IMPROVINGPERFORMANCEAND AGILITYTHE ROLE OF BUS INESS PROCESS

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Few things are solved by a silver bullet, but performance management stands out in thisregard. Even a revolver full of silver bulletswouldn’t guarantee you’d got it covered.

The purpose of performance managementhas been described as establishing ‘sharedunderstanding about what is to be achievedand... ensure that it is achieved’.1 Sound allencompassing and slightly nebulous? It can be.It’s certainly far broader than a line managerrunning through an annual appraisal form, oreven taking a member of staff to one side todiscuss their under-performance.

Instinctively, we know this is true. We don’texpect an organisation’s performance to besorted simply by virtue of a discrete manage-ment system. We need processes in place tohelp employees develop the right capabilitiesand get them to buy in to the vision of theorganisation. Line managers need sufficienttime and resources to support their teams andideally, should be given the authority to ensurethey are realistic. If not, performance runs therisk of being short lived, as systems crack andindividuals buckle under pressure.

Performance management has a lot in commonwith employee engagement, an increasinglycommon focus of people management. Thenotion of engagement describes employeeswho are not only willing to go the extra mile,

but have the physical well-being and energy tobe able to do this and – equally important froma performance lens – are going the extra milein the right direction. In other words, as theMacLeod Report2 puts it, they see the ‘line ofsight’ between their role and the organisation’spurpose and strategy.

But while there is no simple answer for how to‘do’ performance management, I would singleout the following guiding principles.

The opportunity to discuss aims and targetsis important not only to develop shared understanding but also to help shape them.This may be a question of avoiding unrealistictargets that set you up for failure, but equallyit can be a way of stretching targets and beingmore ambitious. If teams and individuals aregiven ownership of targets by being involved insetting them, they take more responsibility fortheir performance and often aim higher.

FOCUS ON LEADERSHIP AT ALL LEVELS

Leadership development should not be the solepreserve of a selected few at the top of theorganisation. At any level of the organisation,people managers should not be dishing outorders, so much as helping their reports liveand breathe the overall aims and deliver ontheir personal objectives.

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EmbracingperformancemanagementJohnny Gifford, Research Adviser at the CIPD – theprofessional body for HR and people development, givesthought to the complex factors involved in achievingperformance management with purpose…

EDITORIAL FEATURE

A HOLISTIC APPROACH

We should recognise that performancemanagement is not an isolated activity thatcan be clearly delineated. The implicationsare far reaching, affecting our day-to-day conversations and business planning, as wellas the more obvious aspects like appraisals.We also need an integrated approach, as pullinga lever in one area can affect performance elsewhere. This can be the case either negatively,with unintended consequences, or positively,taking the opportunity to build shared purposeor cross-departmental collaboration that benefits different aspects of the organisation.

Performance management systems areundoubtedly an important strand, for example,helping ensure poor performance is picked upand addressed. Well constructed systems willalso include support both for line managers(for example, training on giving feedback onperformance) and reports (for example, stressmanagement courses). But no matter howgood the design, we also need to recognise thatperformance management relies upon regularinteractions, not just periodic reviews of targets.

There is a perennial temptation in performancemanagement to fall back on what DouglasMcGregor called a ‘Theory X’ view of the world,adopting a do/tell, command-and-controlstyle of leadership.3 For most employees in

most situations, we are far better working tothe ‘Theory Y’ assumption that the role ofmanagers is to inspire and support, ratherthan dictate. This does not deny the existenceof certain non-negotiable objectives, or the needto hold people to account. But in today’s climate,employers are invariably looking to do morewith less and get employees to contribute morewidely to the performance of the organisation.It is hard to see how this will be done sustainablyif people are treated like robots. ■

1 ARMSTRONG, M. and BARON, A. (2004) Managing performance:

performance management in action. London: Chartered Institute

of Personnel and Development.

2 See: www.engageforsuccess.org/ideas-tools/employee-

engagement-the-macleod-report/#.U2zWEdtwbow

3 Douglas McGregor (1960) The human side of enterprise.

Jonny GiffordResearch AdviserThe CIPD, the professional body for HR and people developmentTel: +44 (0)20 8612 6200www.cipd.co.uk

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INTRODUCTION

All businesses, in whatever the state of development and maturity, will use businessprocesses to deliver services and goods to theircustomers. These processes evolve over timeas companies and public bodies become moremature, complex with embedded fixes forproblems in the past and are conducted withimplicit rules by front line staff. In the case ofpublic bodies they are also constantly impactedby changes in government policy.

The documentation of processes is seen aspainful, because it takes a long time, involves awide variety of staff and requires a number oftools to document the outcomes. Businessesare driven to provide this documentation forcertification, supporting work instructions andtraining materials and for some businesses itis the differentiator for winning contracts ormaintaining good public services. However,senior management still consider this activitylow added value.

In manufacturing it has long been recognisedthat viewing, reviewing and streamliningprocesses is the key to improving quality,customer service and reducing costs. A numberof key tools and techniques have been developedaround this requirement, such as TQM, SixSigma and the 5S for example. Manufacturingprocesses tend to be very visible and as a resultcan be more easily visualised and subsequentlytransferred into words and diagrams. Also the

use of visual aids and problem solvingtechniques is well understood.

Applying these sort of techniques to public bodiesand back office functions, such as finance orHR, and creative functions such as engineeringor project management is much more difficult.So how do we raise the value of documentingbusiness processes in the mind of senior executives, make the exercise more fulfillingfor those engaged in it and speed up theprocess of documentation and review?

This book addresses these questions bydemonstrating to senior executives andpractitioners the process of building businessprocess models that are exciting, have built invalue during their development as well astheir subsequent reuse within the business.To do this we look at how the processesshould be defined, who should be involvedand how you manage the reuse of the workthat is undertaken.

The authors will aim to convince you that this isby far the most advantageous way of capturingthe knowledge from around the business sothat you can support activities as diverse asorganisational design all the way through toinduction and training.

Whilst minimising the cost and developmenttime and maximise the benefit… is this realistic?

IMPROVING PERFORMANCE AND AGILITY – THE ROLE OFBUSINESS PROCESSESBy Rod Horrocks and Gayatri Ramanujam

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WHY & WHAT IS MODELLING

So why should business managers be interestedin process modelling? ‘Surely this is only relevantfor certifying our operations?’ It is fact that mosterrors and inefficiencies are due to the way workis performed rather than due to the personperforming it. By mapping and documentingthe business process it is possible to analysewhere improvements can be made, identifythe correct balance of work and where to applycontrols. It is also a fact that the longer thetime it has been since businesses have beenreviewed, the less streamlined and poorperforming they are.

The statistics are that after 18 months there is25% waste introduced into a process and within5 years this has grown to 70%.

So how would each management level withina business use a process map? They all needdifferent views of the business and a flat singlelevel flow chart of the end to end businessprocess will not provide this. For example theC band executives will require a very high leveloverview of the entire business showing how theCore business processes deliver the businessand how they contribute to the strategy. If theBalanced Scorecard is used to articulate thestrategy, then this will require targets to be setfor the key business processes.

Middle management will require a more detaileddrill down showing handovers between functionsand how the cross-functional needs of businessdelivery to customers can be in conflict withdepartmental objectives or how poor handoverscan affect down stream performance. They

also need to understand how business policy asapplied to their processes impacts performance.

Front Line staff require a fully detailed step-by-step, model of the process, showing the tasks, who does the work and how it shouldbe done and how to get to work instructions,particularly for more periodic processes thatare not day to day activities.

Beginning by lifting the roof off the factory oroffice, each process step would be expandedout to give each of the actors, from seniorexecutives through middle managers to frontline staff the right view. This is not unlike thebreakdown of a movie with the lowest levelbeing the individual actors’ script. These arealigned by the storyboard that provides theunderlying orchestration of the story. This seriesof pictures enables the crew and actors to reviewand verify the achievement of the story line.

Such hierarchical mapping is crucial in understanding how a particular work processfits into the entire end to end business process,and how any particular process fits into thebusiness delivery. By mapping this way wecan ensure that all processes are continuouswithout gaps or missing links, across allfunctional disciplines. This is frequently theproblem with traditional flowcharting processes,where processes are separately modelled butnot all linked together. Meaning we have notvalidated how the process is triggered andwhere it is triggered from, what the interprocess orchestration rules are and thereforethe cross functional links are not made.

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INPUTS

ACT 1

SCENE 1

SHOT 1 SHOT 2 SHOT 3 SHOT 4 SHOT 5

SCENE 2 SCENE 3 SCENE 4

ACT 2 ACT 3

THE MOVIE

SCRIPT

OUTPUTS

Shot2

Scn1

Scn3

Act1

Act3

I O

Shot4

INPUTS

CreateMaterialDemand

CreatePurchaseRequisition

IssueRequisition& RFQ

ReviewQuotations

IssuePurchaseOrder

Set UpPurchaseOrder

ManagePurchaseRequisition

Inspect &ReceiveGoods

Ship Goods

Procurement

Project Execution &Detail Engineering

Task Mapping of Process with Roles & Systems

OUTPUTS

Shot2

Scn1

Scn3

Act1

Act3

I O

Shot4

Figure 1 - (from BusinessProcess Mapping - J. MikeJacka, Paulette J. Keller)

Figure 2 - Example of Task Mapping using XSOL

Using the movie metaphor, an example of a procurement process is shown below.

EFFECTIVE MODELLING –

WHO AND HOW SHOULD WE GET PEOPLE INVOLVED IN MODELLING?

The first step in modelling is to agree on theuse of a mapping tool.

Once that has been agreed, workshops can getunder way to start modelling the processes.The first workshop should be with the C bandto identify the core processes of the business.Since generally the business has come througha number of changes and everybody has adifferent view of what the processes are, thisshould be done in a group, preferably thewhole C band. By using a standardizedbackbone for the industry, the facilitation ofthe design is quicker.

The next set of workshops will add middlemanagement, to examine the more detailedprocess steps and the underlying businessrules; C band executives will provide additionalinformation regarding business policy.

Finally, there should be workshops with thefront-line staff who will identify the individualtasks, who does them and how they are done;again validation of who does what will requiremiddle management. At this level we build thedetail behind each activity and task in the formof work instructions, procedures and processknowledge into the business model.

Business Process Modelling provides theopportunity to conduct effective cross-functionalprocess workshops by engaging senior managers,including directors, as well as operatives at thefront line. Processes can be examined, exploredand understood from all points of view.

Select a facilitator, ideally this will be anexternal who does not carry any baggage andcan ask the ‘dumb blonde’ questions. Facilitationwill enable the attendees to discuss how aprocess is designed, how it is orchestratedand what business rules govern its delivery.Each of the individuals will have a specific perspective on the process; from a managementperspective on what are the outcomes to anoperator’s perspective dependent on what areinputs and outputs to the process. By facilitatingup to two-hour sessions and documenting the outcomes, initially on flip charts and thenapplying that information into a dynamicmodel, each of the following sessions canbuild on that model design:

• Reviewing the process live on the screenenables you to move around different partsof the process

• Validate and check points of discussion forcontrol and management

• Examine who undertakes that particular partof the process now and if that is correct

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Using a modern business process managementtool will enable you to conduct this workshopin a very effective manner for sessions probablycovering a significant level of detail within abusiness process. Subsequently following thesession you can compile the output, produce afully documented model which can be circulatedvia an intranet for comment and subsequentupdate.

It is inevitable that an overview of the businessfrom top to bottom will not be available on dayone. It is therefore much more effective to bringin a core model back-bone, either based onsome form of bench marking such as APQC or astandard back-bone from industry businessframework. By providing a framework thatcan be critiqued, progress will be quicker and contributions will be easier to be had bychallenging people’s perception of their ownprocesses against the existing model.

The alternative is to take existing documentation,perhaps ISO documentation in the form of Visiodiagrams and Word documents and convertingthem into process models within a hierarchywhich enables you to see the gaps whichhave been previously ignored in the existingdocumentation. This process will also enablethe process delegates to compare with bestpractice standards, such as APQC.

MAKING THE BUSINESS PROCESSMODEL THE CENTRE OF DAY-TO-DAYBUSINESS

Once the business model is complete, it shouldbe deployed for access by the entire business.By deploying the model to all staff a number ofobjectives can be achieved including knowledgetransfer, continuous process improvement andincreased business agility.

Having developed a model that represents theaccumulated knowledge of the whole companyof probably more than 1,000 processes, the keyto success will be the reuse of that work. Thereare many opportunities to do this namely:

• Organisational design, such as introducingnew departments

• Due diligence over mergers and acquisitions

• Setting realistic process performance measures

• Identifying role requirements, supportingcompetency definition and resource planning

• Supporting business improvement initiativesand the application of technology

• Supporting internal audits for security andsegregation of duties, and quality certificationsuch as ISO

• Training of staff who are new hires or promotions

The following diagram shows how the processknowledge repository feeds all these initiatives.

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This represents a significant benefit to thebusiness and therefore should not be missed.The key to ensuring this, is gaining ownershipof the model within the senior executive andfunctional departmental management anddemonstrating immediate benefit.

Gaining ownership will only be achieved byproving the benefit of the approach to thoseasked to own both processes and outcomes. Tosuccessfully achieve this, the model should beused to define process targets and therefore formpart of a department’s drive for improvementthat in turn is part of the overall strategic planof the business. By designing processes withinthe model business managers can apply timeand cost so that the cost of delivery can beassessed; this might be related to rework loopsand the benefit of avoiding them or skill of theperson undertaking the activity. If the model isaligned to business KPI’s realistic targets canbe set to drive improvements and the removal of‘waste’; providing the source for ‘lean’ initiatives.

Managers must be trained in how to use themodel to successfully facilitate process reviewand internal organisational redesign, i.e. such as

moving jobs between incumbents and removingjobs through the application of technology. As apre-requisite to this, we recommended that allsenior managers and process owners aretaken through a process awareness course andobviously given an understanding of how themodel has been developed if they have not beeninvolved in its development. This course willalso teach them how it can be used to supporttheir decision making during regular processanalysis workshops.

Making the model central to training andinduction is much easier; by using the model asa ‘how to’ guide for each business role, enablingaccess through the companies intranet leadingto more in depth materials such as writtenwork instructions or SOP’s, or videos of the same.Using the model to ‘fire up’ an application orERP transaction giving further insight into howto perform the task can further enhance thetraining. Rapid analysis of roles and job scopeis aided by the ‘where used’ report applied tothe business role.

We outline some key activities in the sectionson the following pages...

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CHANGE MANAGEMENT

PROCESS CHANGEIt is only possible to perform change effectivelywhen it is known what you are changing fromand to; thus requiring a good description of theprocess before and after the change.

Using a process that is mapped end to end,with role responsibilities assigned, it is easy toevaluate the change on role workload as wellas information handover.

The modelled processes also double as trainingvehicles and if done properly these changes willhave been done with front line staff contribution.

ERP IMPLEMENTATIONAn ERP system is not just an IT tool. It normallyfundamentally changes the way business can

deliver its the work process, through betteraccess to wider data, new algorithms andimproved roles for staff.

Once the business process is fully mapped, thenthe work processes, which will now be handledwithin the ERP, can be identified and changed.The old IT systems currently in use for specifictasks can be highlighted and process streamlining introduced to remove them andutilise the ERP functionality. Validating thebusiness requirements of the ERP system whilstalso identifying the key changes makes iteasier to manage the implementation, managerisk and manage the training.

M&A – IDENTIFY BEST PROCESSA great number of M&A projects fail because“due diligence” only really focuses on moneyand financial integrity; not process integrityor business culture.

This knowledge is generally tacit and informallytransferred between employees. By mapping theprocess, the knowledge is available immediatelyto all employees and the on-boarding of newemployees.

In the case of mergers and acquisitions, thereis a vast quantity of knowledge available andprobably many different processes to achievethe same objective. Process modelling allowsidentification of the best process, as well as aconsistent method of codifying and storing theknowledge across all companies. Comparisonscan be made to both ‘best practice’ and thepractice adopted by the merging entities;identifying this gap and seeking ways tobridge it will significantly enhance the potential for success.

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A good ERP is more than just goodsoftware. It involves an institutionalcommitment to connecting people,processes and resources.James Young

CONTINUOUS IMPROVEMENT

PROCESS MEASUREMENTMeasurement targets for processes are notoriously difficult to set; particularly if youwant to measure the end-to-end processes.By making current work processes visible, itbecomes more obvious what elements govern theperformance and therefore should be measured.

They can be analysed and streamlined throughjust visual challenges to flow or attaching timesand looking for the waste. With a hierarchicalmodel, is then possible to roll these timings upfor parts of a process and obtain a time/cost/resource required to drive the end to endprocess. Process models are very effective insupporting the analysis of rework loops.

It also makes it easier to target particular tasksthat are causing frustration, allowing staff toquickly implement improvement activities.

WORKLOAD/ROLESAs each task has a role assigned to it, it is easyto extract a list of tasks per role, allowinganalysis of the role workload. It is also easierto identify who is responsible and accountablefor each section of the process.

As employees gain a better understanding oftheir contribution to a process and the subsequent impact on the entire work processif they are not disciplined or accurate then animproved sense of purpose and behaviour canbe garnered.

PROCESS COLLABORATIONA shared view of how the entire work is doneprovides employees the opportunity to proposeimprovements themselves, on how they canbest collaborate on the work process. Makingthe model the centre of departmental meetingsand performance reviews drives this andenables staff operating outside parts of aprocess to contribute.

Similarly when dealing with external suppliersand subcontractors, a clearer scope break andhandover can be easily provided as well as asimpler way of describing the work processand their role in it.

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Service companies go from an EBITDAof 1.3% to 37%* as they becomeprocess-driven.SPI Services Maturity Model 2013

REDUNDANCYA traditional way of improving reliability is tointroduce redundancy. Redundancy is usefulfor both risk identification and risk mitigation.

Redundancy is provided by some combinationof duplication (two roles performing the samefunction) or overlap (two roles with functionalareas in common).

Redundancy can now be made visible in thework process and therefore controlled andmonitored.

SKILLS DEFINITIONAs each task is detailed and its function in theoverall work processes clearly defined, therequired skills of the responsible party caneasily be defined for HR and a more targetedrecruiting and training programme can be setup. Training programmes can be tailored toincrease awareness of the complexity of theprocess and interactions and competencymodels can be built to test competence basedon the agreed process model.

EFFICIENCY, RELIABILITY & QUALITY

CONSISTENCYThe emphasis in industry thus far has been toincrease efficiencies in terms of cost and time,rather than on improving service quality andreliability. However the main source of costand schedule overruns is re-work due to poorquality and unreliability.

Standard, repeatable operating procedurescontribute to reliable performance and prevent,or at least minimise, the chances of humanerrors occurring.

Employees can follow the same workflowensuring a more consistent, reliable delivery ofwork if they have an easy reference and candig for more information as they need. Themodel that holds all the process knowledge ofthe company enables this.

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Doing the job right the first time isthe single most important factor forminimising the cost of designing andconstructing world-class facilities.Willis & Willis

KNOWLEDGE MANAGEMENT

STANDARD, STRUCTURED SOURCE OFKNOWLEDGEEach task has associated work instructionsand guidelines, checklist and otherinformation connected or coupled to it. So therelevant required information is directly tohand, so there is no time spent in trying tolocate the knowledge or expertise.

Knowledge management processes are embeddedinto normal work processes so that they do notseem to be a burden on the individual.

LESSONS LEARNED/KNOWLEDGE TRANSFERAnother characteristic of a high reliabilityorganisation is constant knowledge transfer.

Any lessons learned or improvements identifiedcan be linked with the associated task in the

model. This means that the information isavailable where it is needed and easily retrieved.

In business where learning about technologyand organisation is continuous, remarkableflexibility in responding to unexpected eventsresults leading to a more robust, reliable andsuccessful business. Using the process model tocapture this information means it can be usedin process workshops, or lead back into serviceor product development for example.

BUSINESS RULESThe business rules explaining why certaintasks are done and how they are performedare frequently not documented and not easilyaccessed leading to people performing tasksin their own way. The business process modelmakes these explicit and can demonstratetheir impact. Being part of the model enablesthem to be regularly review, challenged andimproved.

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Knowledge has to be improved,challenged and increased constantlyor it disappears.Peter Drucker

STANDARDS & REGULATIONS

CONTINUOUS MONITORING In most companies, the work instructionsand procedures are kept in a binder and onlyaccessed during audits or when they need tobe updated.

Now each work instruction is graphicallyrepresented in the process model and shouldreflect how the work is actually done.

The work instruction is now “alive” and continuously monitored as people use the model.

SEGREGATION OF DUTIESA critical factor in any control process is thatthere should be some segregation of duties.

With the roles and responsibilities assigned toeach task, clear segregation of duties can beensured and demonstrated.

EFFECTIVE AUDITING/PROCESS CERTIFICATIONIf the procedures do not reflect the correctworking processes it will result in, individualshaving to risk sanction or discipline for adaptingrules in order to get the work done or havingparallel systems in place where everybody doesit “their own way”.

The business model mitigates this since theworking process generates the work instructionsand procedures. Auditing of the work processesnow becomes easier and consequential.

ISO requires clear ownership, control proceduresand record keeping which are all inherent inthe business model.

Facilities such as ‘where used’ for a particularbusiness role or risk control can be used todevelop audit checklists.

Furthermore, the work processes are easilyvisible and allows auditors to raise meaningfulquestions about the normal operations anddecisions.

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A fault in the interpretation of observations, seen everywhere, is tosuppose that every event (defect, mistake, accident) is attributable to someone (usually the one closest athand), or is related to some special event. The fact is that most troubleswith service and production lie in the system and not the people.Dr. W. Edwards Deming

CONCLUSION

You should now be convinced of the value ofbusiness process modelling but is this visionrealistic and has any body done it?

Yes is the answer to both though not manyorganisations have the maturity across theimplementation of the proposed model thatthey can demonstrate all aspects together. As modelling tools move away from a just adiagramming capability to a ‘real life’ representation of processes and from an ITtechnical perspective to alignment with business needs then businesses can see thebenefits. We use XSOL, a tool that has beenspecifically designed to address these needsand its track record in large and small businesses to undertake tasks from completebusiness management systems through ERPimplementations to singular applications suchas Disaster Recovery procedures is impressive.

Please contact Rod orGayatri@enterpriseprocessmodelling.comso we can demonstrate the ‘wow’ factor of this approach.

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AUTHOR BIOGRAPHY:

Rod Horrocks

Rod has over 40 years consulting to a wide rangeof industries both large and small, in the publicand private sectors. His role is facilitating seniormanagement teams and their staff to align theirbusiness strategy through business processes tosystems. These systems are then implementedalongside an improvement program, withrobust and appropriate performance measuresthat ensures the systems support the businessachieve its’ strategic objectives.

Rod also regularly mentors management teamsand directors, helping them to create robuststrategic plans and his facilitation skills allowhim to drive discussions and challenge thinking.

We focus on the ‘people’ sideof change programmes.

We employ industry bestpractice, with many key tools.

We’ll help you innovate yourorganisational structure.

Taking your business to a better place

ROD HORROCKSMANAGING DIRECTOR

H3 PARTNERSLONG BARNALDSWORTHCHELTENHAMGLOUCESTERSHIREGL54 3QY

TEL: +44 (0)7772 114896EMAIL: ROD@H3PARTNERS.CO.UKWEB: WWW.H3PARTNERS.CO.UK

At H3 Partners, we provide Business Change Programmesusing Organisational Change Management frameworks tohelp transform a business from within.