"90 percent of the organizations I know have failed at standardization," says industry expert Steve Stanton, Managing Director, FCB Partners. Doing business in our global, tech-driven and consumer-oriented world is becoming more and more complex.
Thanks to the Internet, even micropreneurs can sell to customers in different regions and overseas. This broadening of the market brings with it the need to take multiple factors into account, including country-specific regulations and a wide range of customer attributes.
How can companies deal with this requirement to balance the benefit of process standardization, and the need for process variations to enable them to stay agile and advance their organizational objectives?
First, let's look at standard processes and why they tend to fail.
In theory, creating standard processes should help unify an organization and reduce complexity. However, in today's global market, imposing a single standard isn't always feasible.
For instance, a large healthcare organization with locations in multiple states may want to roll out a new process for the recording, storing and safekeeping of electronic health records (EHRs). While the goal may be to develop a standard process that allows time and cost savings to healthcare professionals, there's one significant hurdle to overcome: while HIPAA regulations govern the fundamental aspects of patient privacy and the security of EHRs, each state has its own additional regulations.
Clearly, the standard process — no matter how good it is — isn't going to be achievable without some tweaking. For every state where the organization operates, a variation will need to be designed to ensure the process is in compliance with local regulations.
3 unsuccessful responses to process variation management
Many process owners are fully aware that their standard processes don't meet the precise requirements of the teams that use them — and that as a result, they won't be adopted.
There are three overarching responses to the challenge of managing process variations:
- The creation of high-level standard processes: This scenario is commonly found in early maturity organizations. The standards are summarized at such a high level that they're ineffective as practical guidance for teams or as a platform for process improvement.
- The creation of mega processes that include every possible variation: This approach is commonly found among technical teams and during large transformation projects. Detailed process variations are extensively documented. However, this approach often fails because business teams find the documentation too complex and process owners lack the confidence to apply process improvements.
- The creation of separate individual process variations by owners: More mature organizations often allow this approach, which inevitably leads to process sprawl and siloed processes. Unsurprisingly, this makes administration and change management far more complex.
When process variations are managed ineffectively, they can result in high costs, project overruns, inconsistencies and increased complexity. As a result, they'll fail to deliver the desired efficiencies and compromise the organization's agility.
Creating effective process variation management
Here are seven steps organizations can follow to establish effective process variation management:
- Establish a global standard process. The standard processes are established by global process owners. They provide the foundation upon which all variations are built and provide a benchmark against which to measure KPIs. With global process owners forming a centralized governance team, it becomes possible to accurately monitor and manage local process variations.
- Create justified local variations. Process variant experts are responsible for creating local variations of the standard. These variations must be highlighted so they're clearly visible against the standard.
- Ensure visibility of all variations on standard processes. Robust reporting and comparison capabilities facilitate the discovery and review of all adaptations per process.
- Provide intuitive access to processes. Users are automatically routed to the right process variations for their location, business unit or other relevant characteristic. If this isn't possible, they should have access to a list of variations where they can select the one that's most appropriate.
- Issue change management notifications. Local process owners of variations are notified of adjustments to the standard process. They can either reverse those changes or incorporate them into their variation — whatever is more effective for their specific purposes.
- Facilitate global reporting. This allows global process champions to review — and approve or reject — the lists of variations for each process.
- Collect time and cost metrics. Tracking and analysing these metrics enables the comparison of variations against standard processes. This facilitates data-driven decision making as to whether to maintain or eliminate specific variations.
The standard is a starting point
Creating process variations should always be approached with care in order to reduce unnecessary complexities and inefficiencies. With these seven steps providing visibility and control, organizations can efficiently design, implement and manage process variations where required, reap the benefit of process standardization, and still be agile and responsive to change.