I confess–over many years designing office/service (O/S) process, I’ve never once introduced a client to free-standing BPM technology. Too expensive, especially for SMEs, but often in large company settings as well. Too hard to implement, complicated by increased IT outsourcing. But most of all, in O/S settings BPM technology is largely redundant and often irrelevant. Everything BPM systems do that’s appropriate for the O/S space, we provide using alternative methods–especially process management facilities embedded in more and more application software.

For example, SAP’s application layer workflow engine obviates using “bolt-on” BPM systems. And when ERP systems don’t offer BPM functionality, for O/S purposes we typically look to very extensible and configurable CRM systems for process management and measurement. That works especially well because HYM designs O/S process from the customer in, so we’re already enabling customer-company interactions with CRM software. And in the back office, supply chain management systems including SCOR, which is based on “outside-in” process principles, provides more granular process management support than generic BPM technology.

And speaking of granularity, a new wave of “communication-based process” applications embedded in telephony systems will soon appear, offering very granular management of unified communication across the enterprise. Still less need for freestanding BPM in the O/S space.

Because office/service environments are so highly collaborative and interconnected, the exact opposite of manufacturing, content management tools including SharePoint (used by Microsoft as part of XRM) pitch in and carry part of the load. Project-heavy companies are adopting workflow managing project management applications, which again drill down much deeper than free-standing BPM systems. often much more robust than PM capabilities in freestanding BPM systems.
Add it all up and we have “bolt-on” BPM technology that most SME’s can’t cost-justify; that’s not specific enough to support much of O/S process; and that replicates application-level functionality already at work in many O/S settings. And ERP-based applications increasing have the manufacturing space covered.

Not exactly a rosy picture, when vendors are still stumbling over themselves to introduce new, “bolt-on” BPM systems.

A warning to managers seeing the recession as an ideal time to streamline office/service process

Yes, this deep recession is an ideal time to restructure and streamline front and back office process to lower fixed cost and increase scalability for “low-hire” growth in the recovery. In fact, companies taking this critical step will enjoy a distinct competitive advantage once the rebound starts, which economists are predicting in Q3 (of 2009!). They will, that is, if they restructure and streamline office process using a 3^rd generation, “outside-in” process approach (think “customer-in”) as applied by such customer-centric “stars” as Virgin Atlantic, Best Buy, Tesco and Amazon.

The right time but the wrong process approach

Unfortunately, most that restructure will instead use more traditional, “inside-out” approaches such as Lean or, worse yet, Six Sigma. What’s lost? I’d like to share with you a Linkedin reply I wrote to a Lean devotee who posted an offensive message dissing the process capabilities of everyone working in the office, front or back–while also spewing forth lots of process nonsense.

[I’ve CRM-ized the message a bit and removed the process-speak (this exchange occurred in the Linkedin Business Process Improvement group following a question regarding whether Lean and Six Sigma had run their course and what would replace them). And please forgive my tone. A large number of contributors had posted great stuff in this thread before this bloke came along and accused a whole bunch of deep thinkers of “not scratching the surface” because they didn’t dig down and find Lean.”]

My reply

(Name withheld) - your point #11, questioning how many office/service (O/S) managers can spell “Lean,” gives you away. You are the prototypical process professional fulfilling Maslow’s prophecy (introduced in this thread several times previously) of all the world tending to look like a nail when the only tool you have is a hammer.
Lean is hardly the be-all and end-all of process. Yes, it’s very effective in most manufacturing settings. But serious O/S process developers (including the ones you demean) eschew Lean because it’s relatively ineffective in most office settings. Unlike Six Sigma, it doesn’t typically damage the office environment. But Lean barely scratches the surface of O/S process opportunities.What’s wrong with Lean in O/S settings? Let’s start with lacking robust tools for assessing and redesigning systems architecture (and I’m not talking about “bolt-on” business process management systems that provide little value in the O/S world). Just as Lean is legendary for rearranging the factory floor, good O/S design methods rearrange the flow of work - which is now information rather than sheet metal, facts rather than components. Lean doesn’t go there.

I would respectfully challenge you to visit http://www.h-ym.com/officeprocess.htm, scroll down a bit, and study the chart differentiating the O/S process environment from manufacturing. Then I’d like to read your defense of how a process methodology designed for the latter could migrate to the former. And why anyone would bother trying? Or are we back to Maslow again.

If you’re going to restructure, do it right

If you’re going to restructure and streamline O/S process during the downturn, please use an appropriate process design approach. You’ll be amazed at the outcomes.

A Linkedin discussion thread (actually two) gave me a bit of a “light bulb” moment this week. I’d first asked multiple sales, CRM and process groups a question about why the relationship between sales and marketing so often becomes so dysfunctional. That provoked quite an outpouring - with most castigating senior management for not setting common goals and ensuring common purpose. More than a few CXOs would get red-faced reading these comments.

The follow-up question asked whether sales & marketing should have separate or unified leadership. A responder, and a veteran manager who’s lived on both sides of the fence, came back with a fascinating comment, saying, essentially, it depends on the organization. But then he added that he’d worked it both ways and observed that marketing becomes more tactical, as in providing more sales support, under a combined leader - but at the expense of big picturte thinking. Conversely, split leadership tends to keep marketing on the big picture, branding side but at the expense of sales support.

What struck me was that more than just depending on the organizational context, the answer also depends on the economic context. Ergo, with most business thinkers agreeing that demand generation is today’s marketing/sales imperative, shouldn’t we be switching to unified leadership of these two functions?

(Other commenters suggested bringin in customer service, too. However, many companies appropriately tie customer service to operations first, with links to sales, so it’s not always practical.)

For several years now, consumers have been slowly migrating from global banks to regional and community banks and to credit unions as well. Sure, the credit card business has stayed behind–for now. But excessive fees, impersonal service (or no service whatsoever) and overall disregard for adding value to customers were driving folks out the door–already.

Biting the hand that feeds you

But then along comes our whopper recession, which it just so happens was triggered in large part by big bank greed. The banks need bailing out–with public funds. But then they turn around and screw credit card holders with sudden interest rate increases and instant reductions in available credit–targeting the very same folks whose tax money is keeping them afloat. Oh, and then big bank CEOs start wining about having any conditions placed on these gifts of public money. Conditions like using the money for what it’s intended for–lending. Plus they’re especially resistant to giving up any of their outlandish compensation packages, which only bank execs can’t see are outlandish.

What are consumers thinking about big bank behavior? “#$%^&*(@!#$%^&*!!!.” Cleaned up and interpreted, consumers are outraged.

But a better question is, “What the hell are the big bankers thinking?”

Big bankers breathing their own fumes

Tell you what; these guys are breathing their own fumes. They’re so insulated from public opinion–plus so uncaring about what customers think–they just assume they can jack customers around all they want, and customers will just come back for more. There’s actually an acronym for this: “BOHICA.” If you don’t know what it stands for, I’m not gonna tell ya’. At least not here.

These bankers think: “People gotta bank. We’re a bank. A great big bank. So we’ll get more than our share of consumer business.” End of consumer business model. And the beginning of the end of consumer business, at least at current levels.

 The beginning of the end

Certainly, some customers will stay with mega-banks no matter what. But as far as winning back overall consumer trust? Not a prayer. Big Banks can’t win back trust without fundamentally changing their consumer business model–as in adding value to consumers before they add value back to the bank. Instead of: “Give us your business because it’s good for our business.”

I strongly suspect that the much-discussed makeover of our banking system will not only occur from the top (government) down. It’s also going to happen from the bottom (consumers) up. Consumers and small business now see big banks for what they are. It’s like these emperors have no clothes and are wearing barrels instead. Can’t you just see it? Mr. cantankerous John Lewis, CEO of B of A, wearing nothing but a barrel? Uuuglyyy.

The migration will continue. But at a faster pace.

Postscript: just thought about this. Why didn’t one of these big banks come out and say, “We’re not going to unfairly raise rates on our loyal customers; Nor will we arbitrarily shut down small business credit lines on customers; We made a mess, and it’s up to us to clean it up, not up to our customers?”

What a powerful branding and relationship-building opportunity slipped away–unnoticed by all. Customers would line up in the streets to switch their business. Like the proverbial ships leaving sinking rats.

Are engineering and sales pointing fingers at each other? How about customer service and parts? Or HR and branch locations? How about sales and marketing management? Or IT and the rest of the front and back office? Okay, you’re like any other company. But do you have even the slightest sense of what all this dissonance is costing you?

Probably not. In which case you ought to grab or access the April 2009 edition of “Harvard Business Review” and read some sobering data. Very sobering.

April’s HBR features a very pithy one-page abstract by Christine Porath and Christine Pearson, How Toxic Colleagues Corrode Performance, which may very well peel back your eyelids. Their data alone might scare you into action–including running some toxic employees out of town.
You can’t fire the problem

But here’s the irony. Just firing these people won’t accomplish much, because a new set of “bad actors” will quickly fill their shoes. A relatively small percentage of inherently dysfunctional folks notwithstanding, the vast majority of these toxic employees didn’t start off toxic. Instead, their work environment created interpersonal strife by giving people and functions conflicting messages and conflicting goals, and they eventually succumbed to the venal side of human nature. 

The primary culprit is bad work design, not bad people.

That’s the case in almost every one of these toxic situations we’ve walked into over many years of consulting. Poorly designed office process creates conflicting sets of personal and functional interests, and when people and functions pursue their self-interests, the sparks fly. That, in turn, brings out the basest human instincts in some; causes others to withdraw or flee; pushes people who can get past their self-interests into the line of fire (punish the innocent); creates discord everywhere; triggers retribution–until the whole office goes dysfunctional. And then the company cans a few perps, only to have new ones almost immediately step up to the plate.

That’s usually the time when clients engage us–when it becomes painfully obvious that replacing people isn’t the answer–and eliminating sources of toxicity is. Unfortunately, a considerable amount of damage has already occurred.

But isn’t this the norm?

Hey–every office is a bit dysfunctional, no? So why get all bent out of shape? Here’s where Porath and Pearson really shine. While I don’t want to violate HBR’s copyright, I will give you this juicy quote:

Berating bosses; employees who take credit for others’ work, assign blame or spread rumors; and coworkers who exclude teammates from networks–all these can cut a swath of destruction visible only to the immediate victims.

Visible only to the immediate victims, perhaps, but damaging the entire company, especially the bottom line.

How much damage?

Unfortunately, the authors lack the data to convert negative employee behavior into specific dollar costs, but they have quantified the frequency of different types of negative employee reactions to office dysfunction. From there, it doesn’t take much imagination to project whether the size of the dollar loss is a golf ball, a baseball, a softball, a soccer ball or a basketball. It’s a damn blimp!

How employees react to dysfunctional office environments

Again, I don’t want to give away the goods so you won’t go buy the magazine, especially because the article is only a page long. But between 80% and 38% of employees reported specific reactions ranging from loss of commitment to the organization to decreased work quality.  From a process designer’s perspective, when I add it all up it’s not a trickle, not a flow, but a damn gusher of dollars flowing out the door.

But since we’re in a recession, we can afford it, eh?

Unfortunately, many business people consider the front office (sales, marketing, customer service) to be one entity and the back office (everything financial, administration, support) to be another–and never the twain shall meet. It’s liked the Great Wall of China divides them, with the back office folks huddled inside the wall for protection against the front office heathens.

Total misperception. Problem is, if you perceive, it you’re likely to make that way.

Throwing work back and forth

In fact, front and back offices are highly interdependent, which becomes totally obvious if you map workflows such as: creating a new customer accounts, processing and approving credit apps, going from orders to invoices, applying credit holds, checking inventory or availability, pricing complex configurations or projects, getting configuration quotes from engineering, granting and tracking RMAs (return merchandise authorizations) and on and on. Good process practices dictate managing and measuring these flows cross-functionally. But in reality most companies just throw work back and forth over the wall. Which means work gets dropped and often damaged. Oh, and no one’s accountable, because without common management, the two sides can just blame each other for whatever goes wrong.

Swell.  

What’s the fix?

The fix is so easy it’s painful to think of all the companies caught in front office/back office strife. “All” companies need do is map “as-is” workflow cross-functionally across the entire office environment. But two little secrets. First, work in cross functional teams. The vast majority of office process defects occur “in the seams” where work is handed off from one function to another (or from internal functions to external stakeholders, customers included). Second, map using literal clip art images instead of process symbology (at HYM we call these workflow maps “pictographs”). Using process symbology and talking process-speak with business owners and managers leads to communication breakdowns–as in people nodding their heads agreeing to work a new way with no such intention. 

Facing up to reality

Looking at these literal maps will so horrify line employees and managers alike that taking corrective action is all but guaranteed. The underlying problems here are: 1.) Lack of clear accountability for cross-functional flows, including no measurement; and 2.) Using inefficient work methods for so long that internal folks can’t see the inefficiency–until it’s made too obvious to ignore.

Hey, go fix something today.

What’s wrong with using “lead cost” as a B2B, lead-generation campaign measure? Oh let me count the ways: 1) activity after a “lead” is generated overwhelms “lead cost” in contributing to ROI; 2) “lead cost” doesn’t affect campaign ROI sufficiently to serve as a KPI (key performance indicator); 3) fixation with “lead cost” enables laissez faire attitudes towards what really matters; 4)  “leads,” as marketing and sales commonly use the term, are really inquiries, unqualified inquiries, and shouldn’t be called “leads” prior to successful qualification. But the whole world calls inquiries “leads,” so I’ll join in and stop using all the parentheses.

So why can’t B2B companies get passed judging campaign ROI by lead cost? Three basic reasons: 1) they don’t know any better; 2) they know better but lack the will and/or discipline to collect the data necessary to measure ROI; 3) they collect the data but can’t find a calculation for converting raw outcomes data into ROI information. I’ve already beat my brains out unsuccessfully trying to address the first two issues through articles like this, so it’s on to reason #3.

“The formula” for lead-gen ROI calculation

Here’s our cherished formula at HYM.

Don’t panic! I can explain. Let’s take one operand (computational element) at a time.

Selling price minus variable cost (cost of goods sold):  We arrive at this number by taking the average revenue created by all the leads converted to sales and then subtracting the average variable cost across all sales. “Variable cost” describes all expenses that change in consort with changes in the volume of products produced or services delivered. If you’re unfamiliar with the concept, please talk to your CFO.

One caveat–don’t treat selling costs as a variable cost. “The” formula factors in sales expense.

Marketing cost divided by number of contacts:  Nothing more than the good old CPC (cost per contact). For web programs, you can use the number of click-throughs on your site as contacts.

Response rate multiplied by sales conversion rate:  Just what it says.

Qualification cost:  Average cost to qualify one inquiry. If you’re generating sales leads but not qualifying them before forwarding to sales, you should be shot.

Selling cost:  Track the percentage of sales calls made on campaign leads over the sales follow-up period, then take that percentage of all relevant sales costs.

Fulfillment cost:  Hopefully you’ve moved on to using PDFs instead of glossy product information brochures, almost zeroing this out. 

That’s it for the terms. Now let’s discuss the whys and wherefores of the calculation.

The rationale behind the math

The formula says that average gross profit for a closed sale should be greater than or equal to the variable cost of the sale, with “equal to” representing break-even. To extrapolate from the value of a single transaction to total campaign profitability, you simply multiply this average gross profit (or loss) by the number of closed sales. Which begs the question why are we calculating the return on one transaction, rather than the whole campaign?

Two good reasons: 1) the math is so much simpler using a single, average transaction; but more importantly, 2) looking at a single transaction creates a formula ready-made for running “what-if” projections and pre-campaign modeling.

CPC (the numerator) divided by response rate multiplied by conversion rate (the divisor):  All we’re doing here is allocating all marketing cost to only closed sales. The concept is simple, in words at least. Dividing the CPC by the response rate allocates all marketing costs to just inquirers. Then, dividing that number by the conversion rate shifts all marketing cost down further to only closed sales.

Qualification, selling and fulfillment costs divided by conversion rate.  Because these costs apply only to inquirers, we just need to divide by the conversion rate to allocate them to closed sales only.

Q.E.D.

Is calculating  ROI worth all this work?
Yah sure, it is. Let me give you several examples.

• Many clients are running ongoing lead-gen programs when we start engagements. They usually don’t know whether they’re making or losing money. Applying “the formula” tells the true story–and provides a critical tool for identifying what’s broken and what can be optimized.
• On a more granular level, we’ve worked with numerous clients that think they’re saving money by skipping qualification. Invariably, their campaign ROI is in the toilet, with selling costs disproportionate to revenue. Using “the formula” (and lead-gen experience) to project the revenue increase and the sales cost reduction proper qualification would provide usually disabuses clients of that errant thought. Not only do the financial returns from qualification overwhelm qualification expense–but qualification often makes the difference between substantial sales returns and no sales whatsoever.
• I was running a print, lead-gen program for a division of Pitney-Bowes, which wanted to kill the more expensive placements. Until, that is, “the formula” showed them the most expensive per-lead source was the most profitable. In fact, profitability of lead sources was almost inversely proportional to lead cost.
• “The formula” got me fired by American Express by showing that AXP’s ill-fated Financial Services Direct initiative was going to do a face plant–which I duly reported, to the chagrin of AXP execs. But “the formula” didn’t lie. AXP lost its shirt, and a whole bunch of AXP execs had to “walk the plank” from the top floor for their foolish optimism. Boy, did I look good. After the fact.
• On another AXP engagement, we applied “the formula” for up front modeling and learned that to generate positive numbers, we’d have to 1) change a planned two-step mail program to a one-step; and 2) keep our CPC brutally low. “The formula” was right–with one exception. We hadn’t dared plug in a response rate value 8X industry average.  We forgave “the formula.”

And I could go on and on.

Yup, “the formula” really is worth the work. You betcha it is.

Second, when not made correctly, substantial staff cuts reduce scalability, compromising capability to spring on new opportunities. So companies suffer now, when they cut–then suffer again when either recession-driven opportunity pops up or economic recovery kicks in.

Isn’t the recession bad enough by itself?

But wait, it gets worse. While most manufacturing companies at least know how to reduce production employment in a half-way rational manner, even if they don’t always show it, the vast majority of front and back office managers and service company managers don’t have a clue. Nor should they, because the concept of designing office process with the same rigor we apply to manufacturing process–using a process approach designed for highly variable office environments–is a foreign concept throughout business. Most office process change efforts consist of cramming manufacturing process methods down office throats–only to have office and service staff regurgitate everything process they’ve been fed.

It can get so bad that at one of our past clients multiple office people would stand and flip the bird to the six sigma team as it retreated to its hovel.

Cutting the office workplace down to size

Mistake #1 in office process redesign is trying to squeeze out every last penny of “unnecessary” cost–which, ironically, tends to lower the ratio of work done per salary dollar spent, the exact opposite of what’s intended. Creating a Spartan office environment reduces work quality, increases the volume of repair and recovery work, creates bottlenecks that lower throughput, and kills morale. It also kills customer relationships. Sprint tried this approach and so turned off customers that it’s single handedly fueling the growth of both AT&T and Verizon.

A  Aligning process to strategy and technology to process

Smart companies facing a deep recession don’t practice “scorched earth” cost-cutting. They understand the first obligation of office staff is to carry out business strategies. When process fails to align properly with strategy, the two elements work at cross purposes–creating inefficiency, internal friction and customer flight. Plus, process–strategy misalignment increases the quantity of non-value-adding work performed, which increases the number of non-value-adding  employees.

We saw this in spades when we worked with a large credit union a while back. Following alignment, they didn’t just reduce staff, they cut an entire function and combined several more. And when we reviewed HR which had five staff members and planned to add one more, we discovered that three could do the job. Extrapolating that 50% reduction across several other bloated departments shows the labor-saving alignment can achieve.

But wait. Isn’t process supposed to align with technology?

Hardly. Instead of subordinating process to technology, companies that “do process right” mold technology support around process. They use technology to enable process, not lead it.

r   Surprising benefits

Redesigning work to achieve internal alignment must occur in proper sequence–first redesign process, then redesign technology support. When this occurs, companies realize surprising benefits. Not only can they shrink office staff further than they could using the “cost squeeze” approach, but there’s an unexpected benefit. The smaller office staff can provide more responsive customer service and increased customer attention. Why? Because proper alignment, with its focus on streamlining, reduces unnecessary “touches”–and even layers of supervision.

The first time we rolled out our Visual Workflow office process approach, a brave VP of a supervisory function stood up and said, “My function is redundant. We’re superfluous.” She resigned the following week.

T  The final step–aligning people to process

All well and good, but don’t put the tools away yet, because there’s one more key alignment companies must make to achieve the desired results–significant reduction in office staffing requirements, complemented by improved customer relations. Just because a company intelligently redesigns office process does not mean staff will just migrate to the new work approach because they’re told to. To cite the old HR saw, “People don’t mind change. They mind being changed.” And when you tell them to change, they resist.

So how do you overcome human nature?

Simple. Don’t tell them to change. Involve relevant staff in redesigning process right out of the blocks–ideally in cross functional teams, since so many office process defects lurk in the seams between functions. Involvement creates buy-in and ownership. And it greatly mitigates resistance to change. 

Also, implement change across multiple levels. Changing responsibilities and accountabilities on one level sets off a chain reaction. Management has to reset expectations to match up with redesigned work. And staff further along the work chain must be ready to receive new output. These aren’t just process issues, they’re people issues companies must address with training and support.

D Does the resulting staff reduction merit the effort?

Absolutely. On average, using People & Process Alignment techniques we’re able to create the potential to shrink office staff by 15%. In times like these, that’s huge. In past times, most clients have used the excess staffing to cover attrition or launch new initiatives without hiring. But during this recession, many companies will have to lay off instead. The good news is, and “good” is relative here,  by properly aligning strategy, people, process and technology companies can do more front and back office work and better work with fewer people. For some companies, that could mean survival.

Beyond good company-customer communication, effectively serving customers requires intense internal coordination and collaboration–and not just in the front office but between front and back offices and within the back office. Unfortunately, we’re not there yet. Internal communication continues getting the short end of the office process stick, even in communication-intensive business sectors such as banking, which we’re about to use as an example.

Changing internal communication requirements

Back when I was a pup, internal communication meant: a.) yelling over cube tops; b.) sending ubiquitous memos; c.) staggering from desk to desk with piles of green bar reports; and d.) just flopping down in someone’s office or cube and flapping jaws. Then, in my young adulthood, we expanded our repertoire with: e.) 8 ½ X 11 reports plastered with graphs and charts; f.) floppy disks (many of them infectious) and g.) printed slide presentations (a handy format for those who don’t write). Hey, it worked. Sort of. But in my wisdom years on came remote workers, mobile workers, outsourced workers, unidentified flying workers–which required a new communication medium.

E-mail tried to fill the void

Along came e-mail, and more e-mail, and more e-mail–business messages mixed in with baby pictures, wedding pictures, pornographic pictures, social invitations, love letters, rejection letters and lots and lots of gossip. Before long, in-boxes filled to overflowing, forcing recipient to constantly flush stuff out to make room for new stuff. You could almost imagine bursting in-boxes disgorging messages the way overfilled storm sewers blast manhole covers high in the air, leaving messages streaming down the street.

Only overflowing e-mail pipes aren’t funny. Critical messages drown in the flood. Coordination and collaboration go downhill. Internal tensions increase. Staff spends measurable portions of every day, some reporting 25% or more, deleting unread messages, reading a few, responding to even fewer and storing some to read “later” (LOL). And for the capper, time spent wrestling with e-mail coupled with work inefficiencies caused by inadequate internal communication drives up staffing requirements, often by double-digit percentages.

Banking too much on e-mail

If you think I’m stretching a point, let me describe a recent consulting engagement with a regional bank–which mirrors our similar experiences with other consumer FIs (financial institutions). How was our bank client handling internal communication when we arrived? Just as described above, with e-mail, e-mail and more e-mail. And while this bank provided good customer experiences at points of direct contact, problematic internal communication was more than a fly in the ointment. Customers were experiencing process inconsistencies, policy variances, excessive back office cycle times and mixed brand messages–while the bank was suffering from metrics issues, compliance problems and especially “over-employment” stemming from over-reliance on e-mail.

Mapping internal information flow

As customary, we dove into the snarl by assessing and mapping how customer-related work and information (synonymous in a knowledge worker environment) were moving from person to person and function to function. Here’s a high-level representation of what mapping showed.

(click to expand)

More like knitting than well-designed workflow/information flow.

Defining the problem

Specific problems we had to address included:

1. Pushing messaging at recipients, which led to an overwhelming onslaught of communication.
2. Sending many irrelevant messages, because senders lacked time to properly parse mail contact groups.
3. Using a text-only medium, in an environment requiring visual expression (attachments are fine, but viewed even less than text).
4. Messages competing for scarce attention, which meant most messages got little or none.

If we could address just these four issues, good things would happen.

Designing the solution

Fortunately, we didn’t have to start fixing from scratch; this was virtually déjà vu all over again.  And in virtually every case, the core solution includes:

• Bringing people to information, rather than pushing it at them.
• Creating an intranet communication nexus.
• Combining index and search navigation to allow people to access what they need and only what they need–and access it quickly.
• Leveraging web graphic and media potential to communicate marketing campaigns, training information and both workflow and individual work process documentation.
• Creating employee accountability for religiously visiting the site for new information relevant to them.

Here’s how the “to-be” communication flow looked.

(click to expand)

The concept is simple. Every type of information has its own intranet “bucket,” with partitions for marketing, HR, training, process, policy, news, etc. Where necessary, buckets have precise, indexed links that allow quick access to information. Search is always an option, but inappropriate for retrieving granular content such as process and policy.

Every morning when employees boot up (and we’re all shutting down at night to be “green,” right?), a welcome screen lists all new information for the day. Employees are accountable for following appropriate links to need-to-know information for their function. Effecting that does require training plus willingness to apply consequences for non-compliance, but it’s a small price to pay for bypassing e-mail and communicating effectively.

Oh, and by the way, in addition to greatly improving internal communication, this “fix” will allow the bank to repurpose about 15% of employees into more value-adding work.

Not bad, eh?

One caveat

For organizations relying on technical or finely parsed content, as banks do, creating and maintaining content consumes lots of time and resources. However, when you consider the ineffectiveness and costs of the e-mail alternative, it’s most definitely worth the effort. You betcha, it is.

In today’s times, the opportunity to reduce front and back office staffs by 15% should be too good to turn your back on–provided, of course, office staff consolidation won’t adversely affect customers or work quality. Nonetheless, the vast majority of companies (not to mention educational institutions and government) do walk away from this opportunity. And to pour salt in the wound, properly-designed, process-based office staff cuts of this magnitude almost always positively affect both customer relations and work quality, escalating the opportunity cost of failing to redesign office process to run at optimal staffing levels.

Why you shouldn’t walk away

Well-executed, customer-centric redesign of office process (also called “human process”) gives buyers more of what they want from sellers–less bureaucracy; less interference with customer-facing staff decisions; fewer time-consuming, quality-lowering “touches” of customer work; and fewer employee-to-employee handoffs. Plus, delivering all these customer benefits actually does require fewer FTEs than currently in place, not more, as commonly perceived. Sounds improbable, I know, but the combination of a.) Designing office process within silo walls (if at all) instead of across silo walls; and b.) Not using proper automation tools and not using the ones in place wisely–together virtually guarantee a high office inefficiency quotient, as in 15% in our experience.

Makes you wonder how an opportunity this big can stay invisible to companies and organizations desperate to reduce labor costs, doesn’t it? But as you’d suspect, some powerful factors come into play here, keeping the blinders in place.

Seven reasons why companies do walk away

Obviously, business doesn’t leave big money on the table for no reason. But business as well as other organization types will leave money on the table for bad reasons.

Reason #1:  Management can’t “see” the problem.  You’d expect 15% overstaffing to slow the work pace, extend lunch hours and breaks and populate water coolers–giving visibility to lots of slack time. Not the case. Most office employees work hard, often putting in considerable overtime. Why, amidst excess staffing? Because poor work design has a voracious appetite–and eats up tremendous amounts of employee and management time both. Which leaves office staff working hard on necessary work–and leaves management saying, “What’s the problem?”

Reason #2:  No one’s responsible for office process. And if someone is, that person usually has limited office process skills (other than gut instinct) and even less familiarity with designing information flow and automating office work. Designing the information flow component of office process is takes on huge importance because you can’t separate workflow from information flow in the office environment. Unfortunately, designing workflow and information flow in tandem lies far outside the manufacturing process skill set, thus thwarting efforts to “borrow” a process specialist from the production side.

Reason #3:  IT is responsible for office process. While a few companies imbed skilled process professionals into IT (almost all manufacturing specialists), office process managed by IT almost always winds up subordinate to technology–if it reaches the IT radar screen at all

Reason #4:  Companies try addressing office process issues with manufacturing process approaches such as Lean or Six Sigma. In the dozen years we’ve been designing office process, we’ve yet to see one of these initiatives work–and least not to the standards we set. Six sigma, in particular, does face plants in the office. To understand why, view the contrast between office and manufacturing process environments.

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Reason #5:  Laying off white collar workers, or even repurposing them, hits too close to home for managers.  Management works at a distance from manufacturing. People are numbers and shifts, making manufacturing layoffs emotionally easier than office layoffs, which touch friends and colleagues. Eliminating roles of direct reports or people you greet every day hurts.

Reason #6: Budgets are frozen. Because no function has primary responsibility for improving office process, office process budget champions are nowhere in sight. Moreover,  business, education and government all struggle with the concept of spending money to save money. Except, that is, for spending money on technology, which often doesn’t save money.

Reason #7:  Companies can’t find an alternative to manufacturing process approaches. Spurred on by bad business conditions, an increasing number of companies are starting to see the problem and want to address it. But where’s the end of the knotted up ball of string that’s office process? And how do you untangle it?

Where do most companies stand with office process?

Until recently, most companies were failing to address office process for the first four reasons–with reason #5 always lurking in the background. But now that recognition of office inefficiency and ineffectiveness is showing up on at least some radar screens, “walk-away” factors have started migrating to reasons #6 and #7. Either budgets are frozen, and only a much firmer grasp of the ROI potential fixing office process unlocks will thaw them–or companies coming up with the resources required to redesign and automate office process don’t know where to start or how to proceed.

 Educating business in new concepts –like investing a little in office process design to save a lot on office salaries–is always a tough nut, and tougher than normal in this case. What’s the solution? We have to keep educating and educating and educating–and hope organizational self-interest overcomes resistance to office process change. But as for finding an effective office process design approach that’s finally getting easier.

In addition to our office process methodology, Visual Workflow, other office approaches are finally coming online. Better late than never.

If you’re interested in learning more about the Visual Workflow office process approach, please visit our website, www.h-ym.com and download our free white paper.