The Re-engineering RE-Revolution Will Deliver Process Value

I expect many people may recoil from, even dismiss my suggestion that we re-visit the Re-engineering Revolution.

That’s understandable.  In its most debased form the term Re-engineering was thoroughly corrupted, becoming a code word for indiscriminate downsizing

But I believe the concepts underpinning Re-engineering remain valid, even essential in today’s difficult business environment.

The recent (perhaps ongoing) Great Recession has taught us many things, especially the importance of delivering real value to customers while paring costs that don't contribute to value creation.

BPR may be corrupted but businesses today desperately need to become LEAN.

Lean is a philosophy and set of practices used to relentlessly improve Process Value while eliminating waste.  Lean approaches were honed by Toyota and have been refined and adopted for decades.  Both Lean and BPR seek the same goal—measurably improve process value. 

Meridian program for growing process value departs from traditional Lean/BPR approaches through our emphasis on implementation, and especially our commitment to making people a more effective part of your value improvement process.  Our approach has proven effective in manufacturing and service operations.

Mission

Meridian’s approach and traditional Lean approaches agree: Step one is to delineate how you will continually improve the value you deliver to customers.  Mission is a moving target, evolving over time in response to changing taste and competitive pressures, but should be specific and executable.  This is not an involved exercise—most organizations have some sense of Mission, though all find value in succinctly re-visiting their mandate before remaking their operations.

Work

It’s amazing how difficult it is to understand what people actually do day-to-day, hour-to-hour.  Sure there are job descriptions, but these artifacts rarely describe reality.

The key to changing work is to really understand what people do.  It’s not easy—even the simplest query “What are the five key things you do each day,” inevitably leads to a laundry list of actions and exceptions.

We’ve discovered the best route to productive discussions about work center on tangibles—on the inputs, work products, and deliverables people receive, process, and forward as part of their jobs.  In our experience people can pretty completely inventory the tangibles they routinely and exceptionally handle. 

The next level of analysis looks at the actions people take with each tangible—do they transform or improve the tangible, find and fix errors, or is the work purely administrative.  We’ve developed a set of definitions that facilitate effective characterization of all types of work.

Cataloging tangibles and evaluating the actions surrounding each tangible provide a compelling picture of work.  We use this snapshot to collectively evaluate the value of work while simultaneously looking for waste.  This vetting leads to ideas how work can be improved, automated, or eliminated; a roster of Quick Hit work improvements that can be implemented immediately; and a view as to what your Process Value might look like following work changes.

Commitment

This is the point where traditional Re-engineering programs fell apart.  Elite teams birthed brilliant designs that withered because there was no commitment to really changing work.

At this point in Meridian’s process we will have a roster of work changes and improvement opportunities.  We will also know what types and levels of investments will be required.

But to succeed we need to build a broad commitment to implement.

The first task is to build support amongst Directors and Managers—the people with immediate responsibility for managing your production and service personnel.  Directors and Managers really shape how work is accomplished.  Change is not achieved without their support.

We believe the best way to gain support is to ask your Managers or Directors to establish implementation priorities.  Allow them to build their Re-engineering agenda.  Ask them to sell their agenda up and down the hierarchy, engaging both the people who work for them and the people for whom they work.  There is no better way to put your Process Value initiative on a solid footing.

The second task is to translate work improvements into concrete steps.  Many Re-engineering teams lacked what we call “first step vision”—they can see the grand design, and can forecast multiple methods for improving value, but they are hard pressed to describe the simple first steps implementers need to take.

To avoid this common malady we devised “Stop-Start-Change” forms. 

A Stop-Start-Change (SSC) form makes explicit how work needs to change for every role touched by your value improvement program.  It delineates which existing tasks should be stopped, which new tasks should be started, and when today’s approaches to work should be changed.

SSC forms accelerate the rate at which new work procedures are adopted, hastening your program’s return on investment.

Implementation

It’s important to attach measurable impacts to work changes—especially reductions in waste.  In the Lean world waste is anything that does not add value to customers.  The accepted definitions of manufacturing waste, and Meridian’s definitions of services waste, are shown in the following table.  These categories provide the basis for charting results from your Process Value initiative.

In Closing

I admit this post went far longer than originally planned.  Allow me to end with two overarching thoughts.

Whether you use Meridian’s approach or more traditional Lean/BPR approaches,

Continuous Improvement is today’s unavoidable imperative.    

If not underway please consider taking your first steps toward a higher value, lower waste future today.

Growing Service Value, A Real-World Success Story

What the heck! 

I promised to explain how we Rally the Re-Engineering RE-Revolution back in October.

A few detours—work, family, and some pretty compelling ERP events commanded my attention.

But back to the promised topic: describing a successful implementation of Meridian’s unique approach to growing Service Value.

The concept of Service Value was described in earlier posts.

“The majority of service organizations we’ve measured have mildly positive to negative Service Value, meaning they spend more time on their mistakes than they spend with their customers.”

“The best route to growing the value of your service organization is to pin down your Mission and to relentlessly grow the time and effort you devote to delivering your Mission-specified services to your customers.”

Sounds good: here’s how.

Our client is a global services organization comprising over 1,000 customer support outlets.   

This initiative began by gauging our client’s Service Value, calculated by netting the proportion of time devoted to directly supporting the organization’s mission against the energy and effort devoted to fixing mistakes and errors.

We quickly determined that this organization’s Service Value was -14%: bad, but not the worst we’ve seen. 

The core problem was this organization spent almost one-third of their time finding and fixing mistakes—far too much time away from serving customers.

A team comprising client and Meridian personnel immediately captured $1.5 million in savings by making Quick Hit changes to current processes and procedures. 

The team then measurably increased the time this organization devoted to its customers by eliminating non-value added work.  For example we stopped non-value added business practices such as Manual Proof of Delivery of shipped goods; started new, cost-effective business practices like the consolidation of service purchases into master contracts; and re-wrote roles and responsibilities for all customer-facing jobs. 

It’s important to note that over 85% of the ideas for improvement came from client personnel.  In fact we averaged just over two ideas per employee.

It’s equally important to recognize that Service Value Improvement is a political process.  Failure to build a true consensus supporting process and work changes would spell doom for this initiative.

In this case we deliberately created consensus at top levels that process and job changes were needed and could be accomplished by this organization.  We broadened our base of support by engaging a wide sample of client personnel in the development and validation of process and job changes.  Our program culminated in a final ‘endorsement’ meeting during which managers and supervisors explicitly endorsed the process and job changes that would be made in their area.

In the final analysis process and role changes allowed this client to increase the number of personnel directly supporting clients by 25%.  Reallocating resources measurably increased this organization’s Service Value from -14%--a relatively low score—to almost +21%(well above average).

Growing Service Value: Mission, Work, Commitment, Action

As noted before the majority of service organizations we’ve measured have mildly positive to negative Service Value, meaning they spend more time on their mistakes than they spend on their customers.

The best route to growing the value of your service organization is to pin down your Mission and to relentlessly grow the time and effort you devote to delivering your Mission-specified services to your customers.

You cannot do this as an abstraction—you have to engage the people who actually prepare and deliver your services to understand what works, what doesn’t, and your full panoply of improvement opportunities.

Meridian deploys a four step process for growing Service Value, comprising Mission, Work, Commitment, and Implementation.  

Our process is differentiated by our commitment and ability to make people a more effective part of your Re-engineering process.

Mission

Mission describes the specific services you provide to your customers.  Step one is to delineate your Mission—to make clear the services you exist to deliver to customers, whether internal or external to your organization.  Mission is a moving target, evolving over time in response to changing taste and competitive pressures, but should be specific, clear, and executable at any point in time.  This is not an involved exercise—most organizations have some sense of mission, though all find value in succinctly re-visiting their mandate before remaking their service operations.

Work

It’s amazing how difficult it is to really understand what everyone does each day.  Sure there are job descriptions, but do these artifacts actually describe day-to-day reality?  In most cases hardly!

The key to holding productive discussion about work is to focus on tangibles—on the inputs, work products, and deliverables people receive, process, and forward as part of their jobs.  We discovered people can pretty completely inventory the tangibles they handle in their jobs. 

The information collected during this step boils down into an explicit measure of your organization’s current Service Value; recommendations about work that can be improved, automated, or eliminated; a roster of process and work improvements that can be implemented immediately; and a view as to what your organizations Service Value might look like given recommended work changes.

Commitment

This is the point where I think most traditional Re-engineering programs fell apart.  Elite teams birthed brilliant designs that withered because there was no commitment to really changing work.

At this point in Meridian’s process we will have a robust roster of work changes and improvement opportunities.  We will also know what types and levels of investments will be required.

But to succeed we need to build a broad commitment to implement.

The first task is to build support amongst Directors or Managers—the people with immediate responsibility for managing your service delivery personnel.  These are the people who really shape how work is accomplished.  Change is not achievable without their whole-hearted support.

We believe the best way to gain support is to ask your Managers or Directors to decide what will be implemented and to establish implementation priorities.  Allow them to build their re-engineering agenda.  Then ask them to sell their agenda up and down the hierarchy, engaging both the people that work for them and the people for whom they work.  There is no better way to put your re-engineering initiative on a solid footing.

Action

Implementation is the last mile of the marathon—it’s where even the best trained can grievously fall apart.

The simple problem with implementation is people already have full-time jobs.  It’s hard to change how you work when the work is piled high and growing deeper by the minute. 

All previous aspects of our re-engineering program require broad participation to succeed, yet implementation is the opposite.  Focus and accountability are critical, which mean tasking a few people, for a finite time, is the best route to implementation success.

Other keys to successfully implementing the work changes that will grow your Service Value include:

• Developing a clear view of what it will mean to succeed with your re-engineering program.
•  Making clear what you’ll need to succeed (and securing it). 
• Aligning people with their new roles.
•  Training people in their new roles.

I stress that our process for growing your Service Value is a very “human” process.  Unlike traditional re-engineering approaches we ensure that the people who will be required to adapt and change drive your re-engineering process. 

Our process for growing Service Value is also a very “humane” process, reallocating resources toward customer service, rather than just cutting heads.

My next step is to provide a detailed description of a successful implementation of Meridian’s unique approach to growing Service Value.

A Re-engineering "RE-Revolution"

I have a commitment I want to share.

As you may know Meridian has extensive experience helping clients improve business operations.  Most recently operational improvements have been tied to ERP implementations.

But process work substantially pre-dates our ERP involvement.  And my personal experience with process improvement dates to the days of Michael Hammer and the vaunted “re-engineering revolution.”

Whatever happened to the expected “re-engineering revolution?”  Sure Michael Hammer put processes on our brains, but what happened to the “process re-engineering” movement—you know, the widely accepted belief that process re-design was the answer to many corporate ills and inefficiencies.

Wikipedia tells the tale, correctly crediting the 1990 Hammer/Champy HBR article, “Re-engineering Work: Don’t Automate, Obliterate” as the Business Process Re-engineering (BPR) movement’s kick-off.

But the party barely got started.

“The most frequent and harsh critique against BPR concerns the strict focus on efficiency and technology and the disregard for the people in the organizations who were subjected to re-engineering initiatives."

“Very often, the label BPR was used for major workforce reductions.”

I couldn’t agree more.

I don’t doubt that Michael Hammer and a cadre of BPR practitioners fundamentally changed the way we think about and talk about business.  But the actual practice of BPR had too much collateral damage—efficiencies gained at the expense of jobs, morale, and commitment.  Even Hammer himself agreed, later stating, "I wasn't smart enough about that (the people impacts of BPR).  I was reflecting my engineering background and was insufficiently appreciative of the human dimension.”

Lost in the mists is the fact that the rationale for BPR remains valid—managers should obliterate work that does not add value to customers, not automate it.

For the past decade Meridian has worked to make people a better, more effective part of ERP implementations and use.

Our next big commitment is to cure the ills plaguing the solid concepts underpinning Business Process Re-engineering—to make people a better, more effective part of the BPR process.

More about how in my next posts.