Of the four basic perspectives of corporate performance in the Balanced Scorecard (People, Systems, Customer, and Financial), Systems is commonly the least understood. We typically see champions assigned to the People, Customer, and Financial perspectives, such as an HR Director, Director of Marketing, and CFO or Controller, but the Systems perspective often gets overlooked. To drive performance, there must be a champion to oversee the Systems perspective with a focus on business process improvement.
What do most companies want? Increased revenue, Higher profits, etc? To sum it up, we essentially want results. So how can you manage results? From my experience, you can’t really manage results. You can target them, but not manage them. What you can manage, however, is all of the activities that are most likely to produce the desired results. In a business, these activities are often called business processes.
In Rummler and Branche’s book, Improving Performance, the three levels of performance are detailed: the organization level, the process level, and the job-performer level. Too many small and middlesized companies often devise wonderful strategies in the boardroom, at the organization level, and then rely solely on the people, at the job performer level to execute flawlessly. They completely skip the process level. Why are they surprised at the end of the financial cycle when they haven’t met their targets? You simply cannot consistently achieve predictable results without focusing on the process level
Mastermind Your Model
Most small and middle-sized companies often still operate with entrepreneurial thinking management, where the organization has an informal structure with overlapping and undefined responsibilities. Entrepreneurial thinking management has partial, ad hoc control, seldom with formal measurements. This is not the optimal way to manage a business. An organization with professional thinking management will focus on business processes with a formal, planned system of organizational control, including explicit objectives, targets, measures, evaluations, and rewards. Business process thinking changes the focus from the people to the process. Not just relying upon good people to “find a way” to get it done, rather deliberately designing best business practices that produce the desired results. It is virtually impossible to manage activities that are neither documented nor measured. Too often, we see companies where their systems have evolved over time to look more like a patchwork of activity rather than a masterminded plan. An intentional design, when consistently used, can provide quality, dependable service or products even in the most difficult businesses. Well designed systems create predictability, drive profit, make the work and the worker more productive, create efficiency, and provide a basis for measured improvement.
Most managers that I talk to believe that they know their business processes; but far too often, when probed, the reality is they don’t really know what their processes are or whether they can be simplified, improved, or eliminated. To provide clarity to the business process confusion, one very powerful management tool is process mapping. By mapping out your current “as-is” process, business managers can see the entire process, analyze the cost and efficiencies, and devise improvement strategies. Mapping out your optimal business model can provide clarity, logic, and practicality to delivering the desired results. Getting everyone one the same page, working from the same playbook can pay off big time. So, create your roadmap to success today!
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Chris Glassman has expertise in systems analysis, design, implementation, and management with over a decade of experience. He is a Principal of LeadershipOne, a business transition consulting firm.
He may be reached at (916) 202-8625 or at [email protected]