Operational Excellence - Process Ownership

Who owns the processes?

By Nils Randrup

 

Organizations are usually organized by functions, and when they want to improve the way they work, they often have to redesign their processes so they work well across functions. Furthermore, process reengineering gurus such Allan Brache, Jim Champy, and Michael Hammer have over 20 years preached the gospel that companies must appoint process owners to make sure that processes are optimized across functions for the benefit of the customers and the company’s financial performance. Yet, very few organizations which have gone thru process improvement initiatives have process owners or can sustain them. However, best practice companies such as Nokia, Shell and Air Productsamongst others have followed this advice and created high-level process owners, and created a process management structure, that was put on top of the functional structures. Top management is following the critical processes and KPIs on an ongoing basis. And it is also well documented, that having a process owner structure in place create outstanding results. Air Products tripled their productivity in 3 years, and grew operating return on assets by 34% from just over 9% to 12,5%. The company themselves testify to the fact that having process owners has been critical for their successful results, especially because it has provided them with a significant competitive advantage, which they have cashed in on financially. So the success of their process improvement work was significantly impacted by having process owners for cross-functional processes.   So it cannot be because organizations don’t realize that they need process owners for cross departmental processes.

Based on interviews with key managers there seems to be at least 6 possible explanations for the lack of cross-functional process owners:

1.      Uncomfortable Employees

·         Most employees are used to and identify themselves with a specific function which they have trained for and which is part of their traditional identity. So employees think of themselves as a marketer, a sales person, a finance specialist. Process Management structure changes this; employees lose their functional power and have difficulty redefining their work identity accordingly. In one company, customer satisfaction rose, but employee satisfaction plummeted.

2.      Complex organizational structure

·         In especially larger organizations, there are already complex organizational structures in place where employees find themselves in matrix type of functions with a product group relationship, a geography relationship and a functional relationship. Putting on yet another organizational relationship becomes too difficult to adopt so organizations just plain don’t.

3.      Marginalized management

When companies appoint middle managers as process owners, they are functioning more like support functions to the functional departments or management without actual influence on the same level at functional or geographical heads. This means that the traditional management trumph the process owners, and thereby isolate the Process Owners from the main line business.

4.      Project Leader syndrome

In quite a few organizations, the Process owners primary job was to redesign the processes and make sure that the redesigned processes was supported well by changes to the ERP systems. However, when this “project” was over the process owners moved on as they were never considered responsible for the process execution. And more importantly they were never made responsible for the actual performance of the processes they managed.

5.      Unclear job function and role

Process owners also typically did not clearly understand their actual role and the changes that the cross functional position made to their jobs. If a manager had used an authoritative and decisive leadership style, this leadership style was often ineffective when it came to influencing or adjusting job content or behavior of employees who “belonged” to other departments, when there was much more need for an influential and motivational leadership style.

6.      Short term management fad

As management tend to change their strategic priorities typically year on year, some companies, then some companies engaged in larger process improvement initiatives and did everything by the book, including the selection of Process owners. However, with the next years strategy plan, the attention shifted to other more urgent issue which arose, or in some cases management changed and so did the strategies. So with the shift of strategy, the process owners roles were not longer needed and the companies moved on.

So if a company needs sustained effect with process owners, measures has to be taken to avoid these 6 pitfalls.

 

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