Thursday, August 14, 2014

Business Design Principle Number 1: Design the process around value adding activities.

Business Design Principle Number 1:  Design the process around value adding activities.
If you've never read the story of Baron Von Steuben you owe it to yourself to at least check out his Wikipedia page.  The man was a General in the Revolutionary War, and the man understood the importance of process.  He was given the task of turning untrained militia men into a force that could stand up the British Regulars.  He implemented changes to the American military structure that be came the "manual" on how the American military operated and trained for the next 50 or so years, and was famously quoted as saying ,"You say to your soldier, 'Do this' and he does it. But I am obliged to say to the American, 'This is why you ought to do this' and then he does it."  Even from the beginning of our country, American's had to know the "why".

In business, value added activities are the "why".  When creating a process, the target is the Cost, Time, and Quality that you deliver to the customer.  Often processes that have been in place for long periods start to pick up activities that don't help achieve these goals.  The most common cause I have seen in this area is when a permanent policy is put in place to address a transient issue, usually because that issue caused a significant headache the one time it occurred.  So the "ounce of prevention" method would be to examine changes before they take place to ensure that it is a VAA, but if that occurred there'd be no reason for analysts to come in later and cut this fat.  As an analyst, I suppose I should be somewhat grateful that these things do occur.

But every activity in your process should be able to stand on its own, and if you find things that were put into place to handle circumstances that no longer exist, or if they take away from VAA's for a minimal return (i.e., making a change that adds time 100% of the time to deal with an issue that only occurs .01% of the time and only costs 10% more time when it does occur is, well, you do the math).  So make them stand, and if the activity can't withstand the criticism, then its time to change the process.

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