This is a question we hear in all of our courses. In Process Redesign, the focus is on improving the performance; in Process Owners in Action, a process owner may be more focused on the health of his or her process; in Leading Transformation, our attendees focus on both a process and its context for answers.
It’s easy, some say, just look at the numbers. But which numbers?
A smart response begins by recognizing that this simple question actually contains two different queries, each of which has a distinct answer. And the difference between them is critical for understanding and improving your process.
The performance of your process, expressed in outputs like revenue, is a lagging indicator. It tells you how the process operated in the past to produce those results. On the other hand, the health of your process should be focused on leading indicators such as the capabilities of the process performers. This and many others are predictors of future process performance.
Lagging indicators are process outputs, generally easy to measure. Their value is to report where you’ve been. Leading indicators are either process inputs or work-in-process measures and are generally more difficult to determine. They are used for improving your work and are oriented toward a future timeframe.
So the answer to the question, “How’s your process performing?” lies in clearly stated and measured outcomes
But the answer to the second question, “How healthy is your process?” lies in a better understanding of the leading indicators of process performance.
And this is where we focus our latest tool, the Process Performance Certification.
However, complicating any process assessment is the underlying fragmentation of work and authority. This fragmentation operates in all dimensions and causes dysfunction everywhere. It makes it hard to get a complete and clear picture of a process.
Real insight about an individual process’s health and confident predictions of future performance can only come from two sources: by looking deep inside the process itself and assessing the context that surrounds that process.
Six Process Performance Drivers
1. Process Purpose: High performing processes create value that directly enables the achievement of the organization’s strategy. Without strategic direction, a process’s performance cannot be assessed.
- How well does the process support the enterprise’s strategy?
- How well designed and deployed is the process’s metric architecture?
- Does the organization truly understand how this process creates value?
2. Process Profile: High performing processes are clearly defined, documented, and standardized. They must be cross-functional and have a well-defined SIPOC that can evolve as conditions require.
- Is the process a real process?
- Is the process well documented?
- How readily can this process evolve as the environment changes?
- How real are the process’s standards and compliance capabilities?
- Are the interfaces with other processes and other organizations well defined?
3. Process Progress: High performing processes are always improving in a measured and managed way. The critical inputs of customers drive a focus on outcomes, and the ideas of performers provide a steady stream of improvement opportunities.
- How well is the ‘Voice of the Customer’ heard?
- How well is the ‘Voice of the Performer’ heard?
- Does the process benefit from best-practice and benchmarking comparisons?
- How complete is the process’s improvement toolkit?
- Is the process’s improvement project portfolio visible and well managed?
4. Process Power: High performing processes have developed clarity on roles, responsibilities, and decision rights between process leaders and functional managers.
- Is there a Process Leader with a well-defined role?
- How well does the Process Leader execute that role?
- Are there effective process forums in place?
5. Process Performers: High performing processes leverage the talents of well-equipped process performers.
- Are the process performers’ roles well defined?
- Do they have the right knowledge, skills, and behaviors for those roles?
6. Process Platforms: High performing processes exploit technologies in both design and execution.
- Does our technology infrastructure support this process well?
- Are we actively exploring new technologies?
- Are we optimizing our data within this process?
Together, these six performance drivers provide the best leading indicators of future process performance. Improving these will improve tomorrow’s outcomes.