MacNeice and Bowen discuss the High Performance Process - 1: The Problem Defined
In our book “Powerhouse” we identified Process – by which we mean the mechanical model for how an institution is run – as one of the 4 pillars of our Powerhouse Model critical to sustained institutional high performance. The specifics of process transformation are completely situational, with needs and solutions varying by institution across sectors, geographies, sizes and time, however in this article – the first in a series of three – we want to identify the broad “problem” with process that, in looking to transform performance, leaders need to address.
To do this, let’s look at the different types of management processes that we observe in the institutions that we study and work with. For us, these fall into three broad categories as follows:
1. Strategic Processes
Strategic processes relate to the sharing of relevant information, the framing of choices and/or the taking of decisions. The scope of strategic processes is broad, ranging from strategy development and deployment at one end of the spectrum to engagement and communications at the other. By and large strategic processes are “good” and, while the generic challenge is to optimize them to be as efficient and effective as possible, many high-performance organizations – Toyota, and Southwest Airlines being just two examples – deliberately overinvest in aspects of strategic process with a view to ensuring their teams are informed, aligned, focused and motivated to deliver at their best.
2. Regulating Processes
Regulating processes relate to checking that things are happening as they should. Every institution in every situation has an amount of regulating process that they are obliged to implement – to meet their own requirements or those, for example, associated with legislation or regulatory bodies . Like strategic processes, we believe that regulating processes are “good”, however unlike strategic processes, we suggest that institutions should target at all times to have the minimum amount possible.
The problem with regulating processes is that the amount required is a function of the extent to which the institutional environment is under control – that is to say that the less the environment is under control, the more process is needed for leaders simply to keep track of what’s going on . The consequence of this is that the extent to which an institution’s performance is in control today has a disproportionate influence on its capacity to deliver better performance tomorrow, as time invested in monitoring and keeping up by leadership teams of institutions that are not under control comes at the expense of time invested in considering improvement.
3. Accommodating Processes
Accommodating processes are those that cater – explicitly or implicitly – for individual or collective dysfunctions within institutions. Examples of accommodating processes include meetings to get individual leaders up-to-speed with status information because the reporting systems for making performance visible are absent. Or decision-processes that happen in parallel across multiple functions because neither the appetite nor the mechanisms for cross-functional engagement are in place. Or meetings to take decisions that have been escalated but that should really have been taken at a lower level. Or regulating processes consistent with an out-of-control environment that are imposed on an environment that is under control.
Unlike the other two forms, accommodating processes are definitively “bad”, and their existence should provoke strong allergic reactions in leaders everywhere. Unfortunately, however, in institutions other than those that are the best in their games, this tends not to be the case, and in some instances we have observed, we would suggest that accommodating processes account for 30% or more of the total.
Top business leaders, academics and strategists, including Andy Grove of Intel and Michael Mankins at Bain & Co., have argued that an institution’s true scarce resource is its leaders’ time. The reality of life in most of the institutions that we come across – and particularly the big, multinational ones – is that most leadership time is spent engaging in process activities of one form or another, with most of the individual leaders we meet feeling increasingly pressured to fit all of their process obligations inside the boundaries of a working day or week. We see many more examples of calendars that are double, or triple-booked than we see of calendars with “white spaces” for thinking or doing work.
As Mankins and others have observed, and our own work would confirm, when this reality unfolds, the norm is for regulating and accommodating processes to be squeezed in, while strategic governance gets squeezed out.