Great question posed in Lean Six Sigma and Process Excellence by Vijay Bajaj. There are several indicators and one of the leading is the amount of internet interest. So let’s look at some stats courtesy of Google.
(Blue BPM, Red SixSigma)
So at first glance BPM is in the ascendency, SIx Sigma declining, however let’s factor in Lean for the same period against BPM.
This time we see BPM flat against a more volatile Lean, however Lean had its greatest interest back in 2007.
A much more interesting trend, which impacts all three aspects of Process Excellence is the recent emergence of Customer Experience Management. WIth progressive PEX types pushing the boundaries of process Outside-In rapidly, the migration to “the customer experience is the process” seems well established.
Is CEM the natural evolution of PEX? It certainly seems so.
ITWebBPM is South Africa’s premier event featuring the latest and most incisive business process management learning and next practice.
It was a pleasure meeting so many people from the African continent (and further afield including Finland, Germany and the USA!). Watch the overview video, and if you would like a copy of my keynote, panel sessions or workshop do let me know (steve.towers@bpgroup.org).
BPM is all about simultaneously reducing costs, growing revenues and improving customer service, says BP Group’s Steve Towers.
According to Towers, strategy means many things to many people. However, from a BPM context, it means to create a high-performance organization. “In BPM, strategy is the ability to connect the dots from the front line to the boardroom, and demonstrate how every single activity contributes to the strategy of the organisation.”
He also pointed out that BPM is about simultaneously reducing costs, growing revenues and improving customer service.
On improving customer service, Towers noted that customer needs have changed drastically, thanks to digitisation, which means everyone is connected intimately all the time. “The customer experience is the process and we have to get scientific about the customer experience.” He also noted that the customer should be at the centre of everything the organisation does and that organisations should work to identify factors that will not contribute to the overall success of the enterprise.
He revealed that many organisations do not understand their business processes or their customers’ needs, which is why they fail in the end. “If you don’t understand your customers, you’ll end up failing like Kodak and Nokia.”
He, therefore, urged organisations to go out of their way and be innovative in order to determine their customers’ needs.
On the other hand, he pointed out that organisations should not make promises to their customers that they will not be able to keep. “I like it when people say you have to go beyond customer expectations. That is impossible because people will always have their own standards. Rather, promise them the best service you can manage.”
Towers also urged organisations to understand and develop successful customer outcomes, create process activity lists, identify moments of truth, identify breakpoints, identify business rules, perform risk assessments, and develop action plans before managing delivery. “The starting point will be determined by the nature of the challenge. It is, however, essential that a clear and objective understanding of customer needs is articulated. This specifically involves the needs of the customer and goes way beyond traditional voice-of-customer insights.”
Revealing a successful customer outcome project, Towers said organisations must ask: ‘Who is my customer? What is the customer’s current expectation? What is the process the customer thinks they are involved in? How does what we do impact customer success? What does the customer really need from us?’
He added that the primary purpose of crafting successful customer outcomes is creating a fundamental focus for a process or set of processes, or a complete enterprise strategy. “Advanced BPM aka Outside-In extends way beyond the legacy inside-out thinking to create an actionable strategic and operational objective for the entire organisation.”
International process improvement expert, Steve Towers, advocates an ‘outside-in’ approach.
How business process management (BPM) is applied in the organisation is what makes the difference between ordinary businesses and high-performance organisations (HPOs), says international process improvement expert, Steve Towers.
Towers, who is preparing to release his eighth book, says his research into the characteristics of HPOs has resulted in the book and a new set of tools aimed at maximising BPM to enhance business performance. “In BPM, there is a lot of focus on Lean Six Sigma, the technologies and the processes. Basically, companies are doing things right, but they are not doing the right things,” says Towers.
Their metrics may tell them they are managing their processes correctly; they may be showing high levels of performance and efficiency in line with their traditional metrics, but despite this, they may still be going bankrupt. This is because they are measuring the wrong things,” he says. “They may be very busy – but are they doing the right things in the 21st century context?”
Towers says the most critical measure is that of total customer experience. “Companies cannot focus internally,” he says. “HPOs focus on the customer experience. It’s not just about what happens internally; it is also about what happens before that process and what happens after.” Towers has long advocated an ‘outside-in’ approach, rather than an ‘inside-out’ one. This way of thinking is customer-centric, something organisations have to be in an increasingly competitive business environment.
To align processes with HPO best practice, says Towers, organisations need to ask ‘who are our customers and what are their needs?’ “Don’t start with the technology or the process,” he says. “By focusing on the customer first, you may discover you have been focusing too much on unprofitable customers, for example. Once the target customers are identified, you have to define what it is they need. This is often not articulated well – they may not know what they need before it exists, and often the focus is mistakenly placed on what customers think they want – not what they actually need. HPOs actually produce products and services in advance of customer needs.”
Towers highlights revolutionary technologies, such as the Apple iPod, which met customer needs at a time when customers themselves did not realise all-in-one digital music management was something they wanted and needed. “HPOs use systematic approaches to this,” says Towers. “They are scientific about assessing customer needs, and measuring what customer success looks like. Classically, companies use subjective approaches like net promoter scores to assess customer satisfaction. But this is not necessarily good enough. This is a very subjective way to measure customer experience.” Towers says: “Companies need to get scientific about customer experience – they need to measure the right things, using the customer experience ratios used by HPOs.”
ITWeb BPM Summit 2013
Now in its fifth year, ITWeb’s BPM Summit reveals how to drive breakthrough business performance by focusing on practical advice, technology updates and case studies. The summit will help BPM practitioners to improve their skills, advance their BPM projects, and deliver truly transformational BPM to their organisations. For more information, click here.
Towers notes that assessing customer experience by asking ‘how do you feel?’ is subjective and reactive – it takes place after the event. “HPOs know that evaluation of customer experience has to take place at the time of the action, delivering immediate feedback that allows enterprises to manage and control the interactions as they happen.”
This new approach to measuring customer experience to deliver business benefits could help fast-track organisations’ growth in SA, Towers believes. “In BRICS nations, companies are now setting new benchmarks on what performance looks like. They have the potential to take these concepts, run with them and become world-class performers. In line with this, South African companies stand to play in the big league if they adopt more effective process management,” he says.
Towers will deliver a keynote presentation at the upcoming ITWeb BPM Summit on market-focused approaches to strategic business improvement. He will also elaborate on these approaches in a workshop aligned with the event, when he will outline his findings on HPO differentiators. The tactics of HPOs, to be revealed in his soon-to-be-released book, will be shared with SA ahead of world audiences. Towers will also give insights into the metrics behind customer experience ratios – the new measure for customer experience.
For more information about this event, click here.
At a recent performance appraisal this comment was made seriously, “If you pay me for doing dumb things, I will get really smart at doing dumb things”.
Do you measure people with ‘dumb’ metrics – activities and outputs, or with Outside In measures of results and outcomes? If Balanced Scorecards (BSC) and Strategy Maps fail it is largely as a consequence of having dumb metrics in there – activities and outputs.
So how can we measure the right things and encourage success? Instead of people rushing to deal with a call (because all calls must be less than 2 minutes) how do we measure the meeting of a customer need – effective resolution of a query? Using the appropriate process and performance metrics within an articulated Enterprise Architecture is a good starting point. This presentation leads us to the how of that. Enjoy.
The Customer Experience is the Process. What does that really mean and how can that help us reduce costs, grow revenues and improve the customer delivery (at the same time). In this first short presentation James Dodkins (BP Groups Chief Customer Officer) provides us with an understanding.
Describe your Target – The target is the “area” we are seeking to improve. Most often this would be thought of in terms of a “process” but there is no restriction on how we define the target areas we are working on.
Identify Break Points – For the target area, all of the Break Points that exist need to be identified. They also need to be described well enough that we (and others) can easily recognize them at any time.
Describe your Actions – Describing your actions is the way you clearly identify the steps you could take to eliminate causes of work. By identifying Actions and the number of Break Points each Action will eliminate, the benefit from each Action becomes clear.
Do the Cost and Benefit Assessment – The Cost and Benefit assessment adds several items that are important in helping us build our Cost Reduction Plan. What we need to know is: How Much? How Long? How Beneficial?
Build your Cost Reduction Plan – Using the Cost and Benefit assessment we can now build our Cost Reduction Plan. We do this by choosing which Actions are to be taken, and the order they are taken in.
Let’s explore these Steps in more detail:
Step 1 – Describe your Target Area,
ideally in terms that are understandable to others in your organization. Your Target Area will often be a “process,” as this is one of the most common terms used in describing the work people do.
Step 2 – Identify Break Points.
For the target area, identify each of the Break Points that exist within it, then record them in a descriptive enough way that others (and you if you come back later) will immediately know what you mean.
Note – This may initially present a challenge as it is not something we commonly have done in the past. Persevere and do your best to identify the Break Points in your target area and enough information will be available for you to build your cost reduction plan.
Do you follow up on others to ensure that activities they are responsible for are being done in a timely manner so you can get your primary work done?
Any time we “check” on something, we are doing so because a Break Point exists.
Do you ever need to “fight a fire”?
Every “fire” exists because of a Break Point, Moment of Truth or Business Rule.
What about meetings? Do you have meetings in order to get everyone “on the same page”?
Many meetings exist solely to coordinate and communicate the actions that need to be taken in response to “break downs” from Break Points and Moments of Truth.
How many actions do you take to confirm something got done, has been completed or to check on something to make sure it is in a particular place, with a particular person, etc?
Actions taken to confirm other actions are behaviors that arise from failures that have occurred in the past (we have learned our lesson) at Break Points and Moments of Truth.
How many times have you had to fill out one or more forms to “document” the fact that something got done?
Documenting normal work is a behavior spawned by process failure at one or more Break Points as a means to “reduce” the number of failures that don’t get “caught.” (This is called fixing the effect – which always leads to the creation of more Causes of Work.)
Remember, any place that a hand-off occurs for any interaction between any combination of people and systems, a Break Point exists.
What do you need to know to put this strategy to work for you?
It’s simple. You are only five steps away from identifying the causes of work in your organization then eliminating them. You need to have a target, Break Points identified, Actions identified, Cost/Benefit Assessment and your Cost Reduction Plan.
A variety of studies exist that place the percentage of time the average employee spends on non-value added work at 40% to 90%. Regardless of where you fall on that scale one thing is obvious…
Identifying and eliminating the causes of non-value added work presents an opportunity for cost reduction of at least 40%. And that’s a prize worth pursuing.
What are Break Points?
Any point within a process where work is handed off is a Break Point. There are four main types of Break Points:
1) person to person
2) person to system
3) system to person
4) system to system.
Break Points are places where stuff goes wrong more often than any place else. Handoffs fail, work is incomplete, and stuff gets duplicated in a cycle that produces a perpetual drain on the organization’s resources.
Like the baton hand-off in Track and Field relay races; if something happens at the hand-off, something unplanned, the next runner must stop running and deal with the resulting issue.
They can’t continue with the race, which is their professional skill, until they have dealt with the failed hand-off. So when something unexpected happens at a hand-off we must stop what we are doing and perform an activity that is nothing to do with our professional skill.
What could go wrong at a Break Point?
For the relay team, the runner waiting for the baton could start too early, either runner could drop the baton, the runner receiving the baton could start too late, either runner could use the wrong hand*, the baton could be slick for some reason causing it to slip… you get the point.
*Many Break Points cause work when the patterns we (people) are used to get changed for any reason. People always create patterns of work behavior. It makes it much easier for us to do things that have repetition. The patterns we’re talking about are not documented anywhere, they are the naturally evolving patterns people in our organizations create to help them do their work.
But these patterns are often violated. For example: a new person is involved (they don’t know the existing pattern), someone is using a different software program, somebody changed a form or document, a new policy went into place requiring people to follow a business rule in how they do a more generic activity like making a request or sending an email, someone’s job changed slightly and they have created a new personal work pattern, a new manager comes in, etc, etc, etc.
To identify with the concept of Break Points (BP) all you have to do is think about the work you do on a daily basis. How much of that work is caused by Break Points?
That is the size of the prize the Break Points Toolkit targets – the rest of the non-value added work iceberg.
Non value-added work is consuming up to 90% of your employees’ time. Yet many of the approaches to increasing utilization are producing little benefit and may even be contributing to the problem. Yet there is a much easier and direct way to identify the causes of this non value-added work in your organization so that you can start eliminating them today!
A Google search on “non value added work” turns up over 104 million matches. It’s an issue we are all very aware of, one that is a source of continuing frustration because most often when we act to increase our utilization somehow the numbers never seem to hit the bottom line.
So what we are doing isn’t working.
We need something different, something that works. Perhaps there is a statistical method or scientific formula that will help us break through this success barrier?
Actually, all you need is a simple technique that allows you to identify the source of the non value-added work so that it can then be removed!
It’s kind of like a tumor. Before X-Rays, Sonograms, and MRIs, it wasn’t easy to identify a tumor in the human body. With these tools many tumors are now very easy to identify. They stand out like a sore thumb.
For non-value added work our diagnostic machine is Break Points. They are the number one cause of work in organizations everywhere and yet most of the time we aren’t even aware that we should be looking for them.
Like those advanced medical diagnostic machines, using Break Points as our “cause of work diagnostic machine” makes it easy to identify the sources of non-value added work.
And once we have identified them we can take action to eliminate them. That’s where we are going next.
