Old approaches to business process management are failing companies

We all know that companies of all sizes are facing tough economic challenges at the moment. These challenges are coming from one of the toughest directions possible: customers are not spending money, making it more important than ever to convert the few available prospects into profitable customers. Improving business processes is a powerful way for companies to work better, but the old business process management (BPM) approaches companies often rely on just don't fit the current challenges.

Companies invest in business process management from two direction:

• methodology - the way a company can fix its problems
• technology - applications helping people work in a more structured way

The reasons for doing this were all reasonable in an economy with plenty customers with cash in their pockets:

• reduce headcount
• do more work with the same resources
• improve the quality of a product or service

In the current economy, these types of improvement are not enough. Whether a company is a bank, a manufacturer or a law firm, the challenges facing the business is that the economy is making it harder to attract new customers and retain them.

This is where modern business process management solutions kick in. First, they offer a faster startup time with more focused analysis of problems, which means less money is spent on teams of expensive consultants trying to build strategies for things that don't matter. Second, the solutions offered already include a range of business templates, helping companies to build to a tried and trusted plan rather than always reinventing the wheel. Finally, and possibly most importantly, the methodology focuses on iterative improvement, rather than trying to get every little thing right first time. When the tools are designed to adapt to this types of constant change, the company can improve based on experience rather than luck.

With this lightweight approach to business process improvement, the flexibility to change processes based on experience and best-practices allows companies to do something that in the past was really difficult: 

• treat each customer as an individual rather than force fitting them into a standard model of a customer
• allow the processes that serve customers to extend and adapt based on circumstances
• help the business owners introduce new improved processes rapidly and with minimal cost

Business process management can help companies meet the challenges of the current economy. Companies that adopt new methodologies and technologies can become known for great customer service at a good price. In these times when social media is the marketing machine, and word of mouth spreads corporate reputation like wildfire, companies can attract and retain more customers than ever before.

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Lean + BPM = no big surprise

As I have been working more with process improvement professionals that practice lean methodologies, I thought I would put down my thoughts on what 'lean' means to the office / services companies that are typically customers of business process management (BPM) tools. I'm sure for anyone involved in 'lean' already this will sound like a very rudimentary definition; for that I apologize. This is really an attempt to try and communicate the value of applying lean manufacturing techniques to BPM projects, for customers that have not yet delved into one or the other. To me it seems that the combination of lean and BPM is really nothing new.

Lean Production / Lean Manufacturing has been refined by manufacturing companies, building on decades of experience running ever more efficient production-lines. Without the constraints of a physical production-line, office and services businesses often struggle with improving their business processes, typically falling into the trap of deploying ever more complex enterprise software. The benefits of lean methodologies can be experienced by businesses without a huge software investment and lengthy implementation projects; of course, a solution is required to help guide work as it flows between the activities performed by different people in an end-to-end business process.

As some vendors start marketing the benefits of Lean Business Process Management (Lean-BPM), it is important to remember that the design of new and improved processes with BPM and workflow tools has always incorporated aspects of lean methodologies:

Remove waste from the process

• convert manual delivery of paper documents to automated delivery of electronic work cases
• prevent repetitive email of requests lacking appropriate information to template work requests guiding the entry of all information
• handle manual allocation of work by supervisors to team members automatically, allowing supervisors to focus on delivering value as experts rather than task-masters
• reduce the time-lag between activities especially for priority work, by instantaneous delivery of work to the next available person in the process, allowing a critical series of activities to be completed faster
• remove the need for rework by implementing solutions that guide people to completing their tasks correctly first time, also improving quality of the work product and customer perception

Continuous improvement

• provide the capability to measure the performance of processes with real business metrics
• identify issues and areas of waste in a business process with easily reviewed information
• allow business users and analysts to make changes to a process without burdening IT or requiring software development skills

Lean-BPM is a marketing term, not a standalone methodology. A company almost certainly needs software to help improve an office- or services-based business process. If you follow the advice of experienced lean practitioners you will avoid committing to over-complex BPM and enterprise software tools and their extensive software projects at the outset, until you have a better idea of whether they will offer real business value to your to-be processes.

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Lean methodologies and employee development

I've been chatting with some of the experts in the field of Lean methodologies, leadership development and change mangement, to understand the relationship between Lean & Agile methodologies and employee development. I'm trying to understand if there truly is a relationship between Lean, the development of software to improve processes with agile methodologies such as Scrum, and enabling people to perform (as individuals, managers and in teams) better through employee development, or if the the only training and experience Lean wants to give employees is how to implement Lean better.

[Feb 25, 2010 - I just added a related video at the end of this post - short and to the point. Thanks to Mike Leamon for this.]

As I look at various sources of information on Lean, especially comparing it to the Toyota Production System, it seems to me that despite all the talk about the importance of teamwork, respect for opinions, and development of specialists, the process improvement methodologies actually ignore a large part of what can make organizations better - employee development. In so many examples I have read, the training side of a Lean project is not about making people better employees, better teamworkers, better leaders; it becomes assumed that through indoctrination in the Lean way, you will do these things naturally. There must be a thousand attributes of how people could be enabled to work better, without improvement of their processes, that Lean must miss.

Please don't get me wrong - I believe Lean is a powerful methodologies for making processes operate better and Agile is a powerful methodology for implementing software to further assist in the transformation. But Lean is not intended to be a completely holistic program for change in an organization. Therefore there is a distinct chunk of business improvement that is being missed by not addressing the performance and traits of employees and leaders outside of (or maybe it is alongside) the process. Is this a perception industry? Do people care about employee development, or are they just workers in a process that we can swap in and out at will?

Your thoughts and comments are much appreciated...

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