Methods for Organisational Change & Process Improvement - Interview with Derek Miers, Forrester Research

How do you get to the next level of productivity improvement? By not starting off with what you've got, says Derek Miers, BPM industry Analyst at Forrester Research. Businesses need to think about what they should be delivering to their customers, says Miers, and not about how to tweak existing infrastructure and processes.

In this PEX Network interview, transcribed from a video interview filmed on location at PEX Network's PEX Week Europe event earlier this year, Miers talks about something he calls the organizational weave of an organization and the importance of not adopting one single process approach, but rather knitting the elements of each one that adapts best to the organization. Note: this interview has been edited for readability.

PEX Network: You’ve talked about something that you call an "organisational weave" - what do you mean by this term?

Derek Miers: We’ve had a lot of conversations about process improvement revolve around whether one approach is better than another – BPM, Lean, Six Sigma, Balanced Scorecard, or any other technique. There are literally hundreds of techniques. Indeed, I’ve been collecting methods for organisational change and process improvement for at least the last 25 years.

Many organisations have been down this road before as well with different approaches. You often find that many organisations have forgotten they have been here before. For instance, I found myself engaging with a particular telecommunications organisation - for the third time in 15 years - and it’s as though they’ve forgotten what they already knew. We had essentially the same discussion before and no doubt we’ll have it again.

Organisations have got to get comfortable with the fact that there’s no the single method or process approach. They need to get comfortable with thinking about organisational change as a given - there are many different methods involved in achieving that change – that they can add tools and techniques, or take away those that don’t work.

Companies should be experimenting and trying out different techniques [of process improvement and organisational change]. They should be designing organisational experiments and asking, did this technique work? If it didn’t, why didn’t it work? Rather than assuming a particular technique was wrong, companies need to examine multiple possible sources of failure - it may have been the way in which the technique was introduced that was wrong.

In a sense, then, the "organisational weave" is a way of thinking about organisation change. Each company has its own culture, its own history of change, along with a multiplicity of variables including the politics, the personalities involved, different degrees of ownership, and different degrees of maturity. They all influence where you are on the process improvement journey.

Lean, Six Sigma and Lean Six Sigma represent just one set of approaches among many. It is just one of the organisational levers that you could pull, but there’s many others: developing an effective business architecture, adopting a Balanced Scorecard approach, automating processes with technology, dynamic case management, to name a few. They are all part of the discipline we call BPM.

So the weave, coming back to your question, is, in a sense, the idea that there is no single method of process improvement. There’s not a single integrated technique – it’s a blend of methods and approaches. Companies have got to develop the competence and capability to be able to add, subtract, and think about improvement from a wide variety of angles. A lot of people that come to this sort of event [London, PEX Week 2011] are not new to this game. They’re not looking for a single method. Instead, they’re looking for a new way of combining all the pieces – the organizational strands, so to speak - into their own change programme fabric.

PEX Network: I think, though, that a lot of companies have stuck with Lean Six Sigma programmes. But there seems to be some questioning as to what comes next. Done Lean Six Sigma, what now?

D. Miers: It’s not a question of done Lean Six Sigma, what next? Many companies have pushed the boundary of what’s possible. They are getting six to eight percent productivity improvement from Lean Six Sigma type initiatives but, sooner or later, you realise that people are working hard to improve what they’ve got rather than what they necessarily need. Existing processes are normally a bit of a proxy for the org chart.

And this is where something like business architecture comes in. Businesses need to start thinking about the organisation’s target operating model – the services they offer customers, the capabilities required to support them. Processes become the way of packaging the value of the capabilities delivered in the services. Now we need to start working towards that vision, and that means weaving it into change programmes.

The tools of Lean and Six Sigma are important elements of improvement programmes; they provide an approach and way of thinking about what you do and how you do them. The value of these approaches is not going to go away, but the question is really, how do you get to the next level of productivity improvement? How do you ensure you are doing the right things, rather than just doing things right?

And for many, that means not starting off with what you’ve already got. Instead, you’ve got to drive your thinking from the customer’s perspective – what are the experiences you’re trying to deliver? What capability set is needed for this business service? What does that mean for a given category of customers? Process improvement practitioners really need to engage the business people into designing that experience for the customer, from the outside in.

You know, Walt Disney asked "What is it that you do so well that they will want to come back and bring their friends?" He was talking about "Imagineering". Kenny Klepper [COO of Medco] was talking at our Business Process Forum last year, when he described a situation where he typically is looking for a 30% labour productivity improvement. He was talking about how he challenged his teams to imagineer the customer experience. Indeed, he put it more like – "if you haven’t got 30% yet, you haven’t finished". Actually what he’s doing is challenging them to design the outcomes from the outside in, rather than finding variation in the current approach and removing it.

PEX Network: Instead of tweaking what they’ve already got, in other words?

D.Miers: Exactly - let’s think about the experience we’re trying to deliver. Let’s think about changing the programme to be about how do we improve this process to deliver a better customer experience? Further, what does that really mean [to deliver a better customer experience]? Once we have those questions answered you’ll end up looking at your processes from an entirely different perspective.

So how do you challenge people in a change programme to envision a new way of doing whatever it is that they’re doing? To me, it probably comes down to half a dozen different dimensions that you really want to use as guide rails around that change.

First, is what do we know about the market and our position in it? If the competitor’s doing it in two days and it takes us 20, then that tells you something about the change programme you’re going to get involved in. Second, how do we implement governance within the service? How will this service fit into the strategic management practices of the firm? Thirdly, what resources will this service consume? Fourth, how are we going to apply metrics? How are we going to get all those sorts of things working properly in terms of feeding back the metrics to perform its measures of learning into the way in which we deliver the service? Fifth, and perhaps most importantly, how is this service going to implement the relationship management requirements of the business - with customers, partners, auditors, regulators? Finally, how are we going to market the service and what does it mean for colleagues?

But ultimately, if you articulate that customer experience across all these dimensions, you’ll end up with a vision of where you should be going that is not constrained by where we are today. Today is just a start point for the future.

Are many people doing this in the way that I’ve just described? I think there are very few. We talk about the customer journey and designing processes "outside in", but we don’t really find organisations have the programme methods. It’s really a question of first developing the vision and then applying iterative approaches to implementation.

PEX Network: It sounds quite complex. What does success actually look like?

D.Miers: Well, there are a lot of different methods and techniques. What does success look like? I usually adopt a consultant’s trick to challenge the customer to define what it would really feel like to be successful. Rather than tring to define success - look at it the other way around - get the people to start thinking from the perspective of a successful future state and then reflect on what it took to get there. Assume your programme has been successful, look back at the past and ask "what is it we did that made it so successful?" With this approach, you may end up with a completely different list of improvement opportunities.

What does success look like for these sorts of programmes? For the most part, one of the key elements that usually emerges is ensuring cultural change. If you’re not setting out to deal with the culture, you’re going to end up with – as an ex-colleague of mine would say - with "better sameness". In other words, if you don’t deal with culture, you’re probably ultimately going to fail, because you’ll get very short lived improvements, which competitive pressures will overtake quickly. Further, if you don’t have vision, you’ll get confusion. If you don’t have action plans, you’re going to get lots of false starts. If you don’t have a focus on performance metrics and compensation, you’ll get very slow gradual change.

Without these elements - and culture change in particular - you won’t get the results that the executive signed up for many moons ago. And, of course, you’re on a journey; one that never ends. It’s like travelling towards the event horizon - you never actually get there. You may be able to see where the road’s going for the next couple of miles, for instance, but then it disappears for while, and then you can see it way off down in the distance, down at the bottom of the valley. So to understand what is around the corner, you’ve got to talk to people along the way, find out what they’re all about, find out what they learnt, what worked for them, and then start imagining how that might work for you. All those things, I think become part of what you’re involved in here. It’s a journey of discovery, and you never get off it – it’s a life sentence.

PEX Network: That - a "life sentence" – sounds a bit gloomy, doesn't it?

D.Miers: Well, no, it’s a life sentence in the fact that you never stop; you never really get to the point where you stop improving and managing change.