Process Standardization and the "Three Bears" (Transcript)

In the children's fairy tale Goldilocks and the Three Bear, Goldilocks goes into the bears' house and tries their porridge. She finds that one bowl is too hot. Another is too cold. And the final one is just right. So what does a children's story have to do with process excellence?

In process terms too much standardization and you take away people’s autonomy to act in the company’s best interest. Too little and you get chaos and you aren’t leveraging best practice. So how do you get it just right?

They're looking for processes that are "just right"

In this Process Perspectives podcast, Berndt Forssell from Volvo’s OD/VPS Group Function (Operational Development/Volvo Production System), discusses the art of mastering the battle between global standardization and local adaptation, something he will be speaking on in more detail at our upcoming Nordic Process Excellence Summit in Stockholm this May.

Editor’s note: this is a transcript of a recent podcast interview and has been edited for readability. To listen to the original podcast, click here.

PEX Network: At our PEX Nordics summit you’re going to be looking at mastering the battle between global standardization and local adaptation. Can you tell me more about what you’re going to be speaking about?

Berndt Forssell : Sure. My colleague Lars-Gunnar Larssonand I have been working together for over a year now in the Volvo Group initiative to cause a shift in the culture and mindset of our company and towards building structures to make Volvo Group more process driven company.

We’ve been looking at how to manage the potentially antagonistic relationship between the implementation of global standardized processes and the local adaptation of them. We think that it will an intriguing and highly relevant area for many others in the PEX community so we’re looking forward to sharing our learning and experiences. In short, we want to describe our Volvo Group common approach and methodology, addressing the what, the why and the how, and also share results of one actual case with some reflections on learnings from this approach.

This time we will have two different sessions. At the PEX conference in May, we have a workshop where we delve into the approach and put them into practice. We will also have a more traditional presentation during the conference where we will outline the method via a case study of our facility management. You could imagine in an organization like Volvo with more than 150 sites it is a big issue, so we thought that could be an interesting case to test this in reality!

PEX Network: So, why is it so important then to get that balance just right between global standards, and global standardization, and that local adaptation? Wouldn’t it just be much simpler if you could just standardize everything?

Berndt Forssell: Yes, it would be. In theory, you can standardize everything, but in practice it is never as simple. Volvo Group, for instance, is coming from a very diversified and very decentralized structure where you have all these different segments. For instance, we have different brands, we have different sites, and more. Two years ago we started the a huge task of starting to unify these, to better leverage the strength of our global presence - all the competencies and the diversity that we have in the group. To put it simply, we want to have global strength but still not lose the competence and strength of all our local sites.

As my colleagues used to say in this community: Keep it as global as possible and as local as necessary. That is easier said than done. There are numerous initiatives, big ones like this, that have failed, often because of lack of knowledge.

For instance, too much centralisation, then you fully don’t utilize local expertise and knowledge, networks, and solutions. You may also miss that all-important buy-in.

On the other hand, if you have too much decentralization, you don’t leverage fully the fact that you’re a big player in the market. You risk double work, not enough sharing and don’t fully leverage key learning across your company..

PEX Network: What do you see as some of the key challenges in terms of getting that balance right?

Berndt Forssell: I think the biggest challenge is the awareness and understanding of these two different perspectives. It’s not an either /or. The most important word is: "And". This is just as much about culture as it is a matter about structures.

So there are different challenges here. The mindset and awareness, for instance, takes a huge effort to work with this in such a big organization. You need a lot of training, but also need to think about how to work on this for more of the on the job training.

Secondly, I would say cross functionality is essential to work better together - one of the main purposes of having a more process driven organization. In the preparation work, for instance, we have also joined forces here within the process management community, the OD community, HR, communication, etc. How can we standardize our processes and still utilize our different competencies?

Third, it’s a big issue about infrastructure. Having a management system for process is important, of course, but you also need supporting resources. In this case I would say that leaders should not forget that the most important part of this is the support and the infrastructure for process management.

Last, but not least, is having the right buy-in. It goes without saying, maybe, but to get the buy-in in these big efforts, is one of the four biggest challenges.

PEX Network: So what exactly are some of the things that you’ve been doing at Volvo to address these challenges?

Berndt Forssell: As I mentioned already, the preparation work is critical. Trying to combine our different competencies in the start up phase has been one of the big parts here. We must allow all our years and years of combined experience to come into play. One other thing that we’ve done is making it part of the strategy of Volvo Group to work in a process-driven way. So this is a natural consequence to start doing things about it, and also that it concerns everyone.

All our companies work with process and have it on their agenda. How we communicate has been part of this in different ways. We have the e-learning, which we have addressing it for instance. Even our CEO, Olof Persson, talks about this when he’s public within our company. For instance, one of his favourite sayings is: We all belong to a function, but we work in the process.

So there’s lots of different small steps in that direction. Then, of course, we have also set up the structures themselves to reflect the emphasis on process.

Maybe for the first time we have a truly common Volvo Group management system rolling out all these processes in a unified way. We have roles and descriptions of responsibilities. We have management assigned to take ownership for the different processes. There’s a lot of small things and some bigger things that I think has been part of this besides this effort I talked about earlier.

PEX Network: My final question, then, is as a speaker at PEX Nordics, what are you most looking forward to at the event?

Berndt Forssell: Well, naturally the exchange of knowledge and experiences from other professionals. It’s always great to meet others that share the same ideas and passion, but also have the same problems to work with. I also think it could be a great opportunity for us to test our ideas here and our way of working. Getting feedback, learning from others and perhaps also getting confirmation if we’re on the right track!