“You shall not take vengeance or bear a grudge against the sons of your own people, but you shall love your neighbor as yourself“:
Holy Bible, Leviticus 19:18
Today, in the era of digital transformation, customer focus is the mantra of all companies. This consequent focus on customer needs means concentrating on how every interaction helps the customer, rather than how it helps your business. Putting customers at the heart of everything you do as a business places you in a better position to build relationships and increase customer satisfaction (and your revenues, of course!).
But can you focus on your customers too much? Yes, if you live in our reality of limited resources!
One Root of all Evil: Only Two Categories of processes
The discipline of business process management has been around since the 1980ies. It aims at designing processes that create value for the customer in an efficient way.
Rummler & Brache (1995) define two categories of processes that clearly focus on the organization’s external customers :
”A core business process is a series of steps designed to produce a product or service that is received by an organization’s external customer. Support processes produce products that are invisible to the external customer but essential to the effective management of the business. ”
The following example shows a simplified typical process map of a bank. The core processes produce products (e.g. an account) and services (e.g. a payment) for the customer to generate value. Support processes like product management or controlling are necessary to run the core processes:
The core processes end with creating value for the customer, great! All support processes needed to run core processes are in place, super!
So what’s missing in this process map?
Perpetual digital transformation implies that companies must take as much care about the adaptive design of their internal structure as they care about their customers.
This means that the processes needed for constant innovation & (re-)design of the enterprise structure can’t be “yet another support process”. Having “product management” as a support process is not enough. Speaking with Chis Potts: “There is value in structure”, and you need to invest strategically to add this value.
But what happens today? Companies invest in innovation initiatives with the goal to create new customer value ASAP. They do not see the enormous value that well-designed enterprise structures (ie. processes, business capabilities, information objects, IT-applications, physical assets, organization) provide. The symptom of this cause can be found in almost every larger company:
The picture above shows the IT-applications of a larger company and their interfaces. The design quality of this IT-application landscape can’t almost be worse, it includes a tremendous amount of technical debt and is not designed for adaptivity. As discussed in a previous ->blog post this is not an IT-problem but a symptom of ill-designed business architectures and unclear accountabilities. Culture is lacking enterprise , no one takes care of the overall enterprise design. Companies forget to pay as much attention to the structures of their internal design as they do to their customers. As a consequence,
- (i) generating customer value with ill-designed enterprise structures needs many times more resources (servers, energy, people, money) compared to a well-designed enterprise and
- (ii) changes needed to adapt to new market situations are extremely slow and expensive.
Anchor Innovation & Enterprise Design in your Heart
One important step to overcoming this situation is to add a third process category “Innovation & Enterprise Design” to your process model:
These processes are needed to constantly innovate & (re-)design the structures (i.e. business architecture) needed to run your core- and support processes in a sustainably adaptive way. The Architectural Thinking Framework uses the following elements and their relations to design structures to support sustainably adaptive core processes:
Innovation & enterprise design have to go hand in hand to create structures needed for sustainably adaptive enterprises (->previous post). Focusing on product/service innovation alone does not create structural value and usually leads to non-sustainable point solutions.
Invest Systematically in Change
Transformation means (nomen est omen) changing the shape -> means investing in structural value, not in immediate customer value only. With better and better automation (via artificial intelligence, robotics, etc.) more and more value creation shifts from the core processes to the innovation & enterprise design processes. More and more investments flow into change to increase structural value.
We see can see that effect in the manufacturing industry where the effort for designing and building the production line is much higher than the effort for running the core production process on top of it. The much bigger part of the cost of a car comes from the effort to create the production line, not from material, energy and human labor of the actual production process.
Things to consider:
- Become aware that there is enormous structural value in well-designed enterprises
- Structural value depends on the quality characteristics of your business architecture (e.g. support of efficient operations, adaptivity)
- Design your overall business architecture with as much care as your products and services
- Design a concise –>model of the business structure of your enterprise that is understood and accepted by everybody
- Invest in changes  that improve your structure towards sustainable adaptability
- Connect your ->strategic investment decisions with the elements of your business architecture
It’s like in real-world relationships: you need to love yourself to be able to love others.
 Rummler & Brache (1995). Improving Performance: How to manage the white space on the organizational chart.
 Potts (2013). DefrICtion: Unleashing your Enterprise to Create Value from Change.