November 21, 2005
Last week, Ross Mayfield posted an interesting essay called The End of Process. In it, he argues that software-mediated social networks will tend to render formal business processes obsolete by reducing the costs of communication and coordination. "I do believe," he says, "the arguments for engineering organizations are being trumped by new practices and simple tools. The first organizations bringing [processes] to an end will have a decided competitive advantage." He goes on to claim that even today "some staid corporations are abandoning process all together."
While provocative, the argument is much too broad, and it floats on a raft of dubious assumptions. "Organizations," Mayfield writes, "are trapped in a spiral of declining innovation led by the false promise of efficiency. Workers are given firm guidelines and are trained to only draw within them. Managers have the false belief engineered process and hoarding information is a substitute for good leadership." Actually, over the past 50 years or so, businesses have become steadily more flexible, more innovative, less bureaucratic, less hierarchical, and less characterized by rigid work flows and fragmented and hoarded information. They aren't free from these problems, of course, but in general they've been getting better rather than worse. There's no "spiral of declining innovation led by the false promise of efficiency."
In fact, meticulously defined and managed processes continue to be a powerful source of competitive advantage for many companies. Look at Toyota, for instance. Its highly engineered manufacturing processes not only give it superior productivity but also provide a platform for constant learning and improvement. The formal structure, which is anything but democratic, spurs both efficiency and innovation - productive innovation - simultaneously. Structured, well-thought-out processes are also essential to most knowledge work, from product development to financial analysis to software engineering to sales and marketing. And the more complex the effort, the greater the need for clear processes. Far from making business less effective and agile, the increasing attention to process has increased effectiveness and agility.
In a response to Mayfield's post, IBM's Irving Wladawsky-Berger says that "an innovative business looks for the proper balance between process – covering those aspects of the business that can be designed, standardized, and increasingly automated – and people – who bring their creativity and adaptability to handle everything else." I see what he's getting at, but I don't agree that there's necessarily a tension between process and people. Bad processes can destroy individual initiative, but well-designed processes, even very formal ones, can encourage individual initiative and, importantly, guide personal and group creativity toward commercially productive ends. I'm not sure you need to balance process and people so much as harmonize them.
If Mayfield had narrowed his argument, focusing on the way knowledge workers collaborate in certain situations, rather than on business processes in general, he would have been much more compelling. The simple group-forming and information-sharing software tools now being introduced and refined will often provide greater flexibility and effectiveness than more complex "knowledge management" systems. But even in these cases, processes aren't going away; they're just changing. There can't be organization without process.
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First time that I agreed with Nicholas Carr on something - business process matters... Does IT? I still believe that most major business processes in today's enterprise benefit from IT ... [Read More]
Tracked on November 22, 2005 04:37 PM
This is the problem:
"Structured, well-thought-out processes are also essential to most knowledge work..."
They're often not well thought out or they're well thought out, but wrong. Also, everything flies out the door when enough money is involved.
Posted by: ordaj at November 21, 2005 01:08 PM
Right, the problem is that processes sometimes need to be re-thought. The main trouble with that is that sometimes adherence to a particular process makes evaluating other processes more difficult. This leads to a situation where a newcomer with no established processes can introduce a new process and be viewed as exemplifying the benefits of not having process. Meanwhile, the established competitor may not react fast enough due to loyalty to existing, and out-dated, processes.
Posted by: Anthony Cowley at November 21, 2005 03:34 PM
Well-thought out piece but flawed in respect of the tension that unquestionably exists between people and process. Try changing a business system the organisation has used - however well or badly - and then say again there is no tension.
There is an invisible link between people and processes that once secured, is incredibly difficult to cut, let alone re-tie in a different manner.
Process change management remains one of the single biggest inhibitors (and challenges) in the adoption of technology that is specifically designed to free up resources for creative purposes.
It's one of the mainstays of Accenture et al's business model. It doesn't look under threat now, nor anytime soon.
Having said that, I agree that creative thinking can be helped along or be added to through the use of informal networks of this kind.
Posted by: Dennis Howlett at November 21, 2005 07:19 PM
The best processes are light ones. To that end, I have to agree with Ross. Process is like spell check software. You know when it has not be used, but few customers want to pay much for it. The customer POV has been forgotten as we lather our processes with technology, expensive labor, security and compliance ...it's time for Business Process Angioplasty as I write in this blog
Posted by: Vinnie Mirchandani at November 22, 2005 02:29 AM
Hear hear Nicholas. I'm glad this is being picked up on as it's representative of a type of thinking which too readily focuses on the shadows that business processes cast on many of today's rigid and closed IT systems - and confuses these with the real-world business processes that actually live in organisations. See my related post: http://www.mwdadvisors.com/blog/2005/11/business-process-confusion-once-more.html
Posted by: Neil Ward-Dutton at November 22, 2005 05:36 AM
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