A concept that can help look at business processes in a new way and understand how to work with them effectively in large companies.
The faster a company grows, the more new processes emerge. It becomes difficult to keep track of all of them. That’s when top-management decides to group tasks and processes. This results in something like an organizational structure, but horizontal.
What’s the idea? For example, we group them by lines of business. Then, large processes are broken down into subprocesses, and eventually, into actions. Why is this important? Depending on the level we are at, the process model solves different tasks. As a result, decisions and further actions will differ as well.
Let’s take a closer look at each level.
At the top level, our task in terms of process modeling is to address global issues: selecting core processes, determining where the team will invest effort, deciding how to differentiate from competitors, and how to win customers.
At this level, we should answer the question: what is important for the company, and which processes should we focus on. At this level we determine how and where value is created for customers, and where we can use typical processes and ready-made solutions.
Why is it needed? Lines of business help link processes with the company’s organizational structure. At this level typically budget is allocated.
When this level is well-organized, it resolves the issue of who owns each business process.
These are processes, the logic of which we can trace from start to finish. Each process at this level has a clear start, finish, a single management object, and a responsible performer for each step. We bring together people from different departments into one team, focus on the value we create for the customer, and define requirements for each step of the process.
However, if the process is very complex and lengthy, it should be divided into subprocesses. This leads to the creation of another level — the fourth level of the hierarchy.
At this level, the main focus is on how to achieve the outcome with minimal resources. Typically, functional managers are process owners. They determine the sequence of steps and set priorities.
At this level, it makes sense to go into the nuances of automation.
The key here is a clear work instructions that an employee must perform at each step of the process. The manager’s task is to help the employee optimize and automate these actions. This increases the speed and predictability of the process.
The ability to move between these layers helps to properly organize work with business processes.
We always emphasize the importance of building and managing cross-functional business processes, as they make the company’s work seamless for customers and resolve issues related to defining areas of responsibility.
However, attempting to model all cross-functional processes within the company can turn into an endless project. This is why it is so important to move to a higher level, towards process consolidation. This will help group processes together, making them easier to perceive and, most importantly, identify an owner. At an even higher level, there emerges an understanding of which processes create value for the customers.
Then, a reverse movement occurs: we try to focus on specific processes that are important to us and improve them. To determine impotence, it is essential to know what kind of capabilities we want to strengthen. These are strategic decisions made at the very top level. To do this, we need to align the organization’s strategy (how we want to be perceived by the customer) with reality (what we can actually offer).
If we move down to the level of a regular employee, what matters here is a mutual understanding what a specific person can do in their area. To reach employee and give them a work instruction, it is crucial to break the process down into the smallest operations that the employee performs. Then, we can outline the details and the instructions for them.
The hierarchy helps each employee solve issues that correspond to their level of responsibility and expertise. It saves time and ensures proper resource allocation. It eliminates situations where top managers get involved in details and start dealing with things. Like which angle a farming company they manage should plow the field at, rather than focusing on strategic matters.
Typically, delegation happens after task decomposition. We used to delegate tasks within departments according to the organizational structure, whereas here, delegation occurs through the distribution into processes and subprocesses. In a process-oriented structure, we break down not individual tasks, but set of tasks involving employees from various departments.
The main difference is that in a process-oriented structure, people from different departments interact to achieve a common goal.
In a traditional organizational structure, tasks are delegated from the top down by the department manager. Employees focus on these tasks, sometimes not understanding what tasks their colleagues in adjacent departments are solving, and even less so thinking about customer satisfaction. This is where the challenge lies. By focusing on their own tasks, employees could optimize the use of personal and department resources, but they do not consider the final outcome and the customer.
Organizational structure is often the obstacle that disrupts process management. Overcoming this obstacle is challenging.
At the same time, it is important to remember that we cannot abandon the organizational structure; rather, we need to build a process structure alongside it -and be able to switch between them.
Choose a topic that interests you and read the most popular and useful articles from the Bureau:
