The Industrial Revolution. Rail and air transport. Computers. The Internet. All developments that radically changed business. Yet most companies had plenty of time to adapt to and adopt them. The same cannot be said for COVID-19.
At a moment’s notice, organizations had to figure out remote working, rethink operations and make critical decisions. COVID-19 spurred one of the largest and fastest business transformations in history, and will likely have lasting effects on how we run our companies, empower employees and serve customers.
The good news? We’ve seen a tremendous amount of resilience from businesses as they rapidly adjusted to the pandemic. But as companies look to the days where COVID-19 is a less pressing concern, many will need to tackle the organizational inefficiencies that were uncovered or magnified during the pandemic.
Why Having a Defined Scope Matters
While we may be living in strange times, the fundamentals of business process reengineering remain the same: redesigning the way work is done to improve an organization, its operations and its bottom line. The first, and one of the most important, steps when it comes time to execute a project is determining the scope of an initiative.
The scope needs to address the challenges at hand and at the same time be contained enough to avoid distractions and wasted resources. It can be defined in terms of physical limits, geography, functions or organizational effectiveness. Typically, it’s a combination of those factors.
An ill-defined scope can cause serious problems. Failure to set the proper parameters can make a project drift from the target, or miss it altogether. Consider this example from the Harvard Business Review: A European commercial bank redesigned some back-office processes, expecting to reduce costs by up to 23%. The actual cost reduction was only 5%. The reason? In the first place, back-office costs represented only 40% of the bank’s total costs; second, the bank overlooked many processes in designing the project. The initiative had been too narrowly defined to impact the business unit performance in a significant way. In other cases, reengineering efforts fail because of an approach that’s too broad.
How Alice Can Help
Because of the importance of scope development to transformational success, I developed the ALICE methodology to help clients through this process. The acronym stands for:
- Articulate the problem. At the heart of every transformation is the question, which problem are we trying to solve?
- List the ways. What needs to be true for the problem to be solved?
- Identify the means. What capabilities are available to us?
- Capture the enablers. What areas will serve as enablers – people or actions that can assist with the project?
- Explore synergies and interdependencies. Can we sync up with other concurrent initiatives for the benefit of the organization – whether that means slimming down or increasing the scale of the project?
Exploring each step further:
Articulate the problem. Defining the problem may take numerous discussions and cause many disagreements. It can be complicated by the natural tendency to drift from the original objective when discussions trigger new thoughts and ideas. In addition, the line separating root causes and mere symptoms can be blurry. Step one is completed when an organization develops a well-crafted statement of the problem.
List the ways. Listing solutions to the problem calls for honest questions and thorough analysis to identify options, which also helps organizations test the definition of the problem and avoid rushing to conclusions. Once this step is completed, an organization should have a good understanding of what options exist to address the problem.
Identify the means. In this step, an organization identifies its ability to execute on solutions. Potential means or resources might include people, office space, computer systems and technical expertise in sales, R&D, inventory management and procurement.
Capture the enablers. Enablers are influencers or helpers, not decision-makers; they cannot operate on their own to make something happen, but are necessary or useful in a reengineering project to help create the outcome. Examples of key enablers are those in program management, change management, data science and analytics. For example, if we want a sales team to transform, we need a data person to crunch numbers pertinent to proposed changes so those involved have concrete information to measure past and future performance.
Explore synergies and interdependencies. This step focuses on understanding overlaps, synergies and constraints caused by existing initiatives to determine what activities are already underway and can be carved out of the new project, or, conversely, what activities may need to be added to it. To explore overlaps, start with a full list of ongoing initiatives and meet with each program team to understand its work.
Determining the right scope for business process reengineering is crucial. As leaders assess the impact of COVID-19 on their businesses, they will need to examine true root causes. Do they date before the pandemic? Did the pandemic precipitate or exacerbate them? The success of a transformation program hinges on answering the right business questions, right from the start.