Where have all the process owners gone?

When organizations seek improvements in the way they work, their natural tendency is to implement them within their functions. They don't necessarily improve the processes that run across functions – so processes often have to be redesigned to improve the customer experience.

Process gurus such as Michael Hammer, Jim Champy, Geary Rummler and Alan Brache have long argued that companies should appoint process owners to ensure that processes are improved across functions. For 20 years, they have extolled the virtues of this role, which falls to someone whose job is to make sure the organization doesn't slip back into improving only within its own departments. Yet I see few organizations that have process owners. Why?

It can't be for lack of clear guidance. The gurus have provided detailed descriptions of how companies should establish process owners, process councils and other parts of formal process governance structures to manage the six to ten most important cross-functional processes. Process owners should hold senior positions and be respected and well connected so they can make things happen. Their responsibilities include:

• Acting as the “voice of the customer,” understanding the customer's total experience with the company, from the moment they first meet until the end of the relationship.
• Monitoring the process's key performance indicators (KPIs) and keeping executives informed of how the processes are performing.
• Ensuring that the company's key processes are delivering competitive advantage or, if they are not, that the right corrections are made.

Air Products, Nokia and Shell, among others, followed this advice and created high-level process owners. They also built a process governance structure alongside their organizational functions and product structures. These companies kept senior management's attention on critical processes and KPIs. And they have been fantastically successful. Air Products, for example, tripled corporate productivity (profit and loss benefits) from 2003 to 2006 and boosted return on physical assets from 9.5% to 12.5% from 2004 to 2007.

The managers I know at these companies today believe that having process owners gives them a significant competitive advantage. They also believe that companies without process owners are forced to settle for low customer satisfaction, no matter how much they improve efficiency within functions or departments.

Other companies established process owners but over time went back to functional management. Why didn't process owners stick in these organizations?

1. The focus of attention shifted: The effort to install process owners began with strong management support and attention, but then more urgent issues came up, or senior leadership changed. Most employees saw it as just another management fad, sat back and waited for management to move on to the next strategic initiative. When the management team shifted its focus of attention, the process owner roles were dispersed.
2. The roles were misunderstood: Process owners were appointed, but they never clearly understood what they were supposed to do. There were few examples and little time for training. Some companies chose as process owners the functional managers who had the greatest involvement with the process. Success in the function did not always translate into success in the new role; sometimes an authoritarian style that worked there was ineffective across boundaries, where the ability to influence and persuade is often the key.
3. Accountability was lacking: Companies did not hold process owners accountable for improvements in process performance. Many companies appointed process owners to design processes as part of a new system implementation, such as Enterprise Resource Planning (ERP) systems. However, after the system was installed, the process owners left their posts, because the company didn't see them as responsible for running the process. No one was put in charge of looking after process performance once the system went live.
4. The role had little clout: Some companies appointed process owners at middle-management levels. They could not have enough influence on the organization's mindset and culture, so they faded into oblivion. When trade-offs had to be made, solid departmental reporting lines made the process relationships insignificant. The wishes of a functional heavyweight, such as the CFO (Chief Financial Officer), the CMO (Chief Marketing Officer), or the company president, beat the order-to-cash process owner.
5. The organizational structure was too complex: Most large companies already have complex organizational structures, with product groups battling geographic leaders, who in turn fight with functional heads in a three-way competition. Other companies have all of this and, on top of that, stack a customer segmentation structure onto the org chart. Laying a process overlay on top of an already complex structure can be too much for people to handle. As a result, when advised to add a process dimension to their structure, many organizations say "no" to keep things simpler.
6. Employees were uncomfortable: Most employees were more comfortable in a traditional functional organization. End-to-end process management disrupts their usual relationships and their identity. (How many times have you heard "I'm a business man/woman" or "I'm a marketing professional"?) If employees don't want to change, they have power. When one company instituted process owners, customer satisfaction went up, but employee satisfaction went down. A new leader came in to soothe the bruises and flipped the org chart back to a functional structure.

For organizations that are serious about achieving and sustaining cross-functional process improvement, I recommend that they establish process owners. But I also tell them that they must solve the problems I mentioned above to have a chance of succeeding. If they can't meet these conditions, organizations should not attempt a halfway approach.

I will discuss ways to establish process owners and other organizational mechanisms for sustained cross-functional improvement in my next article.

Request: Have you seen process owners or other organizational structures that sustain cross-functional process improvement? Why do you think so few companies have process owners?

Brad Power ([email protected]) is a consultant and researcher on process innovation. His current research focuses on sustaining attention to process management – making improvement and adaptation a habit. He is currently conducting research with the Lean Enterprise Institute.