Tuesday, March 31, 2009

Processes as Art, not Science

 In the March 2009 issue of the Harvard Business Review, there's a very interesting article about the relevance of distinguishing between processes that can be standardized (process as science) and processes that are and should remain flexible (process as art). The authors argue that it is a deadly mistake to try to standardize business activities that are expected to deliver highly customized output to customers while being run in contexts of highly variable environments.

The article also presents a simple tool to decide whether a process should be art of science, which the authors call the process matrix (click on the picture to see). This is all music to my ears because it provides some serious academic support to one of the core propositions of BusinessQuests, i.e. that each specific customer requires a highly tailored approach to achieve business progress. The authors of the Let me quote the authors:

"The movement to standardize processes has gone overboard. Some require an artist’s judgment—and should be managed accordingly." - Joseph M. Hall & M. Eric Johnson

Over the years working with innovative as well as more traditional privately owned European companies I realized how unproductive - perhaps even damaging - it can be to even try to express in a standard format like a process flow those processes that make a company different from its competitors. In fact, I came to call this "the spirit of craftsmanship" when facilitating a workshop with customers, which is also one of the reasons why I enjoyed so thoroughly Small Giants (more on that some other day or on my reading list on my profile). That's precisely one of the points made by the authors of the article and again, let me quote:

"What we call “art” is often described as “judgment-based work,” “craft work,” or “professional work.” The common thread in such work is variability in the process, its inputs, and its outputs. Art is needed in changeable environments (for example, when raw materials aren’t uniform and therefore require a craftsperson’s adjustments) and when customers value distinctive or unique output (in other words, all customers don’t want the product or service to perform or be performed the same way)."

The article mentions the following domains as areas in which processes ought to be treated as art rather than science precisely because much of the value they produce results from the flexibility and adaptability of the process to a given business environment:

  • leadership training... so much for the established methodologies that are supposed to produce your next generation of leaders mechanically and perhaps also the analysis of Hall & Johnson should prompt companies to completely review the way they manage women for leadership: the processes they now have were written far too long ago by men, for men and in a logic of dominant alpha leadership (in its most idiotic form it is also known as the "W" style) and the attributes they seek to develop in the leaders of tomorrow are just completely misplaced

  • auditing, which comes as a huge surprise when you think of the job as it's done by the big-5, no make that 4, no make that 3... until the next big Barings or Enron-class blunder... but is no surprise at all if you've been in the shoes of the auditor or due diligence contributor identifying problem areas in ways that you could only explain after uncovering the problem (it's a bit like creative inspiration in a way)

  • hedge fund management and that's one that only half a year back could have surprised me too, but not after reading Taleb's Fooled By Randomness...

  • customer service, which might come as a surprise, but not if you've ever had to deal with off-shored customer service departments who do their work perfectly decently... but fail to really help you

  • software development, which speaks volumes about why agile approaches like scrum work so well

  • account relationship management, which says a lot about the challenge to recruit good people to do that job

  • business development, which comes as no surprise if you've ever come across people who can generate pretty transformative ideas by simply discussing with you about your business model, something that BusinessQuests has been doing over the past decade or so (not that I want to pat myself in the back, but I'm sure you'll understand how happy I was to see this area mentioned in the article)

  • industrial design, not surprising at all

I would probably add a few, which I'm sure are in the research (now impatient to read the book if these guys decide to publish one on this topic):

  • social marketing

  • interactive marketing

  • architect's services

  • financial engineering, i.e. building the financial vehicles and structures that allow business to achieve its purposes

  • tax services

  • legal services

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