Note: This is the third in a series of articles examining the unique traits of high-performance organizations. The first two articles, “Lost in Translation” and “Success through Accountability,” appeared in the March and April issues of Impact Magazine.

To gain the competitive advantage, organizations can no longer concentrate on isolated efficiency efforts. Instead, they must engage in whole-process thinking that is aligned with the expectations of their customers.

Process thinking is based on the idea that companies don’t produce goods and services; rather, they produce the streams of activities - the processes - required to create and deliver the goods and services their customers demand.

Why functional thinking no longer works

This new way of thinking requires a big-picture mentality, which can be a challenge for companies accustomed to traditional structures. Effectiveness can no longer be measured by the output of departments or functional divisions within the organization, but instead must be measured by the value that the entire process provides for the customer.

Companies that segment responsibilities by department or function unintentionally create process inefficiencies. In such organizations, the various functional teams typically operate in isolation from one another, each with its own set of priorities and goals. Each functional team completes its assigned step in the process and then surrenders the product or service to the next functional team, often without awareness of the other steps required to complete the process.

This behavior creates gaps in the process at the juncture of each handoff. Process gaps indicate a break in communication as well as a lack of understanding of customer demand and expectations. This situation can lead to inventory surpluses, quality-control issues, delivery complications, or other problems that ultimately cause customer dissatisfaction.

For example, say you have a sore knee. You call your doctor to make an appointment, and on the appointed day you fill out several forms before being admitted to the examination room. After some questions from the nurse and more from the doctor, you are referred to an orthopedic specialist - and the process begins again. You call to make an appointment, fill out many of the same of forms, and answer many of the same questions.

This scenario may make perfect sense to health care workers accustomed to vertically aligned organizations; each specialist is doing his or her job by the book. But from your perspective, the redundant activities are more than an annoyance - they are a signal that no individual within the system has ultimate accountability for your care.

Breaking down barriers to process thinking

To encourage process thinking, vertically aligned organizational structures must be torn down and replaced with more horizontal structures. Process thinking requires ownership of whole processes, not just specific functions or activities; the emphasis is on perfecting those processes that affect end-customer value.

One way to achieve this is to arrange similar processes into like sequences. For instance, if a local breakfast eatery provides coffee, bakery, and full-breakfast options to its customers, it should consider having three lines for service: one for coffee-only orders, one for bakery orders, and one for full-service orders. Order-taking and fulfillment processes would be aligned to accommodate customers so that, for example, a customer ordering just coffee would not have to wait behind customers with longer orders.

Another strategy is to eliminate worker specialization and encourage employees to become proficient at multiple skills and tasks. This provides employees with a broader perspective and a greater sense of process ownership, and it gives the organization more flexibility to reallocate human capital as needed to increase throughput.

Process-focused and customer-tuned

Effective internal processes are the biggest predictors of business health and financial performance. Employees with the right information, tools, and materials are able to make the on-the-spot decisions that are critical to overall process effectiveness.

With a horizontal view of what customers expect, employees will take more responsibility for the entire value stream - your organization’s true product.

Mark Stevens is Wipfli’s director of manufacturing process optimization.