Quantas empresas?

Como não recordar o velho ditado deste blogue, "Volume is vanity, profit is sanity". Como não recuar a 2007 e a Correr, correr, correr, só para não sair do sítio... 

"BERLIN, April 6 (Reuters) German carmaker Volkswagen will axe many combustion engine models by the end of the decade and sell fewer cars overall to concentrate on producing more profitable premium vehicles, its finance chief was quoted as saying on Wednesday.

"The key target is not growth, Arno Antlitz told the Financial Times newspaper. "We are (more focused) on quality and on margins, rather than on volume and market share."

Antlitz said VW would reduce its range of petrol and diesel cars, consisting of at least 100 models spread across several brands, by 60% in Europe over the next eight years.

The paper said VW's new strategy was a sign of profound changes in the auto sector, which has attempted for decades to increase profits by selling more cars each year, even if that required heavy discounting.

Former VW chief executive Martin Winterkorn, who resigned in the wake of a diesel emissions scandal, had made it his goal to beat Toyota and General Motors to the title of "volume number one" by 2018."

Trechos retirados de "VW to scrap models and focus on premium market -CFO tells FT" 

Quando esta semana li a notícia, num jornal português que não consigo precisar, pensei logo nas muitas análises de contexto que vejo nas empresas.

Por causa da ISO 9001 as organizações fazem, ou supostamente fazem, análises de contexto. Listam factores internos e externos mas depois ... o que fazem com isso? Nada, ou quase nada, ou folclore para auditor.

Quantas empresas certificadas e envolvidas no universo de fornecedores da VW vão reflectir sobre isto? E recuo a 2009 e a Perspectivar o futuro:

"As equipas de gestão dedicam, em média, menos de 1 hora por mês a discutir a sua estratégia!!!

Os autores não falam sobre as equipas de gestão do nosso país, referem-se aos Estados Unidos.

Pois bem, ontem descobri mais uma citação do mesmo calibre, desta vez atribuída a Hamel:

“On average senior managers devote less than 3 percent ... of their time to building a corporate perspective on their future.” [Hamel 1995] Hamel goes on to point out that some companies devote even less, and suggests that such efforts are far too little to generate helpful projections about the future.”"

Que pode um auditor dizer quando vê uma análise de contexto feita de forma infantil ou de forma negligente? Recordo Deming: "Survival is not mandatory" e também "It Isn’t Illegal to Be Stupid" (parte V).

Recordo Por que não fazer o exercício agora? e o muito recente O risco da complacência.

O risco da complacência

Este artigo, "Leading Change Means Changing How You Lead", começa assim:

"To develop effective strategy amid constant change, leaders must hone their ability to determine which changes will boost their organization's competitiveness. This series examines data from companies worldwide to provide practical insights for business leaders seeking advantage as they navigate complexity and change."

Para já concentro-me na situação das organizações bem sucedidas que não se apercebem da mudança e das suas implicações:

"When a business is performing well on fit to purpose and relative advantage, the leader needs to recognize the twin dangers of complacency (believing that there's no need for change) and hubris (overconfidence in the quality of one's leadership). Contextually effective leaders combat complacency by continually striving for change, and they combat hubris by recognizing that their own opinion is less significant than the opinions of key stakeholders."

E recuei a 2007/2008 e a um caso ... desenhei um cenário sobre um futuro que me parecia claro. O cenário foi desprezado e eu vi o projecto terminado. Menos de 28 meses depois grande parte do cenário concretizou-se e a organização viu o seu mundo desabar, literalmente. 

O contexto é sempre importante!

O contexto é sempre importante!

No entanto, os últimos 18 meses fizeram do contexto um tema quente: covid19, confinamentos, economias congeladas, disrupção de cadeias de abastecimento, bloqueio do canal de Suez, aumento dos custos das matérias-primas, escassez de matérias-primas, aumento dos custos de energia, ...

Este artigo da Bloomberg Business Week é sintomático, "Paintmakers Are Running Out of the Color Blue":

• "Dutch paint maker Akzo Nobel NV is running out of ingredients to make some shades of blue"
• "Akzo Nobel is having trouble sourcing the tinplate used to make metal cans, forcing the Amsterdam-based company to ship empty pots from one country to another for filling"
• "It also called a force majeure on deliveries of some exterior wall paints because an additive needed to make them waterproof is unavailable."

Este outro, "Americans Are Quitting Jobs at Record Rates: Labor Department", remete para o contexto interno. Nos últimos meses uma constante, empresas que se queixam de perderem trabalhadores que decidem emigrar.

Mais fontes:

• How did we get here? Why supply chains are so wrecked
• Fabricar juguetes es hasta un 40% más caro y los precios subirán esta Navidad
• Vinyl Is Selling So Well That It’s Getting Hard to Sell Vinyl
• A tempestade perfeita: sem matérias-primas, sem energia e sem contentores

Conseguir tirar partida da abordagem por processos

Por que é que tantas organizações certificadas pouco ou nenhum valor retiram da abordagem por processos e do seu sistema de gestão?

Da minha experiência de auditor a sistemas de gestão, supostamente maduros, ou seja, com vários anos após a implementação, encontro três causas principais para o pouco valor acrescentado desses sistemas.

Primeiro, objectivos de treta.

As organizações não levam os seus sistemas de gestão a sério, são um sistema paralelo à gestão do negócio. Definem objectivos “infantis”, objectivos pueris que põem logo de sobreaviso quem os encontra. Se os objectivos são de merda não é de esperar grande exigência de melhoria, e num mundo em mudança não melhorar é efectivamente piorar. Acima de tudo é um sistema de gestão que funciona mais como uma carga burocrática mais ou menos pesada

Segundo, considerar que os objectivos do sistema são o somatório dos objectivos de cada processo.

Podemos optimizar um processo associado à aquisição de recursos, mas que gera ineficácia na organização. Compramos muito bem, mas os produtos chegam tarde, ou trazem defeitos que só são descobertos durante a produção ou prestação do serviço, a pior altura para isso acontecer. Recordo uma empresa em que o sector das compras todos os anos recebia bónus, à conta dos savings, enquanto semeava o caos nas operações. Ou uma outra empresa onde o departamento Comercial ganhava bónus por ganhar negócios que funcionavam como mais um prego no caixão da empresa.

É claro que os processos devem ter objectivos, devem poder ser monitorizados e medidos, mas estamos a falar de objectivos operacionais. Quando falamos de objectivos do sistema falamos em objectivos da organização como um todo. Quase sempre a optimização de um todo implica a subordinação de alguns processos a um desempenho inferior.

Este é talvez o erro mais comum.

Terceiro, pretender que o mundo é uma realidade simples ou complicada.

Terceiro, pretender que o mundo é uma realidade simples ou complicada e avançar com planos de acção genéricos que são quase sempre uma reformulação frásica das actividades já previstas nos processos.

Pode ser por causa de uma visão infantil do mundo, mundo simples ou complicado com relações de causa efeito simples e evidentes. Pode ser por causa de falta de tempo e a necessidade de picar o relógio de ponto, e há que ter um plano de acção, qualquer plano serve. Ou pode ser por causa de uma metodologia inadequada para a definição das acções como referi neste postal "O que fazer?"

O que fazer?

Há tempos, enquanto apresentava o relatório de uma auditoria interna ao sistema de gestão da qualidade de uma empresa, depois de elogiar o esforço de registo e relato dos seus indicadores de gestão, deixei a seguinte oportunidade de melhoria acerca da forma como se propunham atingir os seus objectivos da qualidade:

"A equipa auditora põe à consideração da empresa que a definição das acções a desenvolver para atingir os objectivos da qualidade ocorra numa altura posterior ao estabelecimento desses objectivos, por forma a permitir o estudo da situação concreta."

Usar a reunião de revisão do sistema para decidir quais são os objectivos da qualidade, qual o desempenho pretendido e que acções desenvolver, tudo na mesma altura, parte do princípio que a realidade é simples, ou quando muito apenas complicada. E se for complexa ou caótica?

Passar directa e imeditamente do estabelecimento dos objectivos para a definição das acções, sem qualquer investigação, convida à definição de acções genéricas que ninguém contraria, porque são lógicas, mas que muito provavelmente têm a ver com o que já se faz e gera os resultados actuais, e não com o que se tem de fazer diferente para ter resultados diferentes.

Definir objectivos, atribuir um responsável por cada um deles, e dar 2 ou 3 semanas para recolher informação, estudar a situação e propor um plano de acção é o que vejo como mais adequado.

Depois, ainda há isto:

Imagem retirada de "Thriving at the Edge of Chaos Managing Projects as Complex Adaptive Systems" de Jonathan Sapir.

A "Request For Improvement"

How many improvement actions are developed each year in your quality management system?

One of these days, I was part of a team presenting a procedure to top management, describing how a process works. One of the top management’s members said something like:

 

“The secret is here! This process is extremely important, and we continue to have a lot of problems with it! We need to improve this process!!!”

As a consultant I jumped into the occasion and recommended following this improvement journey included in a form called "Request For Improvement":

These were my guidelines for the process manager to start the improvement project:

1. Background

Here describe examples, or performance measurement results that illustrate how much the current process is not the most suitable and why it needs to be improved.

We must not start an improvement project based on the abstract desire to improve. We should start with an account based on numbers or stories that tell us what is wrong, what needs to be changed.

At this stage, we do not indicate causes, solutions, or guilty. Just facts!

2. Current situation

Draw a flowchart describing the process.

Is there any type of product, or customer, where process failure occurs more often? What products? Which customers? What are the failure situations?

So far we only work with facts.

Does what was collected allow us to focus attention on specific stages of the process?

3. Set targets

Remember the typical weight loss photos about the before and after? Based on the "Current situation" and the "Background" information we have the before stage. The after stage is the challenge we took on here in 3, and which will be rated at 7. The goal(s) and success criteria(s) must be in the same units as in 1.

4. Root cause analysis

Now start using theory and your knowledge of the process. Why is it we fail more in these products? Why is it we fail more with these customers? Why is it we fail more with these failure motives? List as many theories as possible.

Select the most likely theories and assess the possibility of making a test to validate them. Validated theories, theories that can be manipulated by us and have an impact on the frequency of failures, are root causes.

Considering the determined root causes, if we eliminate or reduce them, what level of performance can we aspire to? Is it in line with the challenge set in stage 3?

Corrective actions versus continual improvement in ISO 9001

When do you use clause 10.2 and when do you use clause 10.3 when talking about improvement in ISO 9001:2015?

Let's look at this:

We have a standard way of doing things. 

We follow that standard, and we check the results. And we decide how to act. 

When everything is "as usual" we decide to keep the standard. The standard is useful. (Top SDCA cycle in the figure)

When a non-conformity (NC) happens, we treat the NC. After confirming that it was closed we ask,  should we improve? 

If the answer is no, we keep the standard, but when the answer is yes we start the improvement cycle, the PDCA cycle. (Bottom PDCA cycle) 

We plan an experiment about changing the way how things are done. 

We do the experiment. 

We check the results, and we decide how to act. 

If the results are not NOK we will continue in the PDCA cycle trying a new experiment. 

If the results are OK we can leave the PDCA cycle and return to the SDCA cycle where we update our standard. 

This event-based improvement is initiated by an NC it is about clause 10.2 and behind that is clause 8.7. This is the everyday level that I mentioned here.

However, even if our decision after a negative event is to not improve, periodically we should prepare a performance report, we should monitor and measure (clause 9.1.1) and we should analyze and evaluate (clause 9.1.3). And again, we ask, should we improve?

If the answer is yes, we are starting a calendar-based improvement. This is about clause 10.3 continual improvement. Typically, performance reports are about quality objectives and process performance. 

If this topic interests you perhaps this free webinar may be useful. 

Resultados esperados e riscos

Aqui escrevi (como escrevo em muitos outros espaços):

"A ISO define risco como o efeito da incerteza num resultado esperado.

Esse efeito pode ser negativo (risco) ou positivo (oportunidade)"

Aqui, por exemplo, proponho que o exercício da determinação dos riscos comece pelos resultados esperados: 

Interessante que em "High-Impact Tools for Teams: 5 Tools to Align Team Members, Build Trust, and Get Results Fast" encontre esta sequência:

Começar pelos objectivos para chegar aos riscos e voltar.

For ISO 9001 people... (part II)

Part I.

Let's look at the difference between the everyday level and the process level.

At the everyday level, a company receives a complaint and starts handling it. Then, as part of this process, it reaches an agreement with the customer and decides to close the complaint. Immediately before closing it, someone has to assess the interest or opportunity to take an improvement action to reduce or eliminate the likelihood of the complaint being repeated.

Implementing a true and effective improvement action is not cheap unless you already know the root cause. Implementing a true improvement action involves knowing the root cause, but the root causes are usually hidden under several layers of reality. They have to be investigated, tests need to be made and this consumes scarce resources. So, normally, the right bdecision is not to proceed with an improvement action because the return is not worth it.

At the level of the process, driven by the calendar, someone, normally a team, should look at the set of complaints received, at the big picture, and ask the question, does it make sense to develop one or more actions for improvement? A Pareto diagram may be powerful tool to evidence the big picture and show if there are any relevant priorities for improvement. For example:

In this case, the reason "Design deficiency" is responsible for around 30% of all complaints. The company decided to focus the attention on this topic and found this scenario:

Reason A is responsible for 75% of all complaints generated by "Design deficiency". So, Reason A alone is responsible for 22% of all complaints. Perhaps it is wise, and a good investment to decide to develop an improvement action to remove the root cause (s) behind Reason A.

Who should be part of a team to develop an improvement action to remove the root cause (s) behind Reason A?

It is so different, it is so powerful, it is so revealing, looking into the film, looking into the big picture instead of looking for just a frame. Both are needed, but the latter one is fundamental.

For ISO 9001 people...

Implementing a management system is like tossing and keeping a series of plates in the air circulating like a jongleur is able to do it.

A dish is, for example, about ordering, receiving, and supplying raw materials to production. Another dish is about sales, another is about production, control, and packaging, another is about...

What often happens is that once the dishes are released... they fall to the ground...

The management system cannot take on a life of its own. Someone has to always be aware that the dishes have fallen and that they have to be thrown into the air again.

This happens when an internal audit approaches, or when a surveillance audit date looms. Then, on the run, corrections are made, figurately “some walls are repaired, some wires are fastened, and a new scenario is set up” so that the next audit will look good in the photograph.

One of the most important mechanisms to keep the management system working, to keep the dishes in the air, involves measuring, analyzing, and making decisions to improve.

Let me show you why.

First, let us consider three levels of monitoring, measuring, and analyzing:

• The everyday level - everyday people have to act, to react to defects, to complaints, to delays, to orders, to events
• The process level - periodically, people will collect information about process performance and after analysis will decide if any change, any improvement is needed
• At the company level - periodically, people will collect information about company-wide performance and after analysis will decide if any change, any improvement is needed

At the everyday level things normally work, the pressure of the moment, the weight of reality make people acting. However, improvement only comes as a consequence of the other two levels. 

Yes, solving "sporadic spikes", controlling is not the same thing as improving. Remember the good old Joseph Juran:

Improvement only happens when you deliberately decide to change the status quo in a positive way. Improvement is not about eliminating sporadic spikes, improving is not about acting around a frame, improving is about connecting the frames and seeing the film, seeing the trend, seeing what is beyond the foam of the days. 

What if there is no discipline to stick with the actions that lead to the analysis at the process and company level?

What kind of improvement, what rate of improvement can we expect from not working at these two levels? I dare to state that without these two levels there is no improvement. And more, these two levels are not event-based, but calendar-based.

Let me show how ISO 9001:2015 clauses are used while we perform the two levels. 

At the company level:

At the process level:

These inputs are used in analysis and evaluation (also inputs from audit results and management review):

Let us see the outputs:

Check out how the outputs of analysis and evaluation can leverage changes in:

• competency requirements
• competency gaps
• risks and opportunities
• processes

So, if you don't do these two types of analysis and evaluation improvement is only event-based never calendar-based.

Why is that demand for training and webinars on improvement are always not a priority for ISO 9001 people with an implemented quality management system?

• Do you have the right indicators? (Different organizations in the same economic sector with different strategies may require different indicators due to different priorities)
• Do you have a dashboard? Is it well designed according to the rules?
• Do you prepare a report for analysis and evaluation? Do you fall in the three most common mistakes in presenting data?
• Do you make decisions about improvement?
• Do you use the project approach to command improvement?
• Do you use tools and techniques to find the root causes?

Prioridades e ISO 9001

Implementar um sistema de gestão é como lançar e manter uma série de pratos no ar a circular, como um jongleur.

Um prato é, por exemplo, acerca da encomenda, recepção e fornecimento de matérias-primas à produção. Outro prato é sobre as vendas, outro é sobre a produção, controlo e embalamento, outro é sobre ...

O que acontece muitas vezes é que uma vez lançados os pratos... eles caem ao chão...

O sistema de gestão não consegue ganhar vida própria. Alguém tem de estar sempre a dar conta de que os pratos caíram e de que é preciso lançá-los ao ar novamente.

Um dos mecanismos mais importantes para manter o sistema de gestão a funcionar, para manter os pratos no ar, passa por medir e tomar decisões para melhorar.

Um dos webinars que faço para a Advisera é este, "Free webinar – Measurement, analysis, and improvement according to ISO 9001:2015". Os temas são escolhidos com base na procura do tema na internet. Julgo que não faço este webinar desde Outubro passado. Sinal de que o tema não faz parte das prioridades de quem trabalha com sistemas de gestão...

Webinar - Instill a touch of STRATEGY in a QMS

 

How can we use the process approach (part IVa)

Part I, part II, part IIIa and part IIIb.

5.Processes and strategy

5.1 Anything about strategy in ISO 9001 and ISO 9000?

ISO 9000:2015 defines strategy as:

plan to achieve a long-term or overall objective

When you remember the old article from Henry Mintzberg, The Strategy Concept I: Five Ps for Strategy, published in October 1987 by California Management Review. 

Summarizing the strategy in a plan is too little, too poor. 

What about ISO 9001:2015, where does the strategy come in? 

Clause 4.1:

The organization shall determine external and internal issues that are relevant to its purpose and its strategic direction

Interestingly, not many people realize that relevant external and internal issues and their classification are a function of strategic orientation.

Clause 5.1.1:

ensuring that the quality policy and quality objectives are established for the quality management system and are compatible with the context and strategic direction of the organization;

OK, alignment of quality policy with context and strategic direction.

Clause 5.2.1:

is appropriate to the purpose and context of the organization and supports its strategic direction;

Again, alignment of quality policy with context and strategic direction. Quality policy should derive from strategic orientation.

Clause 9.3.1:

Top management shall review the organization’s quality management system, at planned intervals, to ensure its continuing suitability, adequacy, effectiveness and alignment with the strategic direction of the organization.

OK, this is understandable, it is peaceful. 

That’s it!!!

Not very useful as a guide to work with strategy.

Let us try another door. One of the quality management principles is customer focus. ISO 9000:2015 states:

The primary focus of quality management is to meet customer requirements and to strive to exceed customer expectations.

One of the things that worries me about ISO 9001 is that it uses the language "customer" instead of "target customer".

Seth Godin in his book “We Are All Weird” writes:

"The mass market — which made average products for average people was invented by organizations that needed to keep their factories and systems running efficiently.

Stop for a second and think about the backwards nature of that sentence.

The factory came first. It led to the mass market. Not the other way around.”

“For a hundred years, industrialists have had a clearly stated goal: standardized workers building standardized parts”, [Another text by Seth Godin, from his blog]. This resulted, as a business model, while demand was bigger than supply. When demand is bigger than supply, the boss, the one calling the shots, is the one who produces. And when that is the case, whoever is more efficient wins. Everyone tries to compete for the lowest cost. 

In this world, the competitive landscape can be compared to a single mountain and all competitors try to climb that mountain, the higher they rise, the higher the yield, but the higher they climb, the fewer the number of companies that survive, because in this landscape of a single mountain, the one that wins is the one that uses the effect of scale, grow in volume to lower unit costs and be more competitive.

As soon as supply started to exceed the level of demand, the economic world began a transformation towards more variety. In terms of the competitive landscape, this translates into many, more and more mountains. And those who climb one do not compete with those who climb the other:

In an economic world full of different peaks in a rugged landscape there are many types of customers. Different customers look and value different things. 

Let us stay away from statistics and look customers in the eye, literally and metaphorically. If we look at customers who value price above all else, what satisfies them? 

Satisfied customers do not happen by chance, they are the normal and natural result of work done upstream to achieve the results they value. 

What do we have to do upstream to produce these results in a perfectly normal, systematic, and sustainable way? 

This market is highly competitive, different competitors seek to improve their efficiency, whoever is more efficient wins, whoever stretches the frontiers of operational excellence wins. 

Amateurs cannot compete with paranoid competitors.

Now, let's look at another type of customer, the one who wants tailor-made service, or a customized product. What do they value? 

What kind of priorities are behind these results?

Finally, let's look at another type of customer, the one who wants innovation, or values design above all. What do they value? 

Again, what kind of priorities are behind these results?

Now imagine an organization that wants to serve the three types of customers at the same time

What a big mess it will be! A typical stuck-in-the-middle situation.

The following figure is taken from an article called “Using Product Profiling to Illustrate Manufacturing-Marketing Misalignment” by Terry Hill, Rafael Menda, and David Dilts and published in July 1998.

One can look into an organization and evaluate its products and markets, its manufacturing structure, and its infrastructure. 

For example, about the products and markets: organizations can have wide or narrow product ranges, high or low rate of new product introductions. High or Low frequency of schedule changes. And different order winners, the most relevant topic at the eyes of certain groups, certain segments of customers.

For example, for manufacturing: organizations can have small or large production run sizes, high or low set-up frequencies, low or high set-up costs.

For example, for infrastructure: organizations may be designed to new product introductions or for process improvements to improve efficiency. Manufacturing Managers’ tasks may be dedicated to schedules or to quantity.

Let us see two examples.

The blue company is a company that bets on innovation, they have a wide range of products, they have a high rate of new product introductions, They are flexible enough to accommodate and thrive in the middle of a high frequency of schedule changes. Customers love the innovative products and the brand. Their manufacturing is aligned by being able to run small production sizes, handle a high frequency of set-ups and their cost is low. Infrastructure is aligned with product introductions and meeting schedules.

On the other side, one can think about a green company. A company that bets on low cost to compete on price, they have a narrow range of products, they have a low rate of new product introductions. A new product introduction is a headache, is more entropy. They try to minimize the frequency of schedule changes, which reduces throughput, that reduces efficiency. Customers love their low prices. Their manufacturing is aligned by being able to run large production sizes without stop, they minimize set-ups, and their cost is high. Infrastructure is aligned with efficiency and process improvements process in and throughput.

Different organizations, different strategies, different processes, different mindsets.

Now consider the example of a third company, a company that has a weak or unclear strategy, a company not aligned.

They have a wide product range, an average rate of new product introductions, an average frequency of schedule changes, and their order winners are based on price. Things don’t fit nicely together

They run small to average production run sizes and average set-up frequency and cost.

Their mind is in searching for efficiency but at the same time, they look to meet schedules to satisfy different customers looking for different products in small quantities.

This company is a mess, is stuck in the middle trying to serve everybody and fighting with conflicting priorities.

Continue.

"how to shape the future"

 

 "The future is not about prediction but about shaping the future with agile experimentation on what works and what does not work

Regardless of how much you plan, you will not predict the future because neither customers nor companies can anticipate what is possible. The only way to push for radical innovation is to accept the uncertainty and thereby accepting that with more traditional planning we can not predict the future.

By saying so, I do not mean that we need no planning or management anymore. We even need it more than ever, but with a different aim. The aim should not be to predict the future but to plan a creative process how to shape the future."

Recordar o pensamento baseado no risco que a ISO 9001 propõe: o que pode correr mal? 

Recordar os rinocerontes cinzentos e os fragilistas:

A 2 de Janeiro de 2016 escrevi em "O não-fragilista prepara-se para os problemas":

"Os fragilistas partem do princípio que o pior não vai acontecer e, por isso, desenham planos que acabam por ser irrealistas ou pouco resilientes. Depois, quando as coisas acontecem, chega a hora de culpar os outros pelos problemas que não souberam prever, não quiseram prever, ou que ajudaram a criar."

Em Julho do mesmo ano em "O fragilismo" escrevi:

"O fragilismo espera sempre o melhor do futuro, não prevê sobressaltos. Acredita que os astros se vão alinhar em nosso favor, não vê necessidade de precaução, just in case."

Trecho retirado de "The missing part for business model innovation: The process" 

How can we use the process approach (part III b)

Part I and part II e part IIIa.

4.2.5 Step 5 – The main processes

We will use the example of a public works company, civil construction, as a basis for modeling an organization. A public works company is an organization that lives based on construction works, each construction works is put out to tender by the owners of the projects, so in an organization of this type the main steps may be:

These main steps represent the core processes of the organization (I call them the Cristiano Ronaldo of the business), those that are triggered by a customer's need and aim to satisfy that need, thus serving the customer. What happens between those two customer states? What actions, what activities do you do when going from one extreme into the other?

In this way, the main processes necessary to complete the change in the status of customers are identified.

4.2.6 Step 6 – The supporting processes

Once the core processes are identified, the support processes that allow the customer service vector to continue to function in the long term must be identified. These are processes that are not directly related to an order, or work, in particular, but necessary to deal with various orders or other types of requests. These are processes normally associated with resources (materials, services, people, machines, financial, ...). 

The process "Supply equipment" ensures that the works have the appropriate equipment to run without equipment shortages, and also ensures preventive and curative maintenance.

The process "Supply material and service" ensures the adequate and timely supply of materials and services essential to the development of the work, it also ensures the qualification, selection, performance evaluation, classification, and re-evaluation of suppliers and subcontractors.

Some organizations linked to construction and public works, with which we have worked in the past, given the particularities of their market, have chosen processes to support financial management (which included credit insurance, collections, payments) we will not do it here to keep the model simple.

The process "Train people" converts potential employees selected from the job market, into employees of the organization. It improves the skills of employees by receiving, analyzing, and closing gaps in the profile of people who occupy the various functions.

4.2.7 Step 7 – The leading process

Finally, the last process, the process "Lead the organization", a process where top management sets direction, sets objectives, and analyzes the performance of the organization, which evaluates the degree of fulfillment of the purpose, its raison d'être, and proposes new performance challenges and proposes changes in processes in order to leverage the organization to higher levels of performance. 

4.3 - Final remarks

Why do I use here these egg fried shapes to represent processes, instead of well-ordered squares like in the figure below?

In doing so, I intend to emphasize and awaken a spirit of humility, our models are not descriptions of reality full of certainties. We look at the world, at reality and we see complexity, mystery, confusion, disorder and problems, challenges of various kinds, and what we do is to organize our exploration of that world based on theories, on simplified approximations of reality, approaches that they make it possible to analyze the world and issue attempts to explain what exists, reality, performance, results and outline plans for the future, in order to influence behavior and induce future results for this part of the reality that interests us.

The amoeba shape, to the detriment of the rectangle, reminds us that our theories are just that, theories, hypotheses, representations, and have no ontological substance of their own, they are not palpable realities, they are nothing but artifices of the human intellect, and as such, they are not definitive can always be improved. Learning takes place through conscious comparison between the organization, as we perceive it, and the organization as we interpret it with theoretical models, our models are like artificial islands that we create, and we have geographically strategically available to cross an ocean of complexity and disorganization. 

The central arrow is the heart of the organization – these are the main processes, everybody should be working to support these processes because they serve clients. That is the job and purpose of the supporting processes, they exist to serve the main processes. You know that winter sport called curling? Like in curling everybody in the organization should be mopping the floor to reduce friction, to easy, to facilitate customer service through the main processes.

The leading process is the brain of the organization, it is here that direction is set, objectives are set, performance is monitored and decisions made.

In the next part, we will relate processes and strategy.

How can we use the process approach (part III a)

 Part I and part II.

In the last part, I wrote that this part would be about processes and strategy. However, let me make a small change and first address the modeling of an organization, based on the process approach, before relating processes to strategy.

4. Modelling an organization – mapping processes

ISO 9001:2015 clause 4.4.1 states that an:

Organization shall determine the processes needed for a quality management system. 

How can that be done?

We need to develop a model of how the organization works having as its building blocks what we call processes.

4.1 What is a model?

“A model is an external and explicit representation of part of reality, as seen by people who want to use the model to understand, to change, to manage and control that part of reality”

 Michael Pidd in “Tools for thinking - Modeling in Management Science” 

Remember, we don't draw a model to answer ISO 9001:2015 requirements, and please auditors. We draw them because we want to understand, to change, to manage, and control our organization's present and future.

Models are always a simplification and an approximate representation of some aspects of reality, models reduce complexity, simplify the original or the future to be built, to reduce the noise produced by reality, and thus highlight, distinguish the critical factors, for the object of study concerned. The model does not show all the attributes of the original, it only illustrates those attributes that are relevant, or suitable for the observer/creator/user of the model to manipulate. Models do not need to be accurate to be useful, models are simplifications, and their usefulness lies precisely in that approach.

The task of the observer/creator/user of the model is to collect the visions, the perceptions, even if ill-defined and implicit of reality, and to shape them in a sufficiently well-defined way to be understood and discussed by other people. A model is a representation of reality. 

With Deming I learned:

All models are wrong, some are useful!

The reality is composed of a set of objects that constitute a system, at a conceptual level we design a model capable of illustrating the system, the reality. Armed with the model as a work unit, we can perform simulations to perceive reality and influence it, the simulation uses the model to perceive and anticipate the dynamics and behavior of the system.

4.2 Modeling an organization as a set of processes

To build a model of an organization, it is necessary to have a clear definition of its purpose, now an organization exists only because there are customers, they are its raison d'être! 

An organization, the organization object of our study, is an entity, it is a system, which transforms, that converts “potential customers with needs” into “customers served”. 

4.2.1 Step 1 - Identify the different types of customers 

Customers are not all the same, it is possible to identify and isolate different types of customers, this activity is important because different types of customers may require, different processes and may mobilize different actors, may involve different inputs and different outputs. 

4.2.2 Step 2 - List the inputs and outputs of the model

Distinguish the different states of the customers and identify all interactions (inputs and outputs) between the organization and its customers! How do we get in contact with potential customers? How do we collect information to develop new products and services? How do we receive orders or requests for proposals? How do we deliver our products and services? 

4.2.3 Step 3 – Determine the core, the heart of the model

Let us track the route, from inputs into outputs. Let us zoom in on the organization. Let us open the black box! 

For the purposes of this blogpost, we select a certain type of customers and then start to dive inside the organization  (for someone implementing a quality management system for certification, this could be a management system scope option)

I gather a set of people that know the organization, each from a different perspective and give them sticky notes and markers. Then, I post two sticky notes that represent the responsible for major input in the system and the receiver of the major output of the system.

I ask; what actions, what activities do you do when going from one extreme into the other? People use sticky notes to write things that they remember. I set a rule: one sticky note must have one verb and one noun like “Receive Request For Proposal”, like “Write Proposal”, like “Budget Proposal”, like “Present proposal”, like “Negotiate proposal”.

After that kind of brainstorming one can start to aggregate sticky notes that belong to a flow of activities. For example, I can replace these 5 sticky notes above by saying that they belong to the same process called “Win order”. Repeating the technique for other sticky notes we develop the central sequence of processes.

When designing the road from the inputs into the outputs, do not dive into to much detail! 

Let us look at a high level of abstraction and consider 3 to 6 entities (each entity represents a process, a set of activities) And let's number the processes sequentially! 

We can do a mental exercise: "If we were riding an order, what would we see from the reception to its delivery?" Do not register departments or functions, but state changes, the main tasks! ”

4.2.4 Step 4 – Name each process

 

Designate each entity (each process)! Start with a verb that illustrates the transformation that takes place inside! Avoid references to departments, to avoid confusion remember:

• processes are not departments, 
• the organization chart is not a process map, 
• the vertical and horizontal views of an organization are very different.

I like to designate a process by relating its name to the main output of that process. 

While certain processes seem to be clearly determined, based on a physical flow (production, logistics, distribution, transport) or a flow of information (design/development, closing accounts, invoicing, payment), certain activities of an administrative nature seem difficult to integrate into a “process” view. 

There may then be a strong temptation to group them by function analogy and to baptize these groupings as “human resource process” (in which recruitment, training, communication, payment of wages, contract management will be mixed) work, social dialogue, without the slightest logical link or the tangible outputs that characterize such a process appearing), “accounting and financial process”, etc. Performing more or less arbitrary functional groupings is of no interest from the point of view of process management, because it will be difficult to draw interesting conclusions as to the coordination and chaining modes. 

In the next part, we will continue with the modeling of the public works company as a basis for modeling an organization.