Process complexity holding us back
In its 2016 Global Transformation Study, KPMG found the complexity of the operating model was the number one reason why transformation efforts fail. According to Gartner’s 2015 study on Digital Business, lack of business process maturity will limit 80% of businesses from realizing the full potential of going digital. As organizations ramp up investment in digital business capabilities, failure to comprehend and master complexity can be a fatal flaw, blocking effective strategy execution. How can this be? Process improvement has been a major focus of business for decades. And yet here we are – in a world overwhelming in its complexity. How is it that after all the time, energy and money organizations have invested in making work simpler, things have gotten more complicated in the world of work?
Missing the big, complex picture
In part we are here because it is the nature of our world. The arc of our evolving universe tends towards ever more complex systems. Given enough time, a standard devolves into varying ways of working. We tend to add more things into our lives versus cutting back to only essential activities. A room tends to get more messy over time so periodically we need to clean it up. So it is with the processes at work. Over time they take on a life of their own, changing in ways not intended, getting all tangled up with other processes – and we have a process mess on our hands. But how often do we take a really big step back and look at the whole house and every room in it and ask – is this what we want? This is the other reason we have arrived at today’s current state of organizational complexity – more often than not we have missed the big picture.
We have missed that picture because the lens we use for process is usually zoomed in too tight, providing close ups of one aspect of our business. Sometimes insights gleaned from those efforts are applied broadly within the organization yielding big wins through the law of large numbers. But more often than not like projects are chartered again and again, finding similar insights, implementing one-off solutions – while the big needles, measures of capability at the enterprise level, hardly move at all. Business Process Re-engineering (BPR) and its progeny business transformation (BT) and business process management (BPM) do open up the aperture, truly looking at a process end to end, but frequently fall short of comprehending the enterprise in total. When organizations zoom out to see the really big picture what they find is often a mess – complicated, user-unfriendly, incapable of delivering on its promise. That complex mess is the operating model – on top of which many digital transformation programs are now being launched – only to come up short.
Building on our strategies
It doesn’t have to be this way. Great work has been done to clarify and refine strategies. We know our markets and our competitors. We have identified capabilities which would allow us to command a market or disrupt a market leader. With that foundation we can move on to the essential question: does our operating model enable that strategy? Once we scale up to view the operating model as a whole, we can determine which processes are most key to re-positioning us in the market and then invest in and transform them, understanding that they will have to inter-operate with the balance of our processes – and with those of of our customers, partners and suppliers. We can apply the same lean concepts we used at the team level to define a way of working in aggregate that is simpler for our customers and for the employees that serve them. The time to do this is before we launch a major digital business transformation program, ensuring the latest technology is harnessed to solve the right problem, opening the way to a much simpler, more agile way of working, fully up to the challenge of the lighting fast world of change in which we operate today.
There is no one right answer here, no cookie cutter template which works for every company and culture. This is work we have to do. Operating models vary depending on the organization’s objectives and the environment in which it operates. There is also no finish line here. As markets change, as new technologies introduce previously unimagined possibilities – your operating model needs to change to keep up with the competition. Just as strategies require a periodic refresh, so do the processes and systems on which those strategies depend.
How to start
The first step in simplifying the way your organization works is awareness.
Pause the work at hand and carve out some time to try this exercise:
- Start with a blank sheet of paper
- Draw an overall picture of how your organization does what it does
- Begin and end with your customers, trying to see it the way they do
- Be honest about how things really work, the way your employees are
- Include any systems you use or to which you need to connect
- Specify all your locations
- Note key partners and suppliers with whom you go to market
- Illustrate how you manage the business, aligning all employees to goals
- Step back and look at what you have drawn
If your organization is like most, this may be the first time a leader has tried to sketch out your model and you are already starting to ask if there is a simpler way. There is.
You can accelerate this effort by having someone who has seen how these models work across industries to work with you to draw that big picture, to surface those strategic gaps in capability and chart a course to turn them into opportunity.
At GlobeNorth, LLC that’s what we do – we help organizations find the simpler path.