Corporations have infrastructures with various asset classes (capital, access to capital, plant, equipment, people, existing products/services, new products/services, customers, and partners).
The ones that have “secret sauces” succeed, most of the others fail.
The rules for success are quite simple – it’s important to build and maintain each asset class individually.
Then, aside from the risk of being leapfrogged, you need to also enhance your assets to keep ahead of the competition.
Not all assets have the same relative strategic value so you need a way when making decisions re the commitment/deployment of assets to study each fund request in the light of its potential to support strategy.
It pays to maintain a reserve in each asset class. If, for instance, you commit all of your staff to a large project you may need to refuse new opportunities and if your “all-eggs-in-one-basket” initiative fails you will find yourself in damage control mode.
The traditional approach to “management” has been to standardize and streamline.
Policy provides governance, procedure provides guidance, KPIs allow CEOs to steer the ship.
The problem is people don’t keep policy in mind, they don’t read procedure and because things change quickly, it’s very easy to be looking at the wrong KPIs.
This is why we have BPM (Business Process Management) and ACM/BPM (Adaptive Case Management).
A Bit of History
I have always maintained the position that BPM had its origins in CPM (nodes, arcs, end node objective).
CPM goes back to 1957 (possibly earlier) with flow graphing hitting the streets both in the military (Polaris Program) and in the construction business (E I Du Pont de Nemours).
Media coverage of flow graphing peaked in 1962 with DOD/NASA’s Pert Cost. I don’t recall seeing much media frenzy on CPM but the “critical path” methodology has evolved over time to where few considering launching a large project would do so without CPM.
The main contribution introduced by BPM was content-driven decision-box branching and loopbacks.
It is worth pointing out that branching itself was a part of GERT (an invention of General Electric) which recognized the need to avoid having to engage all pathways in a flow graph. The difference in GERT, was that the branching was evidence-based (i.e. plan side) whereas BPM is content-sensitive, causing rule set engagement to occur at run-time.
The problem with BPM came when most of the low-hanging fruit (i.e. mostly linear, straight through, end-to-end processes) had been harvested.
This is resulting in an exodus from traditional BPMs to Case where objectives can no longer be conveniently parked at process end points.
The thing about Case is that it can host objectives and allow background BPM to continue to provide Orchestration.
Governance comes from rule-sets at the Case level. We call all of this ACM/BPM where ACM stands for “Adaptive Case Management”. Some just call the hybrid approach ACM but we need both Orchestration and Governance plus a few other tools.
Corporations that embrace ACM/BPM end up with the best of two worlds i.e. a flexible environment in which structured “best practices” in the form of process fragments are available for users, machines and software to thread together at run time, and where the ability exists at any stage during the lifecycle of a Case to insert ad hoc interventions.
Contrast this with the shaky foundation that maintains that you can, with BPM alone, map out all eventualities. It does not take a lot of analysis to realize that in a relatively simple flow graph, the closer you have branching decision-boxes to the start node, the greater the number of permutations and combinations. Easy to identify flow graphs where the number of permutations and combinations is in the hundreds of thousands.
ACM/BPM wins hands down because there are no restrictions at any point in the lifecycle of a Case re engaging specific processing
Bridging the gap between operations and strategy
It’s fine to be practicing ACM/BPM at the operations level but it’s a trees vs forest wheel-spinning exercise unless/until you have a way to evolve strategy, put in place ways and means of assigning priorities (few companies have the wherewithal to authorize all funding requests that are submitted) and then monitor approved funding requests to make sure work is proceeding on time, on budget and within specification.
Strategy -> Priority Setting -> Objectives <- ROIs <- Cases <- Case objectives
Narrowing the gap between operations and strategy requires ensuring that Case objectives are at all times supportive of strategic objectives.
i.e. Case objectives -> KPIs -> Strategic objectives
The main tools I have used over time to bridge the gap between operations and strategy are
a) shifting from ROIs to SROIs (1) at the funding level.
b) use of FOMM (Figure of Merit Matrices) during monitoring/tracking as a non-subjective means of assessing progress toward meeting Case objective.
c) finding ways to consolidate operations level data to a free-form search knowledge base environment that is able to simultaneously host KPIs.
I will re-visit these in future blog posts.
SROI is “Socio-Economic Return on Investment” – basically it takes the sharp edge off purely financial assessments. The complexity of business today requires taking on a wider horizon than financial returns.