As a manager or fellow employee, don’t you dread it when you hear these words: “That’s the way the system works.” Or, “We’ll make do.” Or the dreaded phrase, “it is what it is.” These are all symptomatic of the value stream or process not being managed and work not being done.
Effective value stream or process management and control require the following:
- Standard work and authority,
- control plans,
- process metrics and KPIs,
- process owners,
- value stream managers.
Standard work and authority are essential. Process steps and tasks should be streamlined, defined, documented, and made known to employees. This includes who does what, when, and how. Standard work, standard operating procedures, or SOPs, and visual standards are used and reinforced through training. Employees should know what they’re supposed to do. They need to know how to do it. And they need to know that they have the responsibility and authority to make things right. Authority must be commensurate or consistent with responsibility and accountability.
Next, control plans should be implemented to enable employees to be in control of the process. The control plan is an organizing tool and comes in various forms. For example, a checklist or table. They are used by employees to monitor and regulate the process. In the control plan, several things should be defined:
- What should be monitored,
- with what metric,
- to what target,
- how actual performance is to be measured,
- and how frequently.
Measurements should be frequent enough to adjust and regulate promptly. In addition, employees need to know when to intervene and when to leave the process alone, and if action is to be taken, what action to take and who does it needs to be clear. Otherwise it will be nearly impossible to regulate and bring actual performance in line with targets
Let’s move on to process metrics and key performance indicators, or KPIs. Process metrics and outcome measures, including KPIs, should establish by management. This way actual performance and desired targets are transparently visible to all employees in the process of value stream. Keep the number of KPIs and metrics to a minimum. A common pitfall among companies is to measure everything and label all metrics as key performance indicators. Don’t fall into this trap. The result is mass confusion, not to mention the time and effort wasted in measuring and monitoring everything. Make sure that all metrics are traceable to what’s critical to quality, or CTQs. In other words, all metrics and KPIs should be traceable to impacting what’s important to customers. Take fast food restaurants, for example. Customers want fast, inexpensive, tasty food. That’s it. So measuring and monitoring and reporting on customer satisfaction levels of fancy decor and ambience is a waste of time.
Process owners. Processes and value streams are cross-functional in nature. They cut across departments and functions in the company, sometimes even outside the company with suppliers and outside partners. While there are managers for the respective departments of functions involved, no one person is in charge of the end to end process or value stream. For example, in the order fulfillment process, many departments, including sales, customer service, manufacturing, supply chain and logistics are involved. But often there is no one process owner for order fulfillment. A process owner should be assigned to ensure that nothing falls through the cracks during the handoffs between the departments or functions. The process owner should have accountability for that value stream meeting its targets. Equally important, the process owner should have the necessary authority to carry out those responsibilities.
Value stream managers. In some operationally excellent enterprises, the role of process owners goes one step further. The organization chart is turned on its side, where there are no functional departments and department managers. Instead, the company is organized by value streams and end to end business processes. There are permanent positions called value stream managers who manage value streams or business processes in the company. Employees working in the value stream report to that value stream manager. The value stream manager has full authority, responsibility, and accountability for the value stream. This includes the resources, the authority to hire and fire, to reward and promote. Essentially, to run the value stream.
In conclusion, a couple of points should be reinforced.
Timeliness and frequency of reporting on actual performance. It should be as immediate as possible so that appropriate actions can be taken to regulate and correct quickly to eliminate or minimize any adverse impact. Imagine the driver of your delivery truck not having a speedometer, but instead, receives a monthly speedometer report.
Responsibility and authority to regulate the process should be pushed down to as close as possible to where the actual work is done. For example, imagine that same driver of your truck having to get permission from corporate HQ before pressing the brakes.
While managing a process or value stream may sound mundane, it is critical that it is done correctly day in and day out. Otherwise, results from the best planning, redesign, and improvement projects will not be sustainable.