A system is powerful. Methodical, sustainable and consistent development is impossible without systemizing behavior. It is the same in modern business governance as well – a well-organized operational system and optimized business processes are two of the milestones of the effective work of an organization.
Regardless of the field of operation, in order to successfully operate, an organization needs regular renewal of working processes, adaptation to changes and adjusting to the individual business model of the company to minimize all the factors hindering the continuality of a business and existing or potential losses. One benefit of the said process is that optimized business processes are directly connected to the most crucial goals of each company – effectiveness and profit maximization.
Company managers often write down entire processes of operational systems and ask their employees to follow them thoroughly. But what happens when the picture described on paper is one and the actual reality is different? Standards are set envisaging every minor detail, but it’s just on paper and not transferred to actual operations. There are cases when top management requires employees to fulfill those processes and procedures and work properly as “described on paper”. But for reality, the daily needs of the company and listed processes do not match, which results in frustration and disappointment among employees.
To somehow meet the operational standards “listed on paper” they have to fulfill extra or completely unnecessary work. Processes and systems are indeed crucial instruments for enforcement and should serve the growth of a company’s effectiveness. Well-organized processes are necessary to create the best product/outcome, but when they are not properly realized and adjusted to actual work, on the contrary, they may appear to be harmful. When they are loaded with too much “trash”, the quality of operational effectiveness and final outcomes are affected. Companies often forget that an operational system is strong not only when it is oriented on the outcome, but when it presents unity of the company’s vision, business strategy and individuals, who are assigned to fulfill those operations.
Operation system require updated / improvement, if:
Through tight cooperation with the management team of the client companies, we create, update and optimize operations oriented on effectiveness. For the transformation of processes, we incorporate agile approaches and methodologies as we believe that in the modern reality only those organization will develop and keep sustainability that have flexible and effective operation system. We work on a variety of topics incorporating the lean methodology: optimization of main processes that create production cycle, service, product.
We assist companies in the transformation of the main operations such as: production, sales and supply, supply chain, service operations and product development.
The process of transforming operations:
Studying and documenting the processes a company has in place
Studying the internal processes of an organization is a starting point in the optimization of business operations. In this process, we tightly cooperate with a client company to study the organization structure, and its main business domains. As a result of the interviews and meetings with employees, we collect information on the processes. We also observe operations in real time and space. After an in-depth study, we document the existing system of processes.
Analysis of the documented processes, identifying the goal of each of the processes
This stage of analysis is crucial in the optimization chain. This is when we visualize the existing processes which enables us to identify useless steps, repeated actions or other types of problematic aspects which prolong the process, requiring excess resources and decreasing the effectiveness of a business activity. At the same time, our team identifies the goal of each process and estimates how the specific goal is correctly set. In addition, in the case of a mismatch between the process and goal, we study what goal this process should actually serve and why that goal cannot be reached through the given structure.
Re-thinking the processes and systemic optimization
After the analysis stage identifies useless steps, in an inclusive work format with a client company, we develop updated procedures that are best tailored to the organization’s business model and goals of the business domain
Implementation of optimized processes
Establishment of optimized processes free of defects and other problematic details is one of the final stages in company’s everyday life. When implementing this process, our team actively supports each business partner. Our joint effort and work ensures quick integration of updated processes in compliance with developed recommendations.
Testing, control, and monitoring
Finally, the optimization circle is closed by testing the updated process design and observing it closely. On the one side, it enables us to eliminate any defects of the new design, if any. On the other side, the monitoring phase enables us to see clear and vivid outcomes – how effective was the optimization of the process and specifically what amount of expenses were eliminated as a result of the optimization.
In today’s dynamic, modern world, the effectiveness of a company is not solely based on the strength of its main operations. Experience shows that to ensure customer satisfaction and to produce high quality product, it is not enough to optimize and normalize those operations that directly serve the production of the product. For example, if financial resources are miscalculated and costs are not effectively managed, while budgeting does not get enough attention, it will certainly reflect on the quality of the product. Incorrect HR processes and systems may also significantly damage the quality of the product or customer satisfaction. Unsuitable distribution of workload, unclear responsibilities or functions, absence of integration of new staff members or a dysfunctional system for employee promotion and incentives will most likely demotivate employees, decrease the effectiveness of their work and will affect the overall performance of the company.
Support functions (e.g., finances, marketing, HR, administration, etc.) are integral components of a full operation system and their effectiveness plays an important role in a company’s success.
The vision of the future and success nowadays is often associated with digital systems. Acceleration and simplification of a company’s digitalization processes is an important precondition for increasing effectiveness. Digitalization of operations is a long process involving every domain of the business. For effective digital transformation, systems need to be fundamentally flexible to easily adapt to new challenges and enable the re-design, update and optimization of systems easily.
Manage the cause, not the result – this phrase belongs to the founder of Total Quality Management, William Edwards Deming. Total Quality Management is a concept, designed to create such an environment for the entire organizational staff, where the employees are given the floor to continuously develop and build their capacity and skills in order to born valuable products and services for their customers. Even though this phrase sounds short and simple, it dramatically transforms the behavior paradigm dominating nowadays.
Literary, in almost every organization we find a manager who does not like to hear about problems, and the employee bringing that issue to the agenda is usually doomed to be placed off. The way how a Manager behaves, in this case, serves as a sign to others meaning that talking over the issues is supposedly far not appreciated. Accordingly, all the employees use to try to represent any point in a positive context and whenever an issue arises due to mistakes made or due to an unaccomplished project, the Manager rebukes the employee, in another case, detains part of his salary or even dismisses him altogether. All the said above serves as a good example of Managing the Result and the way how to combat it. In some organizations, such behavior is so much appreciated, that rebuking the employee and/or posing sanctions on him is considered a “good management” example so far. Such behavior, as a rule, restrains from identifying a real cause, meaning that the issue cannot be solved and it will inevitably show up again.
Transformation of the existing paradigm actually starts when a process becomes the main target, instead of assessing the employee’s fault. The processes taking place within the organization are the very place where the causes keep generating while leaving the space for the employees to make mistakes and perform their work inefficiently. Any process within the organization should serve to the creation of values for the customers and/or to the reduction of the risks of making mistakes at least. Thus, any process or any part of the process which does not serve to achieve either of these two goals mentioned above can be qualified as a loss. This kind of loss being accumulated through the flow of the processes usually causes a decline in the efficiency of the company and hampers the accomplishment of major goals.
To identify and manage the losses found in the processes it is necessary to learn the opinions of the employees actually involved in those processes, as they are carriers of the valuable information required for finding the actual causes. The fact is that whenever an employee is scared by the “follow-up punishment”, he tries to share possibly less information in consideration that each extra word uttered can eventually lead to more severe “punishment”. Therefore, the first priority of the company is to give the employees a sense of security. To achieve the above, we need to openly announce that mentioning the deficiencies and losses existing in the process will in no way lead to the punishment and setting off the employees concerned. It is most important to each employee to know that his voice is heard and he can express his opinion freely without any restrictions. It is significant that this process should not be shaped into the talks about winning the mark and endless complaints, though each deficiency or deviation discussed should be grounded and based on actual facts.
While having the said discussions it is important to depersonalize the processes and the steps undertaken. This approach can easy the way the employees talk over any action or when a certain employee refers to a specific action or a part of the process as a loss. It never causes a sense of discomfort or does not lead to conflict situations in most cases. It is important that everyone agrees on that if any action undertaken in the process is acknowledged as a failure, it does not inevitably mean that the employee who made it, is of no good.
As a rule, discussing the processes and the conversations around the topic take place in the meeting room or at the Manager’s Office. This is where the employees often dispute over the ways of the flow of the processes. To avoid such meaningless and ineffective disputes would not it be better if simply everyone just starts observing the process and agrees that the process is like the one that everybody sees. This behavior may even help the Manager sitting in his office to see and feel what are the challenges his employees have to deal with. While “overseeing” the processes the questions put by the Manager should in no way imply the threat within but indicate the readiness to show support and compassion. The openhearted and sincere gratitude expressed by the Manager to his employees for their answers and their time will significantly grow the confidence of the employees towards the process.
As soon as the agreement on the process and the losses identified within is achieved, there comes the necessity of making changes. It is important to ensure the involvement of the employees in planning for the changes as this will make them feel more responsible for the process is a part of it and when the process is successful they even may feel proud of it. Fear of changes is common to all humans and you can often hear the accompanying words like “it is of no good,” “it will not work” etc. To avoid such an approach, it is important that the employees involved in the process understand that everybody is “on board” (“in the same boat”) and they all share the responsibility for its success or failure. Make efforts to promote the way of thinking, where the questions like “how it could be done?”, “What is needed to make this possible?”, “What is the cost of this getting accomplished?” or “let us try and then discuss will it work or not” dominate.
The next powerful enemy to the possible changes to be made to the process and a spot generating causes for losses definitely - is the inheritance of the actions within the process. We often come across the mechanical actions performed by the employees unconsciously. This is peculiar to the kind of organizations where putting of the question “Why?” is not much appreciated. The organization’s aim is to ensure that each employee is motivated and encouraged to put a constructive question “Why?” To put this question in a due manner and to appreciate it means that everyone in the organization is constantly watching and finding the losses and brainstorming on how to correct the issue.
General Diagram of the constant process of identifying the losses and making improvements looks like the one below:
On the long way of constant changes to the process we should always remember the following:
Acknowledgment of the problem means getting it solved by 70%
99% of the problems are caused by the poorly organized process and not by the employees
Wisdom and experience of the many weigh way too much rather than that of one man
Make a try first and only then say whether “it does work or not”
There are no limits, improvement of the process can be endless
According to Heraclitus: “The only constant in life is change.” Today these words make more sense than ever. The changes can be painful but they are inevitable.
Relying on the support of the executive branch, a united effort of the employees on the way towards the improvement of the process is actually the key to a successful accomplishment of the company’s goals. Research and Consulting Company ACT tested this concept first within its own organization and only after shaping it into the unique transformational and management model PWR3, which is widely offered now to the company’s clients. Back in 2021, the company launched a great transformational process, where the main three forces – Managers and their philosophy, employees and the organizational culture, and well-administered processes collaborated to make the common mechanism work. It is obvious, that rearrangements to move to the said mode of thinking and starting transformational processes will not be that easy, though everybody agrees that changes are needed for moving forward and achieving greater goals.
If you get the same results as last year and you guess you need improvements, we are here to remind you, please, could you appraise: how actual is the point of view of Heraclitus today, regarded as The New Norm.
Problems cannot be solved by the same level of thinking that created them.
Backsliding occurs when there is no progress. Stability does not equal the absence of change, it is only the result of sustainable development. In the digital age, the world is changing at an astonishing rate, and businesses are left with two choices: to either glide on the waves of change like surfers or to disappear under them.
The pandemic has accelerated the cascade of change even more – it changed people, their emotions, social life, and priorities. As a result, the business ecosystem and the rules of the game have also changed, including different industry perspectives, demand for products and services, consumer behavior and preferences, product/service selection criteria, supply channels, brand communication content and style: to put it concisely, everything has changed.
As a result, it is hard to come across a business that does not require a business model or organizational transformation in order to survive or, conversely, to seize new opportunities. The success of a business today is directly related to how timely it acknowledges the need for transformation and how well it manages this very process.
There are multiple signs that indicate the need for transformation in a company's business model or organizational setting. 6 unmistakable symptoms are as follows:
Let us be more specific: if you have not enjoyed the results of your business or the situation in the company for a long time, but despite various attempts, you are unable to change the unwanted status quo, know that the company is in a desperate need of transformation.
Recognizing and acknowledging the need for transformation is a necessary but insufficient condition for the success of a business. It is important for the company’s management team to understand that transformation is so much more than a change of individual parts; rather, the transformation has to be complete.
Analyzing several cases of failure reveals that most companies make a fatal mistake at this very point: they are trying to localize the problem, solve it effectively with minimal costs, or seize the opportunity with minimal resources and outdated approaches. Behind this, of course, are rational motives such as saving time, cost-effectiveness, following a path that has been taken before, the ambition to find the quickest solutions, and more.
However, this approach is ultimately very costly for the company due to it being impossible to achieve large transformational outcomes with small changes. As a result, the company will have wasted its resources or even worse: with the unsuccessful attempts, the company’s management team becomes frustrated, ultimately leading to the shaking of trust and sowing nihilism among the employees when it comes to the company’s management and its future in general.
We have been observing the process of business transformation in ACT for 19 years both in and outside of Georgia. We have accumulated experience and have created a unique model of organizational transformation and management, which we call “the Power of Three”. According to the philosophy of PWR3, the success of any kind of transformation depends on the unity, balance and permanence of these three forces: the power of creativity, the power of order and the power of change.
In the organizational context, we consider three main driving forces of company development and success: (1) vision – (creativity), (2) culture – (order) and (3) execution – (change).
According to our approach, the transformation of a company begins with the renewal of its vision. The second stage of change is the formation of an organizational culture relevant to this new vision, while the third stage of change regards the transformation of organizational systems, processes, and the mobilization of resources needed to achieve new vision and goals.
Our model offers the organization leadership to think and make decisions consistent with regards to these three dimensions: vision, culture, execution. We believe that the decisions bringing the best results are the ones that: 1) serve the company’s vision and main goals, whilst 2) aligning with the company’s values and taking into account the interests of its employees, and 3) the company has to have tangible resources needed for the execution. In other words, PWR3 is not only a model for the transformation of the organization, but also for its effective management, helping the management of the company make consistent and effective decisions, which, in turn, contributes to the sustainable development of the company.
THE POWER OF THREE®’s unique philosophy, model and working principles enables ACT to play a special role in transforming its customers. As a result of PWR3®, the signs of transformation in the organization are clear and visible:
PWR3 is the power of change that, on the one hand, helps organizations become more resilient in the face of new challenges and, on the other hand, boosts their creativity and openness towards opportunities. We believe that along with a sense of the uniqueness of the mission, it is these qualities that make good companies into extraordinary ones.