When Process Standardization Backfires
Current orthodoxy is that process standardization is a Good Thing.
People are committing enormous resources to programmes to deliver global processes supported by a common toolset. It’s driving business transformation across every industry and region.
Process standardization is a fine idea. But the heretical truth is that, as in everything, it’s the ability to execute that counts.
A standardization program can unlock game-changing efficiency savings and service improvements. But pitfalls abound:
IT-led. IT systems are at the heart of most major programmes. Too often IT takes the wheel, leaving the business stakeholders in the back seat. And so a business transformation morphs into an IT project.
Out-of-scope impacts are missed. Costs ‘saved’ in one standardization project re-surface as incremental ‘work-around’ costs in other parts of the organization.
The voice of the customer is muted. Standardization delivers efficiency savings but at the cost of the customer experience.
Process variants are concreted in. There is a one-time negotiation instead of a framework that enables variants to be continually re-optimized, reflecting developments in global best practices and changes in business units’ requirements.
The benefits aren’t sustained. The change doesn’t stick. Gartner termed it ‘organizational snap-back’. McKinsey published an estimate that only 10% of cost reduction programmes showed sustained results three years later.
It’s time for a reality check. I can’t be the only one who’s seeing projects with hidden costs and flaky benefits pedestalized because they are delivering ‘standard global processes’?
Without a platform for effective collaboration among the stakeholders, and a complete understanding of the big picture, there are very significant risks that the benefits of any standardization initiative will be illusory. And without a means to deploy process content in a way that ensures real adoption, the opportunity for ongoing collaborative innovation is missed.
13 Dec 2012 The Universal Business Language: Process
© Text Michael Gammage 2013