A question that forever nags at thinkers and practitioners of BPM is its relationship to strategy. In a recent book entitled Questioning BPM?*, one of 15 questions explored in the book was “Is BPM a strategic tool?” Eleven authors agree there is, or should be, a strong relationship.
The most common viewpoint among them is that BPM is necessary to an organization’s ability to execute its strategies. No matter what the strategy is or how it came into being, it simply sits on a shelf gathering dust unless there are actions taken to carry it out. And as soon as you enter the realm of action, an organization’s business processes are essential in executing the strategic intent. To carry out a corporate-wide strategy necessitates doing so through a company’s large-scale end-to-end processes, and that in turn requires recognizing, designing and managing those processes, which is the essence of BPM.
Effective strategy implementation also requires a particular mindset and behaviors. For one thing, BPM Institute editorial director Andrew Spanyi argues in the same book**, it requires “cross-departmental collaboration [because] no one executive typically has sufficient authority” to achieve a corporate-wide strategy alone. In other words, the company’s executives must see beyond the boundaries of their individual kingdoms, and the best way to do that is to help them comprehend the network of processes that cross those boundaries and depend on cross-functional work.
So while there is broad agreement that BPM and strategy are, or should be, linked, there are different ways of thinking about what the elements are that need to be linked and how best to forge the linkages.
In his book The Concept of Corporate Strategy***, Kenneth Andrews differentiates between corporate strategy, which is about figuring out what markets a company wants to be in, what products and services, what goals and objectives and plans—in essence, what a company wants to achieve—versus competitive strategy—how to win against the competition, how to position oneself in the target markets. This implies there is a sequence to strategic thinking. Assuming one would want the strategic plan to include both the corporate strategy and the competitive strategy, a logical sequence could be:
- Define the corporate strategy
- Define the competitive strategy
- Develop the strategic Plan
So where would BPM fit in this sequence? Think of BPM as comprising all of the company’s internal workings, the sub-systems, if you will, of the organizational system. There are three major sub-systems:
- The “work sub-system” (the network of business processes, i.e., its business process architecture),
- The “governance sub-system” (the policies, practices, processes and mechanisms by which the company’s leaders plan, lead, monitor, supervise and control the enterprise),
- The “resources sub-system” (all of the human, physical, and financial assets of the company)****.
This is everything necessary to carry out the plan, to execute the strategy, which implies the sequence of action to create and execute strategy would be:
- Define the corporate strategy
- Define the competitive strategy
- Develop the strategic plan
- Align the Internal sub-systems to carry out the strategy
This seems to make sense if we view BPM as being all about the tactics and mechanics of carrying out the strategic plan. However, if we look to thought leaders in strategy, we might question this sequence and the positioning of BPM in it.
Michael Porter is recognized as one of the most influential thinkers about strategy, specifically competitive strategy. In his seminal article, What is Strategy?, ***** he argues that the essence of competitive strategy is finding a position different from a company’s competitors and then shaping and aligning all of company’s “activities” (and by implication all of its resources) to carry out that strategy. BPM advocates cite this statement often as the clearest expression of the link between processes (“all its activities”) and strategy.
But if this is so, when in the sequence would one first have to consider the three sub-systems of the organization? It’s not just a matter of aligning those sub-systems to the strategy. You would have to be thinking about them as you create the strategy itself. Exactly what resources do we have that are strategically important? What gives us the edge over our competitors? Which of our business processes are strategic in nature? If we are in a race to create great new products before anyone else, aren’t our research, ideation, product design and product development processes strategically important? This is what Porter seems to be saying.
So a better sequence might be:
- Define the corporate strategy
- Define the competitive strategy
- Define (that is, understand) our internal sub-systems
- Develop the strategic plan
5. Align (e.g., allocate, invest, restructure, etc.) the Internal systems to carry out the strategy
In this sequence the link between BPM and strategy is even more significant. BPM is an essential part of strategy development as well as of strategy execution. It becomes the essence of strategic thinking and planning, and as well as the means for strategy execution.
References:
* Harmon Paul and Roger Treager, Questioning BPM? 109 answers by 33 authors to 15 questions about business process management . Meghan-Kiffer Press, Tampa, FL, 2016.
** Ibid, pp. 83-87.
*** Andrews, Kenneth, The Concept of Corporate Strategy, Dow-Jones Irwin, 2nd Edition ,1980
**** These three sub-systems were borrowed from our book Rediscovering Value: Leading the 3-D Enterprise to Sustainable Success, Rummler, Geary A., Alan J. Ramias and Cherie L. Wilkins, Jossey-Bass, 2011. In the book, the sub-systems were called the three “dimensions” of every organization.
****Porter, Michael, “What is Strategy?” Harvard Business Review, Nov.-Dec. 1996
