Such a situation is not a rare occurrence in today’s environment. Your organisation may have the best, most ambitious mission and strategy, one that your employees, external stakeholders and the market have embraced enthusiastically. In terms of vision, your organisation is first-class. But are your day-to-day defined processes achieving the results you need? Are they optimised to deliver on key objectives? Can you measure the productivity of your workforce? Or are your processes consuming unnecessary valuable time and resources on a daily basis? The fact is that in many organisations there is minimal process knowledge; specifically, in regard to any particular process, organisations can struggle to answer seemingly simple questions such as:
- What are our processes?
- Who performs the activities?
- When are key tasks done and are there process latencies?
- Why is a process performed?
- Who is the customer (internal and/or external) and how are they using its output?
- Where is the data/input coming from to support the process, and what happens if this information arrives late or is wrong?
- Who are the process owners and is the documentation current to support training and/or audit activities?
Jay Thompson, Managing Director and Global Head of Managed Business Services for Protiviti, sums up the challenges faced by many organisations: “Many don’t have a full operational understanding or don’t know where their documentation is. They may not know who owns the process and the only time it is being touched is when the auditors show up. Then they often scramble to find answers and make improvements.”
There is a solution — one that emphasises the need for organisations to reorient their operations strategy. Doing so requires a focus on processes — perhaps through forming an operational process center of excellence, considering and possibly leveraging alternative labor sources, and deploying technologies and digital workflows that automate and boost process intelligence.
Why is process inefficiency such an issue?
At first glance, inefficient internal processes may not seem significant because the costs are hidden. But the costs are often material, and an efficient and effective organisation is crucial to drive innovation and growth.
Among the issues created by a lack of process knowledge and efficiency are:
- Increased time and costs — Leaders and teams may spend valuable time on inefficient, manual investigations and corrections, rather than more important value-add activities. According to the American Productivity & Quality Center (APQC), each employee spends, on average, six hours per week creating workarounds, recreating processes and performing busy work.
- Increased concentration risk among key employees — If one or a small number of employees are responsible for a key process and the knowledge for that process resides solely with them (i.e., “in their heads”), there is significant risk of that process suffering should those people leave the organisation — consider current market trends related to the “great resignation” — or be away for a substantial amount of time. In addition, some employees may become disengaged as a result of spending significant time supporting inefficient processes (see “Less innovation” point below). According to the Journal of Organisational Behavior, less cognitively complex jobs tend to promote more knowledge hoarding due to the threat of being replaced by someone else or automation.
- Difficulty for new or interim resources to become productive — Without clear, consistent guidance, it is very difficult for new resources (either employees or interim) to become productive, which leads to slow and inconsistent process operations. According to the APQC, each employee spends 8.2 hours per week seeking expertise, looking for or requesting information, recreating information that already exists elsewhere in the organisation, or providing duplicate information.
- Lack of technology support/flexibility when circumstances change — According to results from the 2020 Forrester Digital Process Automation survey, when the COVID-19 pandemic forced a massive shift to remote work, two out of three companies reported their processes either could not support the remote environment or could do so only partially. Most organisations have responded but most likely not in an optimal fashion.
- Less innovation — Time spent on inefficient processes means less time devoted to thinking about and executing on bigger strategic projects, as well as less time exploring opportunities to innovate. It is these latter areas that drive higher employee engagement and satisfaction levels. Innovating is how you drive top-line growth.
These points are especially noteworthy as more organisations pursue business or digital transformation and innovation. A common complaint among leaders is that more progress is not achieved more quickly. In most cases, a lack of focus and attention is not the issue — numerous studies, including several conducted by Protiviti, show that transformation and innovation rank among the top priorities for executives. And it almost certainly is not about money, with organisations continuing to make significant capital investments in support of innovation and transformation. Rather, the issue frequently is process inefficiency coupled with a lack of process excellence.
So the key question becomes, “How do we improve our processes?”
First, change the mindset
Process performance cannot be tracked without a real-time, comprehensive understanding of each activity and how processes must operate together to create a more productive whole. Most process owners — working in siloes and focusing on one or more specific areas — lack a broad view of the overall business and an understanding of how process improvement techniques and digital tools can identify and eliminate waste, accelerate production, and increase accuracy. Even when documented, siloed processes become outdated as changes occur to align with business demands. Companies suffer the resulting increased costs, performance issues and decreased innovation.
The key is aligning processes and operations with strategy. At any given point in time, there must be a transparent, clear and pervasive understanding of current processes and how they play into achieving the overall business strategy. This requires a mindset focused on democratising knowledge across the company, and this means that a business must enable its individual process owners to pivot on operations so they can align with strategy.
Process owners who are enabled to contribute to transparency by making recommendations to (and, by proxy, documenting) process improvements are able to support the strategy. Automatically chiseling and refining processes to accommodate business changes must be continuous and a part of the fabric of the organisation rather than a once-a-year administrative burden.