Innovating the business process

Another thought, following on from the video about generating business outcomes via value networks which sparked my last post.

One of the arguments made for developing these value networks was that they allow individuals to introduce their own variations into a process designed to achieve a consistent outcome.  This then helps organisations to innovate more easily, letting them try out different ways of developing or delivering products and services because they aren't tied down to a single prescribed method.

I'm all for innovation - it's what gets me out of bed and to my desk every day - but the idea that anyone within an organisation has the ability to do their own thing when it comes to providing customers with the stuff they're paying you for - the stuff on which your company's reputation is based - makes me very nervous.

These kinds of innovations need to be managed carefully.  Any changes to the way a product is delivered should be analysed and tested first: are the cost savings sustainable?  What are the impacts on the supply chain?  Can we confirm that quality won't be affected?  What are the risks associated with the change? 

By all means, look for ways to improve the way you do business, but do it in a sandbox environment: behind closed doors, away from the watchful eyes of your customers: 

• Carry out an impact analysis: make sure that you aren't introducing problems in other areas of your operation which will end up costing you money in the long run.
• Compare the predicted costs and benefits against your existing baseline, and not just over the next few months, but forecast over the next few years. 
• Implement the process changes in a development environment. Run the new process in parallel with the existing one for a while and make sure the changes have the effect you though they'd have. 

Then (and only then) migrate the tested processes into your production environment and start looking for the next thing to improve.

Continuous process improvement is all about shortening the cycle time to complete these tests and introduce changes, not about taking the gloves off and turning your operation into a free-for-all.

How many ways are there to get to where we want to be?

I just found an interesting post on business processes as value networks from Joe Dager, one of the people I follow on Twitter.

The idea that there may be a benefit in not prescribing one single method of achieving an end result from a business activity got me thinking back to my first job.  When I worked at ME&P, we built models of traffic flows through transport networks in order to understand how different people react to the same problem: how to get to work in the morning (or afternoon, or whenever - timing can be everything in answering this question).

Most people want to spend as little time commuting as possible.  Some people will even move house if it means shaving ten minutes a trip off the journey to work (that works out at 75 hours a year, by the way; how much more could you achieve if you had almost two more working weeks in your schedules?)

By default, navigation aids such as SatNav systems or route planners will work out the quickest route from A to B.

That's fine until everyone tries to drive down the same stretch of road at 8.25 a.m. and traffic grinds to a halt.

The models we built at ME&P used the full transport network, both private vehicle and public transport.  We included all of the alternative routes between two points, and we used feedback loops which allowed alternative routes between the same start and end points to be used if the 'quickest' route became clogged up.

The models we now build at Thorneycreek also take into consideration different ways of achieving the same result.  For the most part, our clients want a simple, repeatable process; one which ensures a quality product at the end; one which is as streamlined as we can make it.  However, we realise that sometimes things go wrong: an internet connection breaks; postal workers go on strike; a key member of staff calls in sick.

That's when we need an alternative route through the network.  Can we manage without the internet?  If so, what does our new business process need to do to work around it?  If not, do we have an alternative way to connect to it?  In either case, we need to know how quickly we can change direction and start along the new route.

Risk analysis and contingency planning should form part of any business process analysis project.  A little investment in time and effort up front could save your entire business if something unexpected happens.