4.1 Stage 3, part 1: Leadership, people and process
4.1.4 Business processes The importance of process
Business processes are the things that we all follow at work – the daily actions, activities and tasks that take up our energy and time. The way people perform these has an impact on how satisfied, or unsatisfied their customers are, and how much of a difference those individuals make for their own organizations and, indeed, for themselves. In a major way they affect the way knowledge is mobilized around the organization to add value.
The following are a couple of formal definitions of what a process is:
A sequence of steps which adds value by producing required outputs from a variety of inputs. (British Quality Foundation 1998) A series of actions, changes, or functions bringing about a result.
(Dictionary.com 2002) The improvement of business processes should be at the very core of knowledge management, with the goal of doing things differently and better. Designing the new reality must have a process redesign element – getting people to look at the way things are currently done and asking – can we do this faster, at Figure 4.5
Dimensions of knowledge creation – how it can grow (adapted from Nonaka and Takeuchi 1995, p. 57)
Work to do (value needs adding)
Training Direction
Support Ask a friend
Ask the audience Ask an expert
Work processes
and rules
The ‘knowledge workplace’
Wisdom Knowledge Information
Culture, incentives and objectives Improve
Work completed (value added) Share with a friend
Share with the audience Share with an expert Knowledge
bases
Knowledge bases
less cost, can we improve the quality, should we be doing this at all, and are there things we do not do, but should?
The ‘knowledge workplace’ was introduced in Chapter 3 and is shown again in Figure 4.6 for reference.
At the centre of the workplace are work processes, performed by people who may be supported by some technology. These people would have received varying degrees of training, direction, and support to help guide their actions. They will also use their own knowledge in performing the work.
The work will either flow to them, or they themselves will initiate work that needs to be done. In trying to complete the work they may ask friends, a wider audience, or specific experts for advice. They may also use paper and electronic systems to find what they need. In doing their work they may also improve the information and knowledge – for example, by adding what they have learnt from their own experiences. So as well as completing the work, they may also share this new found knowledge with friends, a wider audience, specific experts, or record it on paper or on electronic systems.
Figure 4.6 The knowledge workplace (developed by Trevor Howes and Tony Clack)
The knowledge workplace is where a cycle of work constantly flows, where the individual can add value and contribute to the wider community of knowledge.
At the centre of all this are the core business processes – both those things that are ‘formally’ known to be done and also knowledge sharing and other informal actions that may be carried out. It is important to realize that in a knowledge management context, when we talk about processes, we include both informal and formal types. An example: a customer of one of the authors had separate teams performing accounting work across seven different locations, each sharing a building and working closely with their own customers. When they reorganized the teams into a single centralized location, they redesigned the formal processes to cope with the changed accounting information flow, but they also had to take into account that the informal chats where key knowledge was passed between themselves and their local customers’ would no longer happen. Acknowledging this helped them put in place other ways of meeting with their customers, keeping the relationships going and ensuring that important informal information exchanges still continued.
This example echoes the message in our Golden Rule below:
Golden Rule #4: Process change leads to improved perform- ance – Organizations need to build in new processes and routines through job redesign, to ensure knowledge capture and reuse, and to establish and reinforce desired behaviours and activity.
There are many ways in which performance can be strategi- cally improved to meet the pressures on the organization. For example, there will almost always be some form of competitor out there that is working to gain your customer’s attention (even in government, for example, there are competitors for central funding). By better managing or reducing the costs of performing processes, any new competitors will have to be very efficient from day one if they are to compete. Working in unique and special ways can help your organization be
‘different’ from the competitors, making it difficult for com- petitors. In addition, the organization may want to ‘be the best’
at doing a certain thing – this may be by having very close customer relationships, or by producing or providing specialist goods and services. By being the best and constantly innovat- ing, the competition will again have difficulty in competing against your organization.
These can all be achieved by improving the formal and informal processes that the people in the organization follow.
Tesco, the leading UK supermarket, has focused on its supply chain (from product development, supply, storage, and sale) not just to drive down cost but also to gain control of the quality of products. The flow of information between all those involved in the supply chain, and the exchange of knowledge between people, is key to keeping control, but also in looking for innovative new ways of working.
Any process effort must take place with the vision and strategy clearly in mind. The process needs from knowledge manage- ment are particularly focused on the information flow and interactions of people with knowledge. We now need to understand the different knowledge management processes that must be borne in mind when designing our new reality.
Looking at key knowledge processes
In the previous section we outlined the ‘Spiral of Innovation’ that enables knowledge to be shared and improved, with a view to encouraging innovation. There are a set of ‘knowledge processes’
proposed by Gilbert Probst, Steffen Raub and Kai Romhardt (2000) that can be useful to help understand how efficient an organization’s knowledge processes are currently, and assess the future potential of specific improvements (Figure 4.7).
People tend not to carry these processes out in quite such a structured, logical or disciplined way as presented in the questions below, but they are outlined below in such a way for ease of representation. In designing a new reality one should ask the questions:
䊉 Do people perform all these processes in the organization?
䊉 Are they supported with adequate and appropriate technology?
䊉 Are individuals encouraged to carry them out, or do things discourage them?
䊉 In order to meet our needs and mobilize knowledge, what should be happening?
䊉 What supporting technologies or information sources will help?
䊉 What leadership or people areas will help them be carried out?
䊉 Are feedback and control processes needed to keep everything in balance?
Knowledge sharing/
distribution Knowledge
development Knowledge identification
Knowledge retention
Knowledge acquisition
Knowledge utilization Knowledge
goals
Knowledge assessment Feedback
The processes show knowledge creation as ‘knowledge devel- opment’ where it builds upon identified and acquired knowl- edge, which is then shared, utilized and retained. Also shown are feedback processes where the performance is assessed against the knowledge goals of the organization. This allows a constant check to be maintained on the effectiveness and efficiency of the processes, a very important aspect of any process work.
As an example, a team developing a new IT system may have some knowledge goals – to foster best practice and ensure all the key requirements of the users are incorporated in the design, and to help future projects to learn from their experi- ences and progress.
When starting the project the project manager and team will identify what sorts of information and knowledge will likely help them (knowledge identification) – this could be any of the knowledge types identified in Chapter 2. The team will then seek out the information and get it for the team (knowledge acquisition). This might include requesting identified ‘experts’
to join the team, or finding previous documentation and gaining permission to use it. The team will now be ready to move on with the project and start developing the new system.
Figure 4.7 Building blocks of knowledge management (Probst, Raub and Romhardt 2000, p. 34)
During the work people will have ideas and discover useful ways of doing things (knowledge development) and will likely share this with other team members and interested parties (knowledge sharing/distribution). Once the knowledge is shared then people will start using it to move the IT system development on (knowledge utilization). The knowledge at the end of each project stage will be captured on an intranet, written up as ‘knowledge bites’ for new projects, or incorporated into training material for IT staff (knowledge retention). Also at the end of each project stage the project is reviewed to see if it is meeting its original knowledge goals (knowledge assessment).
It may be that different experts may need to be involved, or other knowledge types would help out.
Only a basic flavour of these knowledge processes can be gained from such a simple example, but it assists with initial assesment of what important knowledge and information business pro- cesses exist in the organization.
How to analyse processes
The approach to business process analysis must be pragmatic and focused on meeting the requirements, and constraints, of each specific situation. People within the organization will have the experience and knowledge of what currently hap- pens, and most significantly what is important. Involving them in the analysis is therefore essential if any change is to be successful.
Knowledge processes are at the heart of how the organization works, and will be impacted on by all of the other key KM areas (leadership, people, technology, and information).
Designing the new process reality can be a complex job, but as mentioned previously, the benefits to the project and organiza- tion can be enormous. Our experience shows that many of the
‘off-the-wall’ and ‘silly’ ideas that are raised during the first set of meetings will set the scene for the level of improvement likely. We find such improvement ideas should be captured in an ‘opportunity log’ that can be used throughout the project to capture gaps, weaknesses, inconsistencies, duplications, as well as general improvement opportunities. This log will be a vital source of ideas when redesign should take place.
Deciding on the type of process changes will help everyone understand how radical and risk-bearing the task will be. There are many different types of process changes, ranging from the
continuous and low-impact to the radical, high-risk and high- reward type. They are known by many different names, but the main categories are shown in Table 4.4.
Continuous improvementtends to, as its name suggests, be a continuous activity carried out within an organization. Captur- ing ideas from employee suggestions, or introducing changes as the demands from customers alter over time, are both examples of this.
Example: A medium-sized corporate hospitality company reg- ularly set aside money to implement changes suggested by staff.
A percentage of any resulting financial savings, and profit from extra business won, was used for staff bonuses and a few ‘party’
nights throughout the year. As a result staff tended to talk more about what could be done better after events for customers, improving knowledge sharing, learning, and organizational performance all at the same time.
Process redesign activities tend to be part of a project that challenges old ways of working and may recommend changes running across all our key enablers. The brief is typically that some problems need to be addressed and the ‘end-to-end’
processes (logically related processes that may start from one end of the organization and pass through many departments) should be looked at for wide-scale change opportunities.
Example: A city council wanted to improve the way it dealt with customers when approving disabled car parking passes. It had previously charged customers £2 for an administration fee which was non-refundable, even if at the end of the process they were refused a pass. There was resistance to this among customers. The reason for the charge was that the processes at each local office in the community for checking and handling the money were Table 4.4 Different types of process change
Continuous Process redesign Radical
improvement business change
Cost Low Medium High
Scope Local Local→far reaching Far reaching
Scale Small Medium Large
Risk Low Medium High
Return Low Medium High
complicated and time consuming. After a process review it was decided to handle the authorization at a central location, with redesigned forms that clearly placed more of the data gathering responsibilities onto those applying. The administration fee was also scrapped. The result was a reduction in ‘confrontations’
faced by local office staff regarding the administration charges, and fewer forms rejected due to incomplete information.
Radical business change projects tend to have all parts of the organization as possible areas for change. The focus is typically on designing and implementing new and changed processes that significantly improve the value delivered to customers. The organization is then restructured around these processes. This could mean new physical locations, IT systems, roles, and a whole new culture being required to ensure the new processes are performed in the optimum manner. These projects tend to be substantial programmes – the scope, scale, and variety of the changes require a number of parallel projects to be coordinated together. Risk and reward will both be high – and organizations do not enter into such changes lightly. Significant and compel- ling pressures must be facing organizations who need to make wide-scale changes for survival or to grasp highly attractive opportunities.
First Direct, the phone and internet bank, is a classic example of such a move – where an existing financial institution created a new bank with no branches and offering 24-hour customer contact. The central idea was a change in the value delivered to customers through new processes and interactions with custom- ers. Achieving this required the traditional banking processes to be turned on their head and made ultra-customer friendly. With the new processes developed, the call centres, new roles, and IT systems had all to be created to support them. The needs for sharing and gaining customer and system knowledge were driven by the new ways of working, forcing people to behave differently.
For knowledge management the most common types of projects are those closest to continuous improvement and process redesign. It is unlikely that the drive to gain and share knowledge better will result in radical business changes of the scale described.
During the information and knowledge process analysis, some process information should be captured. A template for basic process information required has already been introduced, and can be found in Appendix 3.
Identify appropriate internal staff
Identify appropriate external staff
Collect feedback
Reject them as unsuitable Identify required
people for a project (to add value)
Bring them in for interview
Assess them during interviews
Appoint them to the project
Deliver on the project (value added)
It is also important to capture the flow of processes, and the information they use, consume, and produce. Figure 4.8 is a simple example of the process for recruiting and using people on an IT project.
By mapping out the key processes that currently happen it is sometimes obvious where improvements can be made. But what we also need to understand is how do people in the organization fit into the process picture? People at work tend to meet and chat and share knowledge, as well as perform their work. The updated Figure 4.9 shows these people, each with their own specific knowledge performing the processes. The dotted line Figure 4.8
Staff recruitment for a project – an example process
Identify appropriate internal staff
Identify appropriate external staff
Collect feedback
Reject them as unsuitable Identify required
people for a project (to add value)
Bring them in for interview
Assess them during interviews
Appoint them to the project
Deliver on the project (value added)
also highlights the community that they form – sharing and building knowledge during formal and informal interactions.
It is precisely these interactions that can make the difference between a process that is average, and one that is exceptional.
Over time, as experience and knowledge are gained and shared about the process, then cost, time, and quality should all increase, and the process itself should adapt and evolve to changing needs. If these people were stopped from talking to each other and sharing their knowledge, then not only would Figure 4.9
Staff recruitment for a project – with roles and community
Experienced/
expert people Social,
human resource and personal
information
Workgroup support
Individual support
Organization information
Drivers for customers,
suppliers and markets
Reference material for professional
roles Formal businesses
processes, structures and standards Skills and
training
the organization suffer, but the satisfaction of work would diminish for everyone concerned.
Whether these processes involve tangible objects, some kind of manufactured goods, for instance, or concern some aspect of provision of a service, part of the work will involve the use of data and information. This may include pricing data, stock location, facts about the product or service – and also knowledge (what is known to the employee about the product or service, about how to deliver it, background knowledge about the customer etc.).
An awareness of the knowledge and information issues sur- rounding a business process is essential. As part of this exercise an analysis of the information produced by the processes (such as invoices, a project plan, or an operational IT system), in addition to the formal and informal knowledge processes, will be required. A more informed analysis of the processes will enable additional strategic improvements to be identified.
Knowledge and information types revisited In Chapter 3, we introduced the idea of using knowledge types to help identify possible benefits. These types are shown in Figure 4.10, and here we will revisit them in a process context to generate further ideas for improvement. Getting the right
Figure 4.10 The nine knowledge types (developed by Trevor Howes, Jack Kenward and Tony Clack 2001)
Table 4.5 Knowledge need examples – process and outcomes
Knowledge type Example process Example outcome
Experienced/Expert people
Periodically, each person should enter details into a log that states a description of projects worked on, skills used, level of knowledge held (1–5), and a
‘willingness to use’ (1–5), so that people enquiring can understand ‘who knows what’ – the forming of a directory of expertise
Easier access to people with specific knowledge; better exploitation of existing knowledge and experience
Skills and training A process where people must enter details into a log (perhaps as part of a directory of expertise) after they receive training
Easier access to people with specific skills; better
exploitation of training
A process where people are required to share a ‘tip’ from a conference or event
attended
Better value from spending on events
Formal business processes, structures and standards
The availability and publicizing of ‘easy to follow’ organizational and project process and role descriptions.
Increased knowledge of how to do things – reducing uncertainty and increasing conformity. Increased clarity of each person’s official responsibilities – know who to go to for formal requests After action debriefing
process established following project stage reviews; case study process at the end of projects
Learning captured from projects before it gets forgotten
Project start-up process – project manager required to spend time on search for relevant material from similar past projects
Project managers start to apply the lessons from previous projects to new ones – less risk, quicker start-up