Customer Value, Business Functions and Process

“A process is a set of tasks that takes inputs, adds value to the inputs that customers are willing to pay for and then sells those outputs to customers.”

Many, many companies are organized around departments and functions: sales, marketing, research, accounting, and so forth. Most teams, departments and/or divisions have, as their primary interest, their own survival and sometimes, the acquiring of additional power and “territory” within an organization. Organizing a company around departments or functions almost always leads to a silo effect which negatively impacts cross-functional processes, teams and most importantly, customers.

You see, customers do not experience a function – they experience a process. Most businesses do not identify or understand the key processes that affect their customers, so there is a strong disconnect in how a company is organized vs. how a company is experienced. In our Christian Business Reference Architecture, we identify four core processes in every organization: Strategy, People & Talent Development, Operations and Value Creation. It is this last process that most companies fail to articulate and understand.

We advocate having a balance between process management and functional management. We’ll always need accounting, legal, human resources and so forth – in other words, shared services. But when it comes to sales, marketing, business development, research, product/service fulfillment and the like, those activities should be managed within a process rather than within a department. Process management helps you achieve greater effectiveness, greater customer satisfaction, and greater efficiency. Hence, the achievement of your business mission and vision can be realized.

If you organization your company around processes, then you’ll need a process owner – someone who is responsible for the design, improvement, monitoring and execution of the process. The outputs of the process are what the individual is measured and bonused on. If the process isn’t producing what it is supposed to produce, it is the process owner who is responsible to fix it. Organizing a company, in part, around processes may mean that some of the cherished titles no longer exist in your organization. For example, you may not have a Vice President of Sales. Instead, you might have a Process Director for Revenue. The difference is profound. Another example: you may not have a Vice President of Marketing, you might have a Process Owner for Lead Generation and Brand Enhancement. While these types of titles are rare, they do represent a shift in thinking about how we organize our companies.

Process owners should be subject matter experts, the one who experiences the most pain or gain when the process is broken or efficiently working, someone who has respect for upstream and downstream processes and someone who has an attitude toward continuous process improvement, which means they will need an open mind to change and criticism.

Highly effective organizations are customer, process and culture focused. Those companies that organize based on functions across shared services while organizing by process to improve customer experiences are those what will have a strategic advantage in the future.

Bill English, M.A., M.Div.
Licensed Psychologist
CEO, Mindsharp
Associate, The Platinum Group

 

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