We have all heard about how difficult the banking situation is on folks holding a mortgage who maybe at risk of foreclosure. Last night I happened to catch this segment on ABC News: Nightline.

The more I watched the more irritated I became, and it didn’t even affect me!  Why? Because it is SO unnecessary. This is the result of process failure, pure and simple and has nothing to do with how complex any given mortgage may or may not be.

How do I know this? Because folks couldn’t get to any given department to begin the process of ascertaining complexity! Bank Of America, IndyMAC (now bankrupt), Countrywide, and most others should be embarrassed to no end in their lack of ability to serve their customers. You see, it’s not just mortgages albeit that was the topic of this televised segment, it’s almost any customer interaction anymore that is not a point-of-sale transaction. These companies and most others have spent the lion’s share of their capital in removing friction to capturing revenue, and reduce whatever costs possible to increase the margin. That’s expected by and large, but here’s the rub. They have lost site of the value of a customer and as such have no idea what areas are acceptable to refactor and what areas should be considered competitive, value-added differentiators on the operations side.

Simple enough image, companies for the most part do everything from poor to excellent in just getting their good or service out the door. It’s in that other arrow – “information flow” – that a lot of companies out there do a horrendous job. Requests come back into the organization from a customer and depending on their nature it can be a deal-killer for a customer.

In today’s world, you need quality in delivery AND in information flow to really be a serious, long-term competitor.  That paradigm is increasing in potency and speed a lot quicker than many organizations are able to determine strategies to deal with it. Ask yourself, will the next generation of customers/buyers be as forgiving as we have been in the past decade? I don’t believe they will be, because as time marches on, these next round of customers will have even more choice in who they do business with.  The implicit bet that these banks mentioned above are making is that their customers have no choices in today’s economic environment.  In the short-term that may be true – but it only takes one experience like this to lose a customer for life.  And it only takes handling this customer process really *well* to win a customer for years to come.

Folks, it is about process and even more important than the execution of process is knowing what and which processes matter. Companies have to stop with investing in every link in a chain whereby every link is continuously fed resources (that will not scale, it just burns money) and understand instead where is my WEAKEST link in any given chain; don’t forget the whole point of process improvement. Develop a superior relationship with a customer at the lowest possible cost.  When there are such glaring opportunities to differentiate your business without having to compete on price, one is hard-pressed to find a better investment in terms of ROI.  If you’re not doing process improvement with an eye on the customer then as our new President said, “you are on the wrong side of history”.

We’ve updated our service offering. No, we’re not actually doing different things out there in the field, but we’re working toward explaining it better. We’ll continue to explain in a series of blog posts and updates to our content. We previously unveiled parts of our approach in Lance’s post about defining BPM, and in a previous post of mine about working on this framework on our whiteboard at the office.

It starts with the chart below:

The themes (or pillars) of our framework are Visibility, Control, and Performance. Horizontal bands give you the rough timeline, as well as high-level phase or activity description. The right hand columns inform us on the expected benefits and outputs from that phase. At the bottom of the chart, you can see the overall outcomes of the program. For Visibility: Increased Capability. For Control: Increased Repeatability and Reproducibility. And for Performance: A Breakthrough Benefit (rather than incremental).

To take an example… Across all three themes, if you are just getting started, you spend the first 1-2 weeks doing Process Definition. In the Visibility theme this means Value Stream Analysis. In the Control theme it means prioritization and selection. And in the Performance theme it means Process Charter. The benefit is a $ benefit identified and cost-avoidance of taking on projects that don’t have cost-benefit, and the key output is root and contributing cause identification.

Once we figure out which theme we either are focused on or should focus on, and we figure out how far down the pillar we’ve already traveled, we can give you a pretty good idea of what the typical ROI of that next step is, and we can give you a pretty good idea of what the typical ROI of that step is when you don’t execute the previous steps vs. when you do execute those previous steps.

Check out the revised services page here, where you’ll also find links to further detail on each of the three themes above.

Expect to hear more from us on the subject on this space. But by all means, feel free to reach out to us directly for more information. We’d love to hear from you.

I am not going to give yet another definition of BPM. That has been played out like DeLorean gull-wing doors. Everyone has a definition and in most cases they say mostly the same thing, and then the definition is changed and re-cast again:

Wikipedia – “a method of efficiently aligning an organization with the wants and needs of clients”

Gartner – “BPM is a management practice that provides for governance of a business’s process environment toward the goal of improving agility and operational performance. BPM is a structured approach employing methods, policies, metrics, management practices and software tools to manage and continuously optimize an organization’s activities and processes.”

I could cite more references but it’s really not all that interesting, it doesn’t tell you the ‘How’, ‘Why’, ‘When’ or especially the ‘How Much’, and the latter is much more compelling than putting just a label on BPM. This is really why we talk about Visibility, Control, and Performance in order to describe the pillars of BPM and how this all hangs together.

You can think of BPM this way, no matter what the business objectives are, when it comes to process management or improvement it is going to fall into one or more of the three categories. Visibility – we need to understand how our process is truly operating and be able to act on that information. Control – we need to fix our process because it just isn’t getting it done for the customer or the business. Performance – we need to radically improve a process because either it does not exist or, it is too expensive/broken to bring into control. Any business may be looking for one or all of the three tenets but no doubt it will be largely represented by the above framework. These three areas are closely related to one another. It helps to have visibility in what the process is really doing before you set out making changes to make it more stable (predictable) and likewise, if you are looking for truly breakthrough improvements the more stable the process is the better off you will be in terms of any major remediation work.

Now here is the best news of this whole post. You can do things starting out in Visibility that will deliver immediate and strong benefits even before you stabilize the process. You absolutely don’t have to jump-in to getting an extreme makeover before you can reap solid returns. Sometimes those returns can be big enough that there is no need to go much further out of the gate! The trick here is to understand what that process is doing first, that alone can bring relief immediately in terms of customer satisfaction, costs or even revenue for the business. By “lighting-up” the process you can instrument certain areas to behave more pro-actively, thereby minimizing the impact of an unstable process.

BPM definitions continue to change, what we are trying to communicate is just the basic physics of how this works. The business goals for BPM aren’t changing despite the wrangling over precise definitions – you want visibility, you want control, and you want performance. Focus on that, and your business can benefit and we can have fun in our work! This is how we are modeling our services in each of the pillars, as very discreet phases with very real benefits in each one.

Happy to talk more about this if you want to learn more, feel free to shoot me an email, call, or come talk to me at Driven 2008. I’ll be writing more about our framework, consider this the first volley

[author's note:  we're going to publish a number of blog posts that reveal our thought process behind what we do.  I guess you could call it looking backstage or behind the curtain.  I think this formulation is particularly interesting at the stage of the business that we're now in. ]

Not Just What. It’s How and Why.

We have a set of services we can offer customers, and in fact we have a list of a good number of those services on our website. That’s the “What” as Lance would say. But we don’t have the How, or the Why.

So Lance has been going through the process of defining the How and Why, and yet boiling it down to a visual that can be easily consumed. All great creative processes seem to require napkins or white boards. We went with white boarding. We now have a great chart on the wall that shows progression over time for achieving improvement in your process based on the three calls to action on our front page of the website: Visibility, Control, and Performance. Each horizontal band captures a discipline, and each vertical band captures a focus area. The intersections are specific services with expected outputs and expected value (return).

To me, the brainstorming around this framework was a lightbulb moment – the “aha” moment that crystallizes all those things we do into an actionable framework. For a given process, you find out what your goals are in terms of Visibility, Control, or Performance (or combination of the above), and where you are in your current progression from top to bottom (timeline reflecting actions taken to date). Based on that, the framework pretty well tells you what you should be looking to do next.

Already decided what to do? Well, our framework will tell you what the expected return on that next step is, and what the expected outputs should be.

We have some interesting ideas for this framework. It let’s us do apples to apples comparisons of projects and processes that, on the surface, are quite different. Which then allows for how we can focus our business growth and business development, because we can talk about statistically significant volume of projects and ROI’s associated.  Over the long run this will be a really valuable asset, and in the short- to medium- term it helps us drive a lot of decision-making.

We’re still working on the fit-and-finish for the framework, and it will likely to continue to be a work-in-progress as we build out our business, but watch this space for more details soon.