Potential Pitfalls on the Road to a Process Managed Organization (PMO)

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BPTrends – November 2006

Written By: Geary A. Rummler, Alan J. Ramias, and Richard Rummler

We firmly believe that the general understanding that work gets done – and value is added – through cross-functional processes is potentially the greatest business management breakthrough in the past 100 years. There is little doubt that process design and improvement over the past 20 years have yielded great gains in customer satisfaction and cost containment in organizations throughout the world. In addition, Thomas Friedman (1) has identified work flow/ business process innovations as one of the “Ten Forces that Flattened the World” and changed our lives forever. But, all that said, the potential of process to assist executives in the effective management of their organizations remains largely untapped.

Case in point, we recently received an email from an acquaintance working in an organization struggling with becoming a Process-Managed Organization (PMO). He said that when asked, “What examples can you provide of organizations successfully transitioning process improvement and process management from design to implementation?” their internal process excellence group and the companies in the Phoenix Group (of which they are members) could provide no examples. Hmm! We think it safe to say that, with few exceptions, the recent push toward the Process-Centric Organization or Process-Managed Organization is stalled. What has happened? Where do we go from here? Well, one place to go is back to the drawing board.

We suggest stopping and examining the road that most organizations are following to get to the PMO, because there is a better way. We believe the goal of becoming a PMO is absolutely the correct one. But we also believe that the failure to realize the potential of process thinking in the past – and the threat to realizing the potential of process thinking in the future – is the failure to understand processes in an organizational system context. Thus, we present this two-part article, the purpose of which is to correct this lack of understanding.

In this article, we present what we at the Performance Design Lab call the Organizations as Systems Lens. We believe it provides a way of looking at organizations that is essential to the notion of being process-centered. As part of that lens, we present a powerful framework called the Processing System Hierarchy, which makes it quite clear what must be done to successfully travel the road to the PMO. We then use the Processing System Hierarchy as a template to highlight and discuss what we see as the major pitfalls on the way to a PMO. This is followed by a summary of what we believe are the critical success factors for a PMO journey. The paper ends with a comparison of the typical road to a PMO being traveled with the journey we at PDL recommend.

Related Links

For information on our consulting service to help organizations along the path to becoming a PMO, click here.

For an additional article on the topic of the process managed (or process-centered) organization, click here.

For a presentation about the process-centered organization, click here.