How to Start with Business Process Management

There should always be a reason why certain processes exist in a company and not others. The justification lies in the business goals the company has set for itself to achieve. When these goals change, the processes have to change as well.

This sounds logical, but it is not intuitive to many companies. Once an elephant has been shaped, it is very hard to move it around with the agility needed to react to certain changes in the environment.

The above can be nicely visualized by the 5 monkeys & a ladder experiment. Read more below on how to avoid this behavior.

Definition

Company Overview

There are several important elements when setting up an organization: those are the company’s Mission, Vision, Strategy, and Values [Figure 1]. They are defined by the company’s Top Management, they come in written form, they are widely communicated and adopted, they are regularly monitored, not so often updated, and are the basis for everything else that the company does.

Figure.1

The Mission statement is aimed at answering the questions of who we are and why we exist as an organization. The Mission statement also provides the needed clarity on how the company serves its stakeholders (customers, employees, investors, etc.). The company’s Mission equates to the company’s overall purpose.

The Mission is closely related to the company Values. The Values are the beliefs, in which the organization is emotionally invested. The Values determine the approach the company takes in reaching its Vision.

Examples of Mission, Vision, Strategy, and Values statements:
Toyota Global Vision & Guiding Principles
The Coca-Cola Company
Whole Foods Market
Netflix Culture
Starbucks
Hallmark
Xerox
SAP

The Vision statement is a declaration of where the company wants to be in the future, what its aspirations are. As the Mission statement provides the company’s purpose, the Vision statement then defines what the company wants to become as a result of its purpose. The Vision is typically determined after an analysis of where the organization currently is (e.g. done by a SWOT analysis). Sometimes the Vision statement can only be a short tag-line, e.g. the company slogan.

The Strategy flows directly from the company Vision. The Strategy explains how the company will achieve its Vision and thus satisfy its Mission. There can be a long-term and a short-term Strategy, both of which comprise of Goals & Objectives.

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The company’s overall Goals & Objectives are the building blocks of the company’s Strategy [Figure 2]. These terms are often used interchangeably, however, I make a difference between them: The Goal is a broad statement of what outcome we want to achieve. The Objective also contains the desired outcome in its definition, however, the Objective is SMART: specific, measurable, actionable, realistic, and time-bound.

Figure.2

The company Strategy, incl. its Goals & Objectives are still a pretty high-level statement about how the company’s Vision will be achieved. They need to be broken down into smaller steps, which will, in turn, be broken down into smaller steps, and so on until a level of granularity is reached, which the teams can practically understand and execute.

As a next step, the Strategy is further broken down into company Processes.

Process Overview

Each process definition (and usually description too) starts with a Process Purpose, Process Objectives, and Process Controls [Figure 3]. These three things together give the high-level overview of what a process is supposed to achieve and how that will be ensured, which in turn provides the detailed view of how the company’s Strategy will be executed, monitored, and controlled.

Figure.3

The main element of a process is the Process Purpose. The Process Purpose provides the reason why a process exists, i.e. WHAT the main thing is that a process is trying to achieve. If a company is in the Automotive industry, for example, you would expect the majority of its processes to be connected to manufacturing cars and car parts or producing software for those cars. Just as like, if a company has a chain of coffee shops, you would expect the majority of its processes to be around producing and/or handling coffee. It will be rather surprising to see an automobile manufacturer having company processes for making the best cup of coffee in town.

The Process Purpose then breaks down into Process Objectives, which – like any other objectives – are also SMART (specific, measurable, actionable, realistic, and time-bound). The Process Objectives explain HOW a process achieves its purpose. The Process Objectives are the items that are measured and controlled to ensure the Process Purpose is indeed achieved.

The Process Controls are then established to ensure the Process Objectives are fulfilled. The biggest part of the Process Controls are the Process Metrics, which measure directly the Process Objectives (not necessarily a 1:1 relationship). However, the process should contain additional control mechanisms to ensure all of its Objectives are achieved, in case not everything can be measured by a Metric. A Process Control can be e.g. the next step in the process, which cannot happen if the previous one is not done (i.e. gating mechanism).

If your company has an Employee Performance Management (or Evaluation) system in place, your Personal Objectives are based on the company Strategy and the company Processes you execute. All those items are cascaded down to you through the organizational levels above you. Theoretically, the sum of all Personal Objectives will give the sum of all Process Steps, which in turn will give the company Strategy. This all will constitute the WHAT part of your activities, i.e. the desired company outcomes. In addition, you will have to take into account the company Values, which will constitute the HOW part, i.e. the desired approach to achieving those outcomes.

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The Process Objectives then break down further into Process Steps and that can complete the full process definition and description. However, sometimes we need a bigger level of complexity, where the process ends up being broken down into several nested levels of detail to ensure everybody in the company understands what needs to be done and how [Figure 4].

Figure.4

The company’s Policies & Guidelines are the internal standards that everyone should follow. Both Policies and Guidelines can be present at any level of the process breakdown structure, depending on their scope. The main difference between the two is that the Guidelines are not mandatory and tend to be somewhat informal. They explain how certain steps can be performed: for example, a guideline for using the company-branded templates. Policies, however, are formal and mandatory. They outline requirements which have to be complied with and also highlight the consequences if those requirements are not being met (e.g. some sort of a disciplinary action). Example: the company’s IT Security Policy.

The Process Framework is, in other words, the diagram representing the Quality Management System (QMS). It consists of all processes and process interactions in the company. Note that a Process Framework can also be designed on a lower organizational level, i.e. have a smaller scope: company unit, cross-functional program, etc. The main goal of the Process Framework is to establish a controlled environment by enabling Management to identify dependencies and risks, make informed decisions, and overall optimize its activities and use of resources. Example: QMS (source). More info on QMS here.

The Process is a set of interrelated or interacting activities that use inputs to deliver an intended output. They are what Management plans for, executes, and measures, in order to control the operations of the whole organization. Examples: Project Management, Requirements Management, Configuration Management, SW Development, Incident Management, Problem Management, etc.

The Standard Operating Procedure (SOP) provides the specifics in carrying out an activity, process step, or a whole process. Therefore, the SOPs are typically linked to the Processes they detail. Example: the Project Management process consists of the following steps: Initiate, Plan, Execute, Control, Close. An SOP for the Control step can detail how controlling is made (e.g. reporting), how often, in which form (e.g. e-mail, meeting, presentation), who the Owner and the audience is, what happens when gaps are found, etc.

If needed, an SOP can be furthered detailed in a Local Work Instruction (LWI). Continuing with the previous example: An Instruction for the Procedure of creating the Project Management report will specify exactly where a person has to go (e.g. which tool), where to click, what to copy-paste, and so on, until the report is ready.

Lastly, the LWIs can contain Scripts, which are the lowest level of detail in the process definition. The Script will say line by line what each party in a process step is supposed to do. Example: a Script in a Call Center may look like this or this.

Now that we have discussed the theory, let’s see how we can implement it in practice.

Execution

There are overall two scenarios when Business Process Management needs to be set up: either a fairly big organization is just being established or the organization has already been operating for a while but for some reason (growth, distributed assets, certification, etc.) it needs to now implement stricter BPM. Let’s look into both of these scenarios:

New Company

Processes are a wonderful thing in my books, but they are also not for everyone. Their benefits are endless (more info here), however, they require a great amount of investment to implement and of discipline to maintain. Therefore, every Management should make a conscious choice of whether to start spinning the heavy wheel of BPM or they will prefer something more lightweight, even chaos within a certain scope. You might not need BPM if the following is true:

All employees are in the same location. That literally means in the same room or open space. Even if you have rented two floors of the same building, that already sets the beginning of work in silos. The reason behind is that nowadays, in the blossoming era of communications, everyone would prefer to send an email or ping by chat (at most!), rather than go upstairs to talk to a colleague. Any old excuse goes: the colleague might not be at their desk, or they will be busy with something else and I do not want to disturb, or maybe I do not even like this colleague but I still have to work with them, or my knees/back/head/whatever hurt and I cannot be going up and down the staircase, or it is simply faster to write to them in the chat, etc. And if people do not talk face to face, they do not connect and, hence, they do not feel like they are part of the same team.

The company is relatively small in size. And it depends what “small” means in your specific situation. If you are all in one location, something breaks, you stand up and shout you need help, and someone will always volunteer to help you, that is small enough. However, if you are all in the same location and you do not feel comfortable speaking out loud when there is trouble, or you do not know what all these people around you are working on, let alone the ones furthest away from you, and they do not know who you are or what you do either, or you do not even talk to the person sitting right next to you, etc., this does not qualify as “small”. It qualifies as “work in silos” and if you have that in your company, you will have to bridge the gap by defining processes.

The clients/business environment/industry do not require BPM. Implementing BPM is very often done when the company wants to pursue some kind of a certification (ISO or other) or satisfy customer requirements. However, as mentioned before, Management should be very much aware of what they are trying to achieve with BPM and how they will measure their success (and know when to stop!). If the potential Return on Investment (ROI) is not as desired, then perhaps BPM should be implemented partially or not at all. Examples: we are running several art/craft studios, a SW Development house, or similar, and our employees need minimum rules (if any) so they can stay creative and innovative.

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That being said, if you are still convinced BPM is the way to go, then, first of all, congratulations! And second, go back to the beginning of this article and start defining things one by one in the order described.

  1. Your Mission and Values come first.
  2. Vision and “where you are right now” are defined in parallel, as it helps you to immediately see the gap between the two.
  3. Nearly at the same time as pt.2, you will know what is needed to get from pt.A to pt.B and this will be your Strategy.
  4. Start breaking your Strategy into smaller steps, until you reach the level of Processes. It might be the immediate next level of detail, but if not, then whatever is in-between your Strategy and your Processes is your long- and short-term Strategic Plan.
  5. When you already know your Processes, you essentially know the reason why they exist, why you need them, i.e. their Process Purpose.
  6. Put all your Processes together in one picture (which will eventually become your Process Framework) and draft the interfaces between them and the resources each Process might require.
  7. At this point, you have to start thinking about how to build your organizational structure. The resources each Process needs are a huge giveaway and should be your main driver. Do not start creating an organizational structure based on individual competencies or personal preferences, before you have a pretty good idea of what Processes you need in your company, what their interactions are, and how many resources they will require. The purpose of the organizational structure is to support the company’s processes, not the other way around.
  8. Based on the Processes and the organizational structure, you now know what kind of professionals you need to hire and approximately how many. You can also draft pretty accurate Job Descriptions and advertisements already. Do not forget your company Values: you need people who will share the same beliefs if you are to build the company culture you want.
  9. Once you have the people in place, it is time to start delegating. You will have different groups executing different processes. Explain to them what their respective Process Purpose is and let them come up with the details of the Process; they are the Subject-Matter Experts (SMEs), after all. Meanwhile, you will be busy defining the Policies and Guidelines in your company, so that everybody knows what the overall rules of the game are.
  10. You will also be busy with perfecting the Process Framework. Your team will provide you with the details of the Processes, based on which you will update the Process Framework. As your team operates, they will see new areas for improvement and update their respective Processes, while you will have to update the Process Framework (and Policies & Guidelines, if needed), and then the whole cycle repeats. This is how you close the loop of your Continuous Improvement Process.

I want to stress on that last point and especially on the “continuous” part of it. When you set up your BPM, this is not the end of all process work required, quite the opposite – it is only the beginning. Now that you have gone through all the effort of establishing your BPM, you have to maintain, monitor, and continuously improve it, if you are to reap all the benefits of it. Think of it as a flower: You go through all the trouble to find it a nice pot, plant it, and locate it somewhere in your apartment where there is enough light. But if you then forget about your flower, it will eventually die. You have to take care of it on a regular basis if you want to be able to enjoy your flower’s bright colors and lovely smell.

Established Company

If an organization has already been operating for some time, servicing customers or delivering products, that probably means that the following things are already in place (even if not clearly defined and communicated): Mission, Vission, Strategy, organizational structure, some kind of informal or partial Process Framework.

Theoretically, the Values are not a must for a company to operate, however, they define the company’s culture and no process can make up for having an ill culture. Moreover, the lack of defined company Values does not mean that there is no corporate culture in place: it simply means that no one has paid attention yet to what the culture is and how it contributes to or destroys what the organization is trying to achieve.


“Culture eats strategy for breakfast.” − Peter Drucker


A company might decide to transform so globally that it also needs to re-define its Mission, Vision, Strategy, and hopefully Values too. If that is the case, you can follow the steps above for implementing BPM in a brand new company.

However, regardless of the case, in order for the whole organization to proceed with defining the company’s Processes (and also Personal Objectives), Management has to ensure that a) there is indeed a company Strategy, and b) employees are aware of it, understand it, and know how to follow it. Otherwise, everyone will end up feeling very confused and demotivated by the lack of clarity and company direction and processes cannot make up for that. In fact, the company’s Processes cannot be defined well if the Strategy is unclear, therefore, without a proper Strategy we are set up for failure before we have even started.

When you already have the Mission, Vision, Strategy, and Values as the bare minimum, the next element without which you cannot proceed implementing BPM or running any other type of a transformational program is the Leadership Commitment. Without the Leadership Commitment, you cannot get enough attention, resources, and traction. Unfortunately (or maybe fortunately), you cannot do everything on your own because, for one thing, you are not an expert in every process area that needs to be defined. And even if you were, you would literally need to clone yourself to do everything and meet all deadlines. If done well, a transformation program will involve everyone in an organization and Management has to be completely certain they want to go ahead with such a huge investment. Management also has to actively support it all the way, especially when things get tough (e.g. a client is escalating that the company is delaying its deliverables): such times are the true test of the Leadership Commitment to implement BPM.

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Once the above minimum elements are ensured and assuming you aim to set a full-blown BPM in place, you have to work in two parallel streams: the WHAT and the HOW.

The WHAT

If you have a partial or non-existent Process Framework, you have to do a bit of re-engineering. You would already know the Strategy and you have the organizational structure too. Look at those two things and try to extract what Processes the company has or should have. Once you have all the Processes, you can draft two Process Frameworks: one will present the existing situation and one will present the desired state. You would need to have a meeting with Management at this point to point out all the misalignments between the two Frameworks and agree on ways to move forward. The action items from this meeting will eventually be your transformation program deliverables. You can now move on to pt.9 and pt.10 from the above list of implementing BPM in a new company.

A word of caution about all the politics that will be intertwined inside an already existing organization: You might end up with the desired Process Framework lacking half of the teams which are already present in the current Process Framework. If possible, try not to act like a bull in a china shop. Rather, ask questions about why things are the way they are and really listen to understand the reasons behind. Sometimes, you might need to redesign the perfect Process Framework you have created to accommodate political elements that are not plain visible at first sight. This might not be the best for the company, but if it is not the worst either, then you can skip fighting small battles when you have a war to win.

Note also that disruption has a huge price too. The Big Bang approach is an absolute no-go in this case: Everybody hates being pressured to change, so you will not be able to withstand the opposition you meet if you go with the Big Bang approach. Try to do baby steps instead. Do not get too discouraged or impatient: persistence is key. In the end, you will achieve what you want if for no other reason, then for the mere fact that everyone else will already be tired of arguing, fighting, opposing, and seeing your annoying face every day. Or, if the baby steps are too small to even notice, people will wake up one day and realize things have dramatically changed without them even realizing it. Even better!


“Transformation is an ongoing process that tends to appear ordinary, when, in fact, something extraordinary is taking place.” − Suzy Ross


The HOW

The corporate culture is a lot harder to change and it takes one person at a time. Management sometimes thinks that if we change the WHAT the HOW will automatically change too, but it is rather the other way around. Having the company’s Values defined is the first step, but those Values have to be lived in order to become true (just as like the Processes have to be executed in order to add their intended value). Here are some suggestions on how to implement the Values inside the company’s Processes, i.e. bring the HOW inside the WHAT:

You have to start looking at the Management first. You will need to make an objective analysis of how well the company is really being managed. You want Management to be:

  • communicating to the teams only WHAT has to be achieved and leave the teams to come up with the HOW;
  • providing the teams with a clear direction and frame in which to move while executing tasks;
  • readily supporting the teams by removing obstacles from their path towards the goal;
  • respecting and trusting their teams;
  • providing a stable environment (e.g. not introducing changes too often).

Or in other words, you do not want them to micromanage. Unfortunately, micromanagement is a natural reaction when a person feels like they are losing control. BPM will provide the controlled environment everyone needs, however, Managers have to let go of micromanagement, otherwise, BPM will not work. If both Management and the teams are busy with the details around executing tasks, then no one is steering the ship. In order to ease the Management up, you have to give them the wheel: the Process Framework and the Process Controls that will steer it where they want to go.

Be careful with the Process Controls and Metrics you implement, though, because you will get what you measure. Process Controls and Metrics will determine human behavior, especially if the corporate incentives are tied to them too. For example: If you measure how many SW bugs your teams have resolved and you reward the higher numbers, the teams might start creating mediocre SW code only so they get more bugs to resolve. However, if you measure the inflow of bugs to the teams and you reward the lower numbers, the teams will be more careful with the quality of their SW code, to begin with.


“Not everything that can be counted counts, and not everything that counts can be counted.” − William Bruce Cameron


In addition, you also have to look into the Job Descriptions inside the organizational structure and the Process Roles inside the company’s Processes. You must have definitions for both Job Descriptions and Process Roles, which are a) in alignment, and b) clearly stating who should do what inside the Process Framework – and that includes Management too! If such Jobs and Roles definitions are not in place, then they have to be created. You might be able to merge them into one, however, keep in mind that Job Descriptions are based on the Human Resources (HR) architecture, probably also linked to the career paths. Whereas, Process Roles do not care about the expert level of the person executing the Process Step. Also, a Process Role is not exactly equal to 1 Full-Time Employee (FTE). Usually, it is either more or less than 1 FTE. Which in other words means 1 FTE can perform multiple Process Roles or only a part of 1 Process Role.

Read here for more info on how to define Process Roles and why that helps with implementing the corporate culture.

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