Do you really know how your business operates?

When leaders are asked to describe their operating model, they will often look confused.  When they discover it refers to how their business runs, they quickly reach for the whiteboard markers and get ready to draw.

Initially, most leaders draw a high level image of their business.  It may show the various departments; a reflection of their colleagues on the senior leadership team. 

 “Please can you draw the processes for the level below this one?” I ask them

They continue to provide an insight into the organisational structure, sharing an image of how the organisation has evolved over time.  They make the comment that they can provide the details for their department but not for other departments. Once they’ve finished, the leader will talk me through the image on the whiteboard.  I will then explain that organisation charts provide an insight into work that is currently being performed by people in the organisation.    

Designing the organisational structure, is a process that should occur after other critical steps have been completed.  These steps include defining the specific work that must be done, and mapping the process steps required to complete that work. This latter step shows the system of connected processes for your business. 

When leaders are asked to draw the systemused to transform inputs into the required outputs, the task becomes much more complex for them and in many cases, unachievable.  The process is complex and it takes time to do properly. But, it is necessary if the leader wants to run an effective, efficient and reliable business. 

“If you cannot describe what you do as a process, you donot know what you do.”

– W Edwards Deming

Deming was instrumental in Japan’s transformation after the Second World War. The change to how they produced results, initially in manufacturing and then in other industries, was pivotal in their journey to becoming world leaders.

Japanese car manufacturer Toyota is one business that understands the value of mapping their production processes.  The Toyota Production System shows the value that can be realised by managing processes, rather than trying to manage the results those processes deliver.

Everything we do in business involves a process.  Some of those processes will be completed thousands of times each day, other processes may only be done every year or two.  One of the most enjoyable moments I experience when working with clients who’ve never mapped their system before, usually occurs very early in the relationship.

 I will ask the leaders to tell me where they are experiencing pain in their business.  They will often provide three or four areas.  I then ask them to tell me which one is the most important to improving performance right now. Once they’ve agreed on an area, we make arrangements for all the key stakeholders in that areas to invest time together – ‘mapping the processes involved.’  

As soon as one person steps forward and starts to explain how a process works, others will immediately interrupt saying things like this:

“That’s not how it works” 

“Do you do that?  I actually do the same thing but in a different document? 

“Is it possible for me to access that data? It would make my job much easier.”  

“Can we automate that?”

 Most leaders don’t understand all of the processes involved in producing their results. This means its costs the business more money, time and energy to produce those results, than it should.

Having clarity about a process, enables you to monitor the performance of every process and find ways to improve them – when appropriate.  Every process should have an owner (and only one owner) who is ultimately responsible for any changes made to the process. Interestingly, Toyota give every process owner (and those working within aprocess) the authority to improve the process.  They are encouraged to try new things, and everyone knows that not everything they try will work.   

Instead of instilling fear in their employees about trying something new and it failing, leaders in Toyota make sure employees feel supported whenever they try to improve the process. If it fails, the team comes together to see what they can learn from the failure and will try again.  This is what Toyota calls a learning organisation. 

“When you have mapped your system of connected processes, you are able to look at the performance of the system, and each individual process within the system.  This immediately gives you the ability to improve your business performance. And, its easier than you might think. “

– Sean Redmond

When you have mapped your system of connected processes, you are able to look at the performance of the system, and each individual process within the system.  This immediately gives you the ability to improve your business performance. And, its easier than you might think. It is only when you know what work must done, and the processes required to do the work, should you begin to discuss the organisational structure.  

There are important rules and principles to designing an organisation to ensure it is effective and efficient. The organisational design must be aligned with the work required to meet the goals of the business. 

So, the next time someone asks you about your business; 

• Will you be able to draw the system of connected processes?   

• Will you be able to explain how one process relates to another? 

• Will you feel confident describing how each process is performing? 

• Or will you draw the latest version of the organisation chart, expanding only in the area that concerns you?