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Musings from the team.

MIA - Business Process Owners

This article in Harvard Business Blogs hit a chord for me,  it was entitled, "Where Have All the Process Owners Gone?" by Brad Power

He writes of what I've seen repeatedly, companies view process engineering/improvement/redesign - as an isolated event, rather than something embedded into the culture of the organization.  Processes change over time, new situations arise that impact execution (i.e. the introduction of additional employees, new technology or software), or the proposed process does not work as intended and it must be refined.  All reasons for an organization to keep focused on

A few of Power's points resonated with me:

Companies rarely have process owners that oversee processes across the organization.  Rather process improvements are often limited to one department or functional team within the company and consequently improvements are muted or lost in the noise of the organization.  The problem is that customers (or stakeholders) do not view their experiences this way.  They look at a company and their engagement with it as a complete experience.

It is easy to miss potential opportunities for improvement if  the company does not step back and review work at a level that crosses functional boundaries.  I once performed a process review for a company where reports containing much the same information before any further action was taken were handed off multiple times.  These duplicative efforts unnecessarily extended the product's delivery time and tied up resources that could have been used elsewhere.  Looking at the flow charts just by function, these excessive activities were not obvious.

Process owners should be senior level, respected, and connected, in other words influencers so that changes can happen. Their responsibilities include:

  • Advocating for the customer, acting on "voice of the customer" (VOC) feedback by understanding customers' total experience with a company, from the moment they learn about it to the moment they end the relationship.
  • Monitoring process key performance indicators (KPIs) and appraising senior executives of how processes are performing.
  • Ensuring the company's key processes deliver a competitive advantage.

Companies like Nokia and Shell heeded this advice and created senior level process owners. Equally as important, they built a process governance structure that overlaid organizationally on their functional and product structures. These companies retained senior leadership's attention on critical processes and KPIs, and succeeded wildly as a result.  Another company (Air Products, tripled corporate productivity in two years, and boosted operating return on net assets, again in two years from 9.5% to 12.5%.  These results should be music to any manager's ears.

Power points out that other companies established process owners, but eventually reverted to traditional functional management. He identifies several reasons that these positions were not kept in the organizations:

1. Senior management's attention shifted elsewhere. Senior leadership did not stand behind the roles and consequently employees waited to see what the next position du jour would be.

2. Employees were given the roles without clear direction of what was required. People in these positions must be influencers and if they are not well selected they will fail.  

3. Companies did not hold process owners accountable for improvements in process performance. Many companies appointed process owners to design processes to implement a new system such as enterprise resource planning (ERP). However, after the system was installed, the process owner leaves as the company does not recognize their contribution for process execution and no one oversees performance once the system goes live.  Additionally, if you give someone an ill defined role or set of expectations, how do you measure their contribution?

4. Companies appointed process owners at middle management levels rather than senior executives. The lack of authority translated into a lack of commitment by the C-Suite and the employees just bided their time.  These process owners did not have the influence to impact the organization's mindset and culture; who will argue with the CMO if she claims that the changes will affect her ability to deliver on her annual milestones.

5. Most large companies have complex organizational structures, with product groups butting heads with the geographic leaders fighting functional heads in a never ending tuff war. Other companies might heap on customer segmentation structure for good measure.  The thought of putting a process overlay on a complex structure can be too much to fathom so leadership politely (or not) declined to add a process owner to their structure.

6. Employees were uncomfortable with this newfangled role that was at odds with a traditional functional organization ("I'm a finance person" or "I'm a marketer"?) If employees will not change, they have passive resistance and time on their side.  In one company that instituted process owners, customer satisfaction went up, but employee satisfaction went down, so a new leader came in and reversed course back to a functional structure, I bet customer satisfaction dropped as a result.

I agree with Power's statement that "For organizations that are serious about achieving and sustaining cross-functional process improvement, I recommend establishing process owners". However, with this change organizational wide change to be effective, at least two conditions must be met:

  1. The company must have a good change management plan to transition to this structure - the role must be clearly defined, employees must know what is happening and why, what impact it will have on them, how the changes will take place - all the critical groundwork to secure their participation and acceptance.
  2. Leadership must be committed to its success, as stated above, if employees sense this is a phase they will not accept it, but if they know these roles have their support they will work towards achieving its success, especially if they understand that a benefit is that their job is easier.

This process is not for the faint of heart, nor is it for the company that might timidly stick their toe in.  It calls for total commitment from the highest levels, but the results have shown that those who persevere gain a competitive advantage that makes it worth the effort.