Author, Mastering Business ChaosIn working with organizations I often hear statements to the effect “that when things get back to normal – we can take the time to get this right, but in the interim, we need to do this work-around to get through the day,” - or week, month-end, etc.”
The reality is that there is no state of “normal” in an organization to “get back” to – there is just continual change. Change is increasing and at an increasing rate.
The Business Platform (People, Processes and Supporting Technologies)
Organizations create sustainable business value via their business platform. An organization’s business platform are the people, processes and supporting technologies integrated with and across the tactical, operational and strategic layers of the organization.
To embrace and successfully manage the chaos of continual shifts and changes in an organization’s business environment requires a business platform that enables sustainable and continual evolution and pace of change.
Accordingly, the goal of business transformation is to transform an organization’s as-is business platform to a sustainable future state business platform that manifests six essential characteristics:
- High Performing. Effective in producing customer value and efficient in the utilization of resources to create customer value.
Scalable. Enables business revenue to grow exponentially, while the staffing of the platform grows linearly / incrementally.
Extensible. Enables new business functionality (activities, procedures, technology, mechanisms, roles, etc.) to be added quickly and seamlessly to the platform.
Adaptable/Nimble. Enables proactive early identification and rapid effective response to the shifts and changes in the business environment.
Robust. Stability of the platform at the tactical, operational and strategic layers to enable an organization to leverage its strengths (and bolster weakness) to exploit opportunities and mitigate threats from shifts and changes in the business
Transparent. Enables the appropriate stakeholders to accurately, thoroughly and unambiguously understand the components and moving parts at each layer of the platform.
Business transformation is difficult. Most organizations struggle to achieve transformational and sustainable change regardless of the amount of time and resources expended on the effort.
The primary reasons that business transformation initiatives such as Business Process Reengineering (BPR) often fail to deliver transformative and sustainable change are:
A myopic focus on the tactical workflow layer of an organization without fully engaging the operational and strategic layers;
Superficial mapping, high-level analysis and limited scope - rather than detailed and deep analysis across the enterprise.
Insufficient experience in recognizing the underlying patterns across the enterprise and among the layers that need to be disrupted and reengineered.
Sub-optimization of the opportunity backlog – informal prioritization of the opportunities based subjective factors rather than objective prioritization based on value drivers.
Passive rather than proactive development, implementation and on-going refinement of the opportunities selected from the backlog.
The solution is to engage the organization from 360°.The Interrelated Layers
Organizations are complicated, complex and chaotic. Transformational BPR requires engaging the organization from 360°.
360° engagement requires analyzing people / roles, process and technology at the tactical, operational and strategic layers – and analyzing how people, processes and technology engage one another across the enterprise and among the layers..
The Tactical Layer
The tactical layer of an organization includes the business work activities, the hands-on staff performing the work activities, workflows and supporting policies, procedures and technology. Together, these elements comprise business processes.
The tactical layer of an organization and its associated business process comprise a complicated system – many moving parts. There are many interrelated work activities, policies, procedures and technologies comprising and supporting the work activities and staff performing the work activities.
The Operational Layer
Organizations are typically organized vertically / hieratically from a managerial perspective. For example, a workgroup of 3-5 staff report to a supervisor; a group of supervisors report to a department manager; department managers report to a general manager; and so on it goes up the organizational hierarchy through senior and executive management levels to the COO/CEO.
The operational layer of an organization is complex - people in the operational layer interact based on knowledge, judgment and experience more so than by policies and procedures.
Operational layer complexity manifests: 1) between the tactical and operational layer – the staff performing work activities and their direct supervisors and managers; 2) at the operational layer horizontally between business functions (e.g. between the Supervisor of Order Entry and the Supervisor of Customer Billing); and 3) vertically up and down the tiers (e.g. between the Manager of Billing/Accounts Receivable and the Supervisor of Customer Billing).
Accordingly, as the business processes flow horizontally across the organization, the various work activities are supervised / managed by disparate silos of vertical hierarchies - which do not always work together in harmony.
The Strategic Layer
In successful, high performing organizations, the strategic layer of the organization creates business chaos – and drives chaos down and across the organization into the operational and tactical layers. Business chaos is the apparent and perceived state of flux in an organization as it evolves and changes.
Major shifts or changes in an organization’s business environment (aka strategic inflection points) require an organization to rapidly adapt - or risk going into decline. The emergence of innovative competitors, significant regulatory changes, changes in economic conditions and shifts in information technology are examples (the spheres in the illustration above) of major shifts and changes in an organizations business environment.
When to Use BPR
Transformational BPR is essential to organizations that encounter a major shift or change in an organization’s business environment – such as competition, regulatory change or economic conditions that requires an organization to rapidly adapt - or risk going into decline.
The shift or change in the business environment is sometimes referred to as a strategic inflection point – a term coined by Andy Grove, former CEO of Intel.
Based on experience across the spectrum of industries across the world, there are 10 types of recurring shifts or changes in the business environment that require transformational BPR.
These shifts or changers include
Enterprise Application Software Initiatives
Regulatory Compliance │Organizational Governance
Business Process Outsourcing & Shared Services Arrangements
Leaning / Flatting the Organizational Hierarchy
Mergers & Acquisitions
Divestitures / Going Private
Pre-IPO / Early Post IPO (also applies to rapid growth)
Graying of the Workforce / Talent Acquisition
Every organization continually experiences major changes and shifts in their business environment and almost every organization is currently experiencing at least one of the 10 reasons - and typically multiple reasons for transformational BPR.
A business platform that is high-performing, scalable, extensible, adaptable/nimble, robust and transparent enables your organization to successfully manage and leverage the chaos of continual shifts and changes in your business environment.
However, your business platform is complicated, complex and chaotic. Transformation is equally complicated, complex and chaotic. Successful transformation requires substantial business knowledge, adept judgment and seasoned experience.
Organizations that embrace and successfully transform to manage the chaos associated with continual shifts and changes in their business environment thrive - regardless of the relentless waves of shifts and changes.
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