Articles

Creating Your Own Reality

Every day, the papers are filled with stories of failing businesses, and the supply of new stories has been endless for a couple of years now. What destroyed the likes of Enron, Arthur Anderson, WorldCom and today the Bear Sterns Companies? The common denominator seems the fact that those organizations are destroyed from within; they collapse onto themselves. How does the market react? Impose stricter regulations and tighter controls such as Sarbanes-Oxley. Is that the only resort?  Have tighter controls prevented failures in the past? Are they preventing failures today? Will they prevent future failures? What is the role of Business Process Management in creating more failure-proof organizations?

Have you heard the story about the native American Indians on the Caribbean Islands who could not see Columbus’ ships when they sailed by? Although in plain sight, the natives could not see the ships because the brain only matches patterns that are ingrained through conditioning. Since they had no knowledge of clipper ships, their brain could not consciously project what their eyes were seeing. When their Shaman figured out what caused the unusual ripples on the water, he showed them this new pattern that conditioned their brain for a reality inclusive of ships.

Today’s educational system conditions business leaders to see organizations in terms of its business functions such as Sales, Marketing and Finance. Many executives have what we call Deep Domain Expertise in those silos of specialized knowledge. Their reality is reflected in the increasingly complex products, services and highly automated business operations, where machines of growing complexity have come to intervene between the human and the physical task. As a result, operators are separated from the processes they nominally control.

Specialization and complexity make business systems opaque, which leads to insufficient knowledge about what is happening and what the system is capable of doing. Such opaque realities are the breeding ground for human error, causing organizations to implode. Human error is another pattern with which to condition our brain; the subject for a subsequent article.

A Dutch study into marine incidents found that human error is usually caused by the unique conjunction of 7 to 58 distinct necessary but singly insufficient factors. Since the same mixture of causes is unlikely to recur, efforts to prevent the repetition of specific error will have only a limited impact on the safety of the system as a whole.

Errors are broken up into active errors, activities associated with front-line operators and latent errors created by poor design, incorrect implementation, faulty maintenance and bad management decisions. The more removed its decision-makers are from front-line activities (and, incidentally, from direct hazards), the greater is their potential danger to the system. The notion of latent error is intimately bound up with the character of modern technology.

Apart from the majority of business-leaders who are functionally oriented, there is a minority of decision-makers whose reality is structurally oriented. They reason that if business functions are dots, then business structure is the connection between the dots. If you are structurally oriented too, then you and I know that the key to understanding the true meaning or purpose behind business activities is to understand the structure of an organization; recognizing processes from end-to-end. We also know that this reality is a big leap of faith for our functionally oriented colleagues. They need a solid reason why they should invest in Business Process Management in a time where every department is on the prowl to save money; outsourcing functions rather than creating new functions that are not even a primary business function. Two different and sometimes competing realities.

Contemplate this new pattern for harmonizing both realities.

In a world dominated by choice, we create a brand to help us stand out from competing offers; to help consumers choose. A brand is comparable to personality in human terms. From personality tests such as the Myers-Briggs Type Indicator (MBTI) we know that personality has two components:

Temperament is who we are; our values, talents, passions and preferences for performing certain business functions. Every person, department and organization has its own distinctive innate nature. For example, the temperament of a hospital is completely different from that of a bar or a home-improvement store. And, different hospitals have different temperaments. Each organization has its own purpose for serving its clients and community, which I call their Anticipated Outcome!

Character is what we are; how we behave, our configuration of habits and thus how clients experience our relationship with them. The behavior of an organization, referring to formal processes (operational tempo, time pressures, production quotas, incentive systems, schedules, etc.), procedures (performance standards, objectives, documentation, instructions about procedures, etc.) and oversight within the organization (organizational self-study, risk management, and the establishment and use of safety programs) is what I call Business Mechanics. Each organization should develop their Business Mechanics appropriate to its Anticipated Outcome. Herein lays the integrity of any organization. If its Business Mechanics is misaligned with Anticipated Outcome, the business system is dysfunctional; for example claiming customer service as priority and demanding outrageous termination fees when you are dissatisfied with their product or service.

Business Process Management is critical because Business Mechanics is impartial, just like railroad cars are impartial. But, the way you lay the tracks is the path the train will follow. Consequently, organizations will grow beautiful roses if the reality of their Anticipated Outcome intents to serve noble causes. On the other hand, organizations will implode when the reality of their Anticipated Outcome is set to follow selfish goals. After all, how many potential buyers can you convert into loyal clients telling them or letting them experience that you are only interested in making money?

Besides, claiming that the purpose of business is to make money is similar to saying that the purpose of life is eating and drinking. Making money, eating and drinking are necessary, no doubt about it, but there is more to life and business than that! If your reality is to offer products and services that are superior to those of anyone else, wouldn’t people like to give you their business, be loyal and pay a premium price?

In conclusion, the secret of any organization lies in the design, maintenance and execution of its business processes; the implementation of its strategy! Although you cannot control people’s opinions of you, you can control your own character. Therefore, in an era where nothing is more constant than change, executives need Shamans like you to show them new patterns called Business Process Management, to prevent them from unintentionally derailing their own train.

Copyright © 2008 by Hans Norden. All Worldwide Rights Reserved.