CHAPTER 2
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The Process Improvement Context
This chapter covers the basic concepts of Process Improvement and introduces the fundamental conventions and learning blocks needed to discuss Process Improvement in practical terms. One of the most important components to successful Process Improvement efforts is ensuring that all participants are trained in the discipline, understand critical linkages to other areas, and have a common understanding of basic terminology. Ensuring this level of understanding occurs ahead of all other activities, helps reduce communication gaps, speeds up execution efforts, and fosters more collective thinking because learning roadblocks are removed early on. This chapter defines several key terms and provides the foundation for anyone looking to improve the state of business activities within their organization through Process Improvement.
This chapter focuses on the following knowledge areas:
•  Process defined: What is a process? What is a subprocess? What are the different types of processes?
•  Relationships among Policies, Processes, and Procedures: What is the difference between a Policy, a Process, and a Procedure?
•  Process Improvement defined: What is Process Improvement? What is the value of conducting Process Improvement efforts?
•  Process Improvement Organization: What is a Process Improvement Organization?
•  Process Improvement and Operations Management: How does Process Improvement differ from day-to-day Operations Management?
•  Role of a Process Improvement Manager: What is a Process Improvement Manager and what are his or her primary responsibilities?
•  Process Orientation and Organizational Structure: What is the difference between organizing your business by function versus process, and why does it matter?
•  Leadership and Process Improvement: What role does leadership play in Process Improvement efforts?
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Process Defined
Every organization is made up of a series of interacting activities that are carried out in order to achieve intended results through a systematic and efficient allotment and usage of resources. A Process is a set of activities that use these resources (people, systems, tools) to transform inputs into value-added outputs. It is a sequential set of related tasks or subprocesses performed to achieve a particular business objective or to produce a specific product, service, good, or piece of information. A process is often thought of in the context of a workflow, user instructions, or the steps required to produce something of value to an organization’s customers. Customers are both internal and external and include each person involved in the process as well as the entity that receives the final output of the process. Examples of processes include processing orders, invoicing, shipping products, updating employee information, and producing reports. Processes exist at all levels of an organization and include actions that the customer is able to see as well as actions that are invisible to the customer.
In general, the various activities of a business process can be performed in one of two ways: (1) manually by a business operator or (2) by means of interaction or automation with a technical system or application. Technical activities are typically a collection of substeps or instructions handled and processed by a particular system involved in the execution of activities contained within a process. In most cases, manual and system-based tasks may be sequenced in any order, and the data and information being handled through a process passes through a series of both manual and computer tasks. The outcome of a well-designed process is increased effectiveness (value for the customer) and increased efficiency (decreased costs for the company).
The following list outlines the general characteristics of a process:
•  Defined: Processes have defined customers, boundaries, inputs, and outputs.
•  Sequential: Processes consist of activities that are ordered to achieve specific results or outcomes.
•  Valuable: Processes must add value to an organization and its customers.
•  Customer centric: Processes are designed with an organization’s operators and customers in mind.
•  Embedded: A process exists within an organizational or departmental structure.
•  Cross-functional: Processes should span several functions within an organization.
Types of Processes
Business owners, managers, and staff members create processes to outline the specific activities or tasks needed to complete various functions. This process can involve the use of charts or maps to create a pictorial reference for use by process operators. Owners and managers can break these models down to the lowest task or activity in the company. This allows companies to visualize activities in an end-to-end construct and better reduce duplication and streamline operations. Following are three primary types of processes that can be modeled:
•  Management: These are business processes that govern the operations of an enterprise or organization. Typical management processes include strategic planning and corporate governance.
•  Operational: Also known as primary or core processes, these are business processes that form the primary objective of the enterprise and subsequently create the primary value stream. Typical operational processes include Engineering, Purchasing, Manufacturing, Marketing, and Sales. An example of a core process for a manufacturer might be to assemble parts.
•  Supporting: These are business processes that support the core operational processes of an organization. Typical supporting processes include Finance, Information Technology, and Service Delivery departments such as Project Management and Process Improvement, as well as Organizational Development and Customer/Technical Support. In the manufacturing example, a supporting process might be to recruit production staff.
Process Owner
Process Owners are a critical component of Process Improvement efforts. They are the named individuals responsible for the performance of a process in realizing its objectives. Process Owners are responsible for the comprehensive management of processes within the organization, including approving documents (Process Maps, Procedures, and Work Instructions), determining key performance indicators, as well as monitoring process performance and recommending improvements. A Process Owner is the only person with the authority to make changes to a process and is the contact person for all information related to its performance. In most cases, Process Owners are leaders within an organization but can also be individuals in nonleadership positions. Process Owners are supported by Process Improvement Organizations and ultimately inherit the solutions created by a Process Improvement project team. A Process Owner should
•  Be a subject matter expert of the process or the domain in which the process is classified
•  Demonstrate process-oriented thinking
•  Understand the outcomes and experience needed to achieve customer satisfaction
•  Have insight into performance issues or disconnects within the process
•  Be a well-respected professional who can positively influence process operators and project team members
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Relationships among Policies, Processes, and Procedures
Process Improvement requires that participants understand the distinction between a Policy, a Process, and a Procedure before beginning improvement activities. All three terms address related subject matter but do so with different types of content and at different levels of detail. Each term has a unique purpose that drives the content contained within each document. Although these terms are often used interchangeably, Policies, Processes, and Procedures are in fact distinct items. Consequently, it is important to have a formal definition of each term prior to embarking on improvement initiatives. With this understanding, participants and stakeholders know what work will be performed over the course of a Process Improvement project. Although it is very easy to lump these terms together as if they were a single entity, knowledge of the difference will enable participants to understand the documentation that will be produced, as well as deliver higher-quality artifacts throughout Process Improvement projects.
Policies
Policies are guiding principles that are intended to influence decisions and actions across an organization and govern the implementation of its processes. They include laws, guidelines, strategic goals, and business rules under which an enterprise operates and governs itself (why an organization does something). They contain the formal guidance needed to coordinate and execute activity throughout an organization. When effectively deployed, policies help ensure process designs meet organizational standards. There is not a one-to-one relationship between a Policy and a Process as corporate policies may affect multiple processes. However, processes must reflect the business rules contained in any related Policies. Policies outline a particular principle and its classification, describe who is responsible for its enforcement, and outline why the Policy is required. A simple Policy Document is the most common tool used to describe a Policy (Figure 2-1).
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FIGURE 2-1   Sample Policy
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NOTE   A Business Rule is a declarative statement of control or constraint that the business places upon itself or has placed upon it. Policies, on the other hand, are general or informal statements of direction for an enterprise. Although both are considered elements of guidance, policies are usually translated and refined into business rules. A Policy may be the basis for one or more business rule statements, just as a business rule statement may be based on one or more policies. An example of a Policy–Business Rule relationship for a car dealership would be the following:
•  Business Policy: We only sell vehicles in legal, roadworthy condition to our customers.
•  Business Rule: Vehicles must be safety checked upon return from each customer test drive.
Processes
Processes are related activities or actions that are taken to produce a specific service, product, or desired result. Processes can be formal or informal, large or small, specific to a set of cross-functional departments, or span across an entire organization. Processes are publicly known, documented, supported, and widely used by an organization. They contain resources, steps, inputs, and outputs used to indicate where there is separation of responsibility and control within a series of related and connected activities (what an organization does or should be doing). Unlike the relationship of Policy to Procedure, there is a direct relationship between Processes and Procedures as Procedures describe in detail how each activity within a process is carried out. Processes address who is responsible for performing activities (departments or divisions), what major activities are performed, and when the process is triggered and subsequently halted. Common tools used to display processes include Flowcharts, Cross-Functional Process Maps, and Integrated Definition for Functional Modeling (IDEF) Diagrams.
An example that illustrates this concept is the process of repairing a vehicle at a car dealership. The process is triggered by a customer’s request for an appointment and concludes when the vehicle is returned to the customer for use. Figure 2-2 illustrates this in a simple Process Map.
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FIGURE 2-2   Simple Process Map
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NOTE   A Subprocess is a set of activities that have a logical sequence and that meet a clear purpose but with functionality that is simply part of a larger process. Just like processes, there are goals, inputs, outputs, and owners, but they are modeled as lower levels of detail within larger processes. Subprocesses are important because they play a major role in improving overall processes. In many cases, processes are too large to analyze and improve at one time, and so grouping common process activities into subprocesses can help Process Improvement efforts tremendously. It is recommended to break large processes into separate master processes and child processes, because it reduces the complexity of the process map and allows subprocesses to handle exceptional situations and ancillary activities. Sub-Processes are also useful for hooking the functionality of an existing process into another process.
Procedures
A Procedure is a set of written instructions that define the specific steps necessary to perform the activities in a Process (Figure 2-3). They document the way activities are to be performed to facilitate consistent conformance with organizational requirements and to support quality and consistency. They define how the work is performed and are typically documented in step-by-step fashion, describing in detail each activity within a process. Procedures detail specifically who performs the activity (the role within a department), what steps are performed, when the steps are performed, and how the steps are performed, including any standards that must be met. The development and use of Procedures is an integral part of successful process-focused organizations. Procedures provide individuals with the information needed to perform their jobs properly and they detail the regularly recurring work processes that are to be conducted or followed. Many businesses use Procedures to reduce errors, assist with training employees, or as a point of reference to ensure consistency of work. In doing so, use of Procedures can minimize variation and help ensure quality through consistent implementation of activities within an organization. Procedures can take the form of a Work Instruction, a quick reference guide, or a detailed Procedure Document.
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FIGURE 2-3   Sample Procedure
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NOTE   Work Instructions are a form of Procedure and are generally recognized as a subset of Procedures. However, they are typically written to describe how to do something for a single role or activity within a process, whereas full-fledged Procedures describe the detail of every activity within an end-to-end cross-functional process. Well-written Procedures can often eliminate the need for documenting Work Instructions. However, most process mapping and modeling tools available today enable and encourage Work Instructions over formal Procedures due to the click-through and component-oriented nature of the applications. Organizations may choose the most optimal and user-friendly route for their users.
Using Policies, Processes, and Procedures
The easiest way to think about Policies, Processes, and Procedures is in the level of detail contained within each item (Figure 2-4). Processes can be described as being at a high level and operating across an organization’s various functions, whereas procedures are at a lower level and contain more detailed information, breaking down the various activities within a process. In simple terms, the primary difference between a process and a procedure is that a process is what you do and a procedure is how you do it. Policies are at the macro level of detail and contain guiding principles or rules intended to influence decisions and actions carried out in Processes and Procedures. All are innately linked and, depending on the organization’s needs, may or may not be required in order to execute day-to-day activities or Process Improvement efforts.
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FIGURE 2-4   Process Hierarchy
Processes are an excellent means of displaying a series of related activities in an easy to understand format; however in many cases they are deemed too high level for employees to use to perform their day-to-day tasks. The most common solution to this problem is to pair process diagrams and procedural detail together, clearly detailing the steps in a process that a procedure refers to. By doing this, employees can see the greater context and implications of the cross-functional process while also having the level of detail required to successfully complete their duties. When proper policies exist, everyone within an organization who is using different processes and procedures will be able to see the connection of what they are doing to why they are required to do so in a certain manner.
The most important element is that there is a cascading effect of improvements made at a higher level on those at a lower level. If a recommendation to replace a given Policy with a better one is made and accepted by business Process Owners, then corresponding changes in the subsequent Processes and Procedures must follow in order to ensure compliance. Policies, Processes, and Procedures are all part of an organization’s Process Ecosystem and usually work best when all are managed together. Figure 2-5 outlines the distinguishing characteristics of a policy, process and procedure.
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FIGURE 2-5   Distinguishing Characteristics of a Policy, a Process, and a Procedure
Best Practices for Developing Policies, Processes, and Procedures
The following list describes best practices for developing and implementing Business Processes, Policies, and Procedures for use across an organization:
•  Establish format, content, and writing standards for all three items
•  Identify who will write, review, and maintain the documents
•  Write Policies, Processes, and Procedures in separate documents
•  Ensure each document is written with clear, concise, simple language
•  Ensure documentation is easy to access, use, and update
•  Setup common vocabulary to reduce confusion and ensure consistency of terms
•  Use version controls to ensure proper document management
•  Ensure subject matter experts are identified and readily available to resolve issues
•  Develop each artifact with the customer and/or user in mind (internal or external)
•  Ensure each document does not include any unnecessary information
Benefits of Developing Policies, Processes, and Procedures
Development of Policies, Processes, and Procedures helps organizations
•  Provide visibility into areas of quality, productivity, cost, and schedule
•  Improve communication and understanding
•  Plan and execute activities in a disciplined fashion
•  Capture lessons learned
•  Facilitate the execution of organization-wide processes
•  Analyze and continuously improve operations
•  Reach new maturity levels
•  Provide a basis for training and skills assessment
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Process Improvement Defined
Process Improvement is an ongoing effort to improve processes, products, and/or services in order to meet new goals and objectives such as increasing profits and performance, reducing costs, or accelerating schedules. These efforts can strive for incremental improvement over time or rapid improvement in a very short period and often follow a specific methodology or approach to encourage and ultimately create successful results. There are several widely used methods of Process Improvement such as Kaizen (Plan-Do-Check-Act), Lean Six Sigma, and Rummler–Brache. These methods emphasize employee involvement and teamwork by measuring and organizing processes; reducing variation, defects, and cycle times; and eliminating process waste to better service customers and deliver value faster and more effectively.
Process Improvement provides a framework that will facilitate continuous improvement, process design, and performance measurement activities that ultimately drive the fulfillment of important organizational goals. It can be applied to all industries and is relevant to all areas of an organization because processes naturally degrade over time for any number of reasons. In addition, the act of continuously monitoring and improving these processes helps proactively resolve issues in order to avoid operating in a crisis management environment when process degradation occurs.
Process Improvement efforts will almost always result in dramatic, positive returns on investment that affect the organization and its people, practices, and products in a positive way. The primary objective of Process Improvement is to continually improve process productivity. Since process productivity is measured in terms of effectiveness, efficiency, and quality, an effective process is one that produces the right results consistently. Process Improvement enables organizations to
•  Increase customer satisfaction
•  Reduce unnecessary business costs
•  Produce higher-quality products
•  Eliminate wasteful activities
•  Improve employee morale
•  Reduce interdepartmental conflict
•  Improve efficiency and effectiveness of operations
•  Reduce cycle time and variation
•  Break down process silos
•  Design more robust solutions
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Process Improvement Organization
In today’s economy, processes are constantly evolving as organizations seek new ways to reduce costs, improve operations, increase productivity, and eliminate waste. Managing these diverse efforts along with the people, resources, technology, and communication that go along with them is often a challenging endeavor. An effective solution, one that is created to establish a more centralized management structure for Process Improvement efforts, is the Process Improvement Organization. A Process Improvement Organization is assigned various responsibilities associated with the centralized and coordinated management of Process Improvement efforts and projects across an enterprise. Responsibilities can range from directly managing Process Improvement Projects, to implementing and modeling business process architectures, to simply providing Process Improvement support to functional managers by way of guidance and education. The function provides organizations with skilled Process Improvement Professionals who provide oversight and leadership services throughout improvement activities, either in a consulting arrangement or as dedicated delivery managers or subject matter experts. They deliver the necessary architectures, procedures, systems, and tools necessary to achieve effective Process Improvement by leveraging various methodologies and standards, allocating resources, establishing consistent performance criteria, and reducing duplication of efforts within an organization.
How a Process Improvement Organization is staffed or structured depends on a variety of organizational factors including targeted goals, traditional strengths, and the cultural imperatives of the organization or enterprise it supports. Process Improvement projects managed by the organization are not necessarily related to one another. However, they must provide some form of value or improvement to the organization and must consider the overarching business process architecture, as well as any customer who might benefit from the endeavor. In general, the Process Improvement Organization provides the framework for the construction and maintenance of an organization’s business process landscape and the execution of major Process Improvement projects. It is recommended that all Process Improvement activities be coordinated through this department to ensure the stability and sustainability of organizational processes.
Responsibilities of a Process Improvement Organization
The Process Improvement Organization has many responsibilities including capturing and documenting processes, managing and facilitating workshops, gathering performance data for management review, capturing improvement requests, and keeping an up-to-date repository of all processes and related documentation. Other responsibilities include
•  Identifying and implementing appropriate Process Improvement methodologies, best practices, and standards tailored to a corporation’s needs
•  Developing and managing project checklists, guidelines, templates, and other best practices
•  Managing Process Improvement activities and projects throughout the entire Process Improvement life cycle
•  Managing and facilitating Process Improvement workshops
•  Designing and building business processes and overseeing the enterprise process ecosystem
•  Administering and maintaining organizational process models and repositories
•  Coaching, mentoring, and training business partners and management staff
•  Ensuring alignment of process improvements with strategic business goals and priorities
•  Monitoring performance of processes for opportunities of improvement and areas of risk
Benefits of a Process Improvement Organization
There are many benefits to establishing an effective Process Improvement Organization including
•  Increased efficiency when delivering improvements: Methods used by Process Improvement Organizations provide a roadmap that is easily followed and help guide stakeholders to project completion.
•  Heightened customer satisfaction: Formal Process Improvement efforts that are completed to satisfaction, that are kept to a defined schedule, and that deliver valuable results increase customer satisfaction.
•  Service predictability: Improvement efforts managed out of a central organization provide predictable service and bring a sense of comfort to customers.
•  Increased process focus: Positive improvement results that are carried out by project teams often inspire functional employees to look for ways to perform activities more efficiently.
•  Increased agility: Strategic planning combined with disciplined Process Improvement enables flexibility through structured processes that are designed to continually adapt to changing organizational conditions.
•  Broader context: Improvement conducted through a centralized governing body allows all changes to be analyzed for downstream effects or potential business conflicts.
•  Mature service delivery: A structured delivery approach ensures proper standards are in place and provides more mature management of Process Improvement projects.
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Process Improvement and Operations Management
The coexistence of Process Improvement and Operations Management can be a complex relationship at times, particularly when improvement efforts or projects require the implementation of large-scale changes or alterations to day-to-day operations. A smooth and amicable relationship between these two functions is critical. Before embarking on any major improvement project, all interested parties should become well versed in the differences between Process Improvement and Operations Management as well the responsibilities of each function. An Operational or Functional Department is any group of individuals that carries out a set of repetitive tasks or processes to satisfy mission-critical requirements or to produce products or services. These are the day-to-day activities that are required in order to sustain the business and are permanent in nature. Examples of operational functions include Order Processing, Legal, Manufacturing, Accounting, Finance, and Sales.
Process Improvement is the ongoing effort to improve an organization’s processes and activities. When operational processes or tasks require improvements in order to achieve better results or meet particular strategic objectives, unique and temporary business initiatives or projects are formed. These efforts require the expertise and knowledge of a dedicated Process Improvement professional to ensure alignment and disciplined and structured delivery.
A Process Improvement Project is an individual or collaborative initiative designed to determine the cause of a business or an operational issue, define and analyze current performance of activities related to the issue, implement improvements that rectify the issue, and ensure that appropriate operational transition and monitoring occurs. Process Improvement projects are temporary in nature, have a definitive start and end point, and conclude when projects achieve their improvement objectives or are terminated. Improvement efforts are undertaken to produce specific outcomes such as a reduction in order cycle times, a reduction in unnecessary shipping costs, production of higher-quality products, or elimination of redundant activities.
Once the improvement initiative delivers its output, it is concluded and deployed back into business operations. Although Process Improvement involves continually examining processes for efficiencies and making improvements to enhance the business, an operational unit often initiates these activities when issues or concerns relating to operational performance are identified. The efforts to improve or rectify these issues are then led and managed by a Process Improvement Manager. There is generally significant interaction between an organization’s operations department and Process Improvement teams. Process Improvement efforts intersect with operations at many points in time including when
•  Performance issues arise in the execution of a process and Root Cause Analysis (RCA) is required
•  Activities are not shared or visible, and mapping activities are required
•  Processes are not consistent, and operational activities require standardization
•  Changes or improvements to an operational process are required
•  Direct oversight is required to manage improvements throughout each phase of the Process Improvement life cycle
•  Lessons learned or other facilitation is required to discover, change, or discuss better ways of operating
Differences between Improvement Projects and Operations
Key differences between Process Improvement Projects and Operations are
•  Improvement Projects are temporary and unique, while Operations are ongoing activities with repetitive output.
•  Process Improvement requires project management or facilitation of activities, whereas Operations require ongoing functional management.
•  Projects are executed to start a new business objective and terminated when the objective is achieved, while Operational work is performed to keep an organization functioning and to be able to able to sustain the business.
•  Projects have a definitive beginning and end, while Operations are ongoing.
•  Projects conclude when a unique improvement or result has been attained, while Operations produce the same product service or result on an ongoing basis.
•  A Project concludes when its specific improvement goals or results have been attained, whereas Operations takes over any newly designed activities and continues their execution.
Similarities between Process Improvement Projects and Operations
Improvement efforts and Operational activities are
•  Performed by people
•  Constrained by limited resources
•  Planned, executed, and controlled
•  Executed to achieve particular objectives
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Role of a Process Improvement Manager
A Process Improvement Manager is responsible for the development and evolution of an organization’s capabilities. This is done by teaching Process Improvement skills and managing any Process Improvement projects or related endeavors. They demonstrate best practices associated with the Process Improvement discipline and inspect business processes for areas that could be improved while creating a positive learning environment for the various stakeholders involved with an organization’s processes. They support the delivery of new processes and solutions that are more robust, customer centric, and lean in design. The role of a Process Improvement Manager is distinct from a functional manager or operations manager. The operations manager is typically focused on providing management oversight to a facet of the core business on a permanent basis, whereas a Process Improvement manager is responsible for facilitating the improvement of operational processes throughout the temporary nature of a formal project. Depending on the organizational structure, a Process Improvement Manager may report to a functional manager or into a centralized Process Improvement Organization. The recommended approach is to keep separation of duty in place and have all Process Improvement professionals report into a centralized organization. However, in many cases, organizational cultures, finances, or resources do not permit this. If that is the case, it is still ideal to ensure that the Process Improvement Manager’s role is a distinctive role even when inserted into a functional or core operations division.
Process Improvement Managers facilitate change to the various process areas such as cycle time, waste reduction, quality improvement, increased awareness of risk, mitigation of risk, effective communication, and increased customer and business satisfaction. They must be highly skilled in the identification and resolution of strategic challenges and tactical execution and be able to demonstrate these skills in order to mentor other Process Improvement professionals or business stakeholders. The role is typically highly visible in the organization as it is engaged in meaningful corporate change activities at the strategic level. Process Improvement Managers act as advisors and coaches to business owners. In this capacity, they typically do not take on direct responsibility for business team members because it is necessary to ensure that the purity of their purpose is maintained and the integrity of proposed solutions is upheld. Process Improvement Managers should always be collegial and act as a helping hand rather than as a control point. Although operations managers are responsible for managing the day-to-day activities of a process, Process Improvement Managers focus on improving those activities in order to sustain business competitiveness and performance. Process Improvement Managers ensure that any improvement effort is managed in a disciplined and structured fashion and that all efforts align to an organization’s strategic objectives.
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Process Orientation and Organizational Structure
Organizations require a purposeful set of methods for achieving goals and ensuring processes align with strategic objectives that meet and exceed customer expectations. In order to do this successfully, organizations must determine the structure in which they wish to operate. One type of organizational management structure is the Functional Management structure. Functional Management is the most common type of organizational structure and is defined as the configuration of an organization into departments or silos on the basis of the type of work to be performed (e.g., Order Processing, Sales, Demand Management, Logistics, and Manufacturing). In such a model, the Sales Team takes the role of promoting the finished product in the marketplace, Demand Management focuses on predicting future sales, Order Processing focuses on handling orders, Manufacturing focuses on rolling out the final product, and Logistics focuses on shipping orders. Figure 2-6 illustrates the basic structure of a sample functional organization.
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FIGURE 2-6   Sample Functional Organization Design
While there are inherent advantages to operating in a functional capacity, it is important to be aware that functional organizations are prone to have any number of the following drawbacks:
•  The focus is on individual department improvement rather than cross-functional and integrated improvement that focuses on the customer.
•  The decision-making process can be bureaucratic and far from expedient when trying to solve customer issues that cross boundaries of multiple functions.
•  The flow of communication and synchronization between functional departments is complicated and typically lengthy.
•  The speed of resolving problems can be slow and inefficient.
•  Grouping based on functions results in a lack of a broader view of company objectives for employees.
•  Successful performance is defined as performing within and winning for the function, sometimes at the expense of the overall organization.
•  Things often fall through the cracks or into white space, causing fragmented or duplicate efforts.
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NOTE   Rummler–Brache created the term White Space. It refers to the area between the different functions or departments of an organization. In White Space, rules are often vague, authority fuzzy, and process ownership unclear, resulting in misunderstandings and delays.
Another organizational management structure is the Process Management Structure. The Process Management Structure is defined as a management system that facilitates Process Improvement and process design activity in a way that focuses on customer requirements. It promotes common language and goals across all departments and emphasizes cross-functional improvement activities. This management structure is the basis for all Process Improvement efforts.
Process-focused organizations
•  Place considerable focus on linking processes between individual functions for end-to-end process coverage
•  Ensure everyone is able to more efficiently utilize resources
•  Provide a common language across departments
•  Provide lessons learned supported by reliable data that can be applied to other processes and improvement activities
•  Ensure all employees understand process steps and how they add value
•  Ensure employees understand how processes are performing and the value behind capturing this data
•  Ensure employees help manage each other instead of escalating conflicts
•  Hand-offs between employees are smooth and without artificial boundary
•  Ensure processes are objectively and frequently measured and reviewed for performance fit
•  Ensure customers’ requirements are known by everyone in the organization
The purpose of implementing a Process Management structure is to integrate and harmonize functional and process management systems so that an organization’s primary focus is on aligning departments to common goals, which focus on the customer experience. This practice fundamentally shifts the mindset of an organization and helps foster a culture that is process driven and focused on meeting customer requirements and creating predictable results. This philosophy incorporates a “what is good for the customer can also be good for the company” approach.
Figure 2-7 illustrates an example of a process-focused organization. The illustration shows the linkage of process deliverables to customers, how they are measured, the connection of core processes with strategic objectives, and the alignment of strategic objectives with customers. In order for a Process Improvement Organization to be successful, the traditional functional thought process must change to focus more on process performance that delivers value to the customer.
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FIGURE 2-7   Sample Process-Focused Organizational Design
Implementing a Process Improvement framework, eliminating departmental barriers, and becoming process focused takes time as results are delivered incrementally over time. As the shift occurs from well-defended functional silos to cross-functional processes, the organization matures and is able to respond more flexibly, efficiently, and effectively to customer demands. Departments become less divided as the process and its outputs become more visible and dominant. A lean process takes less time, has steps that only add value for the customer, and has fewer hand-offs and errors.
Common changes that a team should plan for when implementing a Process Improvement framework include shifts in employee roles, shifts in department policies, changes in customer requirements, shifts in employee empowerment and engagement levels, some anxiety about an employee’s role in the new operation, changes in performance targets, and replacement of existing tools and technologies. Change management is always an important consideration when working with processes, and it is even more essential when adopting a process-driven approach to an operation. Other kinds of changes that occur when an organization streamlines into a process-focused approach are
•  Organizational structure changes from functional orientation to process orientation.
•  High walls between departmental functions change to cooperative partnerships.
•  Operational activities change from simple tasks to multidimensional work.
•  Employee roles change from being controlled to being empowered.
•  Processes change from being somewhat flexible and inefficient to being highly flexible and efficient.
•  Focus on delivering value to a function shifts to delivering value for the customer.
•  Quality changes from being add-on to being built-in.
•  Managers change from supervisors to coaches.
•  Processes change from being uneven to being balanced and capable.
•  Focus of performance measures shifts from activity to results.
•  Advancement criteria change from being performance based to being ability based.
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Leadership and Process Improvement
All organizations realize that leadership is a vital component in achieving their missions. Effective leadership can bring many advantages such as
•  Increased employee productivity
•  Improved cost management
•  Improved resource allocation
•  Better change management
However, making sure that Process Improvement efforts take advantage of the many benefits of good leadership requires active communication and involvement. Leadership commitment and support are critical for successful Process Improvement endeavors (Figure 2-8). The following list outlines several support strategies that leaders are encouraged to use in order to properly support Process Improvement efforts:
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FIGURE 2-8   Leadership Strategies for Process Improvement
•  Change organizational norms: Leaders should strive to change the way people in the organization think. Having people modify their perspectives and adapt new organizational norms is a fundamental activity in shifting to process orientation. All process and system changes require some sort of change effort, and any meaningful improvements cannot occur until organizational norms are changed and individuals embrace them and alter their behaviors accordingly. Leaders should use the persuasive power that comes with their role to create a culture that embraces change instead of fighting it.
•  Set clear objectives: Leaders should articulate a vision for what process excellence looks like. They should communicate this vision to everyone in the organization and continuously deliver a consistent message regarding priorities to Process Improvement stakeholders. Another critical component is assisting Process Improvement teams in forming a manageable scope for each Process Improvement project. Whether this is through direct involvement or through committee, leaders should help define the attributes needed for success and empower employees to develop efficient and effective approaches to accomplish Process Improvement projects.
•  Select improvement priorities: Leaders should set appropriate targets for the organization and identify the processes they feel are critical for improvement. They should solicit input from process operators and customers in order to identify processes that are in need of attention and determine those that have the greatest potential for improvement. These processes should bring about a sense of urgency in team members and be included in any annual strategic plans for the organization.
•  Provide support: Leaders should communicate their support for Process Improvement efforts both verbally and through actions on a continuous basis. This can consist of written communication through e-mail to staff articulating the vision, or expressing expectations for these efforts in various leadership meetings such as town halls and team meetings. Following any improvements, leaders should express gratitude for the efforts, demonstrate conformity to the new way of operating, and actively participate in project retrospectives in order to recognize progress and reinforce the importance of continuous improvement.
•  Dedicate resources: Leaders should dedicate resources and money to support improvement efforts and ensure that the new processes are implemented as planned and that Process Improvement gains are realized. They should work with the Process Improvement Organization and any process owners to ensure that the allocation of staff and funds is suitable for the scale of effort being undertaken.
•  Participate in activities: Leaders should attend Process Improvement meetings and invite participants to report on progress and share any meaningful successes. They should encourage Process Improvement team members to escalate issues that need resolution and address any concerns promptly. The involvement of passionate and committed senior managers is critical to ensuring the long-term success of Process Improvement efforts.
•  Implement feedback systems: Leaders should implement feedback systems in order to establish close communication with customers, employees, and suppliers. They should develop methods for obtaining and evaluating process owner, process operator, customer, and supplier input in order to determine any cultural, policy, or procedural obstacles to success.
•  Monitor performance: Leaders should identify metrics and information that is needed to understand how the organization and its processes are performing. Process Improvement teams should concisely report metrics and information on key aspects of processes, and leaders should review performance metrics on a regular basis. Leaders should also discuss process owner and department management performance in supporting specific Process Improvement efforts during performance reviews. In addition, they should use this information for compensation and promotion decisions, where appropriate.
•  Remove roadblocks: Leaders should make themselves available for issue resolution and create time during meetings with managers and staff to discuss performance of processes overall and any impediments related to improvement efforts. Leaders should also make themselves visible by walking around the office and engaging employees at their work stations to ask specific questions about how the processes and subsequent improvement projects are working, what support might be required, and what challenges are being experienced. Where roadblocks cannot be removed, leaders should work with managers to build alternate strategies.
•  Celebrate achievements: Leaders should recognize Process Improvement accomplishments whenever possible and communicate this to staff at meetings and via newsletters, e-mails, and through internal or external corporate websites. Other options include awards and parties to acknowledge individual and team achievements. The more leadership acknowledges Process Improvement efforts, the more engaged and motivated team members become.
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Summary
In this chapter, we introduced several key terms and concepts associated with Process Improvement. This chapter outlined the relationships among Policies, Processes, and Procedures; described the Process Improvement Organization; and introduced the concept of a Process-driven enterprise. We also learned that
•  Processes are related activities or actions taken to produce a specific service, product, or desired result.
•  Three primary types of processes can be modeled: Management Processes, Operational Processes, and Supporting Processes.
•  Process Owners are a critical component to Process Improvement efforts. They are the named individuals responsible for the performance of a process in realizing its objectives.
•  Policies are guiding principles intended to influence decisions and actions across an organization and to govern the implementation of its processes.
•  A Procedure is a set of written instructions that define the specific steps necessary to perform activities in a Process.
•  Several best practices are recommended when developing and implementing Business Processes, Policies, and Procedures for use across an organization. These include establishing standards for all three items; identifying who will write, review, and maintain each item; and writing each in separate documents.
•  Process Improvement is an ongoing effort to improve processes, products, and/or services in order to meet new goals and objectives, such as increasing profits and performance, reducing costs, and accelerating schedules.
•  A Process Improvement Organization is assigned various responsibilities that are associated with the centralized and coordinated management of Process Improvement efforts and projects across an enterprise.
•  A Process Improvement Manager is responsible for developing the capability of an organization by teaching Process Improvement skills and managing any Process Improvement initiatives or endeavors.
•  Functional Management is the most common type of organizational structure and is defined as the configuration of an organization into departments or silos on the basis of the type of work to be performed.
•  Common changes that a team should plan for when implementing a Process-Oriented approach include shifts in employee roles, shifts in department policies, shifts in employee empowerment and engagement levels, and changes to performance targets.
•  Leadership commitment and support are critical for successful Process Improvement endeavors. Several support strategies can be employed to ensure successful Process Improvement implementation.
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Chapter Preview
Now that the basic fundamentals and key terms of Process Improvement have been discussed, the next step is to continue learning the key knowledge areas of Process Improvement. Chapter 3 covers Process Maturity in detail and outlines the key components that make up a mature organization. A roadmap for evaluating or assessing process maturity within an organization is also discussed.