8 Simple Steps to Start With Business Process Management
8 Simple Steps to Start With Business Process Management
A lesson in System Thinking 🧩 Traditions are a mystery 🧩 Company mission, vision, strategy, and values 🧩 The link to process purpose, outcomes, activities, and personal objectives
Today, I have a whole lot of little helpers that will make it easier for me to explain to you what I mean - cats! 😺😺😺
What do cats have to do with Business Process Management, you ask?
I hear you.
Read on 👇
🪂 Operation Cat Drop
Back in the early 1950s, some of the villages on the island of Borneo (then a British colony of Sarawak, now part of Malaysia) faced a serious malaria outbreak. To save human lives, the World Health Organization decided to intervene. They sprayed the insecticide DDT across the area, killing the mosquito population - the insect that carries malaria - and significantly reducing the incidence of the disease.
However, the World Health Organization failed to foresee the full impact of their actions. One of the first side effects was that house roofs started collapsing. The DDT had not only killed the mosquitoes but also a parasitic wasp that preyed on thatch-eating caterpillars. Without the wasps, the caterpillar population flourished, causing the roofs to deteriorate. Britain provided sheet metal for new roofs, but in an area with heavy tropical rain, the tin roofs proved problematic, as they were noisy and kept the villagers awake at night.
Worse still, the DDT poisoned other insects that were eaten by gecko lizards, which in turn were eaten by cats. As a result, the cats started dying, allowing the rat population to explode. The rats not only started destroying the crops but carried infections too. The people ended up facing outbreaks of two new serious diseases - sylvatic plague and typhus.
To address these self-created problems, the World Health Organization decided on a unique solution: parachuting live cats into Borneo. Between 20 and 30 cats were supplied and flown in from Singapore (also a British colony at the time). This event took place in the early 1960s and is known as Operation Cat Drop. The parachuted cats effectively solved the rat problem, helping to finally restore balance to the local ecosystem.
🐈 The Ritual Cat
An Ancient Zen Fable
When the spiritual teacher and his disciples began their evening meditation, the cat who lived in the monastery made such noise that it distracted them.
So the teacher ordered that the cat be tied up during the evening practice. Years later, when the teacher died, the cat continued to be tied up during the meditation session.
And when the cat eventually died, another cat was brought to the monastery and tied up.
Centuries later, learned descendants of the spiritual teacher wrote scholarly treatises about the religious significance of tying up a cat for meditation practice.
🏢 Setting up the Organization
These cat stories show us two things:
Random action brings random results. We must plan our activities, look at different scenarios, and choose the best one (based on pros and cons) so that we can minimize the risks.
When the circumstances around (and the reasons for) our chosen scenario change, we must ensure we’re aware of it so that we can adjust our activities accordingly.
How do we apply this to organizations?
We do that right from the beginning, when setting up our company.
Before we start setting up our company, though, it’s good to know the basics of how to manage it. Read more about that here:
1️⃣ Company Overview
Each company starts out by establishing clear business goals - meaning, we have to define our company’s mission, vision, strategy, and values. These four things are the basis for everything else our company will do. Defining them is Top Management’s responsibility. We have to create them in written form and ensure they are widely communicated, adopted, and regularly monitored. They are long-term parameters, therefore, we don’t have to update them so often, but we do have to constantly keep an eye on them to ensure that a) they are still valid for us, and b) our actions still support them.
This rectangle represents our company. Everything inside of it is our operation and organization, and everything outside of it is our business / market environment. The green star with Sam inside (yes, he has a name 😉) is where we are right now. This can be best determined by a SWOT analysis.
Let’s look at each of the four elements in this picture in more detail.
🔵 Mission
The mission (the cloud and the blue surrounding line in the picture) is our company’s overall purpose. The mission statement aims to answer the questions of who we are and why we exist as an organization. It has to be a concise and inspiring answer and, once properly defined, it shouldn’t change. The main goal of the mission statement is to create a sense of identity for everyone inside the organization. It also provides the needed clarity on how the company serves its other stakeholders: customers, partners, suppliers, shareholders, investors, etc.
See this explanation by Dan Heath on how to define the company’s mission:
🔴 Vision
The vision (the red star in the picture) indicates where we want our company to be in the future, i.e. what our aspirations are. The vision statement describes a better world that does not yet exist, but which will be achieved as we realize our purpose (i.e. deliver on our mission). The vision statement can only be a short tagline, e.g. the company’s slogan. Like the mission statement, once properly defined, the vision statement shouldn’t change. It serves as the North Star: it provides the direction of our company and it aligns our people behind one common goal.
See this explanation by Simon Sinek on how to define the company’s vision:
🟢 Strategy
The strategy (the arrow in the picture) is the long-term plan, which will take our company from where it currently is to where we want it to be in the future (i.e. to the company’s vision). The strategy encompasses the goals and objectives of the company - the products or services we want to deliver and the customers or markets we want to deliver them to. We use our strategy to make decisions about prioritization and allocation/optimization of company resources. The strategy can change due to market conditions, stakeholder expectations, etc, even though that’s rare because it’s long-term by default. Apart from ensuring the company’s vision is achieved, the strategy also has to be aligned with what the company stands for: its mission and values.
See this explanation by Erica Olsen on how to define the company’s strategy:
🟡 Values
The values (the sun in the picture) are the beliefs in which our company is emotionally invested. The values define what we stand for - they shape the company’s culture and help with decision-making. The values determine the approach our company will take in reaching its vision, i.e. how we will conduct our business and essentially all of our everyday activities.
See this explanation by Jeff Lawson on how to define the company’s values:
Examples of Mission, Vision, Strategy, and Values Statements
2️⃣ Process Overview
Once we have clarified our business statements and goals, we have to feed them into our daily operations. This means that, for each process we create, we must explain how it supports our higher-level objectives and principles.
🟣 Process Purpose
There is always a reason why certain processes exist in a company (in their current shape and form) and others don’t. When that reason changes, the processes must change as well. To be able to make this change, we must first ensure the reason WHY is explained. We do that inside the first section of each process document, called Process Purpose. The purpose tells us why a process exists.
Moreover, there’s a tight correlation between our company strategy and the processes we have. For example, if our company operates in the Automotive industry, the majority of our processes will be connected to manufacturing cars and car parts or producing software for those cars. Likewise, if we have a chain of coffee shops, the majority of our processes will be around producing and/or handling coffee. It’ll be rather surprising to see an automobile manufacturer having company processes for making the best cup of coffee in town 😉
That’s why we have to align the process purpose with the company’s strategy - and when the strategy gets updated, all our processes must be revised too.
More on this topic here:
Let’s take an example process from e.g. A-SPICE v.3.1: The Process Purpose of the Risk Management process is to successfully manage risks within a given scope.
The following sections will tell us what happens next.
🟠 Process Outcomes
The Process Purpose breaks down into Process Outcomes. The outcomes are the main things that a process aims to achieve, i.e. the WHAT part. They tells us how the process purpose will be realized.
The process outcomes shouldn’t be confused with process outputs. The outputs are what the process produces as a result of its activities - e.g. documents, records, software code, reports. Those outputs are then used by the subsequent process(es) in the overall system of processes. The outcomes, however, are the benefit that the outputs bring to the organization, its customers, and other stakeholders. Those could be things like establishing a controlled environment, maintaining employee and customer satisfaction, increasing revenue, etc.
More on output vs. outcome here (see Leverage):
Continuing with the Risk Management example, we break the Process Purpose into the following Process Outcomes (I’ve shortened it for clarity):
The Risk Management scope is established.
The Risk Management strategy within that scope is established.
The risks are identified.
The risks are analyzed.
The risk treatment actions are identified.
The risk treatment actions are implemented.
Note that the Process Outputs of the same process are defined as:
Risk Management Plan
Risk Action Request
Risk Mitigation Plan
Risk Analysis Report
Risk Status Report
etc.
🟤 Process Activities
The Process Outcomes are then broken down into Process Activities. Those are the actual steps of the process, the day-to-day execution. They show us HOW the process will achieve its outcomes and, thus, realize its purpose. Which, on a higher level, tells us how our company’s strategy will be executed.
The process activities are typically presented in a process diagram or flow and are also associated with many other elements from the process definition, like scope, inputs, outputs, process interfaces, RACI Matrix, monitoring and measurement, etc.
You can use my free Process Template to define your processes in full.
Continuing with the Risk Management example, we break the Process Outcomes into the following Process Activities (aka Base Practices, since A-SPICE is an external standard):
Establish the Risk Management scope → Process Outcome 1
Define the Risk Management strategies → Process Outcome 2
Identify the risks → Process Outcomes 2 and 3
Analyze the risks → Process Outcome 4
Define the risk treatment actions → Process Outcomes 5 and 6
Monitor the risks → Process Outcomes 5 and 6
Take corrective action (when risk mitigation is not achieved) → Process Outcome 6
⚫️ Personal Objectives
Now that we’ve defined our processes, we have to ensure they’re executed as intended. Companies use Employee Performance Management (or Evaluation) systems for that (with various degrees of success).
If executed right, the personal objectives should be based on the company processes that the individual executes, which in turn are based on the company’s strategy. All strategic objectives are cascaded down from the highest organizational level to the lowest and, therefore, should also be traceable in the other direction - from the lowest-level tasks to the highest-level strategic goals. As a result, the sum of all personal objectives in our company should give us the sum of all company process activities, which in turn should give us the company’s strategy. That way, everyone in our organization knows how what they do daily contributes to this better future world that the company envisions.
The same logic applies to the company’s values. We not only have to define the personal objectives as WHAT has to be done but also explain HOW. The individual methods should support the overall company values. Thus, the total sum of everybody’s HOW shapes our company’s culture.
And that’s how we connect the two sides of our business - external (product and market related) and internal (organization and operation). And, by doing so, we also create the basis for our future success.
Thank you for reading 💝
Till next time,
Irina
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