November 9, 2018

Design your process around value-adding activities

The most important design principle is “Design you process around value-adding activities, not departments, job titles, or personalities.” To understand this principle, we first need to know what a value-adding activity would be. A value-adding activity can have any of these three characteristics:

  • It transforms information or material into what the customer wants
  • It is a service feature
  • It is a step the customer would pay for.

Here the steps in green are value-added steps.

After you have created an “as is” flow chart of your process, go back and identify those steps which are value-adding. I usually change these steps to green. Why green? Because money is green. Now look at your process and see how many steps are green. Probably not very many. Nirvana would be a process that would be pure green.

If you are working in an environment of turf protection, strong personalities, and issues about who should do what, then I suggest you do not initially make a functional-activity flow chart for your new process. Instead focus on creating the flow, the sequence of the steps, and optimizing around the value-adding steps. This will allow you to create a great process and not be derailed by arguments about turf, etc.

After you have hammered out a great flow, then put on the boxing gloves and figure out who should do each step. This where the second design principle is used. “Work is performed where is makes the most sense.” Does it make more sense for sales or marketing to do this work? Should the admin do this step or the manager? By keeping these discussions after you have the new flow, you will speed up your efforts significantly.

There is another school of thought in the process improvement community. This school wants you to focus on the non-value added steps and eliminate them or reduce then. I tried this technique once and this is what happened. The folks who were doing the non-value added steps argued with me that these steps were necessary. Secondly, it created a hostile and contentious atmosphere. Third, those folks are probably afraid they will loose their job since they are doing non-value work.

The above is completely circumvented by focusing on value-adding activities and trying to optimize those. By doing that, guess what happens? The non-value adding steps fall away, and you have avoided an unpleasant interaction with many people.

Future posts will highlight other design principles which I commonly use with clients. In addition I plan to write about creating value in processes when we redesign them.

Check us out at Value Creation Partners.