Is it time to move from process to performance excellence?
Companies have for years implemented various methodologies for improving processes in order to increase efficiency, reduce costs, improve customer satisfaction and ultimately, drive better business results.
The Twentieth century saw some of the greatest advances in "process" thinking, with an emphasis on continuous improvement. These include the development of Statistical Process Control, the Toyota Production System, Six Sigma, Total Quality Management, Lean and many other methodologies.
Those methodologies have been tested over time and generated exceptional results for companies. Some have fallen out of favour and others have come into vogue, but there’s no disputing that the methodologies have provided a useful toolkit for tackling common business problems and identifying opportunities for improvement.
But it’s often said in management parlance that "you get what you measure." Put another way, you get what you focus on.
Process is a means to helping the business achieve its strategic objectives; perfect processes are not the end goal: business performance is. When process descends into red tape, ill-thought through KPIs and blind adherence to procedures; however, it can distract from the actual business outcomes that you’re really trying to drive.
Many traditional process excellence methodologies such as Lean and Six Sigma focus on process largely as a non-technology activity, for instance. Where IT can be avoided, some strains of thought may go, it should be avoided.
But with the advent of fast-evolving and disruptive new technologies, the rules of process engagement are changing and technology is a fundamental component of process improvement.
"The technology component is huge. It’s game changing. It takes whatever you were thinking about and just smashes it and then it moves on again," says John Macdonald, Global Manager Business Processes at TNT, quoted in PEX Network's "Trends and Success Factors in Business Process Excellence 2014" report.
It’s no longer enough to look at process in isolation from new technologies that could fundamentally open the business up to entirely new ways of working. Mobile technologies, big data and analytics, automation, wearable technology and the list can and will go on – these are all technologies that are driving profound change in entire industries. To truly drive performance excellence, both the technology and process must be considered as integral parts of the overall whole.
"In the past you would bring experts together and you would look at what your process is and what it could be - almost entirely from a pure process standpoint. Now you have to bring technology in and look at it as a reinvention state and ask yourself: ‘what could I do to disrupt it?’" observes Seth Marrs, Vice President of Operations at medical device manufacturer Carl Zeiss (also quoted in PEX Network's Trends and Success Factors report) "By adding in this third step it gives you the option and visibility to ensure that the process work you are doing is actually creating the best process using the best technology."
Big Data, for instance, is allowing companies to find out more about their customer’s actual behavior than ever before and faster than ever before (with vendors touting "real time" as the latest buzzword to capture your cash). That’s opening up new opportunities to identify new market segments, uncover hidden needs, and empower employees with information that can help them make better decisions day to day.
But performance excellence is even more than just applying technology to a problem or improving a process, it’s also about ensuring the right focus throughout the organization.
PEX Network research, for instance, has found that those companies that focus on driving customer satisfaction are more likely to report greater success with process excellence efforts than those who view it as a cost cutting exercise or drive for efficiency.
So, do you focus on business process or business performance? Perhaps it doesn’t matter what you call it as long as you’re looking at how you can drive performance improvements by linking strategy to operational excellence.