By Harry Rever
Why are we working on this project? How does this project fit into the grand scheme of things? Does anyone even care about this project? Is common sense ever considered when selecting projects? Can you, as a project manager or Six Sigma Green/Black Belt, relate to any of these situations? How many times have each of us been assigned to work on some seemingly silly “pet” project? These situations are not only frustrating to project managers and team members but they make achieving project success even more difficult. And there is yet another entire category of frustration which we almost all have to deal with on a regular basis; knee-jerk reactions, over-control, and micromanagement. Typically, some business leader looks at a number on a report, comments on it, and unknowingly (or worse, knowingly) set off a chain reaction of reactive decision making all in the name of “improving results.” It’s maddening yet as common place as the ubiquitous monthly report review meeting. What is needed is a fool proof way to select projects which align with the strategic direction of the company and a way to drastically reduce knee-jerk reactions. Business Process Management is a fundamental concept of Six Sigma and directly addresses both sets of the problems just described.
Business Process Management
Corporations in both service and manufacturing industries have some kind of output: completed orders, finished products, installed services, etc. This “output” is a direct result of the company’s established methods, their procedures, and their processes. Hopefully, the effectiveness and efficiency of those processes are adequately and appropriately measured. If a solid set of process metrics is not in place, this is an entirely separate, and equally important, topic to be addressed. (Please refer to the two “Fundamentals of Metrics” articles referenced at the end of this article for ideas relative to this issue.) It only makes sense then to improve the output of any business one must improve the process that generates the output. Managing the process, not the results, is the key to improving results. It really is that simple. Figure 1 shows the five major components of a process. Identifying the suppliers, measuring the inputs and process steps, measuring the outputs, and identifying both internal and external customers can help any project team properly scope their project. (Please refer to the article on the SIPOC diagram referenced at the end of this article for ideas on scoping.)
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Figure 1 – A generic picture of the major components of a process
The concept of process thinking and process management is one of the main themes of Business Process Management. Business Process Management (BPM) is a top down approach to selecting and managing projects. It adds structure to project assignments and is a systematic method to understand, monitor, and improve business results through proper project assignments. To do this effectively, a process mindset is imperative.
A Paradigm Shift is Necessary
A sure sign of ineffective leadership is to “blame the people.” This is an easy way out for supervisors and leaders. “You need to work harder.” “Look, do whatever it takes, just do it.” “If you can’t handle this, I’ll find someone who can.” People who manage this way simply don’t understand that people are part of the process, just like the materials, machines, and methods they use to do their jobs. Very rarely does a person own or have control over a process. Therefore, telling them to overcome the limitations of a process (a process most likely established by business leaders) is not only frustrating, it’s kind of a ridiculous way to manage improvement. BPM is not about fixing people, it’s about fixing the process. Reacting to output metrics is, by its very nature as shown in figure 1, after-the-fact management. These end-of-month “scorecards” or “dashboards” reflect lagging metrics. These are the types of reports and metrics that lead to knee-jerk reactions, tampering and over-control. Process management focuses on managing the inputs and the process in order to deliver the necessary and required output results. Properly managing these leading metrics will lead to satisfactory output results. This is a fundamental change in the way many organizations currently manage results.
Another consideration for process thinking has to do with the functional aspects of organizational alignment. Historically, companies manage vertically through hierarchies in functional divisions. Of course processes cut across internal functional boundaries. It is not easy managing processes through these silos.
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Figure 2 – a Functional Focus compared to a Process Focus
Because processes cut across functions, projects will cut across functions. Business Process Management understands that projects will most likely be made up of cross functional teams representing various departments and organizations. The focus is on improving core processes which deliver customer value; a horizontal thinking approach to improvement. It takes a skilled project manager or Six Sigma Green/Black Belt to deal with the inevitable political and turf issues that will arise with process-focused projects.
Aligning Metrics, thus Projects, to Business Strategy
So, how should a project be chosen? More importantly, how can we be sure the project is aligned with the strategy of the organization? The bottom line is that business leaders are interested in improving results. Inevitably the way leaders go about improving is through projects. This is why the Project Manager and Six Sigma Green/Black Belt are such important positions in business today. The only way to know if results have improved is to see desired movement in the key metrics of the business. Hence, every project should in some way be tied to a strategically important key measure of the business. A successful project is one that improves one or more of these key metrics. A project can finish on schedule and on budget but still may not improve anything. The true value of a project is easily demonstrated if it can move some identified business leader’s key measure in the right direction.
A vital aspect of BPM is developing a complete process view of the company which includes a comprehensive set of metrics with each metric having an identified process owner. These key measures should be linked to customer needs and business strategy. The end result is a set of metrics which link departments and align with corporate strategy. Figure 3 demonstrates this concept of line-of-sight metrics and accountability for process performance. This BPM metrics process should be driven from the top and facilitated by a Six Sigma Green Belt or Black Belt. These metrics should be the ones linked to balanced scorecards and end-of-month reports or dashboards.
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Figure 3 – Business Process Management Key Measure Hierarchy
Figure 3 is a depiction of how an organization can organize and align key metrics so they drive to common goals and business strategy. Starting from the top, the company or organization decides on their most important key company and customer driven metrics (for example, measures include sales, expenses, accuracy rates, process times, or turnaround time). These metrics are not only identified but they are tracked using run charts or control charts. In other words, they are looked at over time using the correct quality tools, assessing stability and capability along the way, to avoid knee-jerk reactions. In this example, the first set of metrics is at a Vice President level. Four key metrics have been identified. At the Director level, key measures are identified which directly support the VP metrics. These measures represent the processes which the directors are responsible for managing. These director key measures become the VP’s process measures. Area Managers who report to the directors have their set of key metrics which drive to the director’s key metrics. These area manager key measures, in turn become the director’s process measures. Each measure:
- Is identified
- Reflects processes the measure owner is responsible for managing
- Is operationally defined
- Has a data collection plan
- Is tracked using a run chart or control chart
Additionally, knee-jerk reactions and over-control tactics can now be avoided. Figure 4 shows the steps business leaders can take to more effectively manage improvement efforts, taking advantage of process thinking and the key metric alignment. This decision tree emphasizes the correct approach to managing the process of improving as opposed to shooting from the hip or reacting to single data points.
The Antidote to Knee-Jerk Reactions and Over-Control
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Figure 4 – Project and Process Management Decision Tree
The greatness about managing the way Figure 4 describes is, it is so much easier and more logical. It’s an unemotional, process-focused approach to making decisions based on data. Instead of making knee-jerk reactions, now it is simply a matter of deciding if results are good enough. If they are not, a process improvement team is established to address the problem and improve the key measure. If a process improvement team is already in place, now instead of micromanaging, the project champion simply manages the process of improving by asking questions relating to a team’s progress through the Six Sigma DMAIC steps (Define-Measure-Analyze-Improve-Control). (Please refer to the PM & SS article referenced at the end of this article for more information on DMAIC.)
It is very common for people to say, “We already have something like this.” More times than not, unfortunately, it’s not the case. Remember, every key metric should not only be identified, but needs to be operationally defined and tracked using a run chart or control chart. An understanding of what and how to measure is necessary to ensure the right metrics are in place; metrics that consider the voice of the customer and the voice of the process. This usually requires training in process improvement or Six Sigma.
A Process Approach to Improving Results
The concept of Business Process Management helps leaders manage the entire business by understanding and managing the processes within a company. Processes are identified, measured, and can be broken down into sub-processes. This allows for better project scoping and faster turnaround on project completion. To fix a higher level key measure or process, a team will focus on the lower level metrics and processes as shown in Figure 5.
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Figure 5 – BPM Provides a Complete Process View of the Company
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Does your organization suffer from a chaotic approach to improving results; one in which projects are not strategically aligned and everyone seems to have their own approach to improving?
If everyone is working on what they think is most important, there will be inconsistencies, more variation, frustration, and it will be harder to manage improvement.
However, if a company incorporates Business Process Management, one of the foundational concepts of Six Sigma, they will have organizational alignment and accountability where everyone is working towards common goals. This is a more consistent approach to establishing and prioritizing projects. Equally important, BPM will reduce knee-jerk reactions and emotional decision making.
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Figure 7 – Organizational Alignment via. BPM
The choice is simple: either take a chaotic approach to establishing projects and managing improvement or utilize the BPM structured approach based on process understanding and solid metrics. What will you and your company decide?
References
CSSBB Primer, Quality Council of Indiana, West Terre Haute, Indiana, December, 2001.
International Institute for Learning. Lean Six Sigma Green Belt Certificate Program. New York, New York. 2008 www.IIL.com
Rever, W. Harry. The Fundamentals of Metrics Part 1: Considerations for "What" to Measure. www.allPM.com April, 2008 newsletter.
Rever, W. Harry. The Fundamentals of Metrics Part 2: Considerations for "How" to Measure. www.allPM.com June, 2008 newsletter.
Rever, W. Harry. Similarities Between Project Management & Six Sigma. www.allPM.com May, 2007 newsletter.
Rever, W. Harry. The SIPOC Diagram. www.allPM.com September 2007 newsletter.
Rever, W. Harry. Project Management and Six Sigma: Use Six Sigma Methods for Better Project Results. www.allPM.com March, 2006 newsletter.
© 2009 allPM.com
If you have further questions or comments, Harry can be reached at harry.rever@iil.com
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