Performance Management

by Peter Parkes

Business process

Defining the business process is the stage that is the least well understood and the most overlooked, but it’s crucial to success.

If we embed measures and reporting into a process, we help to establish the ‘as-is’ situation as the norm, which makes it more difficult to change. Since the purpose of performance management is to improve performance, it follows that the logical sequence is to optimise the process first, and then apply continuous improvement techniques to it.

In any event, we should have a process map (or procedure) for the process in order to understand what we are measuring, and also to give us a chance of taking management action to help achieve the targets. Most departments and functions have a starting point for this in their procedures manuals, which can be updated and incorporated into the performance management process.

If you do not have an explicit procedures manual for your area of control, now is a good time to create one. People may seem to know what they are doing, and water will always flow down hill, but it may take many routes, and rarely takes the most efficient path. It’s vital that you understand the process that is in actual use, rather than the one you think is happening.

Business Process Re-engineering (BPR)

BPR was hailed as the way to ‘re-engineer the corporation’, but since it was tainted by the trend to reduce costs with the inevitable redundancies that followed in the 1990s, many organisations have shied away from it. Consequently, many organisations have not upgraded their processes since the requirements for ISO 9000 to ‘say what you do, and do what you say’ in the 1980s (in other words, write down your processes and evidence that you follow them). This is unfortunate, since BPR, or at least an investigation of process, is a necessary component of any improvement program, and does not necessarily lead to downsizing.

BPR uses a set of tools and techniques to map the existing ‘as-is’ process, then facilitate the operational team to come up with an optimised ‘to be’ process. There are complex IT-based process mapping solutions about, but these should be combined with focus groups of the people who are actually doing the processes. The more input you can get from the ‘shop floor’ on mapping your actual processes, and coming up with improved ones, the better.

The change management process then helps the organisation move from the ‘as is’ situation to the ‘to be’ situation. (Note that the change management process will also encompass other aspects of required change, such as organisational structure and job definitions).

Action

This aspect of improvement is often referred to as Transformational Change, or Intervention, whereas performance management usually deals with the continuous improvement aspects of the steady state processes.

BPR is a necessary part of the introduction of major computer systems, such as those for Enterprise Resource Planning (ERP) and Customer Relationship Management (CRM), as the business processes need to be explicit in order to configure them within the work-flow in the software.

Exercise

Think about what it would take for your team to be master of their own destiny with regard to process improvement.

Would they benefit from some basic training in BPR?

As affected managers, it is important to consider what automatic data collection and monitoring we want to apply to the business processes at the time of configuration.

As managers and supervisors, our job will be to form part of any review team as subject matter experts, and from there to continue to look for ways to continuously improve the process or adapt it to changes in circumstance. In mature organisations, the operations team often takes full ownership of their own processes.

Business Process Management (BPM)

Business Process Management refers to BPR plus the ongoing management of processes across computer systems and departments; in other words, it offers a wider, more holistic view on improvement as it includes the continuous improvement aspects that are missing from BPR.

As managers and supervisors looking at perhaps only part of an enterprise-wide process, BPM is very valuable in helping us understand the context of what we are doing, and how our actions affect those downstream from us in the process chain.

Equally, it gives us an understanding of what might be changeable upstream to make our job more effective or more efficient.

Exercise

What inputs or outputs to your part of the overall process would you like to change to make your job easier?