In the following scheme, we can observe the internal element of the WITORG Guide that focuses on process management. Once the essence of an organizational system has been created, and the concept of continuous improvement has been established, the management processes must be designed and implemented.
The process management concept, if, for example, Wikipedia or ASQ is consulted, includes different and varied elements and concepts. And, especially if we look at the reality of organizations, the concept of management process is very distorted with respect to what WITORG understands as such.
Next, we will analyse some management concepts by processes and process management. An attempt will be made to list minimum conditions so that something can be considered a management process and so that an organization can affirm that it is managed by processes. Always from the WITORG point of view.
We will present two examples of the industry that WITORG considers management processes. Both can occur in the same organization.
Examples of management processes
Example 1: Order to delivery management process
Industrial organizations manufacture products to supply to their customers. This includes a lot of activities in order to deliver that product. All are ordered through a more or less formal organizational system. In all of them, a person or several people can participate in the process to get a product delivered and be able to collect it, one or several suppliers, one or more customers, banks, public administrations, collaborators, etc.
To organize the activities mentioned in the previous paragraph and, surely, some more, an organizational system where these are organized by routines, procedures, standards, ICT, people, teams, departments, etc. is needed. However, an external observer perceives the client’s request, the delivery of the product and the collection thereof.
Example 2: Launch of new products
An organization focused on the design and development of products investigates needs on its own initiative or by requests from third parties and develops products so that they can be sold. In this case, an external observer perceives the acquiring of a need and the development of a product.
Both management processes examples cited can include nuances, criticisms or contributions. Even so, both processes have a clear beginning and end, at least for an external observer. An external observer to the organization can analyse the management process, identifying more or less clearly its beginning and end, considering that this set of elements called management process represents one of the key activities of an organization, such as the examples presented of ‘order-to-delivery’ and ‘launch of new products’.
Other examples that can be considered management processes
- ASTAS: after-sales technical assistance service. A product, once in the hands of the end user, begins to be used and may require attention such as repairs, spare parts, fuel, recycling, maintenance, etc. The interaction between an organization that provides services to clients that make use of the products and require certain attention can be considered a management process from the WITORG perspective.
- Could the automation pyramid (industry 4.0 concept included) and all its connections with external entities to the organization regarding the necessary ICT infrastructure be considered a management process? The same elements of an ICT infrastructure can be used by several management processes such as those shown so far. Different management processes would use this infrastructure.
- Could continuous improvement be considered a management process?
- Could the management of the organizational system be considered a management process?
- For companies like IBM, the delivery service of personal computers to their employees is a process, or subprocess, of management of great importance due to the amount of software and hardware necessary for all the activities in which IBM may be involved in different, sectors, countries and regions.
Process management summary
The first conclusion is that it is important for an organization to have a person or a team of people who can understand a management process as if they were external observers. Understanding the management process as a core or main activity of the entire organization.
WITORG does not intend to define the concept of the management process, rather it tries to convince of the minimum necessary entity that a management scope must have so that it can be considered a management process.
Quality systems and Taylor organizations
The systems shown in the external element B as ISO 9000, EFQM, TQM, QMS, etc. usually mention or are based on process management.
We can often see in organizations certified in ISO 9000 or family or others managed under the EFQM system, departments (functions) placed as management processes in a process map. This does not mean that a department or function cannot be managed as a process. However, this fact will be associated with a Taylorist operation of the organization, with all its conditioning factors; and the main Taylorist conditioner are interdepartmental frictions.
When we see a map of the management process where the departments are the management processes (like the organizational chart) and where the departments, from their headquarters, look for departmental optimum, the efficiency of the organizational system usually suffers.
If we go back to examples one and two, we can see that the processes proposed do not have to do with functional departments, therefore, both their design and their subsequent management will be carried out regardless of the classic power distribution in Taylorist organizations.
If, for any reason, it is considered that a management process or key element in the management of an organization must be divided into parts (even being functional departments), WITORG will consider those parts as ‘management subprocesses’. This way, we will always put the subprocesses at the service of the main process, avoiding local optimizations that can create friction in the main management process, since we do not have the necessary global vision.
The design of a process management and process management
In the process of designing a management process as well as in its subsequent management, large teams of people can participate.
In the design stage of a new management process or when it is detected that it requires modifications, WITORG raises the question of the need for a leader or a team of people called ‘designer of the management process’.
When executing the management process, who is the person or team responsible for the operation of the management process to be carried out? WITORG calls this ‘the management process executor”.
KPIs are associated with management processes and indicate the performance of the management process. Who is the person or team responsible for carrying out the analysis and observing the results obtained by the management process and evaluating the operation of the management process itself? This person or team is called the ‘management process analyst’.
In summary, three roles can be observed conceptually in a management process:
- Designer of the management process.
- Executor of the management process.
- Analyst of the management process.
Can the same person or a single team of people play all three roles? Several options are possible and the solution in each organizational system will be unique.
Organizations different to the Taylorist and their relationship with the business process management
We will briefly expose two types of organizations other than the Taylorist: franchises and organizations based on holacracy, or that are in that trend.
Franchises
In this type of organizations, the design and execution of the management processes are clearly differentiated. The franchisor (designer of the management processes) designs the management processes from a central entity. The franchisee (executor of the management process) executes the management processes designed by the headquarters. Then, the central entity or franchisor takes the role of analyst of the management process to evaluate the performance of its franchisees and thus analyze opportunities for improvement in their management processes. The franchisee may also perform the analysis of his own franchise’s results and may propose improvements to the headquarters.
Both franchisor and franchisees share the role of analyst of management processes, although from different approaches. The responsibility for the redesign rests with the head office as the designer of the management process, but, surely, the franchisees can contribute to that process.
Organizations based on holacracy
Holacracy is today a popular word. Its philosophy is to create organizational systems where the roles, attributions and scope of people are defined and there is a freedom of action within the established limits. Scopes for teams are defined through circles. All this is endorsed by the organization’s shareholders and CEO. In addition, in holacracy, the organizational system is reviewed frequently and organized so that it can be mutated or evolved while the environment changes.
Holacracy is not at odds with process management. Nor in the WITORG process management. However, within the organization of its circles, it must be observed if it is linked to the idea presented by WITORG about the management process.
Holacracy is a conceptual form on which different organizations work, to some extent, experienced with its concepts, and whose philosophy wants to be implanted in concrete realities. There may be temptation in some organizations which, faced with the novelty and promising of the concept, try to apply their philosophies and carry them out in a Taylorist conception. Certain advances will be obtained; however, the organization must not lose sight of the management process as a key or nuclear activity. There are already organizations, mainly Taylorist, that claim they manage through processes, but whose processes are in fact departments.
Organizational maturity for process management
Organizations can decide to evolve their Taylorist essence organizational system or to take a new approach for management processes. This step is usually made being aware of interdepartmental frictions and in an attempt to overcome them. This evolution requires a change of focus from the people, who must understand the importance of working for one or several management processes as these are key elements in an organization’s performance. People need to understand the operation of the management process considering the following points:
- Globally understand the management process for which you work.
- Know how a person’s activities, routines, etc. are connected within the management process.
- Know the consequences of not being able to execute one’s own activities, routines, etc. assigned from the management process as a whole.
- Be on the alert in case an environmental change can cause the design of the current management process to be revised.
- Have mechanisms to collaborate in the evolution of the management process.
Within internal element 600 of this guide, the relationships of people and teams within the organizational systems are deepened. Even so, the following questions are posed regarding people and their participation in management processes: Is it necessary for all the people of an organization to assimilate the five points described in this section?
Each organization should look for its answers, however, the fewer people assimilate the five points, the more complicated it will be to evolve a Taylorist system to another by management processes.
Premises or considerations to be able to evolve to an organizational system by management processes:
- The CEO and the shareholders must commit to carry it out.
- The management team should involve enough people, who will assume the five points mentioned in this section.
Even if it is believed that the team of people has assumed the five points, this is generally not the case. Some members of the management team may say it is so, but it does not suit them. The reasons can be several: fear of a loss of power, not knowing how to do it, lack of experience, resistance to change, feeling comfortable in the current situation, etc.
If managers sometimes do not have the need to evolve clear, it is easy to imagine how complex it will be for people with a hierarchical position below the management.
In cases where the resistance to change is within the team selected to carry it out, it is possible that a Taylorist reality is disguised in a management processes map. Then, the departments will appear as management processes within the process map of the organization. Even so, improvements can be achieved, but without reaching the essence of process management and its benefits.
Organizational maturity requires a team really formed and convinced of the need for evolution. External help can be used; however, the first thing is the conviction of the team that leads it. Normally, an organization of Taylorist essence will not have the required maturity, it is normal, although there may be some case in which it does.
A team truly convinced and prepared and with the CEO and shareholders’ support can carry out the evolution. At the beginning resistance will appear. This must be overcome with training and, above all, with the conviction through the results achieved and with the understanding of how a global management process works and its benefits.
Those who are selected to work in process management must assimilate the five points. These people will mostly be reasonable, however some of them will need ‘to see to believe’”. It is normal, it is human.
In an organization, when asking a person if they do their job well, the usual thing will be to obtain an affirmative answer. However, when the same person is asked how the collective works, the answer will be: there are problems, it is badly organized, it is others’ fault, that’s what bosses are paid for… WITORG understands that if a person thinks that he does his work well, and nevertheless considers that the group in which he is included works poorly, that is a clear sign that there is no organizational maturity. The reasons will be several, but an important one is usually the lack of awareness of the importance of understanding the management of business processes. Or, simply, the lack of them.
The frequency of review of management processes (process management)
If the management processes of an organization are reviewed according to standards or systems ISO 9001, EFQM, TQM, QMS, etc., the system review will be carried out with a minimum frequency determined by the regulation itself. The frequency should not be fixed, if we agree with the ideas presented in point 200, although it is always better to do it with a fixed frequency than not.
Based on this basis, these are the points to take into account when reviewing the management processes:
- Management processes are reviewed when performance indicators or other analysis show that they begin to lose both efficiency and effectiveness. Next, it will be decided whether changes or readjustments are required.
- The management processes should be reviewed when we know that in the medium term future there will be important changes in the organization: end a product’s life/service that represents an important part of the current activity; launch of a new product/service with plans to become one of the main activities of the organization; internationalization; significant increases or decreases in the number of people in an organization, others.
- Reviewing a management process does not mean changing it.
- The management processes can be reviewed by comparison with other organizations considered as referents.
- Fulfilling the objectives set for KPIs does not mean that improvement cannot be done.
- The management processes must mutate to anticipate the changing world in a natural way, otherwise, we will be talking about a rigid organizational system with difficulty to evolve as the environment does.
KPI, targets and business processes management
In internal element 400, KPI aspects and the objectives management within the organizations and their organizational systems are analysed. To evolve, according to internal element 200, it is necessary to measure, understand and be connected with the reality of the environment. And as the management processes are the ways to relate internally and, above all, with our environment, it is advisable to use KPIs connected to a management process.
The requirements of quality systems as ISO 9000, EFQM, TQM, QMS also include the use of KPIs in each management process to measure efficiency and effectiveness in their performance.
The association of KPIs to management processes is necessary not only as a requirement for compliance with a standard, but also for the connection with internal and above all external reality. In those organizations whose maps of management processes represent departments, their KPIs have the risk of comparing themselves only with internal references, leaving aside the connections with the outside. This can lead to not being able to detect changes in the external environment that affect the organization. An organization may be evolving in a positive way compared to itself, however, it could be left behind in comparison with its environment and not realize it.
Today KPIs relate to each other, and a management process must be understood while understanding the relationships between their KPIs. Not understanding how a KPI affects the rest of the KPIs of a management process will surely mean that the management process itself is not understood.
Systems and management processes
So far, we have spoken about management processes as a concept, trying to show the dimension of the process in terms of the internal and external relations of the organization, visualized by an external observer. When designing a management process, there is almost immediately a great need for systems. We will talk about them in external element C.
The systems mentioned are external elements that an organization decides, at a given moment, to introduce as tools for the management of one or even several management processes.
With ‘systems’ we refer to many elements such as: ERP, PDM, lean manufacturing, ICT, CRM, MTM, spreadsheets, word processors, databases, programming languages, production facilities and many other methodologies, tools, hardware and software.
All these systems shape the management processes. Sometimes a management process is defined and improved through the introduction of systems. However, other times it seems that the introduction of the systems makes the management process seem chaotic.
The same system can work for one organization and not for another, even having the two organizations similar casuistry, and therefore, need similar systems. If a system works in an organization and not in an analogous one, it will surely be due to the inability of a team of people to, first, understand the management process itself and, second, to understand the system implemented.
Today, systems are an essential part of management processes, once it has been decided to incorporate them into the organization. Technological advances evolve systems more and more rapidly, allowing them to evolve positively. Although it must be remembered that systems are still an external element that we will use as help or support, and just as we decided to incorporate them, we can decide to change them.
In the external element ‘C’ we will deepen into the systems topic.