Sourcing Shangri-La

Hello Checklists, Goodbye Process?

My little world wobbled as I read Atul Gawande’s bestseller The Checklist Manifesto.

It seemed to challenge head-on my conviction that process matters most because it provides the language that enables effective collaboration amidst complexity.

It’s superbly well written (Dr Gawande is an eminent surgeon but he’s also a staff writer on the New Yorker). It was ravishingly reviewed in the FT, the NY Times and The Economist, whose reviewer described it as ‘a meditation on the growing complexity of the world, and how to cope with it’.

The book sets out the evidence on the value of the humble checklist in saving lives (and much else – injuries, time and costs) in even the most highly complex activities – in the operating theater, on skyscraper construction sites, and on the flight deck. It is utterly compelling.

Why do checklists work? Firstly, because ‘they get people talking’, suggests Dr Gawande. They break down hierarchical barriers and encourage the teamwork that can ensure the best possible outcomes – in surgical teams, among construction engineers, even in due diligence teams working for private equity investors.

Checklists also encourage discipline. They recognize that, in a fast-paced world, we can all too easily forget the obvious. Kitchens in top restaurants use them. Checklists can ‘force reflection’ says Dr Gawande, even in complex and dire situations like the loss of an aircraft engine.

As I read the book, I feared I was hearing the distant rumble of a paradigm shift. It seemed entirely plausible that my approach had been turned upside down, that process had been a wasteful diversion – and that checklists were the new process.

The truth though seems to be more subtle and interesting. Checklists and process may overlap but they are essential, and complementary, in enabling us to deal with our enormously complex world.

Both enable collaboration and ensure compliance. 'Checklists are not comprehensive how-to guides', says Dr Gawande, 'they are quick and simple tools to buttress the skills of expert professionals'. Sometimes a checklist could be easily substituted by an end-to-end process and a Storyboard. In other circumstances, only one of them will work. What’s appropriate will depend entirely upon the context.

Context is one of the exciting themes of the book. The best checklists work because their creators are painstaking in understanding the context in which they will be used. They care about the tiniest details because they know that it matters in effective communication. Those who have advocated ‘publishing’ business processes that are static, generic and described in technical gobbledeegook might want to read and ponder these sections.

It’s also, in an odd way, heartening to read of the widespread resistance to checklists, despite clear evidence of their value. Organizations and individuals, across all industries, often applaud the idea of checklists - but have some reason why they are ‘special’ and should be exempt. They have to be won over – even if they subsequently emerge as the strongest champions of the idea. Inviting us to re-think how we define heroism, Dr Gawande reflects on this inertia:

"…We don’t like checklists. They can be painstaking. They’re not much fun. But I don’t think the issue here is mere laziness. There’s something deeper, more visceral going on when people walk away not only from saving lives but from making money. It somehow feels beneath us to use a checklist, an embarrassment. It runs counter to deeply held beliefs about how the truly great among us – those we aspire to be – handle situations of high stakes and complexity. The truly great are daring. They improvise. They do not have protocol and checklists. Maybe our idea of heroism needs updating." [p.173]

Replace ‘checklist’ with ‘process’ and it’s the journey of most organizations towards process thinking, and towards a recognition of the process platform as an essential enabler for sustainable operational excellence.

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Future of BPM? We're In Mesopotamia 3000BC

Adam Deane has set off a discussion on his blog on BPM Visions Of The Future.

My own view is that we are witnessing a revolution in process thinking.  It's similar to the transformation that took place around 3000BC when humankind moved from hieroglyphs to phonetic writing.  It is that breakthrough which makes possible this blog - and poetry and tax returns.

That transformation - the adoption of phonetic writing - too was driven by business needs.  The emerging societies of that time needed governance. Writing was simply the most efficient way to record and report, to establish the bureaucracy upon which control depended.

It was also a global transformation.  Writing seems to have emerged independently in Egypt, China and Central America - but the best evidence we have today comes from Mesopotomia, simply because they used baked clay tablets, which have lasted far better than paper or bamboo. This tablet from Mesopotamia, from the British Museum collection, records the allocation of rations to workers (in the form of beer, an early local currency).

Process is undergoing a parallel transformation. Until recently, process has been about technical symbols, focussed on automation, and intended to be used only by a few.

In the future, process will surely be the universal business language. But it will be holistic, not just focussed on systems. It will be integrated, not just process fragments stored in a common repository. And it will be in the language of the business, so that everyone can understand it - and get involved in continuously improving it.

In short, process will become a polite term. Folks with MBAs won't feel embarrassed to use it. We'll no longer have two terms - process and value chain  -for the same thing.  And it will be inclusive, stimulating a richer and ongoing collaborative dialog: the CIO will sit down with the business user.

And the essential enterprise enabler for all this - the 21st century equivalent of the bureacracy perhaps - will be the process management platform:

... it will integrate process with documents, KPI metrics, risk and controls, quality and compliance,  training and task support.  

... it will provide the collaborative framework and governance that enables process stakeholders, and Lean and Six Sigma teams, to drive performance improvement.

... and it will deliver all this to the desktops and smartphones of people doing real work - in the form of Storyboards and a personalized intelligent operations manual. 

Which is why I count myself thankful to work in such an exciting area.  Phonetic writing gave rise to enormous creativity. You couldn't be reading that blockbuster on your Kindle without it.  As enterprises become more virtual, more outsourced, more socially responsible, more complex and with ever more global supply chains, we will need ever more creativity in the workplace.  And business process management will be a crucial enabler. 

This post inspired by A History Of The World In 100 Objects by Neil MacGregor. Highly recommended (an ideal Christmas present, if you can bear to let it go)

PS you don't have to wait! First editions of the process management platform of the future are available here ;-)

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Toxic Processes: Social, Cloud, Agility - and Risk

There's a looming crisis that's being driven by the headlong rush into Cloud, Social  and Big Data in pursuit of the Agility agenda. Like the financial crisis, the signs are clearly evident well ahead of the crash.  And just like every actor in that sorry tale was acting rationally within the confines of their silo, so too this time everyone's busy.

At the heart of the financial crash was the accumulation, over many years, of  toxic assets purchased in vast quantities by over-leveraged banks. The risks were not clearly visible or understood.

On the smaller scale, many global enterprises are busy working on their own sub-prime crisis. They are relying on toxic processes. As a result, their risks are not clearly visible or understood.    

Organizations are rapidly building a future that is far more virtual, where an empowered workforce manages service delivery operations that are far more complex, fast-paced, and largely outsourced.

Cloud promises the frictionless enterprise.

Social promises employee engagement and the capability to turn on a sixpence.

Sourcing and supply chain innovation promises low costs and rapid response.

Within each program silo - Cloud, Social, Sourcing - it makes perfect sense. It's the agility that CEOs are looking for. But this new level of agility comes with new levels of risk. Two examples:

The complexity of existing supply chains  makes them vulnerable. Car production was halted in several factories around the world when the Japanese tsunami struck the remote Tohoku region: it turns out that the Renesas plant there produces 40% of the world's microcontrollers. Building resilient global supply chains will require even more complexity. The increasing adoption of outsourced services from multiple suppliers - the growing virtualization of the enterprise - will exacerbate this complexity, and therefore the vulnerability.  

In customer relationship management, IBM's Global CMO Study, out this week, shows CMOs living in a world of high complexity and unpredictable interdependencies. It calls out customer intimacy as a strategic goal for CMOs. But it's to be delivered as rapid response in a world of real-time social media by empowered employees - many of them working for outsourcing partners - dealing with empowered customers, and by complex, rapidly-changing, business rules applied to Big Data.  So much higher levels of complexity and therefore vulnerability.

It's easy to get carried away with the potential benefits in Cloud and Social (and Big Data). But the execution risks are correspondingly high - and largely overlooked. In complex, fast-paced and global organizations, increasing agility correlates with increasing risk. 

Business process management is unglamorous next to Cloud, Social, Big Data and Agility.  But a BPM platform is the essential foundation for success.  The first step in mitigating risk is transparency. (It's also the key to unlocking potential innovation as well, of course).   

Pause please while I step up to my soapbox again. The BPM platform that can leverage Cloud, Social, Big Data fully, while properly managing risk, must have three fundamentals:

Holistic perspective. This means visibility of the enterprise that is complete, integrated, rigorous and realtime.  Transparency here is like the capability to run a three-dimensional CT Scan for the enterprise at any time.

Effective collaboration. That means a common language, across the internal functional silos and the extended enterprise. The only plausible language is end-to-end process - but, and this is critical, in the language of the business, not IT-speak, to ensure shared understanding.  It also requires a governance framework that is robust but practical, otherwise collaborative innovation will stall, or undermine risk management.

Ubiquity. It must connect strategy directly with operational reality across the enterprise. There's a compliance gap if the enterprise process model is simply an abstract managed by IT or the Quality function. It has to support real people in getting real work done.  So it needs to be personalized, and deployed to desktops and mobile devices as easy-to-consume process content.  This ensures the real-world integrity of the process model. It also engages the workforce and so channels Social to where it's most productive: fostering continuous improvement within the process context.      

Some organizations recognize these risks - we are seeing new levels of interest in a BPM platform that can deliver this capability - but most don't yet. Some put their faith in complete and 'perfect' IT process models - but they focus only on what's automated, and are understood only by a handful of people. Most organizations rely on incomplete, duplicated and overlapping process fragments in a variety of tools and formats, and with no governance beyond email.  Either way, IT models or myriad fragments, these are toxic processes.

If we continue our current trajectory, Gartner's prediction earlier this year that ten global companies will be toppled within three years by basic process defects looks safe.

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31 Oct 2011    The Socially Optimized Business - And Process

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The Socially Optimized Business - And Process

I love the positive energy and openness of the Dachis Group and the Social Business Council - their one page graphic summarising Attributes of a Socially Optimized Business can be downloaded here - so I don't want to be picky.  But there's a flaw in their manifesto - at least, as I understand it - that may seem nerdy but is, I think, actually quite crucial.

I've huge sympathy for the call for a Renaissance in business:

"After decades of mechanistic, dehumanizing, process-oriented management dogma, progressive organizations are waking up to the disturbing truth that they’ve squeezed all the creativity out of their business. When companies embrace organic, passionate, socially-savvy initiatives, they blossom. Who benefits? Everyone."

What worries me is the way we seem to be trashing 'process-orientation'. 

Agreed, process has for too long been articulated in the form of technical gobbledegook. And it's rarely exciting. 

But - if we express process simply and holistically, so that people across the socially optimized enterprise can understand it, then we have a universal language that can get everyone talking. 

And if we support it with an enabling process management platform, then we have:

connected the creativity with how work gets done.  So we ensure that social business is not an ivory tower, it's about engaging with everyone's ideas

the ideal framework for Lean, Six Sigma and other process improvement programs - and for sustainable continuous improvement

the governance framework that ensures collaboration will be effective, across all the functional silos and the increasingly virtual extended enterprise  (it also allows the Chief Risk Officer to sleep at night). 

Great ideas -please sign me up for the Renaissance. But let's see process as part of the solution and so make it practical.

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Are You Siri-ous?

Check out Siri, the revolutionary new voice recognition feature on the iPhone 4S.  As Apple says: 'Siri understands what you say, knows what you mean, and even talks back'.

It's amazing. Omniscient and with attitiude. It even has a Transcript button - here's an extract, so you can see how it works: 

...

Me: Well, that's great news. I'd completely given up on my pension fund. I thought it would never recover.  So when can I retire?

Siri:  You'll need to continue working until 16 June 2043.

Me:  Sheeesh! So I need to stay employable for another 30 years... What am I going to do? 

Siri: Stick with process. Right now, we've discovered the theory of business DNA. We cracked the double helix, we know how the base pairs work on the chromosomes. And we've pretty much done with mapping of the complete business genome.

Me: So it's all over. I should re-train as a therapist?

Siri: No, idiot, this is just the start. Process will become the universal business language. Every CEO's iPad will have a business process architecture - integrated, complete and in the language of the business, not geek-speak. It will be the startpoint for M&A and business restructuring. 

Me: Not just executive bling? Not just a fad that will leave me jobless in my early seventies?

Siri: No, Bozo.  CIOs will see it as the startpoint for every systems project.  CFOs will demand the transparency that comes when risk and controls are embedded in end-to-end processes.  COOs will leverage it to orchestrate increasingly complex and multisourced operations. 

Me: OK, I get it. Business genetics.  The enterprise grid.

Siri: Much more because it's not just for execs and stakeholders focussed on performance management. It will connect with people doing real work.  It will simplify and help people be more productive.  And make it easy to get involved in continuous improvement.

Me: So where do I want to work? Who's going to win here? The BPM vendor that offers an integrated platform, a collaborative framework and deployment as an intelligent operations manual to every desktop and mobile device?

Siri: Doh! No - whoever integrates Siri first.

.... 

 

Continuous Improvement - Made Easy

Naturally, I would say that Emitra Nelson from Cameron stole the show on Day 1 of the Summit for Finance Leaders in Dallas today (you can hear her story on a SharedServicesLink webinar on 18 October - more details here).

But if I couldn't vote for Emitra, on the grounds that hers is a Nimbus success story, my choice for the most thought-provoking presentation would be Andrew Simpson, Head of Business Services in America for BP, whose case I summarised in a doodle in my notes as this:

 
(my maths is shaky, so I'm hoping this means what I was thinking!)

Andrew defined Continuous Improvement (let's call it CI) as 'operational excellence through process improvements' , or, more informally, as 'stopping business insanity'. He listed the 20 most common excuses he's heard about why CI can't be done, the funniest being the manager who claimed that it would be 'against corporate policy'.

He then proceeded to show exactly how he has implemented CI, and went on to make a totally convincing case that, in the long run, 'background' CI can be even more valuable than high-profile transformation programs.  And a CI culture, he argued, will also make any major transformation program more likely to succeed: people are engaged and energised by change, not simply resistant.  In shared services terms,  CI is 'the critical success factor for any SSO that wants to stay relevant'.  

What's really interesting is how few of the organizations represented in the audience have a serious CI program.  There's lip service but little commitment. How can that possibly be? At the end of the day, CI is pretty straightforward. 

Maybe the clue lies in a video Andrew used in his presentation to illustrate resistance to change (can't find it on YouTube, but it was like this).  The hamster keeps getting on the wheel, spinning faster and faster until it's out of control and finally gets flung out into the cage - then does it again, and again and again... 

Maybe the hamster enjoys the adrenalin rush - just like the business enjoys the thrill of firefighting.   And when, after a while, the hamster is punchdrunk with concussion and unable to think clearly, well that's like the business getting so used to living in firefighting mode that it too can no longer see clearly - and so resists the CI initiative that is ultimately its way forward.

Finally, a great endorsement for CI: people from BP's Business Services unit are sought out by the rest of the business.  It's career-enhancing because it has a carefully thought-through and well-executed CI program that encourages people to bring their brains to work. It breaks out, he noted, of the analysis paralysis of left brain thinking, the belief that life is a machine and we just need to understand how the cogs fit together to get it to work perfectly.  It recognizes the special and unique value that diverse perspectives, working intelligently together, can create.

There was a ton of other good stuff too of course.  More on that later in the week, I hope.

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Accenture: What's Holding Back Shared Services

Hats off to Accenture for bringing some reality and insights to the debate about what's holding back Shared Services. 

Everybody's doing shared services, everybody thinks it's strategic, yadda yadda yadda. The reality though is often disappointment and missed business cases.  Sustainable success in shared services is still the exception.

The Deloitte Shared Services survey, published in April, highlighted some lessons learned: the importance of governance, a collaborative framework, transparency and change management.   

Governance was also a theme running through the PwC/HfS report on Global Business Services, published in July: it has to be 'ongoing', 'well-integrated, consistent and rigorous' and not just another tool for vendor management.  

Those were useful contributions.  But Accenture's report this week Trends in Shared Services: Unlocking The Full Potential brings a new focus.  It spells out what the leaders are doing, and how they are succeeding. And process excellence is front and center.

Noting how one leader in shared services uses automation and metrics and process improvement specialists, it continues:  

"...while other elements are certainly in place - C-level support, comprehensive change management and a relentless focus on value - it is the organization's continued focus on process excellence that stands out ."

I share the report's enthusiasm that shared services will mature to become ubiquitous. And that we are witnessing the emergence of "a long-envisioned" model of integrated business services.  I agree too that 'managing multisourcing consistently' is a huge challenge for most organizations. And I'm delighted that Accenture highlights the vital need for a service management framework.   

But I have one quibble. Because even Accenture hasn't quite joined up the dots.

What is it, ultimately, that enables process excellence, that provides the collaborative framework for change management, that ensures transparency and IT alignment, that supports Lean and other continuous improvement programs, that provides the governance framework for the effective management of outsourcers, and that allows cloud and social media to be most effectively leveraged?  It's a business process management platform. 

It's not a panacea. It can seem a bit boring. It's an unspectacular answer when your SSC is 'in a complete mess'. But everything points to the business process management platform as the foundation for success in shared services.  It underpins process excellence. It's what enables the service management framework.  And it's the only way to optimize the management of process variants, which, the report notes, is the real problem in process standardization. 

What is the business process management platform that can do all this? I've defined it elsewhere as a platform that uses the universal language of end-to-end business process to enable four capabilities.  The only way I'd improve on that definition now, especially in the light of the Shared Services workshop in London last week, would be to re-iterate the importance of adoption.  If our brilliant process management models don't engage process stakeholders, and help real people to get real work done and to contribute to improving things , then we're missing the biggest trick of all.    

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BPM - The Foundation For Operational Excellence

Looking in on rehearsal presentations for Inspiring Performance 2011 next week, it's interesting to see how operational excellence is coming to the fore - and how BPM is central to it. 

Agreed, operational excellence sounds worthy but boring (though execs at UBS might be wishing that they'd paid it more attention).

Agreed too that, while it's a widely used term, there's only a loose consensus on what operational excellence actually means (even the Wikipedia entry includes an appeal for help).

But, however it's defined, or branded within the organization, it's an unqualified good.  Every COO wants it. What's less obvious to many organizations though is how operational excellence is directly linked with Business Process Management.

BPM in its IT incarnation - let's call it 'micro-BPM' - is focussed on automation.  But BPM in its wider sense - 'macro-BPM' - is about operational excellence.  And, in global organizations across every sector, a macro-BPM platform is emerging the essential foundation for operational excellence. 

Talking with clients and colleagues since our first attempt, back in January, to define how you do operational excellence in practice, we've converged on four closely-related capabilities: 

To achieve operational excellence, the enterprise needs the capability...

to understand the whole.  To maintain a complete, holistic and integrated model of the business - including what's automated and what's not, what's outsourced and what's in-house.

to flawlessly execute strategy as end-to-end operational processes. To maintain two-way line of sight between strategy and operating reality.

to continually re-optimize performance by integrating metrics and analytics with end-to-end operational processes and providing the framework for the entire enterprise to collaborate on continuous improvement.

to manage risks, controls, quality and compliance together, within one enterprise-wide and real-time governance framework.

Cue the enterprise-wide BPM platform: the essential enabler for all of these capabilities, and therefore for operational excellence. More on this, after the conference...

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Our Real-Time Interconnected Future

In The Interconnectedness Of Things, my colleague Rob Speck uses an M&A example to illustrate the value of end-to-end business process as the best framework for clarity in an increasingly complex world.

When we revisited our core value proposition recently, our clients' appetite for simplicity really became apparent.  It's what has led us to describe Nimbus Control as an 'integrated management platform' for the enterprise.  Even more boldly, as the enterprise platform for operational excellence.

Enterprise 2.0 needs its people to collaborate on improvement and innovation like never before, and at pace.

It needs collaboration across the silos within the enterprise, and often outside the enterprise, across a complex and dynamic web of activities delivered by outsourcing providers. Above all, it needs effective collaboration across the functional boundaries between operations, IT and compliance.

So simplicity has become crucial. But it's at many levels.

Visibility of end-to-end business processes, not just what's automated, graphically and in the language of the business - is just the start.  Many organizations have plausible end-to-end views.  Usually in Visio and on the wall of a proud process owner.  It's when they are integrated within an enterprise process framework that the benefits really start. Interconnectedness is the key.

But it has to be a multi-layered process framework, managing meta data at every level. It has to blend processes with metrics, systems, compliance, risks and controls. Again, interconnectedness is the key. (London Underground maps offer a parallel). 

And it has to be a real-time enterprise process platform. All this would be just an interesting snapshot without robust governance because everything is constantly changing.

But the hardest part of all is to win hearts and minds.  It has to be intuitive and appealing.  Like the Unix computer so beautifully sold and loved as the iPhone, this integrated management platform for the enterprise has to be seen as easy, authoritative and indispensable. As an intelligent operations manual built around me.

No-one is there yet - this is a journey (come meet some fellow travellers at Inspiring Performance 2011 later this month). But I'm optimistic.  It's beginning to become clear how Enterprise 2.0 fits together and how BPM will be its essential underpinning.

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 more on Cracking Complexity.

The Social Enterprise: Don't All Speak At Once

Larry Dignan at ZDNet nails it in describing the looming 'social sprawl' in A Few Caveats Ahead of Utopia, his take on Dreamforce 2011:

"Every software vendor has some social hook. Let’s say every IT buyer goes whole hog with the social stuff. Well guess what? Now you have HR social features. CRM social. Business execution social. It’s a social fest. Meanwhile, employees are still using Twitter and Facebook. If social sprawl isn’t an issue today, it will be tomorrow. This emerging issue can go two ways for Salesforce. IT buyers can see Salesforce as the great social enterprise consolidator. Or they can close their ears. At this point, it may just be a jump ball."

He's right about the emerging issue of social sprawl. But I think it has a different resolution. It's not a jump ball between Salesforce Chatter and an alternative of a cacophany of voices. There's a rapidly emerging alternative - a process-based paradigm. And the best example may be the convergence of Tibbr with Nimbus Control, which analysts seem to have underplayed in commentary on Tibco's acquisition of Nimbus Partners.

Diversity in our interactions online is natural, just like in the everyday physical world: as Tom Cortese has argued, focussed and niche social networks will always have a place. But the collaboration and dialog that is at at the core of the social enterprise needs structure if it is going to be purposeful.  Especially because, while we may kid ourselves otherwise, the evidence is that actually we're not very good at multi-tasking. 

So what's the context and framework most likely to encourage effective collaboration in the social enterprise? It has to be the processes of the business.  What else is the social enterprise seeking to continually improve and optimize?  Ergo a business process management platform sits at the heart of social enterprise.

After seeing his social baptism ceremony last week, I'm coming over all funny. So, to channel the extraordinary Marc Benioff for a moment: Beware The False BPM Platform!

Is there a single integrated process architecture for the enterprise, with clear line of sight between strategy and operations?  Is there visibility of end-to-end processes, not just what's automated, and across outsourced activities too - and all in the language of the business, not IT-speak? 

No? Then it's a false BPM platform!

Are real-time performance metrics, business controls, compliance and quality, integrated with the end-to-end processes to create the operating system for the enterprise? Does it ensure that Lean and Six Sigma projects are delivering sustainable benefits?  

No? Then it's a false BPM platform!

Does it help people get real work done? Is it deployed to every desktop and mobile device as a personalised intelligent operations manual? Is it easy for every person and process stakeholder - including especially the IT community - to collaborate every day on operational excellence?  

No - then it's a false BPM platform!

Here endeth the diatribe. ;-) 

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Solving The Riddle Of Sustainable Improvement

In a podcast following his HBR Blog How To Sustain Front Line Process Improvement Activities, Brad Power describes the riddle he's trying to solve.

For improvement to be sustainable, it has to be within the DNA of the organization.  It has to create a culture capable of surviving a change of CEO. 

After researching 50 case histories, and Toyota aside, Brad concludes that there are very few organizations with this kind of cultural depth:

 "How do we embed continuous improvement as an ongoing activity across the enterprise? That's the riddle we're trying to solve here."

Looking at leaders in continuous improvement, he identifies characteristics that they tend to have in common, components of an 'architecture for sustainable improvement in an organization':

Process visibility: the ability to 'see' end-to-end processes - singly and in the wider context, and in an intuitive way that everyone understands (esp outside of manufacturing, since most processes are not tangible)

Process ownership: accountability for improvement of end-to-end processes (across the extended enterprise, including activities outsourced or in shared services)

Strategic alignment: line of sight between strategy and front line operational improvement activities

Performance metrics:  KPIs embedded within processes to provide immediate feedback on performance, and the impact of improvement activities. 

When Brad and I have swapped perspectives on this before, I woffled a bit. I couldn't put my finger on what now seems totally clear, and reinforced by real world evidence: that the future lies in a culture of operational excellence that is enabled and sustained by an integrated process management platform at the heart of the business.

This integrated management platform has to use the universal language of end-to-end business process. It has to integrate process with real-time metrics, risks and controls, compliance and quality management - all within one governance framework. It has to be 'live' - deploying process to desktops and mobile devices as an intuitive and personalized operations manual.  And it has to provide the social collaboration framework that gets people working together effectively.  

No platform can solve the riddle completely. Talent management, executive leadership, behavioral incentives to break down political barriers to change - these will always be essential ingredients for sustainable excellence.  But an integrated process management platform is emerging as the essential enterprise infrastructure to underpin a culture of sustainable improvement.

Join us at Inspiring Performance 2011 in London later this month to hear case studies on these themes from Nimbus clients such as Novartis, Northern Trust, Marathon Oil, Northrop Grumman and Royal Bank of Canada.  It's one of the world's largest business performance improvement and process management events - and it's free.

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11 Aug 2011    Why Management 2.0 Will Be Built Upon BPM

 

The Root Cause Of IT Failures

Next month's HBR has new evidence on the colossal cost of IT failures. It's the largest global study ever of IT change initiatives. And it's not optimistic:

"It will be no surprise if a large, established company fails in the coming years because of an out-of-control IT project. In fact, the data suggest that one or more will."

The study conclusions seem sensible - smaller projects, better risk assessment - but they don't get anywhere near the root cause.  

For a start, even if IT projects were smaller and risks were better managed, there is the bigger problem of 'projectification' - the challenge of managing multiple projects within organizations that are complex, fast-changing and increasingly virtual. 

The HBR report includes data on 'projectification':

61% of managers reported major conflicts between project and line organizations

34% of companies undertook projects that were not aligned with corporate strategy

32% of companies performed redundant work because of unharmonized projects.

All of which points to the underlying issue, the root cause of most IT failures: communication.  More specifically, the lack of a framework for effective collaboration that ensures joined-up thinking across the enterprise. 

This is absolutely not breaking news - Michael Krigsman and others have been hammering on about this for years. But it's still true.

The answer, as leaders such as Cameron have realized, has to be a collaborative framework, with a robust governance wrapper, that sits at the heart of the business. 

It has to use the universal language of end-to-end business process.  It has to be holistic, not just about what's automated.  It has to be integrated, combining process with analytics, risks and controls, documents, quality and compliance. It has to offer different stakeholder perspectives of one process reality, especially to align IT with the business. And it has to support people doing real work, and engage them in continuous improvement.

Implementing a platform of this kind  is not necessarily easy.  Conceptually it's neat and obvious. And yet implementation often meets resistance beyond the normal inertia.

Maybe that's because it's hard to shift a culture to embrace transparency and new levels of visibility and accountability.  But maybe there's an even deeper reason for clinging on to things as they are and rejecting the wider perspective. Projects - even big ones - are quite comfortable places to be. There's a seductive sense of certainty and control. 

We don't want to lose project control of course, but the future must surely lie in coordinating all projects within the wider enterprise perspective. It's the only way that major IT failures, that can cost $m as well as the end of many jobs, can be averted. And major business transformation failures, and major compliance failures, come to that.  

Why Your IT Project May Be Riskier Than You Think - Harvard Business Review, Sept 2011

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11 Aug 2011    Why Management 2.0 Will Be Built Upon BPM

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Why Management 2.0 Will Be Built Upon BPM

 
Hats off to McKinsey and the HBR for creating MIX, an open innovation project to accelerate the search for new management models.

Speaking last week on The MIX Management 2.0 Challenge, Gary Hamel, described by the WSJ as 'the world's most influential business thinker', echoed its call for the reinvention of management:

"We are at an ideological inflection point. For 100 years, we've had the ideology of control.  We need to think of control in new ways."

He called for new management models that draw upon the innovation of the Web: organizational hierarchies that grow from the bottom up; working in small autonomous teams wherever possible; and enabling 'communities of passion' to flourish around ideas and innovation.

He called also for the embrace of experimentation: 'cultivating an environment where people don't need extensive permission to run small-scale, low-risk experiments'.

It's not just theory. He cites an example of a business that has embraced Management 2.0 principles -  a company with $3bn revenue and a 50-year history - with a lattice organization and no hierarchy. Every employee decides what to work on, and their compensation is linked to a ranking by 20 peers based on their value added to the company. 

A brief aside - it seems to me that there's a dimension missing here: the social impact of work. We need to create work cultures that are less competitive and more collaborative; where trustworthiness and responsibility are deeply ingrained; where parenting and work are not in conflict; where creating quality jobs is a measure of success. In the jargon, we need Management 2.0 models that embrace far wider definitions of corporate social responsibility.

OK, I hear you say, so just what is the tenuous connection between all this heady stuff and business process management? 

Well, it seems to me that every aspect of Gary Hamel's vision speaks to the need for an enterprise-wide integrated management platform. 

Outsourcing Buyers vs Sellers: Swords Into Plowshares

It was billed as a debate where senior provider and senior buyer executives would 'lock horns to debate the burning issues of today’s outsourcing business'. 

But when HfS Research rustled up its invited audience (impressively close to 500 people, at the height of the holiday season) for its 'Live and Unfiltered' web debate, what stood out was the consensus around the table on the emerging challenges.  

The Buy Family execs - from Northern Trust, Kimberly Clark, Ascension Health and PNM Resources - pretty much lined up with the Sell Family execs - from Genpact, CSC, Accenture and Cognizant - to endorse highlights from the HfS joint study with the LSE:

Hybrid service delivery is the new normal: outsourcing and shared services are set to  increasingly dominate global services delivery - across all industries and regions.

It's not just back-office transformation any more. Shared services and outsourcing initiatives are growing into the middle office, and even into front office support (eg here).

It's way beyond cost reduction, which is taken for granted. It's a search for innovation and nimbleness in service delivery, the kind of flexibility needed to thrive in volatile and hyper-competitive markets.

The emerging challenge: How do you manage this intelligently?

In a world of hybrid service delivery models, where so much is delivered through a  tapestry of providers that is continually changing, how can buyers protect themselves and ensure compliance while at the same time driving innovation and continuous improvement?

It's way beyond contracts and SLAs in Word documents. It demands a governance framework that is way beyond Excel-over-email.  It's why leaders are zeroing in on a new operating system for the enterprise, written in the universal language: end-to-end business process.

This new OS for business sits on what is emerging as essential new infrastructure - an enterprise process management platform, which:

integrates business process with real-time analytics, risks and controls, systems and documents

provides everyone - process owner, stakeholder or user, whether in business or IT - with a personalized perspective of the one process reality

provides collaborative features within a governance framework that fosters innovation and continuous improvement.

It's interesting how the ability to collaborate effectively - in conditions where change is at an ever increasing pace and frequently turbulent - is emerging as a core capability on both sides of the fence. It's the common challenge for both Families, Buy and Sell.

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BPM: The Invisible Gorilla

Crowds aren't always right. Today's conventional wisdom about business process management is that is tedious, technical and matters only to IT.  I believe that mindset is about to be inverted.

There's a famous experiment where subjects were shown a short video clip of a basketball game. They were asked to count how many times one team took possession of the ball. When asked afterwards, most observers had not noticed that a figure in a gorilla suit walks into the middle of the court, turns to face the camera, beats his chest and dances a jig before strolling out of the picture.

What we pay attention to guides our expectations of what we are going to see. If it doesn't fit the template we are currently working with, then often we won't see it (consciously at least), no matter how bizarre.

So how do we ever learn anything new? That's where the brain's right hemisphere comes into play.  But before I go any further, let me acknowledge my inspiration here: A bo0k that took over my summer holiday, possibly one of the most interesting books that I've read in thirty years: The Master and His Emissary by Iain McGilchrist.