Managing By Process: What Does It Really Mean?

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President and CEO, FMT Systems Inc.
Ms. deHenry works as the executive manager of a business process innovation consulting firm. As an entrepreneur​ and product architect, she has also been instrumental in the design, development, and marketing of Xprtly! a user-friendly metrics-driven mobile collaboration platform providing organizations with insight into team member contributions, both internally and externally. Faun is a recognized speaker on topics including business process innovation, process metrics, business intelligence maturity, and best practices for virtual organizations.

Ask senior BPM professionals what “managing by process” means and you will receive a variety of responses. 

     “It becomes a strait jacket that inhibits improvement and innovation.”

     “Most organizations don’t understand managing by process…they approach it in a vacuum, disconnected from the most important goals of a company and other key practices that support a company’s strategy.”

Yet, those same experts voice common threads of agreement.

Managing by process is about:

  1. Steering, monitoring, and adjusting processes based upon events, triggers, and performance indicators such that they align with the organization’s goals, practices, and strategy
  2. Focusing on organizational processes as opposed to employees’ tribal knowledge
  3. Building and maintaining a methodology that enables repeatable results

Managing by process is a dynamic endeavor — a mindset — that requires discipline and flexibility. 

When an organization is committed to managing by process, it has not only defined its core processes, but also measured its processes’ inputs, outputs, and results. The organization is disciplined in its continued and consistent use of data for determining where and when process change and recalibration is necessary.

A flexible organization examines its processes and makes changes (or not) based upon what the data indicate, instead of relying upon anecdotal or “one off” incidences.

The discussion below describes a real, and reasonably simple, operational example of managing by process.

John is the new owner of a vending machine business. Acme Vending, Inc. was started by its original owner in the early 70’s. The company started with three vending machines. Over the ensuing years, Acme grew into an organization with more than one hundred vending machines located in offices, laundromats, truck stops, and community recreational areas.

A series of events with one of the truck stop vending machines prompts John to think more deeply about his new business. Every Monday morning a driver makes rounds to the different truck stops to fill the vending machines. After the driver completes her circuit, she notes that two of the machines are completely empty, four of them are partially full, and two appear untouched. As John has requested, she informs the route and scheduling manager.

The current scheduling process allows for restocking these truck stop vending machines on Mondays only. Further the driver routes are set and have not changed for many years. Clearly, changes need to be made, but without additional data John could make changes that neither serve his customers — the truck stops’ and their customers — nor his driver.

John, not wanting to “leave revenue on the table” makes two initial decisions. First, he instructs the company receptionist to call the managers of these truck stops at noon each day for a status on the supply levels of the vending machine. Second, he instructs the driver to take half the supplies from the “untouched” vending machines and move them to the empty machines.

After collecting data for two months, John makes his changes. He redesigns the driver’s route so that she visits the “untouched” vending machines first and the partially filled machines next, and the empty machines last on Mondays.

Next he reorganizes two other drivers’ routes such that they visit the truck stop with the “empty” machines on Wednesday mornings and Friday afternoons. Further, he tells the company receptionist that she and he will call daily all of the businesses that have their vending machines on location to get a supply status.

He designs a record keeping chart for maintaining the data that he and the receptionist collect. He places a map on the wall in his office with locations marked for all of his vending machines. He also uses the daily calls to improve his relationships with all of his customers and mentors his receptionist to do the same.

After a year of collecting data John begins to notice patterns and realizes that he needs to reorganize all of the driving routes and restocking activities again. Further, he recognizes that the initial purchasing patterns he noticed could change. As a result, John decides that he and the receptionist will continue making those calls and collecting data.

John is managing his vending machine business by process as he:

  1. Steers, monitors, and adjusts the drivers’ routes and scheduling based upon real data that is collected in a timely manner. In doing so, John demonstrates to Acme’s customers that the transition to his new ownership will give them better service than before. Further, he raises his customers’ loyalty to Acme.
  2. Focuses on process-related data as opposed to Acme employees’ tribal knowledge
  3. Builds and maintains his methodology for collecting data about the vending machine supplies that enable him to ensure that his customers have consistently supplied vending machines at their locations.

John practices discipline in his use of data and its collection. He lets the data guide him in his decision making so that he approaches process changes with a flexible attitude. As a result, Acme has become a dynamic and innovative organization that is growing again because it does not suffer from siloed or “strait jacket” thinking.

Any organization, whether it is a division of a large multinational corporation or a department in a medium sized non-profit or business, can apply this same mindset of discipline and flexibility — managing by process. All that is needed is the collective will to define processes, collect data, and make process adjustments accordingly.

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