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Process Management

Process Management. BASIC UNDERSTANDING OF THE CONCEPT FOR ENTREPRENEURSHIP AND ENTREPRENEURSHIP EDUCATION. Henk Verbeke. Tartu, March 2012. 1 – How it all went so nicely 2 – The roaring sixties 3 – Teaching Process Management. There was bureaucracy.

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Process Management

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  1. Process Management BASIC UNDERSTANDING OF THE CONCEPT FOR ENTREPRENEURSHIP AND ENTREPRENEURSHIP EDUCATION Henk Verbeke Tartu, March 2012

  2. 1 – How it all went so nicely 2 – The roaring sixties 3 – Teaching Process Management

  3. There was bureaucracy Borrowed from the Juran website, years ago In the beginning

  4. So we kept teaching it. But suddenly As the Han-emperors did, Charlemagne did, Napoleon did, Kaizer Wilhelm did, and my old professor did. All went well for centuries bureaucracy worked fine We lived in a stable environment. There were changes but they came at low speed. 0 500 1000 1500 2000

  5. 2000 2000 Process Management Line-staff Matrix A closer look 1000 1500 Line

  6. The Roaring Sixties Ah, we sure rocked the boat, didn’t we!

  7. ‘69 ‘60 Arpanet (first internet), Artificial heart, ATM, Bar-code scanner, Battery operated smoke alarm Halogen lamp, Laser ‘61 Valium, Nondairy creamer ‘68 Computer mouse, Computer with integrated circuits, RAM ‘62 Audio cassette, Fiber-tip pen, Spaceswar (first computer game), Silicone breast implants, LED ‘67 Handheld calculator ‘66 ‘63 Video disk Electronic fuel injection (in cars) ‘65 ‘64 Astroturf, Soft contact lenses, Compact disc, Kevlar, NutraSweet Acrylic paint, Pemanent-press fabric, BASIC programming language THE ROARING SIXTIES (an avalanche of new products) 1990 1940 1950 2000 1960 1970 1980

  8. Cuba crisis Anti-War Movement Shepard Escalation of the Viet-Nam War Student riots Columbia Univ. Occupation Berlin Wall Prague Gagarin Civil Rights Movement THE ROARING SIXTIES (political & social turmoil) 1990 1950 2000 1960 1970 1980 1940

  9. Jimi Hendrix Rolling Stones Experimental jazz Andy Warhol (the Factory) Bob Dylan & Joan Baez THE ROARING SIXTIES (subculture & provocation) 1990 1950 2000 1960 1970 1980 1940

  10. Increased production Frequent shifts in buyers’ demand An overwhelming number of new inventions Changed production A revolting new generation Political turmoil Democratised organisations The need for a new organisation model THE ROARING SIXTIES (summary) 1990 1940 1950 2000 1960 1970 1980 Increased family budgets

  11. LA-1 LA LA SA SA staff staff FA dep dep dep LA-2 What we expected: Projects to get new things going What we had: Simplicity What we got: the Matrix to keep new things going FA = Functional authority LA = Line authority SA = Staff authority A fundamental error

  12. LA-1 LA-2 And they paid the price! Battle for supremacy LA-1 Focussed on traditional people-management LA-2 Content-oriented.

  13. Why bureauracy failed When the task environment becomes dynamic rather than stable (…) standardised response rules are inadequate (…). It (the organisation) must determine when and how to act, and its cues must be taken from the task environment. Thompson, J.D (1967) Organizations in action, page 72. McGraw-Hill

  14. J.D. Thompson to the rescue The model we select is strongly depending on the technology we employ. Thompson distinguished three types of technology: Step by step Parallel activities Strongly interdependent activities Long linked Mediating Intensive Thompson, J.D (1967) Organizations in action, McGraw-Hill

  15. Thompson's long-linked technology All steps taken in a nice, predefined sequence. A bureaucrats dream. Perfect for a line model and line staff model

  16. Thompson's mediating technology Example: a very simple bank Personal (savings) accounts Reception Central admin Loans Mortgages Specialists are getting directly involved. A process model would be preferred.

  17. X-Ray Laboratory Supervising Specialists Central Desk Prolonged stay ARRIVAL EXIT EXIT EXIT Administration Only a process model will do Thompson's intensive technology Example: Emergency Ward an involuntary case-study

  18. But it is chaos out there! Consultants keep each other busy in lengthy discussions about Process Management. Especially LinkedIn-groups on process management offer a wide range of discussions between consultants. ISO certification requires that entrepreneurs adopt Process Management, but nobody told them how. We see entrepreneurs ‘describe’ processes only for those activities that are important to the certificates in question. Unknowingly they create hybrid organisations. The IT-Boys & Girls have hijacked Process Management. Many SME’s are tempted to buy expensive software to get ‘up-to-date’. An extreme waste of money requiring the help of expensive experts to get things going again. We see governmental institutions struggle to modernise, thus adopting the Matrix-model (!) A very disappointing experience. As if they never heard about it’s lack of results, combined with extreme costs due to constant meetings. Meetings that are necessary to keep everyone informed and conflicts within limits.

  19. Teaching Process Management

  20. Process Analysis Risk Identification Allocation of Controls What control works best? What can go wrong? What are we doing? Process Additional controls required? What are the causes? At what sequence? Frequency:... What are the consequences? Who are doing it? Environment Reputation Activity 1e Avoidance 2e Out sourcing 3e Hardware 4e Competence 5e Regulations Cots and benefits of controls? Assets People What triggers? Action What likelihood? Amount of Mischief What deliverables? Process Management Steps & crucial questions Can/should this be avoided? Can/should this be improved? Can/should this be improved?

  21. Changes in focus Process Management Traditional In a turbulent environment In a stable environment Value chain People management Risk identification Span of control Effectiveness & efficiency Regulations/procedures Quick response Long linked technology Mediating technology Intensive technology

  22. Universities should play a dominant role in: The development of a relevant body of knowledge. The teaching of tomorrow's managers and equip them with relevant knowledge & skills regarding Process Management. Supporting today’s managers by offering additional courses And please: without all those automation stories. Process Management is a way of looking at your organisation. Automation is just a tool that can come later.

  23. Not a new discipline Process Management could be incorporated in ‘Business Strategies’ Evidence to support this can for instance be found in STRATEGY, Process, Content, Context (De Wit & Meyer) in Section 2: Strategy Process Process Management has a strong focus on the Value Chain. A thorough risk identification/assessment is an important element of Process Management. The results can be integrated in analyses like PESTLE, Porter’s etc. thus providing valuable information for the SWOT analysis. The choice for a management model is a strategic choice par excellence.

  24. Nothing lasts forever This also goes for Process Management

  25. Thank you for your patience Henk Verbeke hverbeke@home.nl

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