Why Bad Process Leads to Bad Results
In the business process management landscape, the saying “garbage in, garbage out” is as true today as ever. With the preponderance of data flowing through large organizations, the challenges of using that data in a productive way have only increased. And the more ways a business serves its customers (ecommerce, brick and mortar, apps, direct mail, etc.), the harder this challenge becomes.
I just completed my first year as the CEO of iGrafx. As an ex-management consultant who spent 7 years helping over 200 software companies, there is a universal truth I’ve found that applies to all companies: Bad process leads to bad results.
The Pain of Poor Process Execution
Consider the consequences of poor process implementation through a few simple examples:
- A bad hiring process will likely lead to hiring lower quality employees
- A bad General Data Protection Regulation (GDPR) process will result in non-compliance, and fines up to €20M
- A bad digital transformation process will lead to unhappy customers and lost revenues
Pick any two processes inside your company today; one that works well and one that does not. It doesn’t take much insight to see how these have impacted your results positively or negatively. And I’d be willing to hazard a guess the successful ones didn’t come easily.
Why is Process Excellence So Difficult?
Let’s explore the challenges of process excellence via a heavy process-dependent initiative: Digital Transformation. I read a great Harvard Business Review article recently written by Thomas Davenport and George Westerman titled Why So Many High Profile Digital Transformations Fail. Davenport is a professor at Babson College and a research fellow with MIT. Westerman is a research scientist at MIT.
The authors cite four reasons why transformations fail. The second caught my attention:
Second, digital is not just a thing that you can you can buy and plug into the organization. It is multi-faceted and diffuse and doesn’t just involve technology. Digital transformation is an ongoing process of changing the way you do business. It requires foundational investments in skills, projects, infrastructure, and, often, in cleaning up IT systems. It requires mixing people, machines, and business processes, with all of the messiness that entails. It also requires continuous monitoring and intervention, from the top, to ensure that both digital leaders and non-digital leaders are making good decisions about their transformation efforts.
If we look at this more closely, the authors touch on a few key points I found insightful:
It’s on ongoing process. Translation: This must be strategic. The only initiatives that survive ups and downs are strategic. If your organization is treating process improvement projects as tactical one-offs, you are in trouble. You will lose visibility, buy-in, momentum, and ultimately, funding. “Getting there” and “staying there” are very different. To remain excellent, you’ve got to keep focus.
- Tip: If you’re leading an initiative, require your executive sponsors to keep a regular meeting cadence with you. Your role in those meetings is to ensure they’re updated on progress, key wins, challenges and insights to ensure they remain engaged. Don’t let them off the hook. Task delegation is not the same as strategic execution.
It changes the way you do business. If you’re in a well-established company that’s been around a long time, how easy has it been to change how you do business? As someone who runs a relatively small organization that’s been around 27 years, I know how hard change management can be. I’ve seen large companies try to change their spots. It’s a grind.
- Tip: Start with the end in mind. What results do you want to achieve, and when? We’ve got a process we use with our customers you might find useful.
It requires foundational investments and mixing people, machines and business processes. Change management, anyone? Spending money without enabling real change can often cause initiatives to fail. We used to have a saying at my old consulting firm that “software companies love to buy software.” But software is just an enablement vehicle. If users can’t use the software effectively, it won’t enable results. This may sound odd coming from the CEO of a software company, but the authors here have it right. The right tools poorly implemented, or the wrong tools can do more harm than good. The proper “mixing” is where the magic happens.
- Tip: If investing in outside help, make sure you get more than tools. Business transformation and process excellence are hard. Often, companies want to focus on features and functionality vs. enabling success. Don’t discount someone’s ability to help you be successful.
It requires continuous monitoring and intervention, from the top. Again, strategic visibility and focus from executive sponsors is key. The other key here is the “continuous” part. It’s one thing to successfully get compliant or complete an initiative. It’s another thing entirely to ensure that initiative drives business results for the long term.
- Tip: Get your arms around how you will continue to execute your vision beyond the event of an implementation or “go live.” We wrote an article to help define what KPIs are most valuable to monitor your progress. Set up a cadence to manage your performance with key executives and enable them to make decisions that allow you
Achieving transformational business results requires a lot of hard work. It requires focus from executive leadership, and it requires a blend of people, money, time and technology.
At the core of transformational initiatives is process. Taking the time to focus on what processes you use, how you use them and how improving these will enable success is the lynchpin of generating results.
We’d like to help you. iGrafx has over 4 centuries of business process excellence under our belts. It’s our goal to help our customers be successful with transformational initiatives. I’d like to offer you a free 30 minute maturity assessment with one of our experts. We will ask you a few questions about your current state and provide you with some ideas on how you might improve or make changes. You can sign up for one here.
Good luck with your next initiative. Hope this was a helpful read.