Business Process Reengineering - Fundamentals of Effective Job Design

These are my notes and experience over several years doing Business Process Reengineering and optimizing business processes.

Please leave questions, recommendations and observations in the Comments section. This is a living document that can be improved with your feedback.

1. Organize around outcomes, not activities
   a. Outcomes are critical. Activities are only a means to an end.
   b. Designing from perspective of activities will at best only lead to process simplification.

2. Hide non-value-added activities from the customer, internal as well as external.
   a. Make organization easy to do business with.
   b. We'll never get it perfect, but why should our customers know.

3. Build in and inspect quality at the source.
   a. Quality is part of the job. It is not "finished" unless it meets the standard.
   b. Quality inspectors (supervisors, managers, etc.) do not add value and often represent waste.
   c. Rework is cheaper if done along the way as opposed to getting to the end and starting over.

4. Make decisions as close as possible to the decision point.
   a. Time between the need for a decision and when the decision is made stops the work and increases costs.
   b. Ask: What does the manager/audit department/HR department/etc. know to make them better qualified to make the decision?

5. Communicate, decide, and solve problems at the levels that are directly involved.
   a. Going to the top of organizational "silos" is a waste of time. Those at the top of organization know less about the daily job.
   b. Use superiors for counsel, experience and advice, but – whenever possible - not as decision makers.
   c. Communication that goes up and down organizational “silos” has more chances for distortion.

6. Design whole, complete tasks to be performed by a single person.
   a. Whole tasks increase employee motivation and ownership.
   b. Whole tasks make accountability for results easier.
   c. Whole tasks minimize hand-offs and overlaps.

7. Minimize the number of hand-offs in the process.
   a. Hand-offs take time and do not add value to the process.
   b. Process hand-offs are a source of problems.
   c. Most hand-offs are placed in the queue, increasing process lapse time.

8. Information should be processed by the person who uses it whenever possible.
   a. Users give more insight into the data when they process it.
   b. This gives visibility of the cost of processing the data (time, effort, expense), thus a decision on its value.
   c. This is an area where technology offers all kinds of possibilities.

9. Build performance measurements into the job.
   a. People do what is unexpected, not what is expected.
   b. Feedback, evaluation and corrective actions must be part of the job, not the responsibilities of another job.
   c. Automate whenever possible.

10. Design intrinsic motivation into the job.
    a. Intrinsic motivation reduces the need for controls and supervisors (overhead)

11. Build feedback to the individual into the job.
    a. Show results to the individual performing the job as often an as fast as possible.
    b. Question why anyone (e.g. a manager) should receive the feedback vs the employee getting in form the source.

12. Move tasks down the organization.
    a. Convert everyone's time to dollars to give visibility to the cost of the task.
    b. This leads to job enrichment for the lower - level employee.
    c. Move decision - making along with the work.

13. Minimize reports produced for someone else that are not needed by the person doing the job.
    a. If the person doesn't need it, why does someone else?
    b. If it is critical, it should be included in the employee's measures.

14. Eliminate non-working (idle) time.
    a. Drive process lapse time to zero (working time is value - added time).
    b. Idle time is wasted cost.
    c. Shorter lapse times increase responsiveness and flexibility.

15. Question every design redundancy.
    a. Some redundancies are the cost of achieving results.
    b. Assume redundancies are bad until proven otherwise.
    c. Avoid redundant data and data capturing.

16. Distinguish between where a function reports vs where the function is performed.
    a. Reporting relationships should provide context, coordination, and support.
    b. Performance (customer service) relationships make sure that customer needs are met.
    c. These relationships do not have to reside with the same person.
    d. Dual relationships may be ambiguous, but more accurately represent the realities of some processes.

17. Document the assumptions for every design feature.
    a. Question whether or not the assumption is valid.
    b. Ask if other designs will satisfy the assumptions more effectively.

18. Document responsibilities, relationships, and interfaces.

19. Question every step that requires someone else's approval.
    a. What is the purpose of the approval (control, coordinator, authorization)?
    b. Is there another way to get to the real purpose?
    c. Is that the real purpose?

20. Question every policy and procedure that is "required"
    a. In some cases, standardization adds enough value to offset the loss of flexibility.
    b. Policies and procedures are generally written by someone removed from the customer.

21. Convert all processes and activities into dollars for insight into the issues.
    a. Time is money. Wasted time is wasted money.
    b. Evaluate returns on investment.

22. Question every intermediary, coordinator and liaison.
    a. By definition, these are overhead positions.
    b. A design that requires excessive coordination by someone who is not part of the process is fundamentally flawed.

23. Identify non-value-added activities.
    a. Non-value added does not necessarily mean not important.
    b. However, question the purpose of every non-value-added activity.
    c. Maximum efficiency will free up resources for value-added work.

24. Consider the design possibilities made possible by technology.
    a. Think first about the information critical to the process. Technology solutions will become evident.
    b. Technology is expensive, but so are people and time.

25. Test the design's ability to serve the customer, both internal & external.
    a. Evaluate a range of potential scenarios.
    b. ** The customer wants the highest quality; faster and cheaper than before. **