doubling-down to develop people and processes

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Doubling-Down to Develop People and Processes

You want to your business to be more productiveYou need your business processes be streamlined and run more reliably

You want your employees to be more engaged and service your customers better

Identify whether you should invest in developing people, processes, or both

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Doubling-Down to Develop People and ProcessesIt is a sunny Wednesday morning and you are raising your freshly brewed cup of coffee to your lips. Your department supervisors' weekly reports are on your desk, showing a healthy up-tick in productivity, and the office managers have celebrated winning their appeal to source only recycled paper for the photocopiers with an office-wide email. Corporate life is not so bad. And the coffee smells amazing.

You hear a knock-knock sound come from your open office door. You look round your raised cup of coffee to see David, your boss, a man not known for his quiet composure looking more agitated than usual. Before you get a moment to speak, your reverie of fresh coffee and organizational clockwork races to hide under your desk in the tangle of network cables. David speaks:

I was reading “ <insert favorite executive journal name here> on my ride to the office, and I think we need to be more like the best companies in the world. We need to run our processes like GE and train our people like FedEx. That way we'll beat our competition into the ground. . ”

David steps away from the doorway, then pauses just long enough to look you in the eye and say, Let me“ know your plan by Friday morning . ”

Betting on Business ImprovementWhen making investments in business improvement to make company operations better, cheaper and faster, there are two common strategies, as David hinted:

1) employ leadership and organizational development to get the best out of people2) refine and automate business processes to achieve efficiency and quality with the skills you have

Most organizations know that focusing on one approach or other can help them meet many of their productivity or efficiency goals. Most of the organizations that have taken the leap to betting on both approaches simultaneously are renowned for their quality product design and manufacturing excellence.





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There are not so many examples of services companies that take the chance to double-down when investing in their business improvement. But David may not be far ahead of his competition in realizing that the payback can be enormous. When we look a little deeper, it also becomes apparent that unlike Blackjack, where the double-down term originates, the overall risk of failure is actually reduced when a company takes a holistic view. Before we look at the companies that have succeeded with a strategy of people and process development, we should look at whether each approach is right for your specific company.

No More 'Touchy-Feely' HRThe terms 'leadership and organizational development' and 'business process improvement' can have different meanings depending on who you are talking to, so let's make sure we don't leave anything to chance and clarify what we mean in this discussion.

Business improvement through leadership and organizational development is used by companies with a long history investing in the performance of their employees, and is the domain of organizational development consulting firms that help them formalize training programs specific to their needs. A widely reported example of a company that does this well is FedEx, with detailed development plans and certifications for every employee and strong leadership development. Companies like FedEx invest deeply in proven employee engagement methodologies, consisting of components such as:

• employee certif ications to identify areas for personal improvement• employee surveys to identify issues that need to be addressed at an organizational level• employee development and training based on current roles and a need to grow• leadership development to help managers work better with their peers and direct reports

Surprisingly, this is rarely about 'touchy-feely' HR issues. Organizational development from the top consulting firms relies on rigorous methodologies, organizational psychology, and an almost scientific approach to measurement and action, making it hard to argue with the results. The development programs are often tied back to measurable business metrics that show a direct correlation between improved





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employee engagement, customer service quality, product quality and overall company performance.

See What You Are FixingThe second approach to business improvement, by directly modifying business processes is the approach taken by manufacturing production-lines worldwide, and emulated in office environments with business process management (often referred to as BPM) tools. The process improvement approach builds on the tangible concepts that businesses will operate better if they:

• run using streamlined processes that weed out wasteful activities• reduce the t ime-lag between activities• use employees where they offer most value and automate the rest• implement changes that reduce errors to prevent the need for rework

This approach, which sounds like common-sense, is given structure by the Lean methodologies, including: Lean Manufacturing, focusing on removing waste; Lean Dynamics, focusing on removing lag between activities. Six Sigma takes the process improvement to another level of rigor that most practitioners would agree is not a good place for organizations to start their process improvement experience. In an office / services environment, a business process is typically the flow of activities that must occur to service a transaction, a customer request, or create some other work product. Without the physical constraints of a manufacturing production-line, the design of a better process in an office environment is typically coupled with software tools for managing the minute-by-minute flow of work between employees, with it landing on their desks in specific PC-based applications.

Know the Team PlayersWhat style of organization benefits most from leadership and organizational development? If we look at the profile of companies the organizational development consultants are marketing to, we'll get a good idea of the profile of customers that are most likely to benefit from their methodologies:





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• services or product organizations...• that have regular communications with customers through delivery, sales or customer services

channels...• where a level of engagement, innovation and intelligence is required by employees...• the activities performed are core to the company's business...• and the operations can not be automated or outsourced while retaining the expected level of quality

or customer service.

So it seems, our FedEx example was a good one. Others good fits are research companies like 3M, Proctor and Gamble and WL Gore, since employee engagement is core to their product innovation. Then there are the companies renowned to top customer service, like Four Seasons Hotels. We know these names for a reason, and we accept that they excel at what they do. Imagine what our collective opinions would be of these companies if their employee development followed more of a 'hire and hope' strategy.

Know Who Keeps Things Ticking Like ClockworkInterestingly, it is rare for companies outside of the product manufacturing space to be credited with having achieved process excellence. When we try and think of names, we always end up with Motorola, GE and Toyota. After a little research we come up with companies that had to excel at automation to succeed, for example: Amazon.com, for the level of automation it takes to actually exist; Bank of America, which in the financial services space does a better job than many at applying technology to common business process problems; Toyota (again), since it applies the extremely lean Toyota Production System to everything it does, not just manufacturing.

The reality is that process improvement in office environments is not a new concept, although away from production-lines it has only recently been applied in a consistent enough manner for its methodologies, such as business process management to be recognized.





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Oil and Water Don't MixThink again about the two approaches, one focused largely on how people act, and the other focused exclusively on what they do. Remember the distinct profiles of the companies that have benefited from them. With all this context, is it possible to envisage how employee development and process improvement could ever be used together?

I have worked with a range of companies and government agencies, and all of them wanted to improve the way their employees worked through the introduction of some repeatable business processes. The aim was for them to finally put some structure around the best practices their most seasoned workers had been refining (often only to make their own working lives easier) during years of service. The organizations wanted to capture the experience and efficiencies of the best people, to benefit all the employees working in the process, and quite frankly because they recognized that one day those experienced employees would retire, leave to raise children, or get an offer from a competitive employer that they just couldn't match.

Why did these organizations select the automated management of their business processes, when they could have just as easily picked to develop the skills of the many involved employees directly? Three reasons came back during business analysis:

1) The opportunity to make cost savings by reducing or reallocating employees2) The need to add automated control to processes to reduce errors, avoid fraud, and demonstrate

best-practices to the Chief Compliance Officer3) The belief that a business process is tangible, therefore its improvement would provide clear,

measurable benefits

Maybe we should ask ourselves if the same thing could be achieved by applying leadership and organizational development programs. In this regard, it might be possible to claim:

1) Employees equipped with skills directly related to their activities are able to work more efficiently





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2) Employees trained in the compliance requirements of their business can catch mistakes and issues that go way beyond those codified in automated software tools

3) The effects of employee performance can be observed to improve business metrics and key performance indicators as positively as process improvement

The problem is that many organizations seem to believe that this is an 'either-or' decision. Especially after seeing a success following one approach, they chase they same results in the same way, over and over. We have seen time and again companies that became dogmatic in their application of a single management principle start to lose their sparkle after a while. A single approach starts to deliver fewer benefits, and the top-down mandated application of the approach requires greater spending to achieve the desired results. It is clear that companies should consider business improvement more holistically, taking the opportunity to reinforce the gains they have with one approach with complementary components from an alternative approach.

Mixing Oil and WaterThe reality of the working world for the majority of office / services employees is that they could truly benefit from improvement both of what they do AND how they do it. Most people are not working mindlessly on tasks that need repetitive actions rather than brainpower. And the majority of office workers are not only exercising their innovation to solve brand new requirements every moment of the day. People are working on tasks that are familiar, in where they comes from, the type of output that is required and what has to happen to the task next. At the same time, these tasks can rarely be considered to be so repeatable that they are completed without any intelligent input.

Some examples may help to show how common this mix of work is:

Customer services representatives: agents responsible for working with you as a customer to solve a problem that you can't address on the company's self-service website. The agent needs the skills to communicate, understand problems, address them, and provide feedback to you in terms you can understand. If this could be automated, you would never have needed to call 'customer





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services' in the first place. Despite this, your call sits inside a workflow that may have to pass from one agent to another, to back-end systems, or require follow up with you the customer at a later time to ensure that everything is now operating as expected.

Service Technicians: mobile workers servicing or repairing equipment onsite or in customer's home. The technician is a key part of a workflow that starts with a request from a customer and appears to finish with a successful outcome a working piece of equipment. The work that the– technician does to repair or service the equipment requires intelligence and experience. The workflow continues beyond the obvious outcome, to include ordering of new parts, billing and warranties.

Insurance Claims Assessor: the person collecting the information and in large part assessing a client's insurance claim. The flow of work leads them to request, consume and follow up on a variable set of information relating to an incident. The workflow and standard set of information required for an insurance claim can be mapped into a repeatable structure, although the activities required of a claims assessor require experienced decisions and communication skills. The claims assessor's final decision is not the end of the workflow, as the claim passes to related processes for payment, subrogation and so on.

As we can see, people perform meaningful activities in end-to-end business processes. The skills of the people to do their work effectively, interacting with customers and team members is essential for major pieces of work to get done. The ability to manage a process that can extend through significant periods of time and cross organizational boundaries, without wasteful activities distracting valuable workers, is why process improvement is so complementary to employee development.

What if I don't Double-Down?There is nothing to say that investing only in process improvement or in employee development will lead you to lose. Much like the double-down analogy in Blackjack, if you win with a simple bet, you still win, just not with the same return. Unlike Blackjack, by addressing both approaches simultaneously, you may





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actually reduce the risk of losing. What do we miss out on if we shy away from a larger investment to cover process improvement and employee development? (1) You can't avoid employee training

If you make significant changes to your business process and the applications that employees must use to do their work, you have to train them to work in the new structure. Therefore there are efficiencies to be achieved in also incorporating training of best practices and behaviors into the same training program. It may actually make it easier for employees to absorb, since they can avoid the common mistake of trying and force-fit some of their old, unproductive work habits into the new process.

(2) Reducing risk is an option Any far-reaching change in an organization represents a risk, and always leads to a short term reduction in productivity. Only addressing one side of a business improvement program leaves the possibility that you will see far less than half of your expected returns due to an unforseen roadblock on the side you chose to ignore. Taking a holistic approach allows a greater likelihood of success.

(3) Improving eff iciency but not at the cost of quality Out poster child, Toyota has unfortunately shown us that despite incredibly efficient processes and design practices that weed out waste at every opportunity, it is the intelligent handling of situations that require the development of employee skills that can not be automated. If you do not develop employees to think outside the production-line, you may miss opportunities for additional improvement in quality of the product or service delivered to your customer.

A Proven SystemYou may ask, how do we know that combining approaches works, or that not combining them may lead to missed opportunities? Some more commonly reported examples may help.





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One example for us to consider is 3M, for what happens when organizations pick just one option and chase it to its extreme. Studies have suggested that the unrelenting pursuit of Six Sigma in the research areas actually hindered innovation. Six Sigma, as a process improvement methodology is extremely heavyweight, and is not a good fit for every type of organization. As such, 3M demonstrates the risk of betting heavily on just one approach to improving a business, even if it has been a resounding success elsewhere.

We are unlikely to find well publicized examples of employee development causing an organization to actually decrease performance. Increasing employee engagement is likely to be positive whenever applied. That said, if we consider an organization with chaotic processes, its likely that the newly engaged, smart employees will be looking around them for new ways to improve the business. Process improvement may well be one approach they pick. If the business resists, we can expect that the employees will either start looking for opportunities elsewhere, or will slide back to a state of low performance. As outsiders looking in, we probably wouldn't attribute this to failure of employee development, just failure of the organization to change.

Despite the recent issues, a really strong example of process improvement and people improvement working together is in the 'Toyota Production System' (TPS). The TPS not only requires continuous improvement of processes, it also reinforces the concept that organizations add value by developing its people. The TPS says:

1. Grow leaders who thoroughly understand the work, live the philosophy, and teach it to others. 2. Develop exceptional people and teams who follow your company's philosophy. 3. Respect your extended network of partners and suppliers by challenging them and helping them

improve.

Toyota believes that the work team supervisors who are working directly with the production workers are exceedingly important to continuous business improvement, since they are so directly attached to the operations that they constantly influence quality, cost, productivity and morale of their teams. Developing these people is therefore core to the success of any process improvement project.




http://en.wikipedia.org/wiki/Toyota_Production_System


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Hunting for a Rare BeastSince we struggle to find examples of pure services companies that excel at process improvement,we are likely to believe that a services company excelling at both processes and employee development is a truly rare beast.

The place for us to search is with the companies that claim they can run your processes better than you can: companies that offer business process outsourcing (BPO). Looking at it this way, any company that can demonstrate its ability to run your business processes better than you while simultaneously servicing your customers better than you do, had better be using proven approaches to process improvement and employee development.

One example we can find to support the point is the Indian BPO firm, Wipro. The firm's long-standing implementation of Six Sigma is well know, and their standing as an excellent place for employees supports the claim of great organizational development programs. In fact any credible outsourcing company will highlight a range of quality and development certifications that typically come from employee education in procedures and methodologies.

It seems that BPO firms could be a strong example of the value of employing process improvement and organizational development simultaneously. We might even argue that BPO offers an option for shortcutting the overall business improvement endeavor, by having someone do it for you. The question then is whether you are willing to pass your important, maybe critical business process to another company? We all know that the answer to this also depends on if you feel that these processes define your company in the same way that building cars defines Toyota.

No Gambling, Just StrategyWhen starting out, a pragmatic, lightweight approach to business improvement is essential. It is not until you try process improvement or leadership and organizational development in your organization that you will see how, or even if, it will work well for you. Investing heavily up front in one methodology or another may lead you to get stuck with it, because it is emotionally and politically hard to back away from the





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investment you have already made.

Despite this, we should also consider the impact of trying to do everything yourself to keep the investment (and therefore perceived risk) low. It is important to use resources with an open mind to help you look objectively at what is going on, what doesn't work and what is really good enough for now. Working with consultants from outside the organization can give you this outside in view, while bringing experience from other organizations with similar business problems. Trying to do it yourself and achieve the full benefits from the synergies of process improvement and organizational development can be like a vacation gambler taking a trip to Vegas with the dream of returning home rich. We all understand the outcome.

If you are not ready to start tampering with your business processes, instead relying on employee development as your first tool for business improvement, try apply some of the thinking of Lean. Evaluate the results of your project, to see if you got the benefits you had planned, then don't treat that as the end-game.

Take a step back after every project and assess where the new issues and opportunities for improvement lie. Don't blindly say to yourself, well, it worked last time, so we'll just do the same again . Take a holistic“ ” approach. Removing a pain-point in one area could highlight an issue in another area completely. So be ready to mix the strategies you use, double-down when it makes sense, and you'll undoubtedly see a winning hand every time.

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