Routine decisions are key to exceptional performance
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Process is about action. When we talk about processes, we’re talking about everything an organization does in its ongoing operations. And so, it makes sense that in order to improve operational performance, many organizations use process improvement techniques such as process mapping to get a handle on all the actions that make up their process flow.
The problem is, in this explicit focus on process-as-action, organizations overlook a much more powerful process performance lever — day-to-day operational decisions. Instead of mapping workflow in detail with “boxes and arrows,” managers should focus on the “diamonds and arrows” of decision flows. In our transformed information economy, improving the decisions of knowledge workers can have a much higher impact on business performance than fixing daily workflow inefficiencies.
My consulting colleague Rob Moon looks at large scale change initiatives through the lens of key decisions. He was recently asked to look at inventory management processes at an electronics distributor where there was a cacophony of complaints about inventory systems and processes and how they impeded day-to-day activities. Inventory performance had degenerated well below industry norms and Rob used this as the starting point of a week-long workshop with materials managers, the key decision-makers for sourcing, purchasing and fulfillment. After reviewing the long list of system issues, Rob posed the question: “What daily, weekly and monthly decisions are you responsible for, and how do they affect financial goals?”
It was a back-to-basics moment. It took two days for the materials managers to reorient themselves from process details to business goals and operational performance, and some further coaxing before they would brainstorm a list of the 47 decisions in 6 categories that they were responsible for. After some hemming and hawing, they prioritized and analyzed 12 decisions that were key to performance. They then focused on these critical 12 for immediate training, performance management, process improvement, and longer-term IT systems improvement. With this re-focusing, they improved the company’s operational and financial performance significantly over the next months.
It is common for managers to lose sight of financial and other business objectives while dealing with day-to-day business. (This happens often, for instance, in larger IT projects.) Another recent one that Rob was asked to review was significantly over budget and had no clear objectives about the improvements it was supposed to deliver. The business leaders were unable to give useful direction in the IT space, and the frustrated project team — which was busily creating process charts — had lost the context.
For the team to move forward it first had to be clear about the business perspective. The purpose of the project was to reduce costs and risk, and to improve operational performance. So with Rob’s coaching the team identified all the decisions that workers would make and reviewed each for its potential to be made better and more quickly. Decisions were examined for timing, information inputs, responsibilities, level of detail, scope, and whether they could be supported by new planning tools.This enabled the team to envision how the work could be improved and brought the redesign back to life. In a few weeks, what had been a years-long, opaque design process focused on implementing a system changed completely; it became a focused design process that leveraged performers’ decision-making to drive better operational performance.
These two stories highlight the advantages of focusing process improvement on “diamonds and arrows” — i.e., making better decisions. Project leaders who focus exclusively on the “boxes and arrows” of workflow action improvement will often find themselves caught up fixing yesterday’s operations and systems issues. Workers who participate in these interviews and workshops tend to fixate on the pain points they want fixed. This focus on immediate problems can actually distract the project team from the real goals of the business and the decisions that will help achieve them.
But, as Rob told me, “the biggest payoff of focusing process improvement on individual decisions and the overall decision architecture is that it engages and empowers workers. As we clarify interdependencies, ownership, risk tolerances, and the skills we need, we are putting performers at the center of the operation.”
This article first appeared in the Harvard Business Review and has been lightly edited.
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