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1
Managing Business Processes and Change DRIVING SUCCESSFUL BUSINESS TRANSFORMATION AND IMPROVEMENT INITIATIVES
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
2
© Imre Hegedus Consulting – All Rights Reserved
3
BPM Perspectives: from Philosophy to Culture
BPM Perspectives Collective Wisdom “this is how we do things”
World View “this is how we see things”
Philosophy
Discipline
Practice
Culture
Theories Concepts
Frameworks Systems
Methodologies Structures
Values Behaviours
Technologies and Structures
Source: BPM – Insights and Practices for Sustained Transformation
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
4
Process focus enabled by a Philosophy and Culture
”Brilliant process management is our strategy. We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes”
Mr. Cho Vice Chairman of Toyota
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
5
Emerging Themes in BPM
The Enterprise as a Dynamic System
Enterprise (Business) Architecture
Executive Engagement
Continuous Improvement
BPM and BPI
Business Excellence
Governance
Technology - Discipline - Culture
The Cloud – Methods - Collaboration
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
CONSULTING
Improving Performance Managing the Enterprise as a Dynamic System Imre Hegedus Ark Group BPM Connected Forum | MELBOURNE 2011
7
“Traditional” BPM focuses on relatively narrow perspectives of enterprise system elements
BPM Maturity
the maturity of an enterprise to manage and improve it’s business processes
BPM Suites
the technologies enabling the BPM lifecycle
Process Governance
structures and roles to ensure the ongoing and integrated management of enterprise processes
Process Improvement
methods to improve specific business processes through rational and deficit-base analyses
People, Change, and Culture are referred to in ing
Learning is rarely ever mentioned!
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
8
Sustainable Performance Improvement requires a focus on broader enterprise system elements
Integrating BPM and BPI
Selecting and sustaining improvement initiatives through BPM and Systems Thinking
Enterprise Lifecycles
Enterprise lifecycle stages inform the approach for managing processes and change
Engaged People
relationship-based positive inquiry to complement the rational deficit-based analysis
Cultural Awareness
appreciation for the culture being changed and that which being being strived for
Learning to improve performance
a system of learning as a means and a by-product of performance improvement
Effective Visual Communication
Using diagrams and graphics to effectively communicate messages succinctly
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
9
The Enterprise as a Dynamic System
©erved Business Agility | Process-Driven Transformation
© Imre Hegedus Consulting – All Rights Reserved
10
Enterprise Perspectives: Functional and Process Models Functional Model
Process Model Australia Post Directing Plan Market
Customer
Activation
Fulfill
Service
Core
Enabling Manage Finance Manage People Manage Information Communications Technology Manage Assets and Services
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
11
Enterprise Perspectives: Systems Models Process-centric Systems Model
Dynamic Systems Model
Environment Strategy
D irect ing Processes
Change & Control Processes
Resourcing Processes
Planning Processes
Value Realisation
Monitoring Processes Structures
Suppliers Suppliers
Technology
Process
Customers
Inputs
O utputs
Core Processes
Supplier s
Results Enterprise
Value Realisation
Customers Customers
People
Supplier Partnership
Customer Relationship
System Culture
Values
Enabling Processes
The system m ap distinguishes between the core transactional processes that deliver outputs to the custom er and two distinct type of ing processes. •
Enabling processes assure the provision of the infrastructure and operational required for the core process to operate
•
Directing processes are the m eans by which the core process m aintains relevance and effectiveness.
Most organizations have well developed enabling processes, which typically encom “shared services” as well as function specifi c processes such as equipm ent m aintenance and certifi cation. However, it is also the case that most organizations directing processes tend towards the unstructured and ad hoc - ex cept for the centre piece of budgeting, which is the m ost comm on name for the “resourcing processes” in the diagram. Critically, the m onitoring processes should look both outside to the environment as well as to Improving Performance Forum 2011 - MELBOURNE custom er , and also| BPM internally to indicators of core and enabling process perform ance. This monitoring should be synthesized by planning processes into inputs to the resourcing
© Imre Hegedus Consulting – All Rights Reserved
12
Enterprise Perspectives: In Practice Organisation Chart
Logo – and meaning… This touches the Ethics Centre's conception of its role, which includes fostering and ing practical change while not losing touch with the deeper springs of human consciousness and identity. The alchemist's approach reflects the Ethics Centre's understanding that there is a universal ethical sense and, properly understood, there is a shared set of values which informs most people most of the time. At the same time, the focus on process is important. Only an appropriate process offers the possibility that a transformation in thinking and understanding might occur.
Each sign relates to a process, and together these encapsulate St James Ethics Centre's core characteristics:
Source: http://www.ethics.org.au/content/ethics-centre-organisational-chart
•
An appreciation of the past combined with an orientation to the future
•
Practical assistance based on sound theoretical principles
•
An approach which is gentle in nature
•
An approach which is non-judgemental
The strength of a good symbol is that many meanings lie hidden for future discovery… Source: http://www.ethics.org.au/content/st-james-ethics-centres-logo
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
13
Improving Performance
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
14
This report brings together a unique set of disciplines, concepts, and case study experiences in one reference. The authors are all: 1. seasoned professionals ensuring real-world relevance and insight 2. thought leaders in their chosen field ensuring a strong research-base to the content 3. consultants who apply and refine their knowledge and experience across all industry sectors ensuring relevance to a broad audience
Contributing Authors
Robert Lamb: Sustained Improvement
Malini Jayaganesh: Culture
Kimberly dela Cruz Odom: Change and Organisational Lifecycle Stages
Jane Kovacs and Michael King: Quality Learning
Jeremy Scrivens: Appreciative Inquiry
Graham Johnson: Effective Visual Communication
Improving Performance | BPM Forum 2011 - MELBOURNE
2012 INDUSTRY REPORT
Improving Performance: Managing the Enterprise as a Dynamic System
© Imre Hegedus Consulting – All Rights Reserved
15
Improvement through Systems Thinking
Deming’s System of Profound Knowledge
Systems: optimising the performance of a particular process will sub-optimise the whole system if not viewed in that context Variation: All processes exhibit variation. Ensure processes are stable before seeking to improve their capability Knowledge: “Facts” are mediated by theories and world views. Develop your own theory for improvement and continually validate it Psychology: Processes operate in a human context – not always rational. Focus on intrinsic motivations rather than extrinsic motivators
Appreciation for a System
Knowledge about Variation
System of Profound Knowledge
Theory of Knowledge
Psychology
Adapted from: Deming (1993)
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
16
Culture is both a function of and an influence on your enterprise Cultural Archetype Study
Culture is an outcome
Japan
Strategy
Perfection
Results Enterprise
Value Realisation
Value Realisation
America Structures
It works (better than before) Suppliers Suppliers
Customers Customers
People
Luxury
Technology
Process
Supplier Partnership
Customer Relationship
System Culture
Values
Adherence to specification
Australia
Relationship
Implications
Heroes respected over process Changes must engage employees A good recovery is often better than getting it right first time! See heroes…
Improving Performance | BPM Forum 2011 - MELBOURNE
We all agree that ‘people’ are central to the effective management and improvement of our business processes and yet we tend to focus on the more technical aspects of the discipline!
© Imre Hegedus Consulting – All Rights Reserved
17
Change Principles underpin sustainable improvement
Adopt and adapt a Change Process
Sustainable change is linked to an enterprises capability to learn A systems-thinking perspective is key to planning and implementing sustainable change Develop a transformation program based on sound change management principles combined with tailored methods and a pace specific to your enterprise context
Adapted from: Kotter (1996)
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
18
The Enterprise Lifecycle informs the BPM Strategy
Enterprise Lifecycle and process change
All enterprises go through lifecycle phases Process Maturity is related to the lifecycle stage of an enterprise The Process Improvement and Management interventions are best tailored to suit the stage of the enterprise as well as the intent of the intervention Enterprise Transformation Programs seek to create a new lifecycle curve more than just prolong the existing one
Late Prime
The Fall
Early Prime
Aristocracy
Adolescence
Salem City
Go-Go
Bureaucracy BPM
Infancy BPI
BPT
Death
Courtship
Growing
Aging Adapted from: Adizes (2004)
BPI: Business Process Improvement BPM: Business Process Management BPT: Business Process Transformation
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
19
Learning to Improve Performance
Learning in a hierarchical enterprise
Performance Improvement occurs in an environment where employees are empowered to learn Learning and improvement are inherent characteristics of humans – consider the enterprise elements constraining performance An effective framework for performance improvement is the System of Profound Knowledge
Management
Employer
Leadership
DO TO
DO FOR
DO WITH
ENABLE
Master
All Knowing Provider
Coach
Facilitator and Mentor
Intrinsic Motivation
Extrinsic Motivation Slave
Controlled
ive Recipient
Learning Participant
Employee
Active Self-starting Learner
Empowered Adapted from: Langford (2009) and QLA (2011)
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
20
Engagement through Appreciative Inquiry
Comparison of traditional improvement approaches and Appreciative Inquiry Traditional Exit Interview – why are you leaving?
Appreciative Inquiry
+
Why are you staying and what have been your best experiences working here?
Deficit-based Analysis (rational)
Strengths-based Inquiry (emotional)
Define the Problem
Select a positive topic
Analyse what is not working well (gaps)
Look for positive experience - stories
Analyse the problem
Identify what works
Fix weaknesses and close gaps
Align strengths making weaknesses irrelevant Adapted from: Scrivens (2011)
Reactive Technical Fix
Proactive Adaptive Growth
People embrace change that they are part of creating – any Transformation Roap should engage people rationally and emotionally allowing them to take forward the best of the past
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
21
Effective Visual Communication – Simplicity is the Ultimate Complexity Visualise your enterprise
Your audience must understand your message – strive for the simplicity on the other side of complexity Presentation of content is not merely a matter of “aesthetics” – it impacts effectiveness Some Industry Standard notations can inhibit communication effectiveness Have multiple representations of your message for your various audiences Broaden your message beyond the discipline or topic (ie. BPM or processes) to the value that your message has for your audience
Business Agility | Process-Driven Transformation
Customers
Customers Business
E-Banking
Customers
Branch Site
International Bank
ATM
Internal Employees
Customers
Home Mtg LOB
Commercial Finance LOB
Government Oversight
ATM
3rd Party Services
Services LOB
Commercial Customers
3rd Party Services
Branch Site
Payment Service Providers
Outsourced service providers
Underwriting Legal Services Mortgage providers
© 2011 IBM Corporation
© Imre Hegedus Consulting – All Rights Reserved
22
The Enterprise is a Dynamic System…
Strategy
Results Enterprise
Value Realisation
Value Realisation
Structures
Suppliers Suppliers
Technology
Process
Customers Customers
People
Supplier Partnership
Customer Relationship
System Culture
Improving Performance | BPM Forum 2011 - MELBOURNE
Values
© Imre Hegedus Consulting – All Rights Reserved
Managing Business Processes and Change DRIVING SUCCESSFUL BUSINESS TRANSFORMATION AND IMPROVEMENT INITIATIVES
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
2
© Imre Hegedus Consulting – All Rights Reserved
3
BPM Perspectives: from Philosophy to Culture
BPM Perspectives Collective Wisdom “this is how we do things”
World View “this is how we see things”
Philosophy
Discipline
Practice
Culture
Theories Concepts
Frameworks Systems
Methodologies Structures
Values Behaviours
Technologies and Structures
Source: BPM – Insights and Practices for Sustained Transformation
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
4
Process focus enabled by a Philosophy and Culture
”Brilliant process management is our strategy. We get brilliant results from average people managing brilliant processes. We observe that our competitors often get average (or worse) results from brilliant people managing broken processes”
Mr. Cho Vice Chairman of Toyota
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
5
Emerging Themes in BPM
The Enterprise as a Dynamic System
Enterprise (Business) Architecture
Executive Engagement
Continuous Improvement
BPM and BPI
Business Excellence
Governance
Technology - Discipline - Culture
The Cloud – Methods - Collaboration
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
CONSULTING
Improving Performance Managing the Enterprise as a Dynamic System Imre Hegedus Ark Group BPM Connected Forum | MELBOURNE 2011
7
“Traditional” BPM focuses on relatively narrow perspectives of enterprise system elements
BPM Maturity
the maturity of an enterprise to manage and improve it’s business processes
BPM Suites
the technologies enabling the BPM lifecycle
Process Governance
structures and roles to ensure the ongoing and integrated management of enterprise processes
Process Improvement
methods to improve specific business processes through rational and deficit-base analyses
People, Change, and Culture are referred to in ing
Learning is rarely ever mentioned!
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
8
Sustainable Performance Improvement requires a focus on broader enterprise system elements
Integrating BPM and BPI
Selecting and sustaining improvement initiatives through BPM and Systems Thinking
Enterprise Lifecycles
Enterprise lifecycle stages inform the approach for managing processes and change
Engaged People
relationship-based positive inquiry to complement the rational deficit-based analysis
Cultural Awareness
appreciation for the culture being changed and that which being being strived for
Learning to improve performance
a system of learning as a means and a by-product of performance improvement
Effective Visual Communication
Using diagrams and graphics to effectively communicate messages succinctly
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
9
The Enterprise as a Dynamic System
©erved Business Agility | Process-Driven Transformation
© Imre Hegedus Consulting – All Rights Reserved
10
Enterprise Perspectives: Functional and Process Models Functional Model
Process Model Australia Post Directing Plan Market
Customer
Activation
Fulfill
Service
Core
Enabling Manage Finance Manage People Manage Information Communications Technology Manage Assets and Services
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
11
Enterprise Perspectives: Systems Models Process-centric Systems Model
Dynamic Systems Model
Environment Strategy
D irect ing Processes
Change & Control Processes
Resourcing Processes
Planning Processes
Value Realisation
Monitoring Processes Structures
Suppliers Suppliers
Technology
Process
Customers
Inputs
O utputs
Core Processes
Supplier s
Results Enterprise
Value Realisation
Customers Customers
People
Supplier Partnership
Customer Relationship
System Culture
Values
Enabling Processes
The system m ap distinguishes between the core transactional processes that deliver outputs to the custom er and two distinct type of ing processes. •
Enabling processes assure the provision of the infrastructure and operational required for the core process to operate
•
Directing processes are the m eans by which the core process m aintains relevance and effectiveness.
Most organizations have well developed enabling processes, which typically encom “shared services” as well as function specifi c processes such as equipm ent m aintenance and certifi cation. However, it is also the case that most organizations directing processes tend towards the unstructured and ad hoc - ex cept for the centre piece of budgeting, which is the m ost comm on name for the “resourcing processes” in the diagram. Critically, the m onitoring processes should look both outside to the environment as well as to Improving Performance Forum 2011 - MELBOURNE custom er , and also| BPM internally to indicators of core and enabling process perform ance. This monitoring should be synthesized by planning processes into inputs to the resourcing
© Imre Hegedus Consulting – All Rights Reserved
12
Enterprise Perspectives: In Practice Organisation Chart
Logo – and meaning… This touches the Ethics Centre's conception of its role, which includes fostering and ing practical change while not losing touch with the deeper springs of human consciousness and identity. The alchemist's approach reflects the Ethics Centre's understanding that there is a universal ethical sense and, properly understood, there is a shared set of values which informs most people most of the time. At the same time, the focus on process is important. Only an appropriate process offers the possibility that a transformation in thinking and understanding might occur.
Each sign relates to a process, and together these encapsulate St James Ethics Centre's core characteristics:
Source: http://www.ethics.org.au/content/ethics-centre-organisational-chart
•
An appreciation of the past combined with an orientation to the future
•
Practical assistance based on sound theoretical principles
•
An approach which is gentle in nature
•
An approach which is non-judgemental
The strength of a good symbol is that many meanings lie hidden for future discovery… Source: http://www.ethics.org.au/content/st-james-ethics-centres-logo
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
13
Improving Performance
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
14
This report brings together a unique set of disciplines, concepts, and case study experiences in one reference. The authors are all: 1. seasoned professionals ensuring real-world relevance and insight 2. thought leaders in their chosen field ensuring a strong research-base to the content 3. consultants who apply and refine their knowledge and experience across all industry sectors ensuring relevance to a broad audience
Contributing Authors
Robert Lamb: Sustained Improvement
Malini Jayaganesh: Culture
Kimberly dela Cruz Odom: Change and Organisational Lifecycle Stages
Jane Kovacs and Michael King: Quality Learning
Jeremy Scrivens: Appreciative Inquiry
Graham Johnson: Effective Visual Communication
Improving Performance | BPM Forum 2011 - MELBOURNE
2012 INDUSTRY REPORT
Improving Performance: Managing the Enterprise as a Dynamic System
© Imre Hegedus Consulting – All Rights Reserved
15
Improvement through Systems Thinking
Deming’s System of Profound Knowledge
Systems: optimising the performance of a particular process will sub-optimise the whole system if not viewed in that context Variation: All processes exhibit variation. Ensure processes are stable before seeking to improve their capability Knowledge: “Facts” are mediated by theories and world views. Develop your own theory for improvement and continually validate it Psychology: Processes operate in a human context – not always rational. Focus on intrinsic motivations rather than extrinsic motivators
Appreciation for a System
Knowledge about Variation
System of Profound Knowledge
Theory of Knowledge
Psychology
Adapted from: Deming (1993)
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
16
Culture is both a function of and an influence on your enterprise Cultural Archetype Study
Culture is an outcome
Japan
Strategy
Perfection
Results Enterprise
Value Realisation
Value Realisation
America Structures
It works (better than before) Suppliers Suppliers
Customers Customers
People
Luxury
Technology
Process
Supplier Partnership
Customer Relationship
System Culture
Values
Adherence to specification
Australia
Relationship
Implications
Heroes respected over process Changes must engage employees A good recovery is often better than getting it right first time! See heroes…
Improving Performance | BPM Forum 2011 - MELBOURNE
We all agree that ‘people’ are central to the effective management and improvement of our business processes and yet we tend to focus on the more technical aspects of the discipline!
© Imre Hegedus Consulting – All Rights Reserved
17
Change Principles underpin sustainable improvement
Adopt and adapt a Change Process
Sustainable change is linked to an enterprises capability to learn A systems-thinking perspective is key to planning and implementing sustainable change Develop a transformation program based on sound change management principles combined with tailored methods and a pace specific to your enterprise context
Adapted from: Kotter (1996)
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
18
The Enterprise Lifecycle informs the BPM Strategy
Enterprise Lifecycle and process change
All enterprises go through lifecycle phases Process Maturity is related to the lifecycle stage of an enterprise The Process Improvement and Management interventions are best tailored to suit the stage of the enterprise as well as the intent of the intervention Enterprise Transformation Programs seek to create a new lifecycle curve more than just prolong the existing one
Late Prime
The Fall
Early Prime
Aristocracy
Adolescence
Salem City
Go-Go
Bureaucracy BPM
Infancy BPI
BPT
Death
Courtship
Growing
Aging Adapted from: Adizes (2004)
BPI: Business Process Improvement BPM: Business Process Management BPT: Business Process Transformation
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
19
Learning to Improve Performance
Learning in a hierarchical enterprise
Performance Improvement occurs in an environment where employees are empowered to learn Learning and improvement are inherent characteristics of humans – consider the enterprise elements constraining performance An effective framework for performance improvement is the System of Profound Knowledge
Management
Employer
Leadership
DO TO
DO FOR
DO WITH
ENABLE
Master
All Knowing Provider
Coach
Facilitator and Mentor
Intrinsic Motivation
Extrinsic Motivation Slave
Controlled
ive Recipient
Learning Participant
Employee
Active Self-starting Learner
Empowered Adapted from: Langford (2009) and QLA (2011)
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
20
Engagement through Appreciative Inquiry
Comparison of traditional improvement approaches and Appreciative Inquiry Traditional Exit Interview – why are you leaving?
Appreciative Inquiry
+
Why are you staying and what have been your best experiences working here?
Deficit-based Analysis (rational)
Strengths-based Inquiry (emotional)
Define the Problem
Select a positive topic
Analyse what is not working well (gaps)
Look for positive experience - stories
Analyse the problem
Identify what works
Fix weaknesses and close gaps
Align strengths making weaknesses irrelevant Adapted from: Scrivens (2011)
Reactive Technical Fix
Proactive Adaptive Growth
People embrace change that they are part of creating – any Transformation Roap should engage people rationally and emotionally allowing them to take forward the best of the past
Improving Performance | BPM Forum 2011 - MELBOURNE
© Imre Hegedus Consulting – All Rights Reserved
21
Effective Visual Communication – Simplicity is the Ultimate Complexity Visualise your enterprise
Your audience must understand your message – strive for the simplicity on the other side of complexity Presentation of content is not merely a matter of “aesthetics” – it impacts effectiveness Some Industry Standard notations can inhibit communication effectiveness Have multiple representations of your message for your various audiences Broaden your message beyond the discipline or topic (ie. BPM or processes) to the value that your message has for your audience
Business Agility | Process-Driven Transformation
Customers
Customers Business
E-Banking
Customers
Branch Site
International Bank
ATM
Internal Employees
Customers
Home Mtg LOB
Commercial Finance LOB
Government Oversight
ATM
3rd Party Services
Services LOB
Commercial Customers
3rd Party Services
Branch Site
Payment Service Providers
Outsourced service providers
Underwriting Legal Services Mortgage providers
© 2011 IBM Corporation
© Imre Hegedus Consulting – All Rights Reserved
22
The Enterprise is a Dynamic System…
Strategy
Results Enterprise
Value Realisation
Value Realisation
Structures
Suppliers Suppliers
Technology
Process
Customers Customers
People
Supplier Partnership
Customer Relationship
System Culture
Improving Performance | BPM Forum 2011 - MELBOURNE
Values
© Imre Hegedus Consulting – All Rights Reserved
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