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Business Process Management and the Balanced Scorecard: Using Processes as Strategic Drivers by Ralph F. Smith

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Chapter 1. A World of Change

What is the most important ingredient for the success of an organization?

If a typical executive is asked what makes his/her company great, the likely response will be one of the following:

“We are more profitable than our competitors”

“We have strong relationships with our customers”

“Our people are the best in the industry”

Very rarely will an executive lead off the discussion of greatness by describing process performance. Yet, ironically, process performance has become perhaps the most critical driver of organizational success in the 2000’s. A high-performing organization in today’s marketplace must not only understand how to identify and correct its process weaknesses (an age old practice), but it must also be able to leverage process strengths and opportunities for strategic advantage.

The fact that processes are so crucial to future success is an interesting phenomenon; analyzing and improving processes is definitely not a revolutionary concept. In fact, many of the tools and techniques (e.g., flowcharts, control charts) used for process improvement have been around for decades. Why, then, is the emphasis on process getting stronger and stronger? It is due to a combination of factors that have impacted the business world over the last several years. A basic change management principle holds that “things are the way they are because they got that way.” This statement implies that it is critical to understand how a current situation developed and evolved ...

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