Winning Without Competition: How to Break Out of a Commodity ...

• They are linked horizontally and vertically.
• They can be diagrammed in terms of their interaction with other parts of the
organization.
• They can be measured—although not always easily measured.
• They can be improved.
• They have a major impact on differentiation of the firm, customer value,
return on assets and organizational goals.
The first step in process improvement is to identify the macro processes of the
organization (Chart One: Macro Process View of a Precast Company gives an
example). One approach to selecting critical processes from this list is to
categorize each macro process into one of the following categories of importance:
• Identity: It serves a major role in creating the desired differentiation of your
company.
• Priority: It meets a customer requirement and strongly influences how well
identity processes are carried out and how the firm stands versus the
competition.
• Background: It supports other processes; many management processes fall
here.
• Mandated: It is required by, for example, government officials.
• Folklore: These are processes that have been in place in the past, but are not
necessarily needed today.
Chart Two: Example of the Process Salience of Different PC-PS Companies shows
an example of process categorization for two precast firms, each with very
different competitive strategies. (For more information on this topic, see Keen,
whose work guided the thoughts in this section.)
Identity and priority processes, or those that could be identity and priority
processes, become the strategic processes for the organization. Organizations
should focus improvement and redesign efforts on background processes only if
they are becoming, or could become, a priority process. Mandated processes take
on strategic important if changing them has a major positive impact on the
profitability of the firm. In general, background processes do not pass this test.
Any folklore process should be removed.
After categorizing processes, the organization must select which critical processes
it wants to improve or redesign so as to achieve greater success. The key to doing
this is to determine which critical processes of the organization already perform
above average versus which perform at or below average. Because of limited
resources, the organization may choose to monitor performance of critical
processes with above average performance in order to maintain a lead. Any
critical processes that are at or below the performance of other competitors, i.e.,
that are not best in class, must be improved or redesigned.
Pamphlet #5 Page 190