In the second Column of this series on how to integrate process management into an existing management system, I will give you an example of how this can be done on a larger scale—by extensively integrating tools, roles and practices of process management into an organization.
In our last Column we described the elements of process management and gave examples of how a company could implement some of them on a modest scale. As a reminder, those elements include:
- Process performance planning and managing processes
- Process performance goals
- Process performance metrics
- Process models
- Process management roles and accountabilities
- Process performance tracking and reporting tools
- Process performance diagnostic tools
- Process performance decision-making mechanisms (e.g., policies, rules, managerial forums, etc.)
Start with Assessment
Before suggesting any changes to an existing management system, at PDL we begin by conducting an assessment of that system. With the results of an assessment, we can recommend changes that are appropriate rather than make any rash assumptions.
If we are in the organization already conducting a process improvement effort, this project becomes a natural platform for doing the assessment. While examining the condition of the as-is process, we can also look at the mechanics of the existing management system. The assessment will attempt to provide answers to questions related to all the elements of management listed above, such as:
- How is performance planned and managed today? How formal are the processes for setting goals, allocating resources, monitoring progress, tracking and reporting results?
- Who does all these things today? What management groups or layers are in place to plan and manage performance?
- What metrics are being used? What data are collected against them, who collects the data and how are results reported? Is there some kind of “scorecard” in use that links all the metrics together?
- How are decisions made about responding to performance issues? Who makes those decisions and how are they carried out?
- How do managers interact with each other to do planning (strategic and tactical), review performance, deal with unexpected issues, make decisions? How formal are these interactions (e.g., face-to-face meetings, email, quarterly get-togethers)?
- Is there a formal system in place for what most companies call “performance management” which is the annual performance review and parceling out of rewards?
- How well is this existing management system working? Are there gaps, inefficiencies or illogic built into it? How do the managers themselves feel about it?
If you are getting the impression that this assessment could be an awful lot of work, you would be right. If we are doing the assessment in tandem with an improvement effort, there may not be enough time or resources to do it completely while keeping to the project deadline. So if we are constrained, we might just look at the most salient elements of the management system, install some of the most essential elements and then return to do a more thorough assessment of the entire management system when there is more time.
If there is adequate time and interest, the following is our ideal approach to the assessment, consisting of four major steps:
- Define the organization’s business process architecture
If we have a picture of the process architecture, we know both what performance has to be managed and what managerial processes are in place to do the managing. We can add process management onto existing processes or create them if they are non-existent.
- Define existing management roles and responsibilities
Once we know the performance that must be managed, we next want to know who is accountable for planning and managing that performance.
- Define the existing practices and mechanisms for setting goals and metrics, monitoring progress, tracking and reporting.
A great deal of the existing management system has to do with measuring and reporting performance, so we want to understand how that happens, what is in place to do this essential management work, and how well the practices are achieving their purpose.
- Define how managers collectively manage the organization
Finally, we want to address how the managers interact with each other to carry out their performance management duties. This interaction is the heart of the existing management system as a set of daily practices. And of course we may find out that current practices are very elaborate and thorough or they may barely exist.
Target the Changes
Once we have completed the assessment, we can determine how to best go about integrating process management into the system we have examined. (This presumes we have the permission, funding and resources to do anything.) If we are piggybacking on another project, we may be able to do only a few things; but if the goal is to install complete process management, we will address all the major elements of the existing management system. For any one of the elements, there are three possible actions we could take:
- Simply add it into the existing management system and practices
- Create the element, because it does not exist at all today
- Improve the existing system and practices, which are deficient today
Element #1: Management Processes
To understand these choices, let’s go through some examples. Taking the first element (i.e., performance planning and management processes) from the list above, we will identify the existing planning and management processes by developing the process architecture. These are some of the typical situations we often run into:
- There are formal planning and management processes in place, but they don’t include process management. (Our solution is option #A: We will add activities and responsibilities for process planning, process monitoring, process improvement, to the existing management processes.)
- There are planning and management processes in place but there is a disconnect between them. The strategic plan is updated yearly but then sits on a shelf while daily management practices and decisions are driven by entirely tactical concerns. (Our approach would include both options #A and #C: We will add process planning and management to the existing system but we will also try to strengthen the links between planning and daily management. One way to do that might be to add a review of progress against strategic goals to every monthly and quarterly management review.)
- There really is no performance planning system in place. Goals might be set, budgets put in place, but all the management attention is on monitoring and pressuring employees for results. (Option #B is the right choice: we would help build the entire front-end planning system, to include process performance planning.)
The same three options apply to all the other elements of a management system:
Element #2: Management Roles & Responsibilities
Management roles and responsibilities may be clearly defined and working well. We will then integrate responsibility for process performance planning and management with those existing roles. This may mean, for example, that the current SVP of Manufacturing now also has a cross-functional responsibility for the entire order fulfillment process. Or a management team is now collectively in charge of the entire new product research, development and launch processing sub-system.
Or we might find that existing management roles and responsibilities are poorly defined, or completely undefined, or they are overlapping, contradictory, difficult to execute, or leave gaps. So our efforts will be to aid in clearly defining management roles and responsibilities while adding process management to them.
Element #3: Measurement System
If there are effective practices in place for monitoring and reporting performance, with good metrics and performance indicators, our task might be largely to add process metrics. On the other hand, we often encounter major problems in this area that have to be addressed in order to make measurement and management work effectively at all. The problems we frequently see are:
- Way too many metrics, with little logic between them. The organization is measuring all kinds of stuff, but is not good at choosing and using them.
- Way too much data but little useful information. This may be related to the first problem (too many metrics) but can also just be far too many reports and raw data for anyone to absorb and make sense of.
- Unclear paths for monitoring and reporting. Just who should collect and report data, and to whom, can sometimes be a real mess, with too many people involved in data collection activity and nobody really managing the effort.
Our efforts will be spent on clarification and simplification—helping managers figure out what targets and metrics are really important, what information will really help them monitor progress and what exactly the monitoring and reporting process will be. Adding process management metrics and reporting will be done while cleaning up the measurement system.
Element #4: Collective Management Practices
We realized long ago that the key to installing process management in an organization is to focus on the practices of managers when they work collectively— typically in meetings, where they gather to plan the organization’s future, set goals, agree on strategies and plans, and then as they sit together to review progress and make decisions. Process management is about managing the critical cross-functional processes that produce goods and services, so by its very nature process management is about managing as a team.
To understand an organization’s current management practices, we will map out all the interactions between managers that we can find out. We will create in effect a “calendar” of all the meetings that take place throughout the year which are aimed at achieving some aspect of managing the organization and its performance. We will include strategic and annual planning events, quarterly and monthly operations reviews, performance review periods, and so on. And then we will analyze how well this system is working and decide how we can integrate process management into it.
Just as with the other elements of the management system, we might find that all is well and that we can concentrate on adding process management as a line item to the existing planning and review meetings (also it’s seldom that easy even with an effective existing management system).
Or we may find that this element needs some improvement as well. We might find, for example:
- Just as with the metrics, there is a chaotic mess of management meetings— way too many, too ill-defined, overlapping, of dubious value. So we will spend time cleaning up and simplifying the meetings—defining their purpose, eliminating overlaps, clarifying roles, building coherent agendas, etc. And adding process management into the meetings.
- The other problem we often encounter is lack of skill in organizing and running these meetings. While coaching a team of managers on how to review process performance and making decisions, we discover that they aren’t very good at diagnosing performance, period. They lack criteria or guidelines for making decisions, they jump to conclusions with doubtful data, they quarrel instead of discuss, they take no responsibility for anything beyond their own little fiefdoms. Some of these issues are not eliminated with a simple tool or by cleaning up a few reports. So our role can evolve into a form of “executive coaching” as we try to guide the team into better performance as managers.
As you have read this, it may occur to you that integrating process management into an existing management system may take you far away from what you consider your role of “process expert” and lead you into a more general role of management consulting. But if you have seen any past failures with process management, you may have noticed that it is typically not the concept of process management that derailed the effort, it was some element in the management system itself that needed fixing. Process management does not work as a silver bullet; it has to be part of a larger, highly effective management system. So you have to be ready and willing to fix whatever needs fixing, if you’re serious about installing process management.