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By Geary A. Rummler and Alan P. Brache

What is A n awful lot of managers don’t

understand their business.
That sounds like a line of boiler-
that is fundamentally flawed. They
see the business through a cracked
‘process management’ plate from a screed on “getting close There is a better way to look at an
to your customer,” doesn’t it? But organization and to run one. It’s
and what’s we’re talking about something else. called process management. Com-
so revolutionary The sermon on knowing thy cus- panies including IBM, Ford, Boe-
tomer as thyself is a good and wor- ing, GTE, Motorola, McDonnell
about it? thy one. And it has been delivered Douglas and AT&T are using it to
so loudly and so often for the past improve the way they do all sorts of
several years that many companies things.
have taken it to heart. A lot of man- Before we can judge the virtues
agers—the good ones—now know of this new set of lenses, however,
quite a bit about their customers. we have to see what the world looks
Spurred by the simultaneous pound- like through the glasses we’re wear-
ing on the themes of “back to ba- ing now.
sics” and “stick to the knitting,”
many also understand their own The Vertical View
products or services. Some even Ask managers to draw the pic-
know the competition pretty well. tures of their companies. You’ll al-
Yet here we are announcing that most always get something that
mangers don’t understand their looks like the traditional organiza-
business. What we mean is this: tion chart depicted in Figure 1. The
They don’t understand, at a suffi- drawing may have more tiers, more
cient level of detail, how their com- boxes and different labels, but what
panies get products developed, it will show is the fact that each de-
made, sold and distributed. partment or business unit has its
We believe the main reason for own management hierarchy.
this is that most managers view their As a picture of a business, what’s
organizations from a perspective missing in Figure 1? Well, it doesn’t

show the products or services we side and everyone else’s affairs out. an “optimized” function. But in
provide. It leaves out the customers These silos prevent interdepart- fact, one unit’s stellar performance
we serve. And it gives us no sense of mental issues from being resolved at making its numbers can hinder
the work flow through which we between peers at low and middle the organization’s overall perform-
develop, produce and deliver our levels. Cross-functional concerns ance.
products. In short, the familiar or- (matters of scheduling or accuracy, For example, the sales and mar-
ganization chart doesn’t show what for instance, that involve two or keting unit can achieve its goals and
we do, for whom we do it or how we more departments) are pushed to the become a corporate hero by selling
do it. Other than that, it’s a great highest level. The manager at the lots of products. If those products
picture of a business. top of one silo discusses the issue can’t be designed or delivered on
Hold on, you say. An organiza- with a counterpart at the top of an- schedule or at a profit—well, that's
tion chart isn’t supposed to show other. Then both bosses pass their a problem for R&D or manufactur-
those things. decision back down to the levels at ing or distribution; sales did its job.
Fine. So where’s the picture of which the work gets done. The silo R&D can look good by designing
the business that does show those culture thus forces managers to re- technically sophisticated products.
things? And why does no one ever solve every mundane issue that They can’t be sold? That’s market-
draw it? arises, taking their time away from ing’s headache. Can’t be made at a
The organization chart is a valu- higher-priority concerns involving profit? That’s manufacturing’s
able administrative convenience for customers or competitors. Lower- problem. And so it goes.
two reason: It shows which people level people, who could be handling Enter the senior manager who
have been grouped together for op- these issues, take less responsibility oversees these units. This executive
erating efficiency and it shows re- for results. They come to think of goes to the manager of manufactur-
porting relationships. But it must themselves as mere drones. ing and demands to know why
not be confused with the “what, why And that’s not the worst-case manufacturing failed to produce
and how” of the business. Unfortu- scenario. Sometimes department something on time or up to specifi-
nately, the two are confused all the heads are so at odds that cross-func- cations. The predictable response:
time. And when that happens, it is tional issues don’t get resolved at “It’s not our fault, its those so-and-
the organization chart, not the busi- all. Then you start to hear of things so’s in R&D.
ness, that gets managed. “falling through the cracks” or dis- This phenomenon was described
The trouble is, when managers appearing into a black hole.” wonderfully in a 1987 Forbes
see their organizations as a collec- As each unit tries to achieve its magazine interview with General
tion of vertical functions (marketing individual goals, it gets better and Motors’ CEO Roger Smith. In re-
here, production there, accounting better at “making it numbers.” gard to a reorganization plan Smith
down the hall), they manager ac- When it gets very good at this, it is is explaining, Forbes asks.
cordingly. More often than not, a hailed as a start, a peak performer, “Couldn’t you just call in the boss of
senior manager who oversees sev-
eral functions will manage them on FIGURE 1
an individual basis. Goals are set for Traditional (Vertical) View of an Organization
each unit separately. Meetings be-
tween units are limited to activity
reports: Unit A learns only that Unit
B processed 603 invoices last
month, which was eight more than
during the same month last year, and
so on. R&D (Product Development) Manufacturing Marketing & Sales
In this environment, managers of
individual departments tend to per-
ceive other functions as enemies,
rather than as partners in the battle
against competition. “Silos” are
built around departments: tall,
thick, windowless structures that
keep each department’s affairs in-

Fisher Body and say ‘If I get one What Smith just described is a that cut across functional bound-
more complaint about your divi- silo culture. In the good old days aries. Finally, it shows the inter-
sion, you and the top three guys are of sellers' markets, it didn’t matter nal customer-supplier relation-
finished?’” much. A company could introduce ships through which products and
Smith’s answer sheds light on products at its own pace, meet only services are produced; that is, it
why GM and other corporate behe- its internal quality goals, and set shows us that function B is a cus-
moths ran into so much trouble dur- prices that guaranteed adequate tomer of function A and a sup-
ing the past decade against competi- margins. There were no serious plier of function C.
tors such as the Japanese: “OK, we consequences to the evolution of
could do that, and it’s the way we functional silos. Those days are Critical interfaces, which
used to do it. But he [the Fisher man] over. Most companies today have occur in
says, ‘Wait a minute. I did my job. to compete in a buyer’s market. the ‘white space’
My job was to fabricate a steel door, We need a different way to look
and I made a steel door, and I at, think about and manage organi- on an organization chart,
shipped it to GMAD. And it’s zations. become visible
GMAD’s fault.’ So you go over to in the horizontal
the GMAD guy and say: ‘Listen, The Horizontal View view.
one more lousy door and you’re Figure 2 illustrates a horizontal
fired.’ He says, ‘Wait a minute, I view—a “systems” view—of a This brings us to the premise be-
took what Fisher gave me and the company. It has some marked ad- hind process management. The
car division’s specs and I put them vantages over the traditional orga- greatest opportunities for perform-
together, so it’s not my fault.’ nization chart. For starters, it in- ance improvement often lie in the
“So, you get the Chevrolet guy, cludes those three missing ingredi- functional interfaces—those points
and you say, ‘One more lousy door ents: the customer, the product and at which a baton is being passed
and…’ ‘Wait a minute,’ he says. the flow of work. from one department to another.
‘All I got is what GMAD made.’ So As for that flow of work, no- For example: the passing of new
pretty soon you’re back to the Fisher tice that the horizontal view helps product ideas from marketing to re-
guy, and all you are doing is running us to see how work actually gets search and development; the hand-
around in great big circles.” done, which is through processes off of a new product from R&D to
Systems (Horizontal) View of an Organization

R&D (Product Development) Manufacturing Marketing & Sales

New Product Ideas

Mfg. Needs
Research Plant Marketing Promotion Receiving
Product Market
Plant Orders Calls
Product Production Sales
Develop- Specs Mfg.
ment Plant


88 1 092491

manufacturing; and the transfer of A, B and C.” tion is the starting point—the foun-
customer billing information from Assuming that A, B and C al- dation—for designing and manag-
sales to finance. ready have competent managers, ing organizations that respond ef-
Critical interfaces, which occur we have to ask if the senior man- fectively to the new reality of cut-
in the “white space” on an organi- ager sees his or her job as re-man- throat competition and changing
zation chart, become visible in the aging those functions. If so, is that customer expectations.
horizontal view of an organization. a role that justifies a salary? We John Manoogian, general man-
We said earlier that managers don’t believe so. A primary con- ager of the Alpha division of Ford
tend to manage the organization tribution of a manager at the sec- Motor Co., puts it plainly: “We
chart instead of the business. It is ond level or above is to manage simply cannot achieve and main-
their failure to recognize what goes interfaces. The boxes already have tain our goals of leadership in qual-
on in the white space that explains managers. The senior manager adds ity, cost and on-time programs
senior managers’ most common an- value by managing the white space without continuously improving the
swer to the question, “What do you between the boxes. processes we use to conduct our
do?” That answer is: “I manage The systems view of an organiza- business.”


New Product Specifications

Labor People Human Product/Service Promotion

Markets Resources MARKETING


Needs and Applications
Research Technology Custom Software and Support Consulting and
DEVELOPMENT Systems Design

Sales Forecasts
Software Orders

Capital Capital
Markets FINANCE Cash

Purchase Material Software Production

Orders Needs Orders Forecasts

Production Assembly
Control & Shipping

Vendors Blank Diskettes & Packaging

ficient and effective process. CBI might be: “Reduce order-to-
How To Do It Here’s a step-by-step approach. receipt cycle time to two weeks.”
How does process management 1. Identify a critical business One of a home security company’s
work? The methodology that fol- issue. Process improvement begins strategic objectives may be to close
lows can be used to fix a broken when senior management identifies a competitive gap in the area of
process, to redesign an existing pro- a critical business issue (CBI). A billing accuracy. Its CBI might be:
cess in response to a change or in CBI is a measurable goal based on a “Reduce the number of billing er-
pursuit of continuous improvement, current or potential problem or op- rors to no more than one per thou-
or to design a new process. For portunity that has an impact on the sand bills.” A chain of pizza par-
simplicity, we will refer to all three organization’s strategy. lors may believe it can increase its
applications as “process improve- A retail store, for example, may share of the business lunch market
ment.” A successful process im- want to establish a competitive ad- by speeding up its service. The
provement project is one in which vantage by reducing the time it CBI: “Fill customer lunch orders
a cross-functional team addresses takes to have the “hot item” of the within seven minutes.” A manufac-
a business need by creating an ef- day available to the customer. Its turer of home appliances may be
losing money on its line of blend-
ers. Its CBI: “Establish a 10 per-
cent margin in the blender line.”
After the CBI is determined,
other goals of the process improve-
ment effort, if any, are established.
For example, top management may
want a narrative description of the
procedures involved in each pro-
cess step, an evaluation of the cur-
rent organization structure or a set
of benchmarking data (documen-
tation of other organizations’ pro-
cess capabilities and characteris-
Consulting & Custom Software tics).
2. Select critical processes.
Sales Effort
Once senior managers have estab-
lished a CBI, they identify one or
more cross-functional processes
that have the greatest potential to
resolve it. For the retail store, the
critical process might be “buying.”
For the security company, it proba-
bly would be the billing process.
For the pizza chain, the food prepa-
ration process and the customer or-
der process would be critical. The
appliance make might select the
manufacturing process.
3. Select a leader and mem-
bers for a process improvement
team. It may be tempting to assign
the task to an analyst, but we be-
lieve that a successful effort must
involve representatives from the de-
partments that contribute to the
critical process. The most signifi-
cant and lasting benefits are derived

from the insights and commitment ing process team should include at to envision a better way of doing
of the people who ultimately will least one representative from each things; has a high energy level; is
make the improvements and work of those functions. able to work effectively in a group
within the process. Each team member should meet of peers; is available to attend team
Let’s invent a software devel- these criteria: has a detailed under- meetings; perceives being assigned
opment and system integration standing of the steps in at least one to the team as a reward.
company. We’ll name it Computec. of the functions that contributes to As for the team leader, this
The functions involved in the process: is able to comprehend should be a person who meets the
Computec’s order-filling process the “big picture” (beyond his or her criteria for selection as a process
are field operations, finance and own function); is not wedded to the team member and also is able to
production. Therefore, an order-fill- current process; is creative enough manage a task group effectively:


Order Clarify
Generated Order


Order Order
SALES Problem Resolved
Com- Sub-

Pleted Mitted

SALES Record

No Check With
Order Order OK Sales Rep Order
ORDER ENTRY Logged Checked ? Or Corrected





establish schedules, control the an expert in process improvement, and a process map (which depicts
pace, assign individual tasks, mar- teaches the subject to the group and a flow of activities). Both maps
shal resources and so on. works closely with the team leader. depict the current state of affairs;
In our experience, an effective 4. Train the team. The team is they show what “is.” Computec’s
team can have as few as three or as taught (usually by the facilitator) relationship and process maps are
many as 12 members. In most cases, the rationale and tools of process shown in Figures 3 and 4.
the team is assigned a process im- improvement. The most efficient approach usu-
provement facilitator whose regular 5. Develop “Is” maps. The ally begins with the facilitator de-
job is not part of the process being team develops a relationship map veloping a “straw man” map based
analyzed — perhaps a consultant or (which depicts the internal and ex- on one-to-one interviews with the
staff trainer. The facilitator, who is ternal customer–supplier interfaces) team members. When the team first

Software Invoice
Received Received






meets as a group, it refines this straw time, its members should be par- cess, but rather a failure to execute
man, ensuring that it accurately de- ticularly interested in disconnects a process step efficiently or effec-
picts the current situation. that contribute to wasted time. A tively. For example, the steps in
6. Find the “disconnects.” As close look at the process map in Computec sales administration’s
the team is developing the “Is” Figure 4 reveals that the serial na- order-entry process may make
process map, it lists the disconnects ture of the process, repeated order sense, but excessive keying errors
in the process. A disconnect is a logging and a credit-checking result in incorrect orders.
missing, redundant or illogical fac- bottleneck all slow down the pro- Disconnects are listed, but not
tor that affect the CBI. cess. resolved, at this point. The number
If, for example, the Computec A second type of disconnect is and severity of disconnects, along
team’s CBI involves reducing cycle not a flaw in the logic of the pro- with the definition of the CBI, dic-




Order Order Problem OK Orde
Completed Submitted Addressed ? Cance



Credit No
Order New Checked
? Yes Invoice

Order Inventory Orde

PRODUCTION CONTROL Entered Adjusted Stopp

COPYING Production Diskettes

Scheduled Copied




tate the appropriate level of detail method or Kepner-Tregoe’s prob- should be. This “Should” process
for the mapping. lem analysis) to determine why is a streamlined value chain of ac-
7. Analyze disconnects. The they are occurring. If subteams are tivities that produce the product or
full process team (or, more com- doing the analyses, they present service required by the ultimate
monly, subteams or individuals), their results to the full team. customer. Since a “perfect” process
identifies the causes of the discon- 8. Develop a “Should” map. may be unaffordable, it is the team
nects. For some, the causes are The team creates a second process leader’s job to ensure that the team
already known or not important to map (and, frequently, a relationship is not being unrealistic in its as-
the solution. Others require a root map) depicting a process that sumptions about what can be done.
cause analysis technique (such as would achieve the goal of the CBI: Computec’s “Should” process map
Kaoru Ishikawa’s fishboning the process not as it is, but as it for order filling, which appears in
Figure 5, addresses the disconnects
we identified in Step 6.
9. Establish measures. Driven
by the CBI, the team hammers out
measurements or standards for the
process and its subprocesses. Start
by creating end-of-line customer
Invoice Payment measures. In order words, by what
Received Sent
standards will the final customer of
the process judge the quality of the
Payment things the process is producing?
Order Re-submitted
(The CBI statement may already
ncelled contain these measures.) Then work
Order backwards, inserting measures at
critical junctures in the “Should”
process, as shown in Figure 6.
10. Recommend changes. Some
process teams are empowered to
make changes, within certain
boundaries, without securing man-
agement approval. Others need to
go through a recommendation pro-
cedure. In either case, the team
should document the steps required
to move from “Is” to “Should,” and
Received draw up an action plan.
At this step, we formally address
the roles that people play in the
process. If job goals, job design
opped and human–performance manage-
ment do not support the proposed
changes to the process, the im-
provements will not stick. Teams
often recommend that jobs be
Order Stop
added, deleted or modified; that
certain people be given specific
types of training; that reward sys-
tems be modified; and that addi-
Order tional resources by provided.
A particularly useful way to be-
Picked gin planning for change is to ana-
lyze the variables in the human per-

formance system: performance Computec’s “Should” process
specifications (job outputs and stan- probably will not work, for ex-
dards), task interference (perform- The most ample, unless production control
ance barriers), consequences (re- significant benefits clerks are trained in order-entry
wards and punishments), feedback come from the procedures, salespeople are re-
(performance information), knowl- people who ultimately warded for submitting orders in a
edge/skill levels and individual ca- timely fashion, and credit analysts
pacity. (See “The Systems View
will work within receive regular, specific feedback
of Human Performance,” TRAIN- the process on customers’ payment practices.
ING, September 1988.) 11. Implement changes. Do it.



100% 100% .01%

Complete Entered of Credit Bad
Order Checks Within
1st Time Within 24 Debts
Generated 24 Hours


Two Credit
Order Order OK

SALES Scheduling Problem

Completed Submitted Errors / Qtr. Addressed ?



Checked No
Order New Credit
Yes Invoice
? No

Order Inventory

COPYING Production Diskettes

Scheduled Copied

& SHIPPING Inventoried



Change the process, following the or managed, may take more time teams met for six weeks, spread
plan developed in Step 10. to analyze and improve than a ma- out over a nine-month period. A
How long does a process im- ture process that only requires fine- typical project spans two or three
provement project take? It depends tuning.) months and involves eight to 10
on a variety of factors, including We have seen process improve- meetings of four to six hours
the complexity of the process, the ment projects in which the first 10 apiece.
nature and magnitude of the CBI, steps were finished in five half-day Here are three quick examples
and the maturity of the process. (A meetings on consecutive days. At of process improvement projects in
“primitive” process, which has the other end of the spectrum was real organizations.
never been documented, measured a project in which five subprocess A company that manufactures
computer components was con-
cerned about its frequent failure to
deliver products on time. A cross-
functional team of 12 managers
worked for four days to analyze the
entire order-to-deliver process. The
team recommended a series of
Products or changes that were implemented
Quantities 95%
Received over a two-month period. The re-
Within 72
sult: reduction in average cycle
100% $3.50
time from 17 weeks to five weeks
Within 48
To Process Software Payment and a 65 percent increase in on-
An Order Received Sent
Hours time delivery. This process contin-
ued to be improved during the next
12 months. Cycle time is now
Re-submitted down to five days.
Senior managers of a regional
telephone company were dissatis-
fied with the performance of the
customer-billing process, which in-
volves nearly every department in
the company. The process improve-
ment effort was driven by the need
to improve quality in a deregulated
environment. Because of the
breadth and complexity of the proc-
ess, five cross-functional subteams
Sent were formed. They found 183 dis-
connects in the process. The ensu-
ing improvements resulted in qual-
ity gains (based on customer sur-
veys), cost savings and a measure-
ment system for tracking the con-
tribution each function makes to the
overall process.
A high-technology company as-
signed a task force to design a “fac-
tory of the future” to make semicon-
ductors. The task force began by
specifying the goals and general
parameters of the factory. In an ex-
ample of proactive process manage-
ment, they then used “Should” pro-

cess mapping to design the produc- source development, billing and making its numbers–often to the
tion process and the key support purchasing could be strategic proc- detriment of the process.
processes. Lastly, they identified esses. The process owner is akin to a
the jobs, skill sets and staffing that Top managers usually do not “matrix manager” who oversees a
would be required by the processes. need sophisticated tools to identify cross-functional product or project.
Step 11 in a process improve- the highest-priority candidates for But there are two important differ-
ment project is not the end by the process management. What they do ences. First, products and projects
beginning. If an infrastructure for need is a clear strategy based on come and go; processes change but
the ongoing management of a proc- competitive advantages, and a list of are permanent. Second, unlike a
ess is not established, the process their organization’s customer and matrix manager, the process owner
will fall into disrepair as quickly as administrative processes. By evalu- does not represent a second organ-
a rebuilt car engine that is not kept ating the impact of each process on izational structure.
tuned. Here are some keys to the the competitive advantages and on That statement requires some
effective practice of process man- the organization’s goals, they can explaining. Effective process man-
agement. readily identify strategic processes. agement demands the peaceful co-
existence of the vertical and hori-
“Strategic” Processes The Vertical and Horizontal zontal dimensions of an organiza-
While a long-range goal may be Organizations tion. In most cases, a purely hori-
to establish a management plan for If we had to select one action zontal organization structure—a
every process, most organizations that makes the greatest contribu- company organized solely around
begin by identifying the critical few tion to lasting process management, processes—is not practical. It’s
that warrant the investment in ongo- it would be the appointment of an usually more efficient, for example,
ing process management. for people in finance, human re-
A strategic process is one that The difference in a sources and information systems to
influences a competitive advantage be grouped together.
that senior management wants to In a process-driven environment,
establish, reinforce or expand. If the organization: reporting relationships remain ver-
time it takes to fill a customer order measurement. tical. Functional managers retain
is a potential competitive advan- their power. They have as much
tage, “order processing” is a strate- “owner” for each key process. The authority as in any traditional or-
gic process. If the quality of cus- process owner, or sponsor, over- ganization. Each line manager is
tomer service is a competitive ad- sees the performance of a cross- still responsible for achieving re-
vantage, the customer service pro- functional process. The owner sults, allocating resources, setting
cess is strategic. If new products monitors the process to see how policies and developing proce-
are central to the competitive ad- well it is meeting customer require- dures.
vantage, the process of developing ments and internal goals. The So how do we overlay the hori-
and producing products is strategic. owner ensures that a permanent zontal dimension onto the vertical
Those examples are all “cus- team strives continuously to im- structure? The key is measurement.
tomer processes.” They produce a prove the process. The owner And the first step in measurement is
product or service visible to the serves as the “white space ombuds- to establish customer-focused,
customer. Administrative (purely man” who helps resolve interface process-driven performance indica-
internal) processes also can be stra- problems among the different units tors.
tegic. For example, if the cost of that contribute to a process. The The difference between a proc-
producing a product or service is a owner develops a plan and a bud- ess-driven organization and a tra-
competitive advantage, then budg- get for the process. The owner ditional, purely vertical organiza-
eting and capital expenditure proc- serves as the conscience, evaluator tion is just this: Each function is
esses may be as strategic as design and champion of the process. measured against goals that reflect
and manufacturing processes. If the Without a process owner, the its contribution to one or more
ability to respond quickly to the “handoffs” that occur in the white processes. That is, a department is
needs of a changing market is a space tend to be ignored. As each measured—and its manager is
competitive, the market research line manager concentrates on his or judged—in terms of its impact on
and planning processes are proba- her piece of a process, each depart- those customer-focused, process-
bly strategic. Similarly, human re- ment reverts to the old focus on driven performance indicators.

That’s where process owners the ability to influence, persuade a particular methodology. It is a
come in. They not only help re- and lead. culture. It’s a culture in which pro-
solve problems in the white spaces, The process owner’s responsibil- cess owner, teams and line manag-
they ensure that process consider- ity is usually associated with a posi- ers practice continuous improve-
ations continue to dominate func- tion, rather than an individual. Of- ment rather than sporadic problem
tional interests. As long as func- ten it is the person who manages the solving. Managers use their rela-
tion managers are judged and re- largest number of people working in tionship and process maps to ori-
warded by their contributions to the process. At one telecommunica- ent new employees, evaluate stra-
processes, you see no tugs-of-war tions company, for example, the tegic alternatives and improve their
between bosses, as you do in many vice president of finance was ap- service to internal and external cus-
matrix-managed organizations. By pointed owner for the billing proc- tomers. The needs of those custom-
the same token, individuals are not ess. When he left that job, his suc- ers drive goal setting and decision
continually torn between commit- cessor became the process owner. making. Policies, technology and
ments to their vertical (line) man- personnel decisions all support the
agers and their horizontal (product An Institution overriding goal: efficient and ef-
or project) managers. In an organization that goes be- fective processes.
Therefore, process management yond “improvement projects” and T
can coexist quite peacefully with institutionalizes process manage-
the functional organization. It ment, each key process has an
doesn’t threaten people’s power or owner. Each has a permanent team
accountability, it doesn’t neces- that meets regularly to figure out Geary Rummler and Alan Brache
sarily change the organization how to make further improvements. are partners in the Rummle-Brache
structure or reporting relationships, Group, a consulting firm in Warren,
and it doesn’t change the direction
Institutionalized NJ. Rummler is a member of the
of the business. It changes the way HRD Hall of Fame.
the business is conducted only by process management is
ensuring that processes (which are a culture.
This article is adapted with per-
there already) are rational and by mission from their new book Im-
aligning functional goals with proc- Each process has a map that docu-
proving Performance: How to Man-
ess goals. Good process owners ments its various steps and the de-
age the White Space on the Orga-
don’t threaten line managers be- partments or functions that perform
nization Chart. published by
cause they add value without tak- those steps. Each has a set of cus-
Jossey-Bass, San Francisco.
ing anything away; they are mak- tomer-driven measures that shape
ing contributions nobody ever its functional measures. Each has an
made before. annual business plan that includes
This picture of peace and har- its expected results, objectives, bud-
mony depends to a large degree, get and nonfinancial resource re-
however, on the people selected to quirements.
be process owners. Because of the To ensure that key processes
pivotal nature of the role, a process meet these and other performance
owner generally should be a senior criteria, IBM, Ford and Boeing
manager with a major equity stake have created process certification
in the total process; that is, someone ratings. At Ford, for instance, a
who has much to gain if the process process must meet 35 criteria to
succeeds and much to lose if it fails. achieve the top rating of “1” on a
Furthermore, the owner should be four-point scale. These criteria
someone who understands the range from a basic requirement that
workings of the entire process, the the process have a name and be
effect of the larger business envi- documented to a demand that the
ronment on the process, and the ef- process be assessed by customers
fect of the process on the business. as “defect free.”
Obviously, the owner also should Institutionalized process man-
have strong interpersonal skills – agement is more than adherence to



Geary A. Rummler
Alan P. Brache

PM M&S-201