3 ways to go from Compliance to Transformation

I think that organizational compliance efforts represent one of the biggest untapped opportunities to increase organizational performance and/or leverage these required activities in the service of organizational transformation. In both the public and private sector, compliance is often spoken of derisively as something to be done only to the degree that is required to check the box and as an impediment to achieving the performance goals of  the organization. Things like Sarbanes–Oxley in the private sector and Clinger-Cohen in the public sector are viewed as an organizational tax with limited benefits, most of them are for external stakeholders and few pertain to (OUR) organization. This small minded view is wrong minded for three reasons.  First and foremost it sets a poor tone for the compliance effort as a whole. Whether you agree or disagree with the objectives, implementation, or impact of the legislation, the fact is that not complying will have negative consequences for your organization that run far beyond the costs associated with compliance. Secondly, most of these mandates were developed by smart people with good intentions who may have a broader view of performance than simply your organization. Finally, a well run organization should be able to handle most of these initiatives on the basis of being well architected. If you aren’t able to easily identify and prove controls within your financial system as required by law, then perhaps deeper problems exist within your organization than the costs associated with compliance. Compliance initiatives simply should not present enormous difficulties to the well run organization. Here are three keys to getting your response to compliance initiatives right:

  1. Take a step back and look at the big picture. One of the biggest drivers of cost with regard to compliance initiatives is that they are often handled separately from the execution of normal planning and reporting activities, even where the information required is significantly similar to other information requirements. Part of reducing the cost of compliance is in ensuring that the requirement is put into the proper organizational context and making sure, to the best of your ability, that the requirement is fitted into a appropriate organizational context.
  2. Avoid the Compliance Silo
  3. Find the right organizational owner. Once you have an understanding of where the compliance activity fits in the big picture of the organization, it is time to find a home for the requirement within the organization. This is a critical success factor because choosing the right organizational home will have an enormous impact on the overall cost profile of meeting the requirement, as well as determine how much re-use of any informational requirements occurs. Drivers for organizational ownership include ability to meet the requirement, familiarity with the data required, ability to provide appropriate executive buy-in, and capabilities required for execution.
  4. Get the Req to the Right Person
  5. Figure out if any of the data can help drive performance. This is critical to lowering the actual cost of compliance to the organization. If the organization is able to lower the cost to be compliant and therefore increase its relative performance to the competition, it will drive performance. If the organization is able to leverage the compliance requirement to better understand their organization or facilitate transformation objectives, it will drive performance. The same business process models that show how an organization ensures internal controls can be used as a mechanism to drive organizational performance.
Find Opportunities to Drive Performance

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

3 ways to ensure your process isn’t the enemy of organizational improvement

The world is becoming a more process-centric place and to a large degree, rightfully so.  The wide acceptance of standards around processes for organizations, specific types of interaction, and data exchanges has, in general, lifted the quality of the goods and services we receive from most organizations on a daily basis, while reducing the cost.  Within many of these organizations, the ones that have grown and matured are the ones focused on the care and feeding of these processes, and the services they support. Unfortunately, in some cases the pendulum has swung too far.  The focus on process has become an anchor dragging on organizational agility and performance.  Is your organization too focused on process and not enough on performance? Here are 3 quick ways to check the pulse of your process-oriented organization:
Check your outcomes: Performance management systems are critical to understanding how your organization drives performance and spotting areas for improvement. Make sure that your performance management system is truly measuring the performance of the system, including outcomes. Knowing that 99% of transactions were completed within a service specification is great.  Knowing that 99% of the customers of that service were happy with it is even better.

Check your peers: Having a mature and well understood process is great.  However, as time moves on you need to keep an eye on innovations within your peer, and near peer organizations. Nobody wants to be sitting on top of a process that is repeatedly, accurately, and steadily increasing the lag between your performance and that of your peers. Understanding where other organizations are succeeding, and developing an ongoing process for accommodating process innovation is critical to maintaining organizational performance while you maintain your process orientation.

Check with your people: One of the first places you will find out about a lagging or underperforming process is at the water cooler. Unfortunately, if you aren’t there when the conversation happens, you may miss a great opportunity to change course and intercept a failing process before it impacts organizational performance. It is critical that an internal feedback loop for processes be in place and that process innovation be a part of organizational culture. Don’t be afraid to allow employees to provide input into your processes. After all, hopefully these are your foremost experts in these processes.

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.

3 Keys to Transformation Success

Once you have figured out where you want to the temptation is always to try to get there as rapidly as possible. Most people who have gone to the trouble to work through planning a to-be state don’t want to wait to get there and in their haste to get to their idealized state they fail. Sometimes in such grandiose fashion that continuing to plod along under the status quo would have been by far the preferred option if they had only known that the to-be was unattainable. This happens to us in both our personal and professional lives. As individuals we attempt radical diets and exercise plans in a haste to lose 50 pounds and recapture the waistline we had in high school. As organizational leaders we attempt to optimize the entire organization in order to become market leaders or achieve our mission. I don’t believe that the culprit is the dream or idealized state as often as it is our lack of planning and patience in achieving that state. Human nature pushes us to achieve our goals as rapidly as possible and markets, bosses, and organizational metrics reward the quick. However the quick is too often the enemy of the good.
I believe that the first step in achieving your transformational objectives is to really take stock in where you are now and access your readiness for change. personal and organizational transformation take energy and resources recognizes that these resources are finite and that you are probably already operating at near capacity is the first step.
On a personal level most people can sustain a surge effort to transform in the same fashion that you may be able to get budget for a transformation initiative for your organization but in both cases the effort is not generally sustainable and the if the transformation doesn’t result in an optimized behavior that requires a similar level of effort or resource or result in a capacity to sustain the elevated resource requirement the effort is doomed to failure. It is for this reason that I believe the planning the transformation is the first key step. While this may seem obvious I think that most people see this as defining the collection of activities required to get to the end state not really critically assessing what can be accomplished based on transformational readiness. Is a 150% or 200% surge really sustainable over a 6-12 week period, over 6 months? What are the real limits and will the benefits derived make the effort worth it?
Thinking about transformation in this context helps set the stage for the next key which is that transformation needs to be put forward in increments.

Incremental Transformation

Developing capability or achieving transformation goals is easier if the the end state can be achieved by following an incremental approach that allows those involved to achieve small victories, assess progress and alter the course as required to achieve the final objective. Another benefit of this incremental approach is that it also enables a shift in the end state or the timeline if the transformation effort is either negatively effecting ongoing performance or the lessons learned on the journey change the desired end state. Increments are also important because if designed correctly they should hedge against the tendency to try to swallow the entire transformation effort in a single gulp. Having short 4-6 week sprints that result in measurable progress often prevent efforts that get get derailed by the sheer size and complexity of the task being attempted. In short the incremental approach supports right sized thinking about transformation.
The next key is measuring, too often measures and metrics that are too big for the transformation effort this is constant with the big bang approach that is after taken to transformation in general. The idea that once you are complete you will have a 25% reduction in costs or a 10% increase in overall profitability should be organizational goals that transformation efforts are aligned to but their should be a level down in granualarity that enables the developed increments to be measured for progress. This ensures that in flight performance is occurring and if the measurements are properly developed they should enable agility in addition to providing an ability to know when success has been achieved.

Finally be the three keys are most effective if they are part of a consistent approach to improvement that is applied consistently across the organization. Transformation is a lot easier to handle if you are practiced at applying the techniques required to be successful. Nobody should be surprised if they fail to meet their transformational or improvement goals if it is something that the rarely do. The most successful people and organizations are continually working to improve their performance and to develop the skills required to carry off those transformational efforts. Making performance improvement something that is ongoing and practicing the skills required to transfer to achieve those goals makes the realization of the ideal to-be state much more likely. Like almost anything else “practice makes perfect.”

Thanks as always for reading my blog, I hope you will join the conversation by commenting on this post.

If you liked this post, please consider subscribing to this blog and following me on twitter @jmillsapps. I regularly give talks via webinar and speak at events and other engagements. If you are interested in finding out where to see me next please look at the my events page on this blog. If you would interested in having me speak at your event please contact me at events@joshmillsapps.com.

If you are interested in consulting services please go to MB&A Online to learn more.