BPM Success Requires a Change in the Mindset of Leadership

Executive support is consistently cited as being a critical success factor in BPM implementation due to the very nature of BPM projects spanning across departmental boundaries. This theme was emphasized on the BPMInstitute Web site by Dr. Raj Ramesh in the article, “Your BPM Project is Bound to Fail.” It is also a recurring subject in most BPM software vendors’ materials.

Guidance on how to obtain executive support is less frequently available. The fact is that enabling a leadership mindset and behavior needs to be shaped in advance of any BPM implementation. And doing this is neither easy nor quick. What’s needed is to influence leaders’ views and leadership mindsets in relationship to strategy and execution, engagement, and other management practices.

This is not a new challenge. In his 1993 book, Process Innovation, Dr. Tom Davenport summarized some of the then widely held customer unfriendly views as:

• We’re smarter than our customers. We know what they really need.
• Our primary and overriding purpose is to make money, to produce nearterm shareholder return.
• Our key audience is the financial market, in particular, the analysts.
• The primary way to influence corporate performance is through portfolio management and creative accounting.
• Managers are paid to make decisions. Workers are paid to do, not think.
• The job of senior managers is strategy, not operations or implementation.
• If it isn’t broken, don’t fix it.

These customer unfriendly views are the product of traditional functional thinking. That’s what stands in the way of companies performing for customers.

Indeed, the traditional functional mindset of leaders remains the principle obstacle to the practice of process management.

While there is a long and rich history of process thinking in business literature, in recent years the practical application of process thinking has had more to do with cost reduction than anything else. The relatively narrow view of process is due in part to the failure of leaders to understand why they should undertake a sustained effort to understand, improve and manage the firm’s large cross-func- tional business processes.

A new leadership wisdom needs to accommodate a broader, more comprehensive, systemic view of the business in a process context. One definition of process management that adopts a systemic view is that process management at the enterprise level involves ‘the deliberative, collaborative, and increasingly technology-aided definition, improvement and management of a firm’s enterprise business processes.’

This involves shaping leadership mindset as it relates to a broad range of critical management practices, including strategy formulation and implementation, employee engagement and growth.

Strategy and Execution

What’s more important, strategy or execution? Now that’s a trick question for you. Obviously, both are crucial. The current leadership mindset says you can’t execute flawlessly in the absence of clear strategy. The needed shaping of leadership mindset is that you can’t execute flawlessly in the absence of a process view of the business on an end-to-end basis.

It’s somewhat puzzling why more business leaders have not nurtured the mental models and behaviors needed to define strategy in a business process context. After all, many would agree that it is the set of enterprise business processes which defines how work is done and creates value for customers and shareholders.

The academic community has been promoting this point of view for some time now. As far back as 1985, Dr. Michael Porter emphasized the concept of the value chain. In his seminal HBR 1996 article, “What is Strategy,” he noted that “Activities, then, are the basics of competitive advantage. Overall advantage or disadvantage results from all a company’s activities, not only a few.”

So why don’t more organizations express the firm’s strategy in process terms? Again, the culprit is the traditional functional mindset. This is manifested in two ways. First, many leaders are not accustomed to thinking in process terms at the enterprise level. Instead, they view processes at a micro level, more like procedures. Perhaps this point was best expressed by a vice president from a major chemical company. In response to the question, “Does process thinking come into play in formulating strategy?” he answered, “Not top of the mind, I would say. When I think of process, I think of something that’s providing a systematic reproducibility, in spite of changes in people. It provides me with a sense of relief that I don’t have anything to worry about. So normally you end up associating process with something that is cumbersome, something that is rigid. Most of the time, I’m pleased with the existence of processes, sporadically, I loathe them–you are more apt to hear that the process doesn’t allow something as opposed to saying that ‘sure, we can handle that special request easily.’ ”

The signs are clear when leaders view process as procedures. You are apt to hear people say “process slows us down” or “process reduces our flexibility and creativity.” Whenever this distorted view of process exists, it may be challenging to raise the level of thinking of the leadership team to pay attention to the firm’s large, crossfunctional business processes.

Next, the traditional functional mindset reinforces the status quo in strategy development. For years, many firms have done the same thing, over and over again, in formulating strategy. But here is the fly in the ointment: the execution of strategy relies upon the improvement and management of the firm’s large, cross-functional business processes–not actions taken in isolation by department heads. A static, departmentalized view of strategy will lead to “me- too” strategies and the use of old, worn-out phrases in articulating strategic direction.

It is the power of process thinking which enables firms to answer the question, “Which of our key processes need to be improved, and by how much, in order to perform for our customers?” In turn, this prepares the organization to then ask and answer, “Which of our key processes need to be improved, and by how much, in order to achieve our strategic goals?” That’s what enables execution.

It is the answer to these questions that pays significant dividends in terms of linking strategy to execution and has considerable fringe benefits in more broadly engaging the organization, as is discussed below.

Employee Engagement

Leadership rightly believes that a firm needs to engage its employees in order to execute strategy. The needed shaping of leadership mindset is that process thinking can provide the needed context to engage the entire organization.

The majority of the firm’s employees are involved in activities such as developing products or services, selling these offerings, delivering them, and servicing them, and so on. These activities are actually performed through collaborative cross-functional activities–or business processes, if you will.

By articulating strategic objectives in terms of the specific improvements needed for these cross-functional activities, firms can better engage and even inspire employees to action.

People value plain speaking and simple, clear goals and priorities that make sense to them in their roles within the firm. For example, the leader of a global special chemicals business articulated the purpose of his firm as providing “value beyond the product.” This statement was supported by a “customer bills of rights” that specified the firm’s commitment to providing customers with:

• what they ordered
• delivery at the time they asked for it to be delivered
• complete, accurate, and defect-free deliveries
• an accurate, complete, and timely invoice

Now, that’s clear isn’t it? Let’s not forget that people have difficulty in identifying their roles in delivering on the traditional financial measures of performance such as profit margin, cash flow, and asset intensity. Measuring what counts for customers is the essential ingredient of process management. It provides a more relevant mechanism to engage people in the organization. This is due to the unavoidable fact that the people perform work and workflows as processes. Thus, putting things in process terms makes it much easier for people to understand what it is they do and how it is important to the customer and, ultimately, the company and its shareholders.

The engagement and teamwork-related benefits of viewing the business in process terms have been known for some time now. Øystein Risan, the operations director for NSB, the Norwegian national railway company, described the benefits of taking a business process view as follows:

“We have a much more united unit. Everyone, the drivers, conductors, management, the union has a more common understanding of what we are trying to do–and that we are all doing our best to achieve it. And people actually believe that each individual makes a difference and that small improvements every day will eventually end up being massive improvements. On any objective measure, punctuality, cost efficiency, safety, you’ll see huge improvements. And I think it’s about believing that you can make a little change and you’ll get huge end results.”

The management of a firm’s end-to-end business processes can enable the type of collaboration that is part of the key to engagement.

Process Thinking and Growth

Growth is essential to overall business performance. Leadership mindset needs to be shaped to recognize the less well-known fact that process thinking is essential to growth.

Michael Treacy emphasized in his book, Double-Digit Growth, that most management teams are adept at meeting cost targets, shaving 10 percent from the expense base or improving an individual process–but are far less able to plan and execute double-digit growth. Why is that? Treacy argues that firms often lack the tools and management disciplines to tackle growth in a structured, systematic way. Certainly that’s part of the answer.

But the other part is this: rapid, sustainable growth requires not just a systematic approach but also a systemic view and broad cross-functional collaboration–and that is something many firms continue to struggle with. That’s precisely where process thinking comes into play.

A process focus on items such as flawless delivery and “first time right” responsiveness is essential in providing existing products or services to either existing or new markets.

Of course, that is not all there is to fueling growth. A firm can have outstanding performance in terms of delivery and responsiveness and yet fail to grow because the features of its product or service no longer meet customer needs or the offering is priced well above competitive offerings. But the converse is also true. Firms which have excellent products or services that are well priced and promoted can fail to grow due to sub-par performance in the delivery and service of their offerings.

Successful, sustainable growth demands that a firm measure, improve, and manage its performance with respect to at least two key processes: order fulfillment and new product or service development. To illustrate this, just consider Table 1, which depicts the typical options to growth organically via a product-market matrix.

When it comes to organic growth, be it based on selling more of existing products or services or introducing new products or services, the systematic improvement and management of the order fulfillment and new product development processes and a systemic view of the business is essential. Leadership mindset needs to be shaped to acknowledge that process performance is essential to growth.

This applies equally to the development and introduction of new products or services to either existing or new markets. Here, the firm’s aptitude in new product/service commercialization comes into play, in addition to flawless delivery and “first time right” responsiveness.

Successful new product development requires cross-departmental teams to complete a prescribed set of related cross-functional tasks in each stage prior to obtaining management approval to proceed to the next stage of product development.

In order to achieve successful new product development and commercialization, firms must measure and manage the performance of this large cross-functional process. It’s equally important to have clarity on customer expectations and a mechanism for ongoing customer input.

Key Take-Away

Leadership mindset must be shaped. The process view in relationship to strategy and execution, engagement, and growth is a prerequisite for BPM software implementation success. Only then will leaders appreciate the potential of BPM software. Then we will hear an increasing number of success stories on obtaining executive support.