Managing a stable and reliable business in a volatile business environment requires a new set of skills. Confucius once said, “Only the wisest and stupidest of men never change.” In a volatile environment, it takes a wise man, to understand what areas of business NOT to change thus making it easier to change where it’s really needed. Business conditions are continually changing increasing the risk of highly unpredictable performance. These collectively create complexity, which describe’s a business environment where CHANGE is the new normal.
To do well in this very dynamic environment needs a combination of agility and compliance. The marketing director likes agility or the ability to adapt to the changing market driving responsiveness, differentiation and growth! A business also needs compliance with words that the Finance Director likes – Reliable, Standard, Efficient and Low Cost. These two objectives tend to be in conflict – an environment that is always changing could become chaotic and inefficient. Through a good understanding of the business processes this conflict can be minimised and better managed. Now, more than ever before, processes are at the centre of the new organisation. We need to identify those processes that change less frequently and are routine. These need to be rationalised and harmonised. If there are fewer variations of processes, changing them is a whole lot easier.
This also allows us to build out those differentiating, new and adaptable capabilities, where we are more dynamic developing new ways to innovate. We also need a process management discipline to move good ideas into action fast. This intent is easy to understand. The challenge is getting agreement on which processes fit into each category. To work through this we need a shared understanding of which processes drive our differentiation and are thus close to delivering the brand promise to the customer and which processes are more routine and thus in the background from a customer perspective. We also need clarity on how different a process is. Is it the same regardless of the context or does it have a high level of variation to meet localised requirements? It is those 20% of processes that are closer to the customer and our brand where we need innovation and change. The balance can be simplified and standardised where possible. This understanding enables us to establish the most appropriate management strategy.
Attempts to categorise processes like this will demonstrate the challenge of validating the reasons for variation. When does it make business sense to have a different process and when is it just the whim of someone not wanting to change? To clarify the impact these issues have on the process we group them into three levels of severity. Through analysing all processes in this way, many of the reasons for variation will be discounted as having no impact on the process, while legitimate variations can be dealt with properly.
Through the proper leadership, representative team and enabling framework we empower the organisation to simplify and standardise most processes across the business. This provides the core building blocks that, alongside other process improvement enablers create a positive environment for change.
This technique is part of the broader management discipline of Business Process Management (BPM-D®). An essential set of practices to help organisations deal with an environment of change moving good ideas into action faster and more reliably.