For some thirty years managers of American corporations and businesses have been engaged in a relentless effort to improve the performance of their businesses. Pressured by suddenly powerful international (especially Japanese) competition and ever more demanding customers, companies embarked on crusades to lower costs, improve productivity, increase flexibility, shrink cycle times, and enhance quality and service. Companies rigorously analyzed their operations, dutifully installed the newest technological advances, applied the latest management and motivational techniques, and sent their people through all the fashionable training programs—but to little avail. No matter how hard they tried, how assiduously they applied the techniques and tools in the management kit bag, performance barely budged.
The inefficiencies, inaccuracies, and inflexibilities of corporate and business performance were exceptional. This was not a new phenomenon; it was just that by 1980 these problems were starting to matter. When customers had little choice and all competitors were equally bad, there was little incentive for a company to try to do better. But when sophisticated customers began deserting major companies in droves, these problems rocketed to the top of the business agenda. The persistence of performance problems in the face of intense efforts to resolve them drove corporate leaders to distraction.
After a while, understanding gradually dawned on American managers: They were getting nowhere because they were applying task solutions to process problems.
The difference between task and process is the difference between part and whole. A task is a unit of work, a business activity normally performed by one person. A process, in contrast, is a related group of tasks that together create a result of value to a customer. Order fulfillment, for instance, is a process that produces value in the form of delivered goods for customers. It is comprised of a great many tasks: receiving the order from the customer, entering it into a computer, checking the customer’s credit, scheduling production, allocating inventory, selecting a shipping method, picking and packing the goods, loading and sending them on their way. None of these tasks by itself creates value for the customer. You can’t ship until it’s been loaded, you can’t pack until it’s been picked. A credit check by itself is simply an exercise in financial analysis. Only when they are all put together do the individual work activities create value.
The problems that afflict organizations are not task problems. They are process problems. The reason we are slow to deliver results is not that our people are performing their individual tasks slowly and inefficiently; fifty years of time- and-motion studies and automation have seen to that. We are slow because some of our people are performing tasks that need not be done at all to achieve the desired result and because we encounter agonizing process constraints in getting the work from the person who does one task to the person who does the next one. Our results are not full of errors because people perform their tasks inaccurately, but because people misunderstand their supervisor’s instructions and so do the wrong things, or because they misinterpret information coming from co-workers. We are inflexible not because individuals are locked into fixed ways of operating, but because no one has an understanding of how individual tasks combine to create a result, an understanding absolutely necessary for changing how the results are created. We do not provide unsatisfactory service because our employees are hostile to customers, but because no employee has the information and the perspective needed to explain to customers the status of the process whose results they await. We suffer from high costs not because our individual tasks are expensive, but because we employ many people to ensure that the results of individual tasks are combined into a form that can be delivered to customers. In short, our problems lie not in the performance of individual tasks and activities, the units of work, but in the processes, how the units fit together into a whole. For decades, organizations had been beating the hell out of task problems but hadn’t laid a glove on the processes.
The time of process has come. No longer can processes be the orphans of business, toiling away without recognition, attention, and respect. They now must occupy center stage in our organizations. Processes must be at the heart, rather than the periphery, of companies’ organization and management. They must influence structure and systems. They must shape how people think and the attitudes they have.
To be serious about its processes, to start down the road to process centering, a company must do four things. First, the company must recognize and name its processes. Every company has its own unique set of business processes. Often companies divide primary processes into a small number of sub processes, which are then describable in terms of basic tasks or activities.
The second key step is to ensure that everyone in the company is aware of these processes and their importance to the company. The key word is “everyone.” From the executive suite to the shop floor, from headquarters to the most distant sales office, everyone must recognize the company’s processes, be able to name them, and be clear about their inputs, outputs, and relationships. Moving to a process focus does not immediately change the tasks that people perform, but it does change people’s mind-sets. Process work is big-picture work.
The third step to process centering is process measurement. If we are to be serious about your processes, we must know how well they are performing, and that means having a yardstick. Companies must identify the key measures by which each of their processes will be assessed. Some of these measures must be based on what is important to the customer. By studying customers and their requirements of the output of the process, a company can decide whether to measure cycle time, accuracy, or other aspects of process performance. Another set of measures must reflect the company’s own needs: process cost, asset utilization, and other such typically financial matters. Measures are essential not only for knowing how the process is performing but for directing efforts to improve it.
The fourth step in becoming serious about processes is process management. A company must continue to focus on its processes so that they stay attuned to the needs of the changing business environment. One-shot improvements, even dramatic ones, are of little value. A process-centered organization must strive for ongoing process improvement. To accomplish this, the company must actively manage its processes. Indeed, we can now see that the heart of managing a business is managing its processes: assuring that they are performing up to their potential, looking for opportunities to make them better, and translating these opportunities into realities. This is not a part-time or occasional responsibility. Attending to processes is management’s primary ongoing responsibility.
These four steps start an organization on the road to process centering, but they are not the whole journey. Process centering is a fundamental reconceptualization of what organizations are all about. It permeates every aspect of the business: how people see themselves and their jobs, how they are assessed and paid, what managers’ do, the definition of the business, and, ultimately, the shape of the societies that depend on these organizations.