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Porter created the idea of businesses having a value chain – ideally designed so as to maximise the efficiency and effectiveness of business processes as understood by the customer.
When we talk about processes we mean the specific ordering of work activities across time and place, with a beginning, an end, and clearly defined inputs and outputs. They are the structure by which a business physically does what is necessary to produce value for its customers.
By mapping out and improving individual processes, and how they worked together as a system, planning and organisation could be facilitated throughout a business. By focusing on common process goals – and the collaboration required where processes span two or more functional lines, the value chain could deliver more value for fewer resources.
Re-engineering was the most comprehensive, far-reaching, enterprise-wide option for process improvement. It was also the most radical. The most prominent proponents of this approach were Hammer and Champy who, in their book ‘Reengineering the Corporation’ stated that managers “must abandon the organizational and operational principles and procedures they are now using and create entirely new ones”.
Their view was that business reengineering meant starting again from scratch, forgetting how work was done as well as understanding that old job titles and old organisational arrangements would cease to matter: How people and companies did things yesterday wouldn’t matter to the business reengineer. They tackled the organisation’s core processes instigating “radical change to achieve quantum process improvement”.
During this time I was a young process consultant, analysing clients’ business processes and assessing the degree to which they satisfied the organisations’ customers. A process focus meant I was less concerned with things like people and technology and although there were associated ‘Hard’ issues (including the tools, techniques and Information Technology available to support the re-engineering effort) and ‘soft’ issues (individual and team behavioural reactions to the instigation of change within the organisation, the management of which spawned further growth within the consultancy industry as ‘Change Management’ shot to the top of every CEO’s agenda) the ethos was that all would flow from the customer and be process-driven as that was the pathway to value creation. Specifications for skills, jobs and even the technology to enable each process would be created and fulfilled as a consequence of the process.
All in all, this process-centric model was a beautifully scientific theory, rational, bursting with logic, and it certainly delivered improvements, but even then I sensed it was missing something fundamental, something intuitive. Maybe the fact that we humans are complex and irrational. Or maybe that in a dynamic context we were moving from one static ‘wrong’ solution to another, static, ‘right’ solution.
The world and the way we look at businesses have since moved on, but I took away a very valuable lesson from this era: All models are wrong, but some are useful.