The Process Level of Performance

We have found the Process Level to be the least understood and least managed level of performance. Processes are rolling along (or, frequently, stumbling along) in organizations, whether we attend to them or not. We have two choices—we can ignore processes and hope that they do what we wish, or we can understand and manage them. We have proposed that the only way to truly understand the way work gets done is to view an organization horizontally (as a system) rather than vertically (as a hierarchy of functions). When you view an organization horizontally, you see business processes.

In previous articles, we discussed the systems view at the Organization Level. We introduced the Relationship Map as a tool for viewing an organization as a system. We showed how a tremendous amount of learning and eventual improvement can result from the documentation and examination of the input-output (customer-supplier) linkages depicted in a Relationship Map.

However, between every input and every output is a process. Our understanding and improvement are incomplete if we don’t peel the onion and examine the processes through which inputs are converted to outputs. While the Organization Level provides a perspective, sets a direction, and points to areas of threat and opportunity, our experience strongly suggests that the Process Level is where the most substantive change usually needs to take place. A clear strategy and logical reporting relationships (Organization Level) and skilled, reinforced people (Job/Performer Level) cannot compensate for flawed business and management processes.

What Is a Process?

A business process is a series of steps designed to produce a product or service. Some processes (such as programming) may be contained wholly within a function. However, most processes (such as order fulfillment) are crossfunctional, spanning the “white space” between the boxes on the organization chart. Some processes result in a product or service that is received by an organization’s external customer. We call these primary processes. Other processes produce products that are invisible to the external customer but essential to the effective management of the business. We call these support processes. The third category of processes—management processes—includes actions managers should take to support the business processes. Examples of these types of business processes appear in Table 5.1.

Understanding and Managing the Organization Level

A process can be seen as a “value chain.” By its contribution to the creation or delivery of a product or service, each step in a process should add value to the preceding steps. For example, one step in the product development process may be “prototype market-tested.” This step adds value by ensuring that the product is appealing to the market before the design is finalized. Processes are also consumers of resources. They need to be assessed not only in terms of the value they add, but also in terms of the amount of capital, people, time, equipment, and material they require to produce that value.

At the Organization Level, we “peel the onion” to increase our understanding of the customersup-plier relationships among functions. At the Process Level, we peel the onion by breaking processes into subprocesses. The manufacturing process, for example, may comprise these sub-processes: scheduling, tooling, fabrication, as-sembly, and testing.

Why Look at Processes?

An organization is only as effective as its processes. Organization Goal can be achieved only through logical business processes, such as those listed in Table 5.1 . For example, one of an automobile manufacturer's Organization Goals may be to reduce the time it takes to deliver a car with the options requested by a customer. The company cannot hope to meet this goal if it has an inefficient ordering process or a convoluted distribution process. When we view the situation from the top down, we see that process effectiveness is a major variable in the achievement of Organization Goals. We can also look at the value of processes from the bottom up. At the Job/Performer Level, we can take a variety of steps to improve performance. For example, we can improve our recruiting and promotion practices. We can provide more specific, up-to-date job descriptions, more effective tools, and more attractive incentives. We can drive decision making down in the organization. We can empower teams to solve problems in their work units. However, even talented and motivated people can improve organization performance only as much. To continue our automobile distribution example, salespeople may be thoroughly completing order forms, data-entry clerks may be accurately coding information, and dock crews may be efficiently loading cars onto trucks. However, the effectiveness of any improvement in their performance could be limited by the logic (or illogic) of the total distribution process, made up of the order entry, production scheduling, and transportation subprocesses.