Process Design – Page 20 – Discipline makes Daring possible.

July 31, 2019

Performance – costs and revenues

As we all know, profit is what’s left of revenue after you’ve taken out all the cost.

Revenue is easy to measure. Cost is a little harder.

Ideally, you would directly attribute every cost incurred by a business (including what would normally be called ‘overhead’) to the end-to-end process of acquiring and serving a single client with their chosen product or service.

This is a time-consuming thing to do, which is why many small businesses work on a rule of thumb of some kind, such as the ‘one third wages, one third overhead, one third profits’ approximation used by many accountants.

It turns out though*, that ‘time spent’ is a pretty accurate proxy for all costs, so a relatively easy way to get an accurate picture of how much a process is costing to run, is to measure how much time is spent on running it.

This means that the efficiency of a business as a system can be measured in a straightforward way – by simple observation.

I like simple and straightforward systems, so this makes me extremely happy.

*”Duration-Based Costing: Utilizing Time in Assigning Costs” Anne-Marie Lelkes, Ph.D., CPA, Management Accounting Quarterly, Summer 2017.

July 30, 2019

Good feedback

Good feedback is:

Objective. ‘You’re crap at this’ doesn’t help. “You tend to pull to the left” does.
Specific. “Try harder” doesn’t help. “Try aiming to the right of where you want to land” does.
Enabling. “Like this” doesn’t help. “Let me put your arm in the right place so you can feel how it should be” does.
Timely. “A week ago you threw short” doesn’t help. “That last throw was only out by an inch” does.

Feedback is good when it tells the recipient something about the process, because the process is what you have to change to improve the result.

Feedback is even better if it can come from the process itself, because then the person running the process has autonomy as well as responsibility.

A cattle-prod, physical or emotional, isn’t feedback. It’s just bullying.

July 25, 2019

Tailor-made

The suit may be a one-off, tailored to fit you perfectly, but the techniques used to make it are not unique. They’ve been around for centuries. If you need to adjust the fit later, another tailor can do it for you easily.

Similarly, you can have a house built entirely to your own specification that any competent builder can re-configure for you later.

Bespoke is sometimes seen as a risky option, especially for software. But it depends where the ‘bespokeness’ is.

If it’s in the techniques or materials used then you need to worry, because only a few people (perhaps only one person) can adjust it for you later.

If however, your developer uses common, easily available, open source libraries, in a common, open-source language, on a common, open-source platform that thousands of software developers use, then the only thing to insist on is that if need be, you get the code. That way, any competent developer can adjust it for you.

Off-the-peg can seem like a safer option, until you discover that it doesn’t quite fit your needs. So you either customise it (which may invalidate the support from the provider, and/or put you in hock to the customiser), or worse, you change your business processes to work around it.

When I first started in computing, almost everything was bespoke from the ground up. Now its much more like tailoring or building.

Much better to invest in bespoke and adaptable, than off-the-peg and unwearable.

July 22, 2019

What makes the best process? Everyone.

The best process is one that everyone will use and improve of their own accord, because it helps them to achieve what they want:

Agency – to make their own ‘me-shaped’ dent in the universe.
Mastery – to learn and master new skills.
Autonomy – to be free to choose how they make their dent.
Purpose – to do this for something bigger than themselves, that has meaning beyond the sale.
Community – to do all this with ‘people like us’.

The easiest way to achieve that is to involve them in its design, right from the start.

July 19, 2019

What makes a good Process? Let the person be the judge

A good process is a prompt, not a prescription. Like a musical score, or a set of building drawings, it tells people what to produce, not how to do it – they already know that, that’s why you hired them.

That means you can leave the details of execution and judgement to the person running the process. You don’t need to spell out every decision, or identify every possible scenario, or include every last detail of the ‘how to’.

You’re not programming a robot, you’re supporting an intelligent human being to take responsibility and use their own skill, experience, empathy, creativity and judgement to deliver what they, as a part of the business, have promised to the people the business serves.

So to recap, a good process is:

clear about the outcome it is designed to achieve
the responsibility of a single role, ensuring all required resources are available when and where they are needed
both map and compass, helping the person running it to get to the right destination in all circumstances – even those you couldn’t predict
a prompt, not a prescription

These things make for a process that people will actually use; that doesn’t need to be changed with every new piece of software or equipment; that is easy for new people to learn and even internalise, that allows the person responsible to ‘just get on with it’.

A process that is as simple as possible, but no simpler.

July 18, 2019

What makes a good Process? A Map and a Compass

A good process is a map, guiding the person running the process to the desired destination, allowing some flexibility of route to get there.

A good process also has a compass built in.

It regularly reminds the person running it of the Promise of Value they are delivering on, so that when they find themselves lost and in the dark, they know the kind of action that will get them back on track and heading in the right direction.

July 17, 2019

What makes a good Process? Responsibility and Resources

A good process is managed by a single role from start to finish. Other roles may be involved, but only one is responsible for ensuring the desired outcome is reached.

A good process also ensures that everything needed to run the process is available at the right time.

With clear responsibilities and no need to scrabble around for resources, everyone can get on with the job – of delivering on promises.

July 16, 2019

What makes a good Process? Clarity of purpose.

A good process has a crystal clear purpose. It is dedicated to achieving a single, customer-meaningful, business-meaningful outcome.

This outcome can be big and abstract at the top level (Keep Promise), increasing in granularity (Walk Dogs) until you reach the lowest practical and concrete level (File VAT Return).

This means that the person running the process knows exactly what they are trying to achieve, and they (and you) know exactly when they’ve achieved it.

July 15, 2019

What makes a good Process? Simplicity.

A good process is as simple as it can be, but no simpler.

And like Chanel’s classic ‘little black dress’, it’s harder to achieve than it looks.

July 3, 2019

Research

I’ve been researching the history and theory of accounting, and I have to say I’m finding it fascinating, not least because it leads off into some very interesting side-alleys.

Along the way I found the Digital Commons Network, an excellent resource.

But the best thing is finding that I’m not wrong about some of the questions I want to ask.

What questions would you ask of Accounting?

Discipline makes Daring possible.

Musings from The Disappearing Boss on People, Process and Responsible Autonomy for small-business employers.

Category: Process Design