Business Process 2.0: All About Your Functional Neighbours
The late Dr. Michael Hammer and James Champy started the reengineering revolution with their ground breaking book, "Reengineering the Corporation." Reengineering was about radical redesign and many corporations fell in love with the idea and proceeded to implement it. Of course, the vast majority failed.
Some organizations still believe in the radical concept. But they may not be aware that Dr. Hammer himself later apologized for that concept. In a later book, Beyond Reengineering, he said the following:
"Reengineering is the radical redesign of business processes for dramatic improvement. Originally, I felt that the most important word in the definition was "radical". ... I have now come to realize that I was wrong, that the radical character of reengineering, however important and exciting, is not its most significant aspect. The key word in the definition of reengineering is "process": a complete end-to-end set of activities that together create value for a customer."
Business Process 1.0 started to run into difficulties as we ran out of strictly functional problems problems whose cause and effect were within a single functional unit. We now face problems where cause is in one unit, and benefit falls in another. These are BP 2.0 problems or cross-functional issues. Everyone understands the nature and benefit in solving these problems, yet few organizations have been successful in tackling them. Why is that? Business Process 2.0 has been largely unsuccessful because we have been trying to solve them using BP 1.0 tools, techniques, mindsets, and most importantly BP 1.0 organizational structures.
Let me share with you the major roadblocks to solving BP 2.0 problems, starting with the front-runner:
- Accountability: Accountability is about caring. The key question is: "Who cares about this?" When a problem starts and ends in a single function, accountability is aligned with the problem. If a functional manager allows the problem to continue, then those above will pressure or remove him. When the problem is solved, he will be rewarded as a good problem solver. So we have both a stick and a carrot motivating the manager.
- A BP 2.0 problem is different: The change (cost) needs to be made in function #1, but the benefit (reward) will be felt in function #2, hence the cross-functional nature. Why would a manager invest the time and energy (cost) to create a benefit for another manager? Most, of course, would not. The nature of BP 2.0 problems in a BP 1.0 organization is that there is not sufficient motivation or caring to solve the problem. And so the problems remain.
- Visibility: Visibility is about seeing. The consequence is in function‑2, so they usually see the opportunity. But the cause is in function‑1. Since it isn't a problem for function‑1, they don't see it as either a problem or an opportunity. Since no one is accountable for end-to-end process performance, then no one is looking out for these opportunities.
In BP 2.0 we need end-to-end accountability and visibility for process performance. But we still need functional accountability as well. We need both. Most organizations still only have functional accountabilities. Those few that have tried to implement process accountabilities have done so by eliminating or weakening functional accountabilities, thereby solving one problem by creating another.
A BP 1.0 organization doesn't see (visibility) or care (accountability) about BP 2.0 problems. All organizations have BP 1.0, BP 2.0, and BP 3.0 opportunities. So they need a way to see and separate each type of opportunity and use the appropriate approach for each. Organizations that adopt a specific methodology as a strategy, no matter how good it is, are ultimately doomed to fail because every methodology has strong tactical roots.
Every methodology was originally developed to solve a type BP 1.0, or BP 2.0 or BP 3.0 problem. It will work well for its problem type and fail for others. Since organizations have all three types of problems at any one time, every methodology adopted as strategy and used across all problem types will eventually be used on the wrong problem. The result can be seen in just about any organization.
The potential benefits of solving Business Process 2.0 are large, larger than BP 1.0. Learning how to deploy BP 2.0 accountability is a key focus for mastery. Do it well and your BP 2.0 problems will begin to melt away. Fail to do so, and you will be forever stuck at your current level of performance. Information Technology is an example of a functional unit (BP 1.0) trying to solve BP 2.0 problems using BP 1.0 tools, approaches, and mindset. Of course, so are most other groups.
Next we need to focus on the problems of Business Process 3.0 and examine the potential benefits of becoming a Business Process 3.0 organization. We need to look at it as a Relational Process Model or framework (not a methodology) to helps us manage our business processes and distinguish among problems BP 1.0, BP 2.0, and BP 3.0.