location, product team, business unit, etc.
- Change Management Notifications: Any changes applied to the standard process by the global process owners should be notified to the applicable local variant owners. They then either amend changes, or approve them to be merged into each variant process.
- Global Reporting: There should be global reporting capability so that process champions can see the list of processes that exist for each variant type.
- Time and Cost Tracking: Process variant costing and timeframe tracking should calculate the difference in cost and time between variations and the standard process. This allows organizations to make informed decisions about whether to keep or eliminate process variations.
It is possible to address the dirty little secret of process management. These capabilities will empower organizations to understand the extent of the process variations they are managing, to control and report on them and importantly, to challenge them.
These seven steps will empower teams to be more agile, more flexible and to customize (or eliminate) activities as they see fit, because the variations will exist in an environment they actually have clarity and control over.