Out of the 100 companies that topped the fortune 500 list at the beginning of the millennium only 41 are still represented today. In fact, only 10% of the original list, made in 1955, are still on it. Great companies come and go. But some seem better equipped to cope with changes than others. They have that ability to adapt. But what does that mean? And how can it be acquired? This paper explains the foundations to become good at change within the process ecosystem. The process ecosystem can help to quickly adapt change in new organization forms, so the company will be more resilient, agile and cost effective. This is key for future business success.
The Digitalisation Wave
Digitalisation is the process of converting information into a digital format. But there is much more happening than only an information conversion. An entire generation, so called millennials, has now grown up in a world that’s more and more experienced digitally. The use of mobile devices and social networking has become second nature to millennials. Their reliance on mobile communications and the desire to remain in contact with large networks is transforming work and consumption patterns. Digitalisation is transforming the way companies operate.
New revenue and value-producing opportunities based on the use of digital technologies have arisen. Modern technology allows for extensive automation of largely manual processes which will directly impact day to day work. The speed of digitalisation is increasingly shortening the cycle of innovation. The examples are plentiful; block chain, autonomous vehicles, virtual assistants, or predictive analytics to name a few. Further away on the horizon are potential technologies that reach the far end of imagination. Human augmentations, neuromorphic hardware and tiny sensors that can be deployed everywhere.
Companies need to transform into innovation driven organisations in order to keep up. They need to become good at change in order to stay in business!
The time it takes to change
Large and bureaucratic companies tend to have a slow ability to adapt. They are like oil tankers. Faced with company inertia they rely traditional pyramid based models to execute the new strategy. The time it takes for those ideas to dripple through to the operational layer hampers companies’ ability to innovate.
More and more companies excel on different organisational models. Companies like Netflix and Airbnb show that a culture of transparency and collaboration can be highly effective and far more adaptive. The stronger the culture, the less corporate process a company needs. In fact, the pyramid based companies will most likely lose against collaboration based models.
The process ecosystem
Translating strategy into day to day operations is one of the most difficult things to do. This is where the process ecosystem can be of benefit. A process ecosystem is a community of processes, tools and people in a particular business area that aims to deliver value generating services and products. The process ecosystem represents the way the business area operates and how it is interacting with its environment.
There are 3 areas to focus on to become more resilient.
- Process modelling
- Time to renew
- Collaborative culture
It’s important to understand that these process building-blocks should fluidly disjoint and reconnect depending on the state of the organisation. Do not rush towards new models, but take pride in the lessons learned from earlier implementations and adapt that. Frameworks come and go, and there’s always a new one coming.
Process modelling tools
Here are some of the models that can help you to understand the process ecosystem you are working in.
The SIPOC
A great way to describe a process is with the use of the SIPOC method. A SIPOC diagram is an effective tool for identifying all elements required for a process. It describes the Suppliers and Customers, the Input and Output of a Process that exists to transform something in order to deliver value.
The Value Stream Map (VSM)
Another tool that can be utilized is the value stream mapping technique that is used to document, analyse and improve the process flow required to deliver a service for a customer. It helps you to see and understand the flow of information as a service makes its way through the value stream. A value stream map takes into account not only the activity of the service, but also the management and information systems that support the basic process. This is especially helpful when working to reduce waste, because you gain insight into the decision-making flow in addition to the process flow.
The critical to quality tree
The importance of the relationship between customer requirements and the business components that help to deliver these requirements is understood with the use of the critical to quality tree. It helps to separate the critical parts that form the key measurable characteristics of a process whose performance standards must be met in order to satisfy the customer. They align improvement or design efforts with customer requirements.
Shorten the time it takes to renew processes
The prime force against process renewal is active inertia. Over time the actual purpose, the why we are doing this, is lost out of sight in lieu of day to day routines. Breaking the routines isn’t done too often and typically approached on an ad hoc basis. A team is formed with experts and managers, that come up with a set of improvements to implement. The team works to develop supporting tooling, reports, governance, training etc. This can be an arduous exercise with a lot of waste. It’s not uncommon for process maturation to take up to a year, even more. But time is scarce. Big companies fail because it takes too long to translate strategy into action. They should build up a capability to quickly create buy-in to adapt process flows, supporting tooling, reporting, governance structures and training of staff.